FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Quarterly Report Under Section 13 of 15(d)
of the Securities Exchange Act of 1934

For quarter ended June 30, 2000 Commission file number 33-41863

NATIONAL HEALTH INVESTORS, INC.
(Exact name of registrant as specified in its Charter)

Maryland 62-1470956
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)

100 Vine Street
Murfreesboro, TN 37130
(Address of principal (Zip Code)
executive offices)

Registrant's telephone number, including area code (615) 890-9100

Indicate by check mark whether the registrant

(1) Has filed all reports required to be filed by Section 13 or 15(d), of
the Securities Exchange Act of 1934 during the preceding 12 months.

Yes x No

(2) Has been subject to such filing requirements for the past 90 days.

Yes x No

24,383,620 shares of common stock were outstanding as of July 31, 2000.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

NATIONAL HEALTH INVESTORS, INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

June 30 Dec. 31
2000 1999

ASSETS (unaudited)
Real estate properties:
Land $ 30,673 $ 31,875
Buildings and improvements 316,673 340,966
Construction in progress 1,971 567
349,317 373,408
Less accumulated depreciation (64,297) (57,387)
Real estate properties, net 285,020 316,021
Mortgage and other notes receivable, net 339,915 316,454
Investment in preferred stock 38,132 38,132
Investment in real estate mortgage
investment conduits 38,142 37,670
Cash and cash equivalents 19,787 16,723
Marketable securities 49,107 49,650
Accounts receivable 12,825 10,714
Deferred costs and other assets 4,201 3,181
Total Assets $787,129 $788,545

LIABILITIES AND DEFERRED INCOME
Debt $170,990 $172,870
Credit facilities 91,000 88,000
Convertible subordinated debentures 95,741 95,741
Accounts payable and other accrued expenses 10,257 7,228
Accrued interest 6,339 6,412
Dividends payable 15,606 18,033
Deferred income 7,190 7,621
Total Liabilities and Deferred Income 397,123 395,905
Commitments and guarantees

STOCKHOLDERS' EQUITY
Cumulative convertible preferred stock,
$.01 par value; 10,000,000 shares
authorized:
747,994 and 748,694 shares, respectively,
issued and outstanding; stated at
liquidation preference of $25 per share 18,700 18,717
250,000 shares issued and outstanding, stated
at liquidation preference of $12.00 per share 3,000 ---
Common stock, $.01 par value;
40,000,000 shares authorized;
24,383,620 and 24,382,987 shares,
respectively, issued and outstanding 244 244
Capital in excess of par value of common stock 425,980 425,963
Cumulative net income 422,032 394,165
Cumulative dividends (463,347) (431,282)
Unrealized gains (losses) on securities (16,603) (15,167)
Total Stockholders' Equity 390,006 392,640
Total Liabilities and Stockholders' Equity $787,129 $788,545

The accompanying notes to interim condensed consolidated financial statements
are an integral part of these financial statements.
The interim condensed balance sheet at December 31, 1999 is taken from the
audited financial statements at that date.
2

NATIONAL HEALTH INVESTORS, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Three Months Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
(in thousands,
except share amounts)

REVENUES:
Mortgage interest income $ 10,232 $ 12,628 $ 20,612 $ 25,016
Rental income 11,703 11,451 23,300 22,603
Facility operating revenue 13,124 2,149 26,234 6,272
Investment interest, dividends
and other income 2,940 2,831 5,876 5,124
37,999 29,059 76,022 59,015

EXPENSES:
Interest 7,062 6,091 14,005 12,219
Depreciation of real estate 3,459 2,852 6,910 5,354
Amortization of loan costs 268 181 490 348
Facility operating expenses 12,701 1,568 24,663 5,623
Loan loss expense (325) 1,524 (325) 1,524
General and administrative 920 890 2,412 1,751
24,085 13,106 48,155 26,819

NET INCOME 13,914 15,953 27,867 32,196

DIVIDENDS TO PREFERRED
STOCKHOLDERS 457 409 854 817

NET INCOME APPLICABLE TO
COMMON STOCK $ 13,457 $ 15,544 $ 27,013 $ 31,379

NET INCOME PER COMMON SHARE:
Basic $ .55 $ .64 $ 1.11 $ 1.29
Diluted $ .55 $ .64 $ 1.10 $ 1.28

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 24,383,620 24,364,888 24,383,356 24,364,796
Diluted 24,637,806 27,906,229 24,510,449 27,919,439
Common dividends per share
declared $ .64 $ .74 $ 1.28 $ 1.48

The accompanying notes to interim condensed consolidated financial
statements are an integral part of these financial statements.

NATIONAL HEALTH INVESTORS, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Six Months Ended
June 30
2000 1999
(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 27,867 $ 32,196
Depreciation of real estate 6,910 5,354
Provision for loan losses (325) 1,524
Amortization of loan costs 490 348
Deferred income --- 167
Amortization of bond discount (893) (670)
Amortization of deferred income (431) (594)
Increase in accounts receivable (2,860) (3,083)
Increase in other assets (1,510) (965)
Increase (decrease) in accounts payable
and accrued liabilities 2,957 2,218
NET CASH PROVIDED BY OPERATING ACTIVITIES 32,205 36,495

CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in mortgage notes receivable (3,615) (17,834)
Collection of mortgage notes receivable 6,657 11,876
Acquisition of property and equipment, net (1,810) (14,144)
Increase in marketable securities --- (33,413)
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 1,232 (53,515)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from credit facilities 3,000 39,500
Principal payments on long-term debt (1,881) (1,952)
Dividends paid to shareholders (34,492) (36,885)
Payments on subordinated convertible debentures --- (800)
Sale of preferred stock 3,000 ---
NET CASH USED IN FINANCING ACTIVITIES (30,373) (137)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,064 (17,157)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 16,723 20,407
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 19,787 $ 3,250

NATIONAL HEALTH INVESTORS, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

Six Months Ended
June 30
2000 1999
(in thousands)

Supplemental Information:
Cash payments for interest expense $ 11,871 $ 10,134

During the six months ended June 30, 2000
and June 30, 1999, $0 and $10,000
respectively, of Senior Subordinated Convertible
Debentures were converted into 0 shares
and 316 shares, respectively, of NHI's
common stock:
Senior subordinated convertible debentures $ --- $ (10)
Financing costs $ --- $ ---
Accrued interest $ --- $ (1)
Common stock $ --- $ ---
Capital in excess of par $ --- $ 9

During the six months ended June 30, 2000
NHI acquired notes receivable in
exchange for NHI's rights
under property and equipment
Mortgage and other notes receivable $(25,900) $ ---
Land $ 1,202 $ ---
Buildings and Improvements $ 24,698 $ ---

The accompanying notes to interim condensed consolidated financial statements
are an integral part of these financial statements.

