Exhibit 99
For Release: January 24, 2006
Contact: Gerald Coggin, Sr. VP Investor Relations
Phone: (615) 890-2020 ext. 1405
NHR reports year end results
MURFREESBORO, Tenn. -- National Health Realty, Inc., (AMEX: NHR) a real estate investment trust specializing in long-term health care investments, announced funds from operations for the year ended Dec. 31, 2005 of $16,509,000 or $1.68 basic and $1.67 diluted compared to $16,643,000 or $1.73 basic and $1.69 diluted, last year. Dividends declared for 2005 totaled $1.43 compared to $1.41 for 2004 representing a dividend payout ratio of 85.1% and 81.5%, respectively.
For the year ended Dec. 31, net income was $11,277,000 compared to $11,435,000 for the same period last year. Net income per share was $1.14 basic and $1.14 diluted compared to $1.19 basic and $1.16 diluted last year. Revenues for the year totaled $19,772,000 compared to $20,191,000 in the prior year.
For the quarter ended Dec. 31, funds from operations were $4,168,000 or 42 cents basic and 42 cents diluted compared to $4,168,000 or 43 cents basic and 42 cents diluted, last year.
For the quarter ended Dec. 31, net income was $2,861,000 or 29 cents basic and 29 cents diluted, compared to $2,936,000, or 31 cents basic and 30 cents diluted, last year. Revenues for the quarter totaled $4,986,000 compared to $5,003,000 in 2004.
The decrease in mortgage interest income is primarily the result of prepayments received on mortgages receivable totaling $30,304,000 in February 2004. We prepaid $4,000,000 of long-term debt from cash flows during the fourth quarter of 2005.
NHR owns the real property of 16 skilled nursing facilities, six assisted living centers and one independent living center. NHR also owns first and second mortgage notes totaling $13.2 million. These notes are secured by operating skilled nursing facilities and other health care properties. Additional information including NHR's most recent press releases may be obtained on NHR's web site atwww.nationalhealthrealty.com. The company trades on the American Stock Exchange with the symbol NHR.
Statements in this press release that are not historical facts are forward looking statements. NHR cautions investors that any forward-looking statements made involve risks and uncertainties and are not guarantees of future performance. All forward-looking statements represent NHR's best judgment as of the date of this release.
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Page 2 NHR earnings
| Condensed Statements of Income | | | | | | | | | | |
| (in thousands except share and per | | Three Months Ended Dec. 31 | | | | Year Ended Dec. 31 |
| | 2005 | | | 2004 | | | 2005 | | 2004 |
| Revenues: | | | | | | | | | | |
| Rental income | $ | 4,375 | | $ | 4,305 | | $ | 17,359 | $ | 17,255 |
| Mortgage interest income | | 611 | | | 593 | | | 2,413 | | 2,831 |
| Gain on sale of real estate | | --- | | | 105 | | | --- | | 105 |
| | 4,986 | | | 5,003 | | | 19,772 | | 20,191 |
| Expenses: | | | | | | | | | | |
| Interest | | 182 | | | 150 | | | 721 | | 781 |
| Depreciation of real estate | | 1,467 | | | 1,492 | | | 5,872 | | 5,966 |
| Amortization of loan costs | | --- | | | --- | | | --- | | 8 |
| General and administrative | | 279 | | | 214 | | | 1,095 | | 1,027 |
| | 1,928 | | | 1,856 | | | 7,688 | | 7,782 |
| | | | | | | | | | |
| Income before minority interest in | | | | | | | | | | |
| consolidated subsidiaries and | | | | | | | | | | |
| non-operating income | | 3,058 | | | 3,147 | | | 12,084 | | 12,409 |
| | | | | | | | | | |
| Non-operating Income (investment and | | | | | | | | | | |
| interest income) | | 152 | | | 145 | | | 569 | | 456 |
| | | | | | | | | | |
| Minority interest in consolidated | | (349) | | | (356) | | | (1,376) | | (1,430) |
| Net Income | $ | 2,861 | | $ | 2,936 | | $ | 11,277 | $ | 11,435 |
| | | | | | | | | | |
| Net income per common share: | | | | | | | | | | |
| Basic | $ | .29 | | $ | .31 | | $ | 1.14 | $ | 1.19 |
| Diluted | $ | .29 | | $ | .30 | | $ | 1.14 | $ | 1.16 |
| | | | | | | | | | |
| Funds from operations | | | | | | | | | | |
| Basic | $ | 4,168 | | $ | 4,168 | | $ | 16,509 | $ | 16,643 |
| Diluted | $ | 4,168 | | $ | 4,168 | | $ | 16,509 | $ | 16,643 |
| | | | | | | | | | |
| Funds from operations per share | | | | | | | | | | |
| Basic | $ | .42 | | $ | .43 | | $ | 1.68 | $ | 1.73 |
| Diluted | $ | .42 | | $ | .42 | | $ | 1.67 | $ | 1.69 |
| | | | | | | | | | |
| Weighted average common shares | | | | | | | | | | |
