EX-99 2 exhibit99q3earningspr08.htm EXHIBIT 99: PRESS RELEASE DATED NOVEMBER 10, 2008 Press Release: November 10, 2008



EXHIBIT 99



For Release: November 10, 2008

Contact: Roger R. Hopkins, Chief Accounting Officer

Phone: (615) 890-9100

NHI reports third quarter income

MURFREESBORO, Tenn. - National Health Investors, Inc. (NYSE:NHI) announced its net income and funds from operations (“FFO”) for the three and nine month periods ended September 30, 2008.

Net income for the three months ended September 30, 2008 was $15,951,000 or $.57 per basic and diluted common share.

Net income previously reported for the same period in 2007 was $36,538,000 or $1.32 per basic and $1.31 per diluted common share and included a recovery (income) of an earlier writedown of a mortgage loan receivable of $21,300,000 or $.77 per basic and $.76 per diluted common share.  Adjusting for the above-mentioned item, net income for the same period in 2007 would have been $15,238,000 or $.55 per basic and diluted common share.

FFO for the three months ended September 30, 2008 was $17,869,000, or $.64 per basic and diluted common share.  

FFO previously reported for the same period in 2007 was $39,486,000 or $1.43 per basic and $1.42 per diluted common share and included the recovery (income) item above of $23,100,000 or $.77 per basic and $.76 per diluted common share.  Adjusting for this item, FFO for the same period in 2007 would have been $18,186,000 or $.66 per basic and diluted common share.

Net income for the nine months ended September 30, 2008 was $44,143,000 or $1.59 per basic and diluted common share.

Net income previously reported for the same period in 2007 was $67,000,000 or $2.42 per basic and $2.41 per diluted common share and included items (income) favorably impacting net income of $24,179,000 or $.88 per basic and $.87 per diluted common share attributable to recoveries of earlier writedowns of mortgage loan receivables, gains from realty sales and a gain from a note collection.  Adjusting for these items, net income for the same period in 2007 would have been $42,821,000 or $1.54 per basic and diluted common share.

FFO for the nine months ended September 30, 2008 was $49,910,000 or $1.80 per basic and diluted common share.  

FFO previously reported for the same period in 2007 was $75,177,000 or $2.71 per basic and $2.70 per diluted common share and included the items above (excluding realty sales not in FFO) of $23,468,000 or $.85 per basic and $.84 per diluted common share. Adjusting for these items, FFO for the same period in 2007 would have been $51,709,000 or $1.86 per basic and diluted common share.

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.

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Page 2 NHI’s Third Quarter 2008 Results


Condensed Statements of Income

(in thousands, except share and per share amounts)

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30

 

September 30

 

 

 

2008

 

2007

 

2008

 

2007

Revenues:

 

 

 

 

 

 

 

 

Mortgage interest income

 $              2,400

 

 $              2,599

 

 $              7,214

 

 $              9,092

 

Rental income

               13,220

 

               12,989

 

               40,017

 

               38,052

 

 

 

 $            15,620

 

 $             15,588

 

 $            47,231

 

 $            47,144

Expenses:

 

 

 

 

 

 

 

 

Interest expense

 $                   62

 

 $                 465

 

 $                 247

 

 $              4,475

 

Depreciation

                 1,925

 

                 2,083

 

                 5,936

 

                 6,163

 

Amortization of loan costs

                       3

 

                       3

 

                     11

 

                     71

 

Legal expense

                    310

 

                    161

 

                 1,041

 

                    554

 

Franchise, excise and other taxes

                    108

 

                      68

 

                    525

 

                    330

 

General and administrative

                    453

 

                 1,227

 

                 2,241

 

                 4,438

 

Loan and realty losses (recoveries)

                        -

 

             (21,300)

 

                        -

 

             (23,000)

 

 

 

 $              2,861

 

 $          (17,293)

 

 $            10,001

 

 $             (6969)

 

 

 

 

 

 

 

 

 

 

Income Before Non-Operating Income

 $            12,759

 

 $            32,881

 

 $            37,230

 

 $            54,113

 

Non-operating income (investment Interest and other)

                    701

 

                 2,556

 

                 4,464

 

                 9,010

Income From Continuing Operations

 $            13,460

 

 $            35,437

 

 $            41,694

 

 $            63,123

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

 

 

 

 

 

 

 

Income from operations - discontinued

                 2,491

 

                 1,101

 

                 2,449

 

                 3,208

 

Net gain on sale of real estate

                        -

 

                        -

 

                        -

 