NATIONAL HEALTH INVESTORS, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(dollars in thousands)

Cumulative Convertible
Preferred Stock Capital in Unrealized Total
Shares Amount Shares Amount Common Stock Excess of Cumulative Cumulative Gains(Losses) Stock.
at $25 per Share at $12 per Share Shares Amount Par Value Net Income Dividends on Securities Equity

BALANCE AT
12/31/99 748,694 $ 18,717 --- --- 24,382,987 $ 244 $425,963 $394,165 $(431,282) $(15,167) $392,640
Net income --- --- --- --- --- --- --- 27,867 --- --- 27,867
Unrealized gains(losses)
on securities --- --- --- --- --- --- --- --- --- (1,436) (1,436)
Total Comprehensive Income 26,431
Shares sold --- --- 250,000 3,000 --- --- --- --- --- --- 3,000
Shares issued in con-
version of preferred
stock to common
stock (700) (17) --- --- 633 --- 17 --- --- --- ---
Dividends to common
shareholders ($1.28
per share) --- --- --- --- --- --- --- --- (31,211) --- (31,211)
Dividends to preferred
shareholders --- --- --- --- --- --- --- --- (854) --- (854)
BAL. AT 6/30/00 747,994 $ 18,700 250,000 $ 3,000 24,383,620 $ 244 $425,980 $422,032 $(463,347) $(16,603) $390,006

BAL. AT 12/31/98 768,894 $ 19,222 --- $ --- 24,364,391 $ 244 $425,449 $340,547 $(357,518) $ (3,284) $424,660
Net income --- --- --- --- --- --- --- 32,196 --- --- 32,196
Unrealized gains (losses)
on securities --- --- --- --- --- --- --- --- --- (1,577) (1,577)
Total Comprehensive Income 30,619
Shares issued in con-
version of converti-
ble debentures to
common stock --- --- --- --- 316 --- 9 --- --- --- 9
Shares issued in con-
version of preferred
stock to common
stock (200) (5) --- --- 181 --- 5 --- --- --- ---
Dividends to common
shareholders (1.48
per share) --- --- --- --- --- --- --- --- (36,068) --- (36,068)
Dividends to preferred
shareholders ($1.0625
per share) --- --- --- --- --- --- --- --- (817) --- (817)
BAL. AT 6/30/99 768,694 $ 19,217 --- $ --- 24,364,888 $ 244 $425,463 $372,743 $(394,403) $ (4,861) $418,403

The accompanying notes to interim condensed consolidated financial statements
are an integral part of these financial statements. 6

NATIONAL HEALTH INVESTORS, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2000
(Unaudited)

Note 1. SIGNIFICANT ACCOUNTING POLICIES:

The unaudited financial statements furnished herein in the opinion of
management include all adjustments which are necessary to fairly present the
financial position, results of operations and cash flows of National Health
Investors, Inc. ("NHI" or the "Company"). NHI assumes that users of the
interim financial statements herein have read or have access to the audited
financial statements and Management's Discussion and Analysis of Financial
Condition and Results of Operations included in NHI's Form 10-K for the year
ended December 31, 1999 and that the adequacy of additional disclosure needed
for a fair presentation, except in regard to material contingencies, may be
determined in that context. Accordingly, footnotes and other disclosures
which would substantially duplicate the disclosure contained in the Company's
most recent annual report to stockholders have been omitted. The interim
financial information contained herein is not necessarily indicative of the
results that may be expected for a full year because of various reasons
including changes in interest rates, rents and the timing of debt and equity
financings.

Note 2. NET INCOME PER COMMON SHARE:

Basic earnings per share is based on the weighted average number of
common and common equivalent shares outstanding. Net income is reduced by
dividends to holders of all cumulative convertible preferred stock.

Diluted earnings per common share assumes the conversion of 8% and 8.5%
cumulative convertible preferred stock, the conversion of convertible
subordinated debentures and the exercise of all stock options using the
treasury stock method unless the impact of such assumptions on the
calculations of earnings per share is anti-dilutive. Diluted net income is
increased for interest expense on the convertible subordinated debentures in
1999.

The following table summarizes the earnings and the average number of
common shares and common equivalent shares used in the calculation of basic
and diluted earnings per share.

NATIONAL HEALTH INVESTORS, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2000
(Unaudited)

Three Months Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999

BASIC:
Weighted average common
shares 24,383,620 24,364,888 24,383,356 24,364,796

Net income $13,914,000 $15,953,000 $27,867,000 $32,196,000
Dividends paid to pre-
ferred shareholders (457,000) (409,000) (854,000) (817,000)
Net income available to
common stockholders $13,457,000 $15,544,000 $27,013,000 $31,379,000

Net income per
common share-basic $ .55 $ .64 $ 1.11 $ 1.29

DILUTED:
Weighted average common
shares 24,383,620 24,364,888 24,383,356 24,364,796
Stock options 4,186 --- 2,093 1
Convertible subordinated
debentures --- 2,845,690 --- 2,858,967
8.5% Cumulative convertible
preferred stock --- 695,651 --- 695,675
8.0% Cumulative convertible
preferred stock 250,000 --- 125,000 ---
Average common shares
outstanding 24,637,806 27,906,229 24,510,449 27,919,439

Net income $13,914,000 $15,953,000 $27,867,000 $32,196,000
8.5% Cumulative con-
vertible preferred
stock dividends (397,000) --- (795,000) ---
Interest expense on
convertible sub-
ordinated debentures --- 1,813,000 --- 3,641,000
Net income - diluted $13,517,000 $17,766,000 $27,072,000 $35,837,000

Net income per common
share - diluted $ .55 $ .64 $ 1.10 $ 1.28

For the three months ended June 30, 2000, convertible subordinated
debentures and 8.5% cumulative convertible preferred stock were convertible
into 2,747,428 and 676,918 incremental shares, respectively. For the six
months ended June 30, 2000, convertible subordinated debentures and 8.5%
cumulative convertible preferred stock were convertible into 2,747,428 and
677,183 incremental shares, respectively. These incremental shares were
excluded from the computation of diluted earnings per share, since inclusion
of these incremental shares in the calculation would have been anti-dilutive.
8

NATIONAL HEALTH INVESTORS, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2000
(Unaudited)

Note 3. INVESTMENTS IN MARKETABLE SECURITIES:

NHI's investments in marketable securities include available for sale
securities and held to maturity securities. Unrealized gains and losses on
available for sale securities are recorded in stockholders' equity in
accordance with SFAS 115. Realized gains and losses from securities sales are
determined on the specific identification of the securities.