| Basic | | 9,939,463 | | | 9,598,964 | | | 9,853,490 | | 9,594,852 |
| Diluted | | 9,945,549 | | | 9,865,635 | | | 9,881,484 | | 9,822,823 |
| | | | | | | | | | |
| Common dividends declared per share | $ | .4325 | | $ | .4125 | | $ | 1.4300 | $ | 1.4100 |
| | | | | | | | | | |
| | | | | | | | | | |
| Balance Sheet Data | | Dec. 31 | | | Dec. 31 | | | | | |
| (in thousands) | | 2005 | | | 2004 | | | | | |
| Real estate properties, net | $ | 115,054 | | $ | 120,926 | | | | | |
| Mortgages receivable | | 13,207 | | | 13,553 | | | | | |
| Long-term debt | | 10,450 | | | 16,150 | | | | | |
| Stockholder's equity | $ | 112,390 | | $ | 113,998 | | | | | |
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Page 3 NHR earnings
Reconciliation of Funds from Operations(1)
The following table reconciles net income applicable to common stockholders to funds from operations applicable to common stockholders:
| Three Months Ended | Twelve Months Ended |
| December 31 | December 31 |
| (in thousands) | 2005 | 2004 | 2005 | 2004 |
| | | | | | | | |
| Net income applicable to common stockholder's | $ | 2,861 | $ | 2,936 | $ | 11,277 | $ | 11,435 |
| Adjustments: | | | | | | | | |
| Real estate depreciation | | 1,467 | | 1,492 | | 5,872 | | 5,966 |
| Gain on sale of real estate | | --- | | (105) | | --- | | (105) |
| Adjustment for minority interest-affiliates | | (160) | | (155) | | (640) | | (653) |
| Funds from operations applicable to common stockholders | $ | 4,168 | $ | 4,168 | $ | 16,509 | $ | 16,643 |
| | | | | | | | |
| Basic funds from operations per share | $ | .42 | $ | .43 | $ | 1.68 | $ | 1.73 |
| Diluted funds from operations per share | $ | .42 | $ | .42 | $ | 1.67 | $ | 1.69 |
| | | | | | | | |
| Weighted average shares: | | | | | | | | |
| Basic | 9,939,463 | 9,598,964 | 9,853,490 | 9,594,852 |
| Diluted | 9,945,549 | 9,865,635 | 9,881,484 | 9,822,823 |
(1)We believe that funds from operations is an important supplemental measure of operating performance. We, therefore, disclose funds from operations, although it is a measurement that is not defined by accounting principles generally accepted in the United States. We generally use the National Association of Real Estate Investment Trusts (NAREIT) measure of funds from operations. We define funds from operations as income before extraordinary items adjusted for certain non-cash items, primarily real estate depreciation, less gains/losses on sales of facilities. 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. Funds from operations does not represent cash generated from operating activities as defined by accounting principles generally accepted in the United States (funds from operations does not include changes in operating assets and liabilities) and, therefore, should not be considered as an alternative to net income as the primary indicator of operating performance or to cash flow as a measure of liquidity.
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Page 4 NHR Earnings
| National Health Realty, Inc. | Portfolio Summary | December 31, 2005 |
| Portfolio Statistics | | | Investment |
| | Properties | Investment | Percentage |
| Equity Ownership | 23 | $ 115,054,000 | 90% |
| Mortgage Loan Receivables | 5 | 13,207,000 | 10% |
| Total Real Estate Portfolio | 28 | $ 128,261,000 | 100% |
| | | | |
| Equity Ownership | Properties | Beds | Investments |
| Nursing Homes | 16 | 1,908 | $ 69,980,000 |
| Assisted Living | 6 | 488 | 30,833,000 |
| Independent Living | 1 | 58 | 14,241,000 |
| | 23 | 2,454 | $ 115,054,000 |
| | | | |
| Mortgage Loan Receivables | Properties | Beds | Investment |
| Nursing Homes | 5 | 714 | $ 13,207,000 |
| | | | |
| Summary of Facilities by Type | | | |
| | | Percentage of | Total |
| | Properties | Total Dollars | Dollars |
| Nursing Homes | 21 | 64.86% | $ 83,187,000 |
| Assisted Living | 6 | 24.04% | 30,833,000 |
| Independent Living | 1 | 11.10% | 14,241,000 |
| | 28 | 100.00% | $ 128,261,000 |
| SUMMARY OF FACILITIES BY STATE: | | |
| | | | | | Percent |
| | | Asst | Retire- | Investment | Total |
| | LTC | Living | ment | Amount | Portfolio |
| 1 | Florida | 8 | 3 | | $ 56,994,000 | 44.44% |
| 2 | Tennessee | 2 | 2 | 1 | 33,758,000 | 26.32% |
| 3 | South Carolina | 7 | | | 27,853,000 | 21.71% |
| 4 | Indiana | 3 | | | 3,875,000 | 3.02% |
| 5 | Alabama | | 1 | | 3,434,000 | 2.68% |
| 6 | Missouri | 1 | | | 2,347,000 | 1.83% |
| | 21 | 6 | 1 | $128,261,000 | 100.00% |
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