Exhibit 99
For Release: August 2, 2006
Contact: Gerald Coggin, Senior VP of Corporate Relations
Phone: (615) 890-9100
NHI reports second quarter income
MURFREESBORO, Tenn. -- National Health Investors, Inc., (NYSE: NHI) announced net income for the second quarter ended June 30, 2006 of $19,780,000 or 71 cents per basic and diluted share compared to $12,815,000 or 46 cents per basic and diluted share for the same period in 2005. Income for the second quarter of 2006 included $5,877,000 or 21 cents per basic and diluted share of income attributable to gains from realty sales and mortgage prepayment penalties compared to $525,000 or two cents per basic and diluted share from realty sales gains and impairment writedowns on mortgage notes receivable in 2005.
Adjusting for the above-mentioned items, net income for the second quarter of 2006 would have been $13,903,000 or 50 cents per basic and diluted share compared to $12,290,000 or 44 cents per basic and diluted share for 2005, an increase of 13.1% and 13.6%, respectively.
Funds from operations, ("FFO") for the second quarter ended June 30, 2006 was $16,739,000 or 60 cents per basic and diluted share compared to $13,825,000 or 50 cents per basic and $13,846,000 or 50 cents per diluted share in 2005. Adjusting for the items mentioned in the first paragraph above, FFO basic for the second quarter of 2006 would have been $16,552,000 or 59 cents per basic share compared to $15,171,000 or 55 cents basic for 2005, an increase of 9.1% and 7.3%, respectively. FFO diluted for the second quarter of 2006, adjusted by the items mentioned above, would have been $16,552,000 or 59 cents compared to $15,192,000 or 55 cents per share for 2005, an increase of 8.9% and 7.3% respectively.
Net income for the six months ended June 30 was $32,400,000 or $1.17 per basic and diluted share compared to $29,609,000 or $1.07 per basic and diluted share for the same period in 2005.
For the six months ended June 30, FFO was $31,995,000 or $1.15 per basic and diluted share compared to $32,682,000 or $1.18 per basic and $32,731,000 or $1.18 per diluted share for the same period in 2005. Adjusting for the items mentioned in the first paragraph above, FFO for the six months ended June 30 would have been $31,700,000 or $1.14 per basic and diluted share compared to $29,506,000 or $1.07 per basic and $29,555,000 or $1.07 per diluted share for the same period in 2005.
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 atwww.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 second quarter income
| Condensed Statements of Income | | | | | | | | |
| (in thousands, except share and per share amounts) | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30 | | June 30 |
| Revenues: | | 2006 | | 2005 | | 2006 | | 2005 |
| Mortgage interest income | $ | 4,219 | $ | 3,924 | $ | 7,866 | $ | 7,831 |
| Rental income | | 11,597 | | 11,075 | | 23,187 | | 22,166 |
| Facility operating revenue | | 22,275 | | 21,636 | | 43,496 | | 42,197 |
| $ | 38,091 | $ | 36,635 | $ | 74,549 | $ | 72,194 |
| Expenses: | | | | | | | | |
| Interest | | 2,042 | | 1,929 | | 4,070 | | 4,399 |
| Depreciation | | 2,931 | | 3,031 | | 5,864 | | 6,033 |
| Amortization of loan costs | | 33 | | 34 | | 67 | | 106 |
| Legal expense | | 181 | | 175 | | 226 | | 322 |
| Franchise, excise and other taxes | | 65 | | 218 | | 134 | | 285 |
| General and administrative | | 1,145 | | 1,068 | | 2,317 | | 2,171 |
| Loan and realty losses | | --- | | 4,000 | | --- | | 8,550 |
| Facility operating expense | | 20,613 | | 20,219 | | 40,973 | | 39,594 |
| $ | 27,010 | $ | 30,674 | $ | 53,651 | $ | 61,460 |
| Income Before Non-Operating Income | | 11,081 | | 5,961 | | 20,898 | | 10,734 |