Note 4. COMMITMENTS AND GUARANTEES:

At June 30, 2000, NHI was committed, subject to due diligence and
financial performance goals, to fund approximately $7,758,528 in health care
real estate projects of which approximately $5,758,528 is eligible to be
funded within the next 12 months. The commitments include mortgage loans or
purchase leaseback agreements for one long-term care center, three assisted
living facilities, and one hospital all at rates ranging from 9% to 11.5%.
NHI has recorded deferred income for commitment fees related to these loans
where applicable.

In order to obtain the consent of appropriate lenders to National
HealthCare Corporation's ("NHC"'s) transfer of assets to NHI, NHI guaranteed
certain debt ($12,640,000 at June 30, 2000) of NHC. The debt is at fixed
interest rates with a weighted average interest rate of 8.3% at June 30, 2000.
NHI receives from NHC compensation of approximately $63,000 per annum for the
guarantees which is credited against NHC's base rent requirements.

In management's opinion, these guarantee fees approximate the guarantee
fees that NHI would currently charge to enter into similar guarantees.

All of the guaranteed indebtedness discussed above is secured by first
mortgages and rights which may be enforced if either party is required to pay
under their respective guarantees. NHC has agreed to indemnify and hold
harmless NHI against any and all loss, liability or harm incurred by NHI as a
result of having to perform under its guarantee of any or all of the
guaranteed debt.

NHI has outstanding letters of credit totaling $10,000,000.
Additionally, NHI has also guaranteed bank loans in the amount of $1,442,000
to key employees and directors which amount was utilized for the exercise of
NHI stock options. Shares of NHI stock are held as security by NHI and the
loans are limited to $100,000 per individual per year.

NATIONAL HEALTH INVESTORS, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2000
(Unaudited)

contingencies, NHI is in the process of requesting from the Internal Revenue
Service ("IRS") closing agreements regarding each of these contingencies.
NHI's management, based on its discussions with its legal counsel, understands
that other real estate investment trusts have been successful in obtaining
closing agreements with the IRS regarding real estate investment trust
qualification issues. However, it is possible that the IRS will not rule in
favor of NHI. Such an unfavorable ruling could result in the assessment of
taxes, penalties and interest by the IRS that are material to NHI's financial
statements taken as a whole and could also result in the loss of NHI's status
as a real estate investment trust, which would have a significant adverse
impact on the financial position, results of operations and cash flows of NHI.

Note 5. CONVERTIBLE SUBORDINATED DEBENTURES:

At June 30, 2000, $38,060,000 of 7.75% convertible subordinated
debentures due on January 2, 2001 (the "1995 debentures") remain outstanding.
The 1995 debentures are convertible at the option of the holder into the
common stock of NHI at a conversion price of $31.625, subject to adjustment.
During the six months ended June 30, 2000, none of the 1995 debentures were
converted into common stock. NHI has reserved 1,203,478 shares of common
stock for conversions of 1995 debentures. See Note 11 for a discussion of
liquidity issues related to the maturity of the 1995 debentures.

At June 30, 2000, $56,286,000 of 7% convertible subordinated debentures
due on February 1, 2004 (the "1997 debentures") remain outstanding. The 1997
debentures are convertible at the option of the holder into common stock at a
conversion price of $37.50, subject to adjustment. During the six months ended
June 30, 2000, none of the 1997 debentures were converted into common stock.
NHI has reserved 1,500,960 shares of common stock for conversions of 1997
debentures.

At June 30, 2000, $1,190,000 of debentures due on January 1, 2006 remain
outstanding related to "1995 debt service debentures" issued to mortgagees or
lessees to satisfy debt service escrow requirements. The debentures are
convertible at the option of the holder into common stock of the Company at a
conversion price of 110% of the market price on the date of issuance of the
debentures, subject to adjustment. During the six months ended June 30, 2000,
none of the debentures were converted into common stock. NHI has reserved
32,740 shares of common stock for conversion of 1995 debt service debentures.

NATIONAL HEALTH INVESTORS, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2000
(Unaudited)

At June 30, 2000, $205,000 of the 10% senior convertible subordinated
debentures due 2006 (the "senior debentures") remain outstanding. The senior
debentures are convertible into the common stock of the Company at $20 per
share. During the six months ended June 30, 2000, none of the senior
debentures were converted. The Company has reserved 10,250 shares of common
stock for conversion of the senior debentures.

Note 6. CUMULATIVE CONVERTIBLE PREFERRED STOCK:

In February and March, 1994, NHI issued $109,558,000 of 8.5% Cumulative
Convertible Preferred Stock ("8.5% Preferred Stock") with a liquidation
preference of $25 per share. Dividends at an annual rate of $2.125 are
cumulative from the date of issuance and are paid quarterly. At June 30,
2000, $18,699,850 of the preferred stock remains outstanding.

The 8.5% Preferred Stock is convertible into NHI common stock at the
option of the holder at any time at a conversion price of $27.625 per share of
common stock, which is equivalent to a conversion rate of 0.905 per share of
common stock for each share of Preferred Stock, subject to adjustment in
certain circumstances.

The 8.5% Preferred Stock is redeemable by NHI for common stock only if
the trading price of the Common Stock on the New York Stock Exchange ("NYSE")
exceeds $27.625 per share for 20 trading days within a period of 30 trading
days prior to the exercise. NHI has reserved 676,918 shares of common stock
for 8.5% Preferred Stock conversions.

The 8.5% Preferred Stock is listed on the NYSE under the symbol "NHIPr."

On March 31, 2000, NHI issued $3,000,000 of Cumulative Convertible
Preferred Stock (the "2000 Preferred Stock"). The 2000 Preferred Stock, which
is not listed on a stock exchange, is convertible into NHI common stock at the
lower of the then trading value of NHI common stock or $12.00 per share after
December 31, 2000. The shares pay dividends at the rate of 8% through June
30,2000, at the rate of 10% from July 1, 2000 through September 30, 2000, and
at the rate of 12% thereafter. The 2000 Preferred Stock was sold to NHC, the
Company's investment advisor. NHI has reserved 250,000 shares of common stock
for preferred stock conversion related to this issue.

