Real Estate	6 Months Ended
Jun. 30, 2011
Real Estate
Real Estate	NOTE 2. REAL ESTATE At June 30, 2011, exclusive of assets held for sale, we had investments in 92 health care real estate properties leased to operators, of which 41 properties were leased to National HealthCare Corporation ("NHC"), a publicly-held company and our largest customer. The 41 properties leased to NHC include four facilities subleased to and operated by other companies, the lease payments of which are guaranteed by NHC. Our current lease with NHC expires December 31, 2021 (excluding 3 additional 5-year renewal options). For the six months ended June 30, 2011, rental income from continuing operations was $37,667,000, of which $18,317,000 (48.6%) was recognized from NHC consisting of base rent of $16,850,000 and percentage rent of $1,467,000, $635,000 of which related to final determination of NHC's 2010 revenues. For the six months ended June 30, 2010, rental income from continuing operations was $35,687,000, of which $17,849,000 (50%) was recognized from NHC consisting of base rent of $16,850,000 and percentage rent of $999,000, $485,000 of which related to final determination of NHC's 2009 revenues. For purposes of the percentage rent calculation described in the master lease agreement, NHC's annual revenue by facility for a given year is certified to NHI by March 31^st of the following year. Acquisitions and New Leases of Real Estate In May 2011, we completed a $15,000,000 purchase of four assisted living facilities totaling 183 units in Louisiana. The facilities, which have an average age of 13 years, are being leased to Selah Management Group over 15 years at an initial lease amount of $1,275,000 per year plus annual fixed escalators. Planned or Completed Dispositions of Certain Real Estate In December 2009, we entered into an agreement with our current lessee, affiliates of Fundamental Long Term Care Holdings, LLC ("Fundamental"), to sell six skilled nursing facilities in Texas. The planned sale of these facilities meets the accounting criteria as being held for sale and is expected to close when HUD financing is arranged by Fundamental. In January 2011, the first of these six facilities having a carrying value of $4,039,000 was sold for total cash proceeds of $4,500,000. As of June 30, 2011, the carrying value of $29,381,000 represented the lesser of the remaining five facilities' net book value or estimated fair value less cost to sell. We have reclassified the results of operations of these facilities as discontinued operations for all periods presented in our Condensed Consolidated Statements of Income. In December 2010, we agreed to the terms of sale with the current tenant of two medical office buildings. The sale of these facilities met the accounting criteria as being held for sale. At December 31, 2010, the carrying value of $3,433,000 represented the lesser of the properties' net book value or estimated fair value less cost to sell. We have reclassified the results of operations of these facilities as discontinued operations for all periods presented in our Condensed Consolidated Statements of Income. The sale transaction was completed in February 2011 with receipt of cash proceeds of $5,271,000. The summary of operating results of all facilities classified as discontinued operations is shown in Note 11.

Real Estate

6 Months Ended

Jun. 30, 2011

NOTE 2. REAL ESTATE

At June 30, 2011, exclusive of assets held for sale, we had investments in 92 health care real estate properties leased to operators, of which 41 properties were leased to National HealthCare Corporation ("NHC"), a publicly-held company and our largest customer. The 41 properties leased to NHC include four facilities subleased to and operated by other companies, the lease payments of which are guaranteed by NHC. Our current lease with NHC expires December 31, 2021 (excluding 3 additional 5-year renewal options). For the six months ended June 30, 2011, rental income from continuing operations was $37,667,000, of which $18,317,000 (48.6%) was recognized from NHC consisting of base rent of $16,850,000 and percentage rent of $1,467,000, $635,000 of which related to final determination of NHC's 2010 revenues. For the six months ended June 30, 2010, rental income from continuing operations was $35,687,000, of which $17,849,000 (50%) was recognized from NHC consisting of base rent of $16,850,000 and percentage rent of $999,000, $485,000 of which related to final determination of NHC's 2009 revenues. For purposes of the percentage rent calculation described in the master lease agreement, NHC's annual revenue by facility for a given year is certified to NHI by March 31^st of the following year.

Acquisitions and New Leases of Real Estate

In May 2011, we completed a $15,000,000 purchase of four assisted living facilities totaling 183 units in Louisiana. The facilities, which have an average age of 13 years, are being leased to Selah Management Group over 15 years at an initial lease amount of $1,275,000 per year plus annual fixed escalators.

Planned or Completed Dispositions of Certain Real Estate

In December 2009, we entered into an agreement with our current lessee, affiliates of Fundamental Long Term Care Holdings, LLC ("Fundamental"), to sell six skilled nursing facilities in Texas. The planned sale of these facilities meets the accounting criteria as being held for sale and is expected to close when HUD financing is arranged by Fundamental. In January 2011, the first of these six facilities having a carrying value of $4,039,000 was sold for total cash proceeds of $4,500,000. As of June 30, 2011, the carrying value of $29,381,000 represented the lesser of the remaining five facilities' net book value or estimated fair value less cost to sell. We have reclassified the results of operations of these facilities as discontinued operations for all periods presented in our Condensed Consolidated Statements of Income.

In December 2010, we agreed to the terms of sale with the current tenant of two medical office buildings. The sale of these facilities met the accounting criteria as being held for sale. At December 31, 2010, the carrying value of $3,433,000 represented the lesser of the properties' net book value or estimated fair value less cost to sell. We have reclassified the results of operations of these facilities as discontinued operations for all periods presented in our Condensed Consolidated Statements of Income. The sale transaction was completed in February 2011 with receipt of cash proceeds of $5,271,000.

The summary of operating results of all facilities classified as discontinued operations is shown in Note 11.