EX-99 2 nhi906er.htm 1997 third quarter press release

Exhibit 99



For Release: November 2, 2006

Contact: Ken DenBesten, Sr. VP Finance

Phone: (615) 890-9100

NHI reports third quarter income

MURFREESBORO, Tenn. -- National Health Investors, Inc., (NYSE: NHI) announced net income for the third quarter ended September 30, 2006 of $13,379,000 or 48 cents per basic and diluted share compared to $12,540,000 or 45 cents per basic and diluted share for the same period in 2005.

Funds from operations, ("FFO") for the third quarter ended September 30, 2006 was $16,034,000 or 58 cents per basic and diluted share compared to $15,383,000 or 55 cents per basic and $15,400,000 or 55 cents per diluted share in 2005.

Net income for the nine months ended September 30 was $45,779,000 or $1.65 per basic and diluted share compared to $42,149,000 or $1.52 per basic and diluted share for the same period in 2005. Income for the nine months ended September 30, of 2006 included $6,109,000 or 22 cents per basic and diluted share of income attributable to gains from asset sales and mortgage prepayment penalties compared to $5,878,000 or 21 cents per basic and diluted share from asset sales gains and impairment writedowns on mortgage notes receivable in 2005. Adjusting for the above-mentioned items, net income for the nine months ended September 30, 2006 would have been $39,670,000 or $1.43 per basic and diluted share compared to $36,271,000 or $1.31 per basic and diluted share for 2005, an increase of 9.4% and 9.2%, respectively.

For the nine months ended September 30, FFO was $48,028,000 or $1.73 per basic and diluted share compared to $48,065,000 or $1.74 per basic and $48,131,000 or $1.73 per diluted share for the same period in 2005. Adjusting for the items mentioned in the third paragraph above, FFO for the nine months ended September 30 would have been $47,733,000 or $1.72 per basic and diluted share compared to $44,831,000 or $1.62 per basic and $44,897,000 or $1.61 per diluted share for the same period in 2005, an increase of 6.5% and 6.2%, respectively.

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 third quarter income



Condensed Statements of Income
(in thousands, except share and per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
Revenues: 2006 2005 2006 2005
Mortgage interest income $ 3,380 $ 6,710 $ 11,246 $ 14,541
Rental income 11,377 10,852 34,564 33,018
Facility operating revenue 22,454 21,296 65,950 63,493
$ 37,211 $ 38,858 $ 111,760 $ 111,052
Expenses:
Interest 2,034 2,101 6,104 6,500
Depreciation 2,928 3,039 8,792 9,072
Amortization of loan costs 34 34 101 140
Legal expense 166 45 392 367
Franchise, excise and other taxes 53 102 187 387
General and administrative 1,159 1,034 3,476 3,205
Loan and realty losses --- 2,852 --- 11,402
Facility operating expense 20,628 19,746 61,601 59,340
$ 27,002 $ 28,953 $ 80,653 $ 90,413
Income Before Non-Operating Income 10,209 9,905 31,107 20,639
Non-operating income (investments and other) 3,170 2,287 8,394 19,831
Income From Continuing Operations $ 13,379 $ 12,192 $ 39,501 $ 40,470
Discontinued Operations:
Operating income from discontinued operations --- 323 464 906
Net gain on sale of real estate --- 25 5,814 773
$ --- $ 348 $ 6,278 $ 1,679
Net Income $ 13,379 $ 12,540 $ 45,779 $ 42,149
Weighted average common shares outstanding
Basic 27,699,239 27,741,424 27,760,247 27,676,367
Diluted 27,723,570 27,860,177 27,778,983 27,829,214
Earnings per share:
Basic:
Income from continuing operations $ .48 $ .44 $ 1.42 $ 1.46
Discontinued operations --- .01 .23 .06
Net income .48 .45 1.65 1.52
Diluted:
Income from continuing operations $ .48 $ .44 $ 1.42 $ 1.46
Discontinued operations --- .01 .23 .06
Net income .48 .45 1.65 1.52
Funds from operations
Basic $ 16,034 $ 15,383 $ 48,028 $ 48,065
Diluted 16,034 15,400 48,028 48,131
Funds from operations per common share
Basic $ .58 $ .55 $ 1.73 $ 1.74
Diluted .58 .55 1.73 1.73
Dividends per common share $ .48 $ .45 $ 1.44 $ 1.35


Balance Sheet Data
(in thousands) Sept. 30 December 31
2006 2005
Real estate properties, net $ 237,284 $ 263,129
Mortgages receivable, net 112,936 118,800
Preferred stock investment 38,132 38,132
Cash and marketable securities 177,718 152,022
Debt 114,946 117,252
Convertible debt --- 201
Stockholders' equity 430,701 424,968