NATIONAL HEALTH INVESTORS, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2000
(Unaudited)

Note 7. NEW ACCOUNTING PRONOUNCEMENT:

In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("SFAS 133"). SFAS 133
establishes accounting and reporting standards requiring that every derivative
instrument be recorded in the balance sheet as either an asset or liability
measured at its fair value. SFAS 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. SFAS 133, as amended by Statement of
Financial Accounting Standards No. 137, "Deferral of the Effective Date of
SFAS 133", is effective for the first quarter of the first fiscal year
beginning after June 15, 2000. The impact of the adoption of SFAS 133 is not
expected to have a material impact on NHI's
results of operations or financial position.

In December 1999, the staff of the Securities and Exchange Commission
issued Staff Accounting Bulletin No. 101 (SAB 101) regarding revenue
recognition in financial statements. NHI will implement SAB 101 during the
fourth quarter of 2000. Management currently is in the process of analyzing
the impact that SAB 101 will have on NHI's financial position, results of
operations and cash flows.

Note 8. SALE OF REAL ESTATE:

In 1993, NHI funded a mortgage loan for Stockbridge Investment Partners,
Inc. and its subsidiary York Hannover Nursing Centers, Inc. ("York Hannover")
in the original principal amount of $29,500,000. Collateral for the loan
included first mortgages on six long-term health care centers located in the
state of Florida, the personal guarantee of certain of the owners, certain
accounts receivable balances above another creditor's $2,000,000 loan, and the
corporate guarantee of NHC for up to $5,000,000 of principal and interest.

On December 30, 1999, NHI purchased from the borrowers for approximately
$25,900,000 (the then current loan balance) all of the real estate, property
and equipment of the six long-term health care facilities. NHI also received
on December 30, 1999, the accounts receivable of the facilities approximating
$2,200,000 as consideration for unpaid interest on the mortgage loan. The
purchase was undertaken in lieu of foreclosure.

Effective January 1, 2000, NHI sold to Care Foundation of America, Inc.
("Care") all of the real estate, property and equipment of the six long-term
nursing facilities. The sale price was $25,900,000, which was NHI's basis in
the properties. Care assumed the first mortgage which had previously been
owned by York Hannover. In accordance with the provisions of Statement of
Financial Accounting Standards No. 66, Accounting for Sales of Real Estate,
NHI has accounted for the sale under the installment method. The note
receivable from Care bears interest at 10% and is collateralized by the first
mortgages on the six long-term health care facilities and the corporate
guarantee of NHC for up to $3,000,000 of principal and interest.
12

NATIONAL HEALTH INVESTORS, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2000
(Unaudited)

Note 9. MORTGAGE AND OTHER NOTES RECEIVABLE:

Borrower Bankruptcy

NHI was informed on November 4, 1999, that Lenox Healthcare, Inc. and
its affiliates ("Lenox") have filed for Chapter 11 Bankruptcy protection in
the United States Bankruptcy District Court in Wilmington, Delaware. NHI's
loans may be impacted as follows:

Zurich North America Capital Corporation - In 1996, NHI funded a
mortgage loan for Zurich North America Capital Corporation in the original
principal amount of $26,000,000. Collateral for the loan includes first
mortgages on ten long-term health care facilities, leasehold assignment of
certain existing leases on the properties, the corporate guarantees of Lenox
and Greylock Health Corporation, and certain personal guarantees. Lenox is
the manager of nine of the ten long-term health care facilities located in the
states of Kansas and Missouri. The tenth facility has been closed during the
bankruptcy.

At June 30, 2000, the net carrying value of the loan is approximately
$21,800,000, which earns 11% interest. NHI is currently evaluating the health
care center portion of the collateral given the bankruptcy status of the
manager and other circumstances affecting the centers but believes that the
combined collateral supports the net carrying value of the mortgage. The
debtor in possession discontinued paying interest on the mortgages on May 25,
2000, and the Company is not currently booking any accrual income thereon.

Pinellas Healthcare Investors, Inc. - In 1995, NHI funded a mortgage
loan for Pinellas Healthcare Investors, Inc. in the original principal amount
of $4,500,000. An affiliate of Lenox was the operator and lessee of the
facility. Collateral for the loan includes a first mortgage on the facility,
the corporate guarantee of Stockbridge Investment Partners, Inc., certain
personal guarantees, and certain accounts receivable. Lenox notified NHI that
it has rejected its lease with bankruptcy court approval. NHI approved the
assignment of the Lenox lease to an unaffiliated company in order to allow the
center to continue operations. NHI has initiated foreclosure action against
the borrower in order to obtain title to the project.

At June 30, 2000, the net carrying value of the loan is approximately
$1,000,000. NHI has not received principal and interest payments on these
loans since August 1999 and discontinued interest income recognition on the
loan on the same date. NHI is currently evaluating the health care center
portion of the collateral given the bankruptcy status of the operator,
disavowment of the lease, the condition of the physical plant, and other
circumstances affecting the center. NHI believes that the combined collateral
supports the net carrying value of the mortgage.

NATIONAL HEALTH INVESTORS, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2000
(Unaudited)

Colonial Land Corporation - In 1996, NHI funded a mortgage loan for
Colonial Land Corporation in the original amount of $25,000,000. Collateral
for the loan includes first mortgages and lease assignments on six long-term
health care facilities located in Virginia. Although Colonial Land
Corporation is not included in the Lenox bankruptcy filing, Lenox manages
three of the facilities, and Mr. Tom Clarke, the principal owner of Lenox, is
also an owner of Colonial Land Corporation.

At June 30, 2000, the net carrying value of the loan is approximately
$19,100,000, which earns interest at 10.8%. NHI is currently evaluating the
health care portion of the collateral given the bankruptcy status of the
manager and other circumstances affecting the centers but believes that the
combined collateral supports the net carrying value of the mortgage.

Other Entities Owned by Principals of Lenox - Not Affected by Lenox
Bankruptcy - Although not impacted by the bankruptcy filing, Mr. Tom Clarke,
the principal owner of Lenox, is involved as a principal in other entities
financed by NHI. The carrying value of NHI's investments in these other
entities is $10,700,000 at June 30, 2000. At the present time, NHI knows of
no reason to assume that these entities will be negatively impacted by the
Lenox filing or that any loss of income or asset value will occur.