                    669

 

 

 

 $              2,491

 

 $              1,101

 

 $              2,449

 

 $              3,877

 

 

 

 

 

 

 

 

 

 

Net income

 $            15,951

 

 $            36,538

 

 $            44,143

 

 $            67,000

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

         27,767,394

 

   27,703,539

 

         27,750,377

 

     27,703,439

 

Diluted

         27,785,708

 

    27,786,198

 

         27,783,141

 

     27,787,604

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 $                0.48

 

 $                1.28

 

 $                1.50

 

 $                2.28

 

 

Discontinued operations

                   0.09

 

                   0.04

 

                   0.09

 

                   0.14

 

 

Net income available to common stockholders

 $                0.57

 

 $                1.32

 

 $                1.59

 

 $                2.42

 

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 $                0.48

 

 $                1.27

 

 $                1.50

 

 $                2.27

 

 

Discontinued operations

                   0.09

 

                   0.04

 

                   0.09

 

                   0.14

 

 

Net income available to common stockholders

 $                0.57

 

 $                1.31

 

 $                1.59

 

 $                2.41

 

 

 

 

 

 

 

 

 

 

Funds from operations

 

 

 

 

 

 

 

 

Basic

 $            17,869

 

 $            39,486

 

 $            49,910

 

 $            75,177

 

Diluted

 $            17,869

 

 $            39,486

 

 $            49,910

 

 $            75,177

 

 

 

 

 

 

 

 

 

 

Funds from operations per common share

 

 

 

 

 

 

 

 

Basic

 $                0.64

 

 $                1.43

 

 $                1.80

 

 $                2.71

 

Diluted

 $                0.64

 

 $                1.42

 

 $                1.80

 

 $                2.70

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 $                0.55

 

 $                0.50

 

 $                1.65

 

 $                1.50

 

 

 

 

 

 

 

 

 

 

In accordance with Statement of Financial Accounting Standard No. 144, the results of operations for facilities meeting the accounting criteria as being sold or held for sale, including the gain or loss on such sales, have been reported in the current and prior periods as discontinued operations.  The reclassifications to retroactively reflect the disposition of these facilities had no impact on previously reported net income.


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Page 3 NHI’s Third Quarter 2008 Results


Selected Balance Sheet Data

(in thousands)

 

 

 

 

September 30

 

December 31

 

2008

 

2007

Real estate properties, net

$      183,283 

 

 $    187,455

Mortgages receivable, net

109,935 

 

       141,655

Assets held for sale, net

629 

 

---

Preferred stock investment

38,132 

 

         38,132

Cash and marketable securities

136,060 

 

       131,172

Notes and bonds payable

5,705 

 

           9,512

Stockholders' equity

446,256 

 

       446,138


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

 

Nine Months Ended

 

 

September 30

 

September 30

 

 

2008

 

2007

 

2008

 

2007

Net income

         15,951

 

         36,538

 

       44,143

 

        67,000

Elimination of non-cash items in net income:

 

 

 

 

 

 

 

 

Real estate depreciation

          1,905

 

          2,201

 

         5,728

 

          6,719

 

Real estate depreciation in discontinued operations

               13

 

             747

 

              39

 

          2,169

 

Gain on sale of real estate-continuing operations

                 -

 

                 -

 

                -

 

             (42)

 

Gain on sale of real estate-discontinued operations

                 -

 

                 -

 

            

 

           (669)

Basic funds from operations

         17,869

 

         39,486

 

       49,910

 

        75,177

 

 

 

 

 

 

 

 

 

Other Adjustments

                 -

 

                 -

 

                -

 

                 -

 

 

 

 

 

 

 

 

 

Diluted funds from operations

 $      17,869

 

 $      39,486

 

 $    49,910

 

 $     75,177

 

 

 

 

 

 

 

 

 

Basic funds from operations per share

 $         0.64

 

 $         1.43

 

 $        1.80

 

 $         2.71

Diluted funds from operations per share

 $         0.64

 

 $         1.42

 

 $        1.80

 

 $         2.70

 

 

 

 

 

 

 

 

 

Shares for basic funds from operations per share

  27,767,394

 

  27,703,539

 

27,750,377

 

 27,703,439

Shares for diluted funds from operations per share

  27,785,708

 

  27,786,198

 

27,783,141

 

 27,787,604


(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 2008 Results


National Health Investors, Inc.     Portfolio Summary      September 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portfolio Statistics

 

Investment

 

 

 

Properties

Percentage

Investments

 

Real Estate Properties

73

63%

 $ 183,912,000

 

Mortgages and Notes Receivables

51

37%

109,935,000

 

     Total Real Estate Portfolio

124

100.0%

 $ 293,847,000

 

 

 

 

 

Real Estate Properties

Properties

Beds

Investments

 

Long term Care Centers

50

                6,923

 $ 104,164,000

 

Assisted Living Facilities

14

                1,133

       56,520,000

 

Medical Office Buildings

4

 124,427 sq.ft.

