Exhibit 99
For Release: April 26, 2006
Contact: Gerald Coggin, Sr. VP of Corporate Relations
Phone: (615) 890-2020 ext. 1405
NHR reports first quarter income
MURFREESBORO, Tenn. -- National Health Realty, Inc., (AMEX: NHR) a long-term health care real estate investment trust, announced net income for the quarter ended March 31, 2006 of $3,103,000 compared to $2,783,000 last year, an increase of 11.5%.
For the three months ended March 31, net income per share was 31 cents basic and diluted compared to 29 cents basic and 28 cents diluted, for the first quarter last year. Basic and diluted funds from operations were 44 cents per share compared to 42 cents basic and diluted, last year. Revenues for the quarter totaled $5,163,000 compared to $4,900,000 last year.
Highlights for the quarter included the renegotiation of our revolving line of credit, resulting in a .5% reduction in the spread over LIBOR. This reduction in spread, however, was offset by an increase in general interest rates. Additionally, we collected approximately $183,000 of percentage rent attributable to 2005 that, in accordance with generally accepted accounting principles, is not recognizable until the first quarter of this year, with such amount being included in quarterly revenue.
NHR owns the real property of 16 skilled nursing facilities, six assisted living centers and one retirement center. NHR also owns first and second mortgage notes having a carrying value of $13.0 million. These notes are secured by operating skilled nursing facilities and other health care properties. 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 share amounts) | Three Months Ended March 31 |
| | 2006 | | | 2005 |
| Revenues: | | | | | |
| Rental income | $ | 4,628 | | $ | 4,307 |
| Mortgage interest income | | 535 | | | 593 |
| | 5,163 | | | 4,900 |
| Expenses: | | | | | |
| Interest | | 149 | | | 164 |
| Depreciation of real estate | | 1,423 | | | 1,468 |
| General and administrative | | 235 | | | 266 |
| | 1,807 | | | 1,898 |
| | | | | |
| Income before minority interest in consolidated | | | | | |
| consolidated subsidiaries and | | | | | |
| non-operating income | | 3,356 | | | 3,002 |
| | | | | |
| Non-operating Income (investment & | | | | | |
| interest income) | | 125 | | | 123 |
| | | | | |
| Minority interest in consolidated subsidiaries | | (378) | | | (342) |
| | | | | |
| Net Income | $ | 3,103 | | $ | 2,783 |
| | | | | |
| Net income per common share: | | | | | |
| Basic | $ | .31 | | $ | .29 |
| Diluted | $ | .31 | | $ | .28 |
| | | | | |
| Funds from operations: | | | | | |
| Basic | $ | 4,371 | | $ | 4,090 |
| Diluted | $ | 4,371 | | $ | 4,090 |
| | | | | |
| Funds from operations per share: | | | | | |
| Basic | $ | .44 | | $ | .42 |
| Diluted | $ | .44 | | $ | .42 |
| | | | | |
| Weighted average common share: | | | | | |
| Basic | | 9,939,463 | | | 9,712,655 |
| Diluted | | 9,946,538 | | | 9,774,491 |
| | | | | |
| Common dividends declared | $ | .3325 | | $ | .3325 |
| | | | | |
| | | | | |
| Balance Sheet Data | | March 31 | | | Dec. 31 |
| (in thousands) | | 2006 | | | 2005 |
| Real estate properties, net | $ | 113,631 | | $ | 115,054 |
| Mortgages receivable | | 13,009 | | | 13,207 |
| Long-term debt | | 10,025 | | | 10,450 |
| Stockholders' equity | | 112,061 | | | 112,390 |
| | | | | |
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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 |
| March 31 |
| | 2006 | | 2005 |
| (in thousands) | | | | |
| Net income applicable to common stockholders' | $ | 3,103 | $ | 2,783 |
| Adjustments: | | | | |
| Real estate depreciation | | 1,423 | | 1,468 |
| Minority interest in NHR/OP, L.P. share of add back for | | | | |
| real estate related depreciation | | (155) | | (161) |
| Funds from operations applicable to common stockholders | $ | 4,371 | $ | 4,090 |
| | | | |
| Basic funds from operations per share | $ | .44 | $ | .42 |
| Diluted funds from operations per share | $ | .44 | $ | .42 |
| | | | |
| Weighted average shares: | | | | |
| Basic | | 9,939,463 | | 9,712,655 |
| Diluted | | 9,946,538 | | 9,774,491 |
(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 | March 31, 2006 |
| Portfolio Statistics | | | Investment |
| | Properties | Investment | Percentage |
| Equity Ownership | 23 | $ 113,631,000 | 90% |
| Mortgage Loan Receivables | 5 | 13,009,000 | 10% |
| Total Real Estate Portfolio | 28 | $ 126,640,000 | 100% |
| | | | |
| Equity Ownership | Properties | Beds | Investments |
| Nursing Homes | 16 | 1,908 | $ 69,064,000 |
| Assisted Living | 6 | 488 | 30,422,000 |
| Independent Living | 1 | 58 | 14,145,000 |
| | 23 | 2,454 | $ 113,631,000 |
| | | | |
| Mortgage Loan Receivables | Properties | Beds | Investment |
| Nursing Homes | 5 | 714 | $ 13,009,000 |
| | | | |
| Summary of Facilities by Type | | | |
| | | Percentage of | Total |
| | Properties | Total Dollars | Dollars |
| Nursing Homes | 21 | 64.81% | $ 82,073,000 |
| Assisted Living | 6 | 24.02% | 30,422,000 |
| Independent Living | 1 | 11.17% | 14,145,000 |
| | 28 | 100.00% | $ 126,640,000 |
| SUMMARY OF FACILITIES BY STATE: | | |
| | | | | | Percent |
| | | Assisted | Retire- | Investment | Total |
| | LTC | Living | ment | Amount | Portfolio |
| 1 | Florida | 8 | 3 | | $ 56,207,000 | 44.38% |
| 2 | Tennessee | 2 | 2 | 1 | 33,449,000 | 26.41% |
| 3 | South Carolina | 7 | | | 27,498,000 | 21.71% |
| 4 | Indiana | 3 | | | 3,799,000 | 3.00% |
| 5 | Alabama | | 1 | | 3,379,000 | 2.67% |
| 6 | Missouri | 1 | | | 2,308,000 | 1.82% |
| | 21 | 6 | 1 | $126,640,000 | 100.00% |
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