Other Non-Performing Loans

Brookside Inn - NHI's investment totaled $5,206,000 as of June 30,2000.
NHI has initiated foreclosure proceedings against the owner, but is currently
forbearing from pursuing this action. The owner is making current payments,
plus repaying over the next eighteen months approximately four months of
missed payments. NHI believes that the expected cash flows from this loan,
along with the value of the collateral, support the net carrying value of this
loan.

SouthTrust Loan Participation - NHI has a 50% interest in a loan made by
SouthTrust Bank to Integrated Health Services, Inc. ("IHS"). NHI's loan
balance at June 30, 2000 totaled $25,643,000. IHS and its affiliates have
filed for Chapter 11 bankruptcy protection. In May 2000 during a
collateralization hearing, the bankruptcy court ruled that the value of the
collateral supporting NHI's loan exceeds the balance due to NHI under the
loan. Based on this ruling and based on NHI's knowledge, NHI believes that
the collateral supports the net carrying value of this loan.

Autumn Hills Convalescent Centers, Inc. - In 1997, NHI funded a mortgage
loan for Autumn Hills Convalescent Centers, Inc. in the original principal
amount of $51,500,000. Collateral for the loan includes first mortgages on
thirteen long-term health facilities, and certain corporate and personal
guarantees. These facilities are located in Texas.

NATIONAL HEALTH INVESTORS, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2000
(Unaudited)

At June 30, 2000 the net carrying value of the loan is approximately
$49,200,000, which earns 10.5% interest. NHI has not received all principal
and interest payments as due and has entered into a Forbearance Agreement with
the Borrower. This Agreement allows for partial payments over the next five
months while the Borrower secures HUD financing. NHI is currently evaluating
the health care center portion of the collateral given the circumstances
affecting the centers but believes that the combined collateral supports the
net carrying value of the mortgage. NHI has ceased recognition of interest
income on this loan.

Loan Reserves

Mortgage and other notes receivable are reduced by an allowance for loan
losses of $9,346,000 at June 30, 2000.

Note 10: DEBT AND RELATED GUARANTEE

On June 30, 2000, NHI and NHC were in violation of certain financial
covenants included in a debt instrument originally financed through the
National Health Corporation Leveraged Employee Stock Ownership Plan Trust;
however, these violations have been waived. In addition, NHI no longer meets
a requirement that its senior unsecured debt be rated investment grade by
Standard & Poor's and Moody's Investment Services. As of June 30, 2000, the
total debt balance on the loan was $23,214,000, of which $10,574,000 is the
primary obligation of NHI. NHI guarantees, and is contingently obligated on,
the remaining $12,640,000 of the outstanding balance under this loan. As a
result of NHI's investment grade down rating, NHI had been delivered a tender
notice from the noteholders to purchase, between June 10, 2000 and June 15,
2000, the $23,214,000 in outstanding notes; however, on July 7, 2000, the
noteholders rescinded the tender notice effective as on the date and time it
was originally given. NHC, the Company's Investment Advisor, purchased the
notes. The Company believes that all terms and conditions of the loan are
currently in full compliance. Subsequent to the recission of the tender
notice, NHC purchased the entire $23,214,000 debt instrument from the previous
holders.

Note 11. LIQUIDITY DEMANDS AND CAPITAL RAISING ALTERNATIVES

Two significant capital needs are being addressed by the company. The
first is the renewal of the existing $91,000,000 revolving credit facility,
which matures on October 10, 2000. The second is the maturity of the
company's $38,060,000 subordinated convertible debenture issue, which matures
on January 2, 2001. These maturing debt issue challenges are compounded by
the lack of capital available for health care REITs, nursing homes, and
assisted living facilities.

NATIONAL HEALTH INVESTORS, INC.

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2000
(Unaudited)

In regard to the revolving credit facility, extensive negotiations are
under way between NHI and the lending group, led by Bank of Tokyo-Mitsubishi.
Management believes that the facility will be extended at a commercially
reasonable rate of interest on or before its maturity date. This rate is
approximately 100 basis points higher than the current facility. It is also
believed that this extension will require approximately $40,000,000 in
principal reductions prior to December 31, 2000.

In order to adequately address this capital requirement, plus the
impending maturity of the subordinated convertible debentures, the company is
considering several possible solutions. Capital raising alternatives being
considered include the orderly sale of some assets; the delay, reduction or
elimination of the company's third quarter dividend; a rights offering to
existing shareholders; and inducement for current borrowers to prepay debt
owed NHI. The company does not believe it to be financially prudent to incur
new debt at a much higher interest rate in this volatile market.

The long-term goal of NHI is to reduce its debt so as to remove the
uncertainty of the payment and amount of the dividend to shareholders in the
future.

The lack of availability of reasonably priced capital limits NHI's
ability to make new investments, and future refinancings at higher interest
rates or the inability of the Company to repay or extend debt when due would
have a material adverse impact on NHI's financial position, results of
operations and cash flows.

Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations

Overview

National Health Investors, Inc. ("NHI" or the "Company") is a real
estate investment trust which invests primarily in income producing health
care properties with emphasis on the long-term care sector. As of June 30,
2000, NHI had interests in net real estate owned, and investments in
mortgages, REMICs, preferred stock and marketable securities resulting in
total invested assets of $759.7 million. NHI's strategy has been to primarily
invest in long term health care real estate which generates current income
which will be distributed to stockholders. Under current market conditions,
however, no such investments are currently being solicited or closed.

NATIONAL HEALTH INVESTORS, INC.

June 30, 2000
(Unaudited)

As of June 30, 2000, the Company was diversified with investments in 202
health care facilities located in 26 states consisting of 146 long-term care
facilities, two acute care hospitals, eight medical office buildings, 22
assisted living facilities, seven retirement centers and 17 residential
projects for the developmentally disabled. These investments consisted of
approximately $349.3 million aggregate principal amount of loans to 29
borrowers, $285.0 million of purchase leaseback transactions with seven
lessees and $38.1 million invested in REMIC pass through certificates backed
by first mortgage loans to 10 operators. Of these 202 facilities, 55 are
leased to National HealthCare Corporation ("NHC"). NHC is the Company's
investment advisor.

At June 30, 2000, 55.9% of the total invested assets of the health care
facilities were operated by public operators, 23.4% by regional operators, and
20.7% by small operators.

Liquidity and Capital Resources

Sources and Uses of Funds

NHI has generated net cash from operating activities during the first
six months of 2000 totaling $32.2 million compared to $36.5 million in the
prior period. The primary reason for this period's decline was a reduction in
net income offset in part by increased depreciation expense. Net cash from
operating activities generally includes net income plus non-cash expenses,
such as depreciation and amortization and working capital changes.