| Non-operating income (investments and other) | | 2,822 | | 6.568 | | 5,224 | | 17,544 |
| Income From Continuing Operations | $ | 13,903 | $ | 12,529 | $ | 26,122 | $ | 28,278 |
| Discontinued Operations: | | | | | | | | |
| Operating income from discontinued operations | | 187 | | 286 | | 464 | | 583 |
| Net gain on sale of real estate | | 5,690 | | --- | | 5,814 | | 748 |
| $ | 5,877 | $ | 286 | $ | 6,278 | $ | 1,331 |
| Net Income | $ | 19,780 | $ | 12,815 | $ | 32,400 | $ | 29,609 |
| | | | | | | | |
| Weighted average common shares outstanding | | | | | | | | |
| Basic | | 27,752,502 | | 27,705,245 | | 27,791,255 | | 27,643,300 |
| Diluted | | 27,768,307 | | 27,850,745 | | 27,807,194 | | 27,813,195 |
| | | | | | | | |
| Earnings per share: | | | | | | | | |
| Basic: | | | | | | | | |
| Income from continuing operations | $ | .50 | $ | .45 | $ | .94 | $ | 1.02 |
| Discontinued operations | | .21 | | .01 | | .23 | | .05 |
| Net income | | .71 | | .46 | | 1.17 | | 1.07 |
| | | | | | | | |
| Diluted: | | | | | | | | |
| Income from continuing operations | $ | .50 | $ | .45 | $ | .94 | $ | 1.02 |
| Discontinued operations | | .21 | | .01 | | .23 | | .05 |
| Net income | | .71 | | .46 | | 1.17 | | 1.07 |
| | | | | | | | |
| Funds from operations | | | | | | | | |
| Basic | $ | 16,739 | $ | 13,825 | $ | 31,995 | $ | 32,682 |
| Diluted | | 16,739 | | 13,846 | | 31,995 | | 32,731 |
| | | | | | | | |
| Funds from operations per common share | | | | | | | | |
| Basic | $ | .60 | $ | .50 | $ | 1.15 | $ | 1.18 |
| Diluted | | .60 | | .50 | | 1.15 | | 1.18 |
| | | | | | | | |
| Dividends per common share | $ | .48 | $ | .45 | $ | .96 | $ | .90 |
| Balance Sheet Data | | | | |
| (in thousands) | | June 30 | | December 31 |
| | | 2006 | | 2005 |
| Real estate properties, net | | $ | 239,811 | $ | 263,129 |
| Mortgages receivable, net | | | 114,988 | | 118,800 |
| Preferred stock investment | | | 38,132 | | 38,132 |
| Cash and marketable securities | | | 176,366 | | 152,022 |
| Debt | | | 115,938 | | 117,252 |
| Convertible debt | | | --- | | 201 |
| Stockholders' equity | | | 428,788 | | 424,968 |
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Page 3 NHI's second 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 | | Six Months Ended |
| | June 30 | | June 30 |
| | 2006 | | 2005 | | 2006 | | 2005 |
| (in thousands, except share and per share amounts) | | | | | | | | |
| | | | | | | | |
| Net income | $ | 19,780 | $ | 12,815 | $ | 32,400 | $ | 29,609 |
| Elimination of non-cash items in net income: | | | | | | | | |
| Real estate depreciation | | 2,649 | | 2,770 | | 5,270 | | 5,448 |
| Real estate depreciation in discontinued operations | | --- | | 111 | | 139 | | 244 |
| Gain on sale of real estate | | (5,690) | | (1,871) | | (5,814) | | (2,619) |
| Basic funds from operations | | 16,739 | | 13,825 | | 31,995 | | 32,682 |
| | | | | | | | |
| Interest on convertible subordinated debentures | | --- | | 21 | | --- | | 49 |
| | | | | | | | |
| Diluted funds from operations | $ | 16,739 | $ | 13,846 | $ | 31,995 | $ | 32,731 |
| | | | | | | | |
| Basic funds from operations per share | $ | .60 | $ | .50 | $ | 1.15 | $ | 1.18 |
| Diluted funds from operations per share | $ | .60 | $ | .50 | $ | 1.15 | $ | 1.18 |
| | | | | | | | |
| Shares for basic funds from operations per share | | 27,752,502 | | 27,705,245 | | 27,791,255 | | 27,643,300 |
| Shares for diluted funds from operations per share | | 27,768,307 | | 27,850,745 | | 27,807,194 | | 27,813,195 |
(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 second quarter income
| National Health Investors, Inc. Portfolio Summary June 30 ,2006 |
|