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Page 3 NHI's third 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 Nine Months Ended
September 30 September 30
2006 2005 2006 2005
(in thousands, except share and per share amounts)
Net income $ 13,379  $ 12,540 $ 45,779 $ 42,149
Elimination of non-cash items in net income:
Real estate depreciation 2,655  2,758 7,924 8,167
Real estate depreciation in discontinued operations --- 110 139 393
Gain on sale of real estate --- (25) (5,814) (2,644)
Basic funds from operations 16,034  15,383 48,028  48,065
Interest on convertible subordinated debentures --- 17 --- 66
Diluted funds from operations $ 16,034 $ 15,400 $ 48,028 $ 48,131
Basic funds from operations per share $ .58 $ .55 $ 1.73 $ 1.74
Diluted funds from operations per share $ .58 $ .55 $ 1.73 $ 1.73
Shares for basic funds from operations per share 27,699,239 27,741,424 27,760,247 27,676,367
Shares for diluted funds from operations per share 27,723,570 27,860,177 27,778,983 27,829,214


(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 third quarter income



National Health Investors, Inc. Portfolio Summary September 30, 2006
Portfolio Statistics Investment
Properties Investment Percentage
Real Estate Properties 90 $237,284,000 70%
Mortgages and Notes Receivables 53 103,761,000 30%
Total Real Estate Portfolio 143 $341,045,000 100%
Real Estate Properties Properties Beds Investments
  Nursing Homes 66 8,557 $151,532,000
  Assisted Living 14 1,161 58,650,000
  Medical Office Buildings 4 124,427 sq.ft. 10,092,000
  Retirement Homes 5 560 10,024,000
  Hospitals 1 55 6,986,000
  Total Real Estate Properties 90   $237,284,000
Mortgages and Notes Receivable Properties Beds Investments
  Nursing Homes 35 3,941 $97,639,000
  Retirement Homes 1 60 1,949,000
  Developmentally Disabled 17 108 4,173,000
    Total Mortgages and Notes Receivable 53   $103,761,000
  Total Real Estate Portfolio 143   $341,045,000
         
Summary of Facilities by Type:      
      Percentage of Total
    Properties Total Dollars Dollars
  Nursing Homes 101 73.06% $249,171,000
  Assisted Living 14 17.20% 58,650,000
  Medical Office Buildings 4 2.96% 10,092,000
  Retirement Homes 6 3.51% 11,973,000
  Hospitals 1 2.05% 6,986,000
  Developmentally Disabled 17 1.22% 4,173,000
  Total Real Estate Portfolio  143 100.00% $341,045,000


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Page 5 NHI's third quarter income



Portfolio by Operator Type      
    # of Percentage of Total
    Properties Total Dollars Dollars
  Public 62 26.81% $ 91,441,000
  Regional 67 60.49% 206,306,000
  Small Operator 14 12.70% 43,298,000
    Total Real Estate Portfolio 143 100.00% $341,045,000
         
Public Operators Percentage
Of Total Dollar
Portfolio Amount
National HealthCare Corp. 14.24% $48,563,000
Community Health Systems, Inc. 3.81% 13,008,000
Sunrise Senior Living Services 3.82% 13,011,000
Sun Healthcare 2.53% 8,616,000
Res-Care, Inc. 1.22% 4,173,000
HCA-The Healthcare Company 1.19% 4,070,000
Total Public Operators 26.81% $91,441,000




National Health Investors, Inc. Summary of Facilities by State September 30, 2006
Percent
Acut Dev. Asst. Retir Investment Total
LTC Care MO Disab Livin ment Tota Amount Portfolio
Florida 15 1 14 4 34 $83,017,000 24.34%
Texas 19 2 1 22 74,421,000 21.82%
Tennessee 20 3 3 2 28 32,919,000 9.65%
Missouri 8 1 9 18,952,000 5.56%
New Jersey 0 1 1 13,011,000 3.82%
Virginia 8 8 19,936,000 5.85%
Arizona 1 4 5 18,087,000 5.30%
New Hampshire 3 1 4 14,167,000 4.15%
Georgia 7 7 13,711,000 4.02%
Massachusetts 4 4 10,568,000 3.10%
Kansas 7 7 11,109,000 3.26%
Kentucky 2 1 3 8,034,000 2.36%
South Carolina 3 1 4 7,442,000 2.18%
Idaho 1 1 2 5,227,000 1.53%
Pennsylvania 0 1 1 4,293,000 1.26%
Wisconsin 1 1 2,573,000 0.75%
Alabama 2 2 2,091,000 0.61%
Illinois 0 1 1 1,487,000 0.44%
101 1 4 17 14 6 143 $341,045,000 100.00%


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