Cash flows from investing activities during the first six months of 2000
included collection on mortgage notes receivable of $6.7 million compared to
$11.9 million for the prior period.

Cash flows used in investing activities during the first six months of
2000 included investment in mortgage notes receivable of $3.6 million and real
estate properties of $1.8 million. Cash flows used in investing activities of
the prior period included investment in mortgage notes receivable of $17.8
million, real estate properties of $14.1 million, and marketable securities of
$33.4 million.

Cash flows from financing activities for the first six months of 2000
included $3.0 million from credit facility proceeds, compared to the prior
period of $39.5 million.

On March 31, 2000, NHI issued $3,000,000 of Cumulative Convertible
Preferred Stock (the "2000 Preferred Stock") to NHC. The 2000 Preferred
Stock, which is not listed on a stock exchange and is convertible into NHI
common stock at the lower of NHI common stock trading value or $12.00 per
share after December 31, 2000. The shares pay dividends at the rate of 8%
through June 30,2000, at the rate of 10% from July 1, 2000 through September
30, 2000, and at the rate of 12% thereafter. The 2000 Preferred Stock was
sold to NHC, the Company's investment advisor. NHI has reserved 250,000
shares of common stock for preferred stock conversion related to this issue.

NATIONAL HEALTH INVESTORS, INC.

June 30, 2000
(Unaudited)

Cash flows used in financing activities for the first six months of 2000
included principal payments on long-term debt of $1.9 million and dividends
paid to shareholders of $34.5 million. This compares to principal payments on
long term debt of $2.0 million and dividends paid to shareholders of $36.9
million in the prior period.

In March 2000, NHI announced a reduction in its quarterly dividend of 10
cents per common share to 64 cents. The reduction reflects the Company's
concern over continuing volatility in the long-term care industry and
increased interest expense on the Company's bank debt. See "Liquidity Demands
and Capital Raising Alternatives" for additional comments concerning the
Company's dividend payment policy.

Commitments to Fund Projects

At June 30, 2000, the Company was committed, subject to due diligence
and financial performance goals, to fund approximately $7.8 million in health
care real estate projects, of which approximately $5.8 million is expected to
be funded within the next 12 months. The commitments include mortgage loans
or purchase leaseback agreements for one long-term health care center, three
assisted living facilities, and one hospital all at rates ranging from 9% to
11.5%.

Financing for current commitments and future commitments to others may
be provided by cash balances, new lines of credit, private placements or
public offerings of debt or equity, the assumption of secured or unsecured
indebtedness, or by the sale of all or a portion of certain currently held
investments.

NHI is currently limited in its ability to make new investments due to a
lack of availability of reasonably priced capital. However, the Company
believes it has sufficient liquidity and cash flow to finance current
investments for which it is committed.

Liquidity Demands and Capital Raising Alternatives

NHI has established a senior unsecured revolving line of credit (Credit
Facility) that allows it to borrow a maximum of $100.0 million. $91 million is
outstanding on the Credit Facility at June 30, 2000, and the entire balance
outstanding matures on October 10, 2000. In addition, $38.1 million of the
Company's convertible subordinated debentures outstanding at June 30, 2000
mature on January 2, 2001. It is unlikely that holders of these convertible
subordinated debentures will convert them to common stock prior to January 1,
2001. These maturing debt issue challenges are compounded by the lack of
capital available for health care REIT's, nursing homes, and assisted living
facilities. Management is considering several possible solutions in order to
meet these short-term liquidity demands.

NATIONAL HEALTH INVESTORS, INC.

June 30, 2000
(Unaudited)

The renewal in whole or in part of NHI's $91 million credit facility
which matures October 10, 2000, is a first priority. Extensive negotiations
are under way between the Company and the lending group led by Bank of
Tokyo/Mitsubishi. Management believes that the facility will be extended at a
commercially reasonable rate of interest on or before its maturity date. The
rate is expected to be approximately 100 basis points higher than the current
Credit Facility. It is believed that this extension will require
approximately $40 million in principal reductions between now and year end.
In order to adequately address this capital requirement, plus the impending
maturity of $38 million of subordinated convertible debentures on January 2,
2001, the Company is considering several possible solutions.

Capital raising alternatives being considered include the orderly sale
of some assets; the delay, reduction or elimination of the company's third
quarter dividend; a rights offering to existing shareholders; and inducement
for current borrowers to prepay debt owed NHI. NHI's long-term goal is to
reduce its debt so as to remove the uncertainty of the payment and amount of
the dividend to shareholders in the future.

Loan Foreclosures and Bankruptcy

During late 1998 and during 1999, NHI purchased 17 long-term health care
facilities and a retirement center for $81.4 million. The purchases were
undertaken either in foreclosure or in lieu of foreclosure due to financial
defaults on first mortgage loans with three different owners. The mortgages
had been funded from 1993 through 1996 in original principal amounts totaling
$88.6 million.

NHI is treating each of the properties described above as foreclosure
property for federal income tax purposes. With this election, unqualified
income generated by the properties is expected to be treated as qualified
income for a minimum of two years from the purchase date for purpose of the
income-source tests that must be satisfied by real estate investment trusts to
maintain their tax status.

In January 2000, NHI sold the real estate, property and equipment of six
long-term health care facilities on which it had foreclosed to Care Foundation
of America, Inc. ("Care") for $25,900,000 in exchange for a note receivable
from Care. In accordance with the provisions of Statement of Financial
Accounting Standards No. 66, Accounting for Sales of Real Estate, NHI has
accounted for the transaction under the installment method. The note
receivable from Care bears interest at 10% and is collateralized by the first
mortgages on the six long-term health care facilities and the corporate
guarantee of NHC for up to $3,000,000 of principal and interest.

NATIONAL HEALTH INVESTORS, INC.

June 30, 2000
(Unaudited)

As more fully described in Note 9 to the Interim Condensed Consolidated
Financial Statements, during late 1999, NHI was informed of the bankruptcy of
one of its major customers. The bankruptcy may affect three of NHI's
mortgage loans. The three loans, which are secured by 17 long-term health
care facilities and other property, were made to three different entities in
the original principal amounts totaling $55.5 million. Current carrying
amounts of the three loans total $41.9 million. NHI is currently evaluating
the collateral given for the loans, but believes that for each of the three
loans the collateral supports the net carrying value of the loan.