| Portfolio Statistics | | | Investment |
| | Properties | Investment | Percentage |
| Real Estate Properties | 90 | $239,811,000 | 69% |
| Mortgages and Notes Receivables | 53 | 105,388,000 | 31% |
| Total Real Estate Portfolio | 143 | $345,199,000 | 100% |
| | | | |
| Real Estate Properties | Properties | Beds | Investments |
| | Nursing Homes | 66 | 8,657 | $ 153,613,000 |
| | Assisted Living | 14 | 1,138 | 58,918,000 |
| | Medical Office Buildings | 4 | 124,427 sq.ft. | 10,201,000 |
| | Retirement Homes | 5 | 517 | 10,005,000 |
| | Hospitals | 1 | 55 | 7,074,000 |
| | Total Real Estate Properties | 90 | | $ 239,811,000 |
| | | | |
| Mortgages and Notes Receivable | Properties | Beds | Investments |
| | | | | |
| | Nursing Homes | 35 | 3,941 | $ 99,214,000 |
| | Retirement Homes | 1 | 60 | 1,961,000 |
| | Developmentally Disabled | 17 | 108 | 4,213,000 |
| | Total Mortgages and Notes Receivable | 53 | | $ 105,388,000 |
| | Total Real Estate Portfolio | 143 | | $ 345,199,000 |
| | | | | |
| Summary of Facilities by Type: | | | |
| | | | Percentage of | Total |
| | | Properties | Total Dollars | Dollars |
| | Nursing Homes | 101 | 73.24% | $ 252,827,000 |
| | Assisted Living | 14 | 17.07% | 58,918,000 |
| | Medical Office Buildings | 4 | 2.96% | 10,201,000 |
| | Retirement Homes | 6 | 3.47% | 11,966,000 |
| | Hospitals | 1 | 1.94% | 7,074,000 |
| | Developmentally Disabled | 17 | 1.22% | 4,213,000 |
| | Total Real Estate Portfolio | 143 | 100.00% | $ 345,199,000 |
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Page 5 NHI's second quarter income
| Portfolio by Operator Type | | | |
| | | # of | Percentage of | Total |
| | | Properties | Total Dollars | Dollars |
| | Public | 62 | 26.83% | $ 92,626,000 |
| | Regional | 67 | 60.20% | 207,813,000 |
| | Small Operator | 14 | 12.97% | 44,760,000 |
| | Total Real Estate Portfolio | 143 | 100.00% | $ 345,199,000 |
| | | | | |
| Public Operators | | Percentage | |
| | | Of Total | Dollar |
| | | Portfolio | Amount |
| National HealthCare Corp. | | 14.29% | $ 49,343,000 |
| Community Health Systems, Inc. | | 3.81% | 13,155,000 |
| Sunrise Senior Living Services | | 3.80% | 13,104,000 |
| Sun Healthcare | | 2.52% | 8,692,000 |
| Res-Care, Inc. | | 1.22% | 4,213,000 |
| HCA-The Healthcare Company | | 1.19% | 4,119,000 |
| Total Public Operators | | 26.83% | $ 92,626,000 |
| National Health Investors, Inc. | Summary of Facilities by State | June 30, 2006 |
| | | | | | | | | Percent |
| | Acute | | Dev. | Asst. | Retire- | | Investment | Total |
| LTC | Care | MOB | Disab. | Living | ment | Total | Amount | Portfolio |
| Florida | 15 | | 1 | 14 | 4 | | 34 | $ 83,724,000 | 24.25% |
| Texas | 19 | | 2 | | | 1 | 22 | 74,994,000 | 21.72% |
| Tennessee | 20 | | | 3 | 3 | 2 | 28 | 33,394,000 | 9.67% |
| Missouri | 8 | | | | | 1 | 9 | 19,157,000 | 5.55% |
| New Jersey | 0 | | | | 1 | | 1 | 13,103,000 | 3.80% |
| Virginia | 8 | | | | | | 8 | 20,002,000 | 5.79% |
| Arizona | 1 | | | | 4 | | 5 | 18,221,000 | 5.28% |
| New Hampshire | 3 | | | | | 1 | 4 | 14,457,000 | 4.19% |
| Georgia | 7 | | | | | | 7 | 14,982,000 | 4.34% |
| Massachusetts | 4 | | | | | | 4 | 10,775,000 | 3.12% |
| Kansas | 7 | | | | | | 7 | 11,168,000 | 3.24% |
| Kentucky | 2 | 1 | | | | | 3 | 8,142,000 | 2.36% |
| South Carolina | 3 | | | | 1 | | 4 | 7,543,000 | 2.19% |
| Idaho | 1 | | | | | 1 | 2 | 5,271,000 | 1.53% |
| Pennsylvania | 0 | | | | 1 | | 1 | 4,317,000 | 1.25% |
| Wisconsin | 1 | | | | | | 1 | 2,331,000 | 0.68% |
| Alabama | 2 | | | | | | 2 | 2,118,000 | 0.61% |
| Illinois | 0 | | 1 | | | | 1 | 1,500,000 | 0.43% |
| 101 | 1 | 4 | 17 | 14 | 6 | 143 | $ 345,199,000 | 100.00% |
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