         9,242,000

 

Independent Living Facilities

4

                    458

         7,621,000

 

Hospitals

1

                      55

         6,365,000

 

    Total Real Estate Properties

73

 

 $ 183,912,000

 

 

 

 

 

Mortgages and Notes Receivables

Properties

Beds

Investments

 

Long term Care Centers

34

                3,581

 $ 106,133,000

 

Developmentally Disabled

17

                    108

         3,802,000

 

    Total Mortgages and Notes Receivable

51

 

 $ 109,935,000

 

        Total Real Estate Portfolio

124

 

 $ 293,847,000

 

 

 

 

 

 

 

 

 

 

Summary of Facilities by Type:

 

 

 

 

 

 

Percentage of

Total

 

 

Properties

Total Dollars

Dollars

 

Long term Care Centers

84

71.6%

 $ 210,297,000

 

Assisted Living Facilities

14

19.2%

       56,520,000

 

Medical Office Buildings

4

3.1%

         9,242,000

 

Independent Living Facilities

4

2.6%

         7,621,000

 

Hospitals

1

2.2%

         6,365,000

 

Developmentally Disabled

17

1.3%

         3,802,000

 

    Total Real Estate Portfolio

124

100.0%

 $ 293,847,000

 

 

 

 

 



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Page 5 NHI’s Third Quarter 2008 Results


Portfolio by Operator Type

 

 

 

 

 

# of

Percentage of

Total

 

 

Properties

Total Dollars

Dollars

 

Regional

48

57.8%

 $ 169,979,000

 

Public

65

32.1%

       94,273,000

 

Small Operator

11

10.1%

       29,595,000

 

 

124

100.0%

 $ 293,847,000

 

 

 

 

 



Public Operators

 

 

 

Percentage

 

 

 

Dollar

 

Of Total

 

 

 

Amount

 

Portfolio

 

National HealthCare Corp.

 $    58,187,000

 

19.8%

 

Sunrise Senior Living Services

      12,361,000

 

4.2%

 

Community Health Systems, Inc.

      11,910,000

 

4.1%

 

Sun Healthcare

        8,013,000

 

2.7%

 

Res-Care, Inc.

        3,802,000

 

1.3%

 

    Total Public Operators

 $    94,273,000

 

32.1%



National Health Investors, Inc.    Summary of Facilities by State    September 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent

 

 

 

Acute

 

Dev.

Asst.

Retire-

 

Investment

Total

 

 

LTC

Care

MOB

Disab.

Living

ment

Total

Amount

Portfolio

 

Florida

11

 

1

14

4

 

30

 $   72,568,000

24.7%

 

Texas

8

 

2

 

 

 

10

     47,729,000

16.2%

 

Tennessee

20

 

 

3

3

2

28

     26,454,000

9.0%

 

Missouri

8

 

 

 

 

1

9

     20,652,000

7.0%

 

Virginia

8

 

 

 

 

 

8

     19,353,000

6.6%

 

Arizona

1

 

 

 

4

 

5

     17,025,000

5.8%

 

Kansas

6

 

 

 

 

 

6

     14,047,000

4.8%

 

Massachusetts

4

 

 

 

 

 

4

     14,908,000

5.1%

 

New Jersey

 

 

 

 

1

 

1

     12,361,000

4.2%

 

Georgia

6

 

 

 

 

 

6

       9,539,000

3.2%

 

New Hampshire

3

 

 

 

 

 

3

       9,051,000

3.1%

 

Kentucky

2

1

 

 

 

 

3

       7,243,000

2.5%

 

South Carolina

4

 

 

 

1

 

5

     10,685,000

3.6%

 

Idaho

1

 

 

 

 

1

2

       4,873,000

1.7%

 

Pennsylvania

 

 

 

 

1

 

1

       4,094,000

1.4%

 

Alabama

2

 

 

 

 

 

2

       1,886,000

0.6%

 

Illinois

 

 

1

 

 

 

1

       1,379,000

0.5%

 

 

84

1

4

17

14

4

124

 $ 293,847,000

100.0%




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