Loan Income Recognition

During the six months ended June 30, 2000, NHI continued not to
recognize income on one loan that had a carrying value of $1.1 million. NHI
discontinued income recognition of unpaid interest on three loans with
carrying values of $5 million, $25.6 million and $48.2 million, respectively.
As of June 30, 2000, one loan with a carrying value of $21.6 million, has
unpaid interest beyond 30 days outstanding. Consistent with its policy on
nonperforming loans to not recognize unpaid mortgage interest income in excess
of 90 days, NHI may discontinue income recognition on this and other mortgage
notes receivable in 2000.

Debt and Related Guarantee

On June 30, 2000, NHI and NHC were not in compliance with certain
financial covenants included in a debt instrument originally financed through
the National Health Corporation Leveraged Employee Stock Ownership Plan Trust;
however, those violations have been waived. As of June 30, 2000, the total
debt balance on the loan was $23,214,000, of which $10,574,000 is the primary
obligation of NHI. NHI guarantees, and is contingently obligated on, the
remaining $12,640,000 of the outstanding balance under this loan. As a result
of NHI's investment grade down rating, NHI had been delivered a tender notice
from the noteholders to purchase, between June 10, 2000 and June 15, 2000, the
$23,214,000 in outstanding notes; however, on July 7, 2000, the noteholders
rescinded the tender notice effective as of the date and time it was
originally given. NHC, the Company's Investment Advisor, purchased the notes.
The Company believes that all terms and conditions of the loan are in full
compliance. Subsequent to the recission of the tender notice, NHC purchased
the entire $23,214,000 debt instrument from the previous holders.

Results of Operations

Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999

Net income for the three months ended June 30, 2000 is $13.9 million
versus $16.0 million for the same period in 1999, a decrease of 12.8%.
Earnings per common share decreased 9 cents or 14.1%, to $.55 in the 2000
period from $.64 in the 1999 period.

NATIONAL HEALTH INVESTORS, INC.

June 30, 2000
(Unaudited)

Total revenues for three months ended June 30, 2000 increased $8.9
million or 30.7% to $38.0 million from $29.1 million for the three months
ended June 30, 1999. Revenues from mortgage interest income decreased $2.4
million, or 19.0%, when compared to the same period in 1999. Revenues from
rental income increased $.3 million, or 2.2% in 2000 as compared to 1999.
Revenues from investment interest and other income increased $.1 million or
3.9% compared to 1999. Facility operating revenue increased to $13.1 million
in 2000 compared to $2.1 million in 1999.

The decrease in mortgage interest income is due to a decline in the
average amount of mortgage investments outstanding as a result of foreclosure
on mortgage loans and due to the discontinuation of interest income
recognition on other loans. During 1999, NHI foreclosed or received deeds in
lieu of foreclosure on mortgage loans totaling $41.8 million, which resulted
in the acquisition of seven long-term health care centers and one retirement
center.

The increase in rental income resulted primarily from the increase in
investments in real estate properties of $14.3 million during 1999. The
increase in investment interest and other income is due to the investment of
higher cash amounts, as well as the net investment of $33.2 million in
marketable securities during 1999.

The increase in facility operating revenues is due primarily to the
purchase, in lieu of foreclosure, of seven long-term health care centers and
one retirement center previously managed and guaranteed by Phoenix Healthcare
Corporation (formerly Iatros Health Network) in August, 1999.

Total expenses for the three months ended June 30, 2000 increased $11.0
million or 83.8% to $24.0 million from $13.1 million for 1999. Interest
expense increased $1.0 million or 15.9% in 2000 as compared to 1999.
Depreciation of real estate increased $.6 million or 21.3% when compared to
1999. Facility operating expense increased to $12.7 million in 2000 compared
to $1.6 million in 1999.

Interest expense increased due to increased interest rates and borrowing
on credit facilities and long-term debt compared to the prior period.
Depreciation increased as a result of the Company placing newly constructed
assets in service, property acquisitions, and the purchase, in lieu of
foreclosure, of seven long term health care centers and one retirement center
previously managed and guaranteed by Phoenix Healthcare Corporation (formerly
Iatros Health Network) in August, 1999.

The increase in facility operating expense is due to the purchase, in
lieu of foreclosure, of seven long-term health care centers and one retirement
center previously managed and guaranteed by Phoenix Healthcare Corporation
(formerly Iatros Health Network) in August, 1999.

NATIONAL HEALTH INVESTORS, INC.

June 30, 2000
(Unaudited)

Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999

Net income for the six months ended June 30, 2000 is $27.9 million
versus $32.2 million for the same period in 1999, a decrease of 13.4%. Basic
net income per common share decreased 18 cents or 14.0%, to $1.11 in the 2000
period from $1.29 in the 1999 period.

Total revenues for the six months ended June 30, 2000 increased $17.0
million or 28.8% to $76.0 million from $59.0 million for the six months ended
June 30, 1999. Revenues from mortgage interest income decreased $4.4 million,
or 17.6% when compared to the same period in 1999. Revenues from rental
income increased $.7 million, or 3.0% in 2000 as compared to 1999. Revenues
from investment interest and other income increased $.8 million or 14.7%
compared to 1999. Facility operating revenue increased to $26.2 million in
2000 compared to $6.3 million in 1999.

The decrease in mortgage interest income is due to a decline in the
average amount of mortgage investments outstanding as a result of foreclosure
on mortgage loans and due to the discontinuation of interest income
recognition on other loans. During 1999, NHI foreclosed on mortgage loans
totaling $41.8 million, which resulted in the purchase of seven long-term
health care centers and one retirement center.

Total expenses for the six months ended June 30, 2000 increased $21.3
million or 79.6% to $48.2 million from $26.8 million for 1999. Interest
expense increased $1.8 million or 14.6% in 2000 as compared to 1999.
Depreciation of real estate increased $1.6 million or 29.1% when compared to
1999. General and administrative costs increased $0.7 million or 37.7%
Facility operating expense increased to $24.7 million in 2000 compared to $5.6
million in 1999.

NATIONAL HEALTH INVESTORS, INC.

June 30, 2000
(Unaudited)

Income Taxes

NHI intends at all times to qualify as a real estate investment trust
under Section 856 through 860 of the Internal Revenue code of 1986, as
amended. Therefore, NHI will not be subject to federal income tax provided it
distributes at least 95% of its annual real estate investment trust taxable
income to its stockholders and meets other requirements to continue to qualify
as a real estate investment trust. Accordingly, no provision for federal
income taxes has been made in the financial statements. NHI's failure to
continue to qualify under the applicable REIT qualification rules and
regulations would have a material adverse impact on the financial position,
results of operations and cash flows of NHI.

NHI is aware of certain income tax contingencies with regards to
limitations on ownership of its stock and to its use of an independent
contractor to manage certain of its foreclosure properties. In order to fully
resolve the contingencies, NHI is in the process of requesting from the
Internal Revenue Service ("IRS") closing agreements regarding each of these
contingencies. NHI's management, based on its discussions with its legal
counsel, understands that other real estate investment trusts have been
successful in obtaining closing agreements with the IRS regarding real estate
investment trust qualification issues. However, it is possible that the IRS
will not rule in favor of NHI. Such an unfavorable ruling could result in the
assessment of taxes, penalties and interest by the IRS that are material to
NHI's financial statements taken as a whole and could also result in the loss
of NHI's status as a real estate investment trust, which would have a
significant adverse impact on the financial position, results of operations
and cash flows of NHI.

Impact of Inflation

Inflation may affect the Company in the future by changing the
underlying value of the Company's real estate or by impacting the Company's
cost of financing its operations.

Revenues of the Company are primarily from long-term investments.
Certain of the Company's leases require increases in rental income based upon
increases in the revenues of the tenants. The Company has negotiated similar
provisions in many of its mortgage notes receivable.

New Accounting Pronouncements

In June 1998, the FASB issued Statement of Financial Accounting
Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"). SFAS 133 establishes accounting and reporting
standards requiring that every derivative instrument be recorded in the
balance sheet as either an asset or liability measured at its fair value.
SFAS 133 requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. SFAS
133, as amended by Statement of Financial Accounting Standards No. 137,
"Deferred of the Effective Date of SFAS 133", is effective for the first
quarter of the first fiscal year beginning after June 15, 2000. The impact of
the adoption of SFAS 133 is not expected to have a material impact on NHI's
results of operations or financial position.
23

NATIONAL HEALTH INVESTORS, INC.

June 30, 2000
(Unaudited)

Item 3. Quantitative and Qualitative Information About Market Risk

INTEREST RATE RISK

The Company's cash and cash equivalents consist of highly liquid
investments with a maturity of less than three months. All of the Company's
mortgage and other notes receivable bear interest at fixed interest rates.
The Company's investment in preferred stock represents an investment in the
preferred stock of another real estate investment trust and bears interest at
a fixed rate of 8.5%. The underlying mortgages included in the Company's
investments in real estate mortgage investment conduits ("REMIC's") also bear
interest at fixed interest rates. As a result of the short-term nature of the
Company's cash instruments and because the interest rates on the Company's
investment in notes receivable, preferred stock and REMIC's are fixed, a
hypothetical 10% change in interest rates has no impact on the Company's
future earnings and cash flows related to these instruments. A hypothetical
10% change in interest rates has an immaterial impact on the fair values of
these instruments.

As of June 30, 2000, $111,225,000 of the Company's long-term debt bears
interest at fixed interest rates. As of June 30, 2000, all of the Company's
$95,741,000 of convertible subordinated debentures bear interest at fixed
rates. Because the interest rates of these instruments are fixed, a
hypothetical 10% change in interest rates has no impact on the Company's
future earnings and cash flows related to these instruments. A hypothetical
10% change in interest rates has an immaterial impact on the fair values of
these instruments. The remaining $59,765,000 of the Company's long-term debt
and $91,000,000 line of credit facility bear interest at variable rates.
However, in order to mitigate the impact of fluctuations in interest rates on
its variable rate debt, the Company has entered into interest rate swap
agreements whereby the Company has exchanged certain variable interest rates
on a $50,000,000 notional principal amount for a fixed rate of interest.
Therefore, after including the mitigating impact of the interest rate swaps, a
hypothetical 10% change in interest rates has an immaterial impact on the
Company's future earnings and cash flows related to these instruments. A
hypothetical 10% change in interest rates has an immaterial impact on the fair
values of these instruments.

The Company's use of derivative instruments is limited to the interest
rate swaps discussed above. The Company does use derivative instruments for
trading purposes and the use of such instruments is subject to strict
approvals by the Company's senior officers. The Company's exposure related to
such derivative instruments is not material to the Company's financial
position, results of operations or cash flows.

NATIONAL HEALTH INVESTORS, INC.

June 30, 2000
(Unaudited)

EQUITY PRICE RISK

The Company's investments in marketable securities include available for
sale securities and held to maturity securities. Unrealized gains and losses
on available for sale securities are recorded in stockholders' equity in
accordance with Statement of Financial Accounting Standards No. 115. The
investments in marketable securities classified as available for sale are
recorded at their fair market value based on quoted market prices. Thus,
there is exposure to equity price risk, which is the potential change in fair
value due to a change in quoted market prices. Hypothetically, a 10% change
in quoted market prices would result in a related 10% change in the fair value
of the Company's investments in marketable securities classified as available
for sale. In addition, a hypothetical 10% change in the quoted market prices
of the Company's subordinated convertible debentures would result in a related
10% change in the fair value of the debenture instruments.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings. None of any materiality.

Item 2. Changes in Securities. Not applicable

Item 3. Defaults Upon Senior Securities. None

Item 4. Submission of Matters to a Vote of Security Holders.

(a) The annual meeting of the shareholders was held on May 24, 2000.

(b) Matters voted upon at the meeting are as follows:

PROPOSAL NO. 1: Election of Robert T. Webb to serve as director for a term of
three years or until his successor has been fully elected and qualified.
Other directors whose terms of office continue are Mr. W. Andrew Adams, Mr.
Jack Tyrrell, Mr. Ted. H. Welch and Mr. Richard F. LaRoche, Jr.

Voting For Withholding Percent For
Authority
Robert T. Webb 22,073,491 146,203 90.5%

PROPOSAL NO. 2: Ratify the appointment of Arthur Andersen LLP as the Company's
independent accountants for the fiscal year 2000.

Voting For Voting Against Abstaining Percent For
22,073,194 49,055 52,005 90.7%

Item 5. Other Information. None

Item 6. Exhibits and Reports on Form 8-K.

(a) List of exhibits - none required
(b) Reports on Form 8-K - none required
25

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

NATIONAL HEALTH INVESTORS, INC.
(Registrant)

Date August 11, 2000 /s/ Richard F. LaRoche, Jr.
Richard F. LaRoche, Jr.
Secretary

Date August 11, 2000 /s/ Donald K. Daniel
Donald K. Daniel
Principal Accounting Officer