EXHIBIT 13
NATIONAL HEALTH REALTY, INC.
INDEX TO FINANCIAL STATEMENT SCHEDULES
Financial Statement Schedules
Report of Independent Registered Public Accounting Firm on Financial Statement
Schedules
Report of Independent Registered Public Accounting Firm on Financial Statement
Schedules
Schedule III Real Estate and Accumulated Depreciation
Schedule IV Mortgage Loans on Real Estate
All other schedules are not submitted because they are not applicable or
not required or because the required information is included in the financial
statements or notes thereto.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON FINANCIAL STATEMENT SCHEDULES
Board of Directors and Stockholders
National Health Realty, Inc.
Murfreesboro, Tennessee
The audits referred to in our report dated January 23, 2006 relating to
the consolidated financial statements of National Health Realty, Inc., which is
contained in Item 8 of this Form 10-K included the audit of the 2005 and 2004
financial statement schedules listed in the accompanying index. These financial
statement schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statement schedules
based upon our audits.
In our opinion, such financial statement schedules present fairly, in all
material respects, the information set forth therein.
/s/ BDO SEIDMAN, LLP
Memphis, Tennessee
January 23, 2006
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Stockholders of National Health Realty, Inc.:
We have audited the consolidated financial statements of National Health
Realty, Inc. and Subsidiaries as of and for the year ended December 31, 2003,
and have issued our report thereon dated January 23, 2004 (included elsewhere in
this Annual Report on Form 10-K). Our audit also included the 2003 financial
statement schedules listed in Exhibit 13 of this Annual Report on Form 10-K.
These schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits.
In our opinion, the 2003 financial statement schedules referred to above,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
/s/ ERNST & YOUNG LLP
Nashville, Tennessee
January 23, 2004
NATIONAL HEALTH REALTY, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2005
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Costs capitalized Gross amount at which carried at
subsequent to close of period
--------------------------------
Initial Cost to Company acquisition Buildings
----------------------- ----------- &
Encum- Buildings & Improve- Carrying Improve-
Description brances Land Improvements ments Costs Land ments Total
----------- ------- ------- ------------ -------- -------- ------- -------- --------
Health Care Centers(6)
Florida $ -- $ 5,735 $ 40,820 $ -- $ -- $ 5,735 $ 40,820 $ 46,555
Health Care Centers(1)
Missouri -- 123 3,728 -- -- 123 3,728 3,851
Health Care Centers(7)
South Carolina -- 6,145 36,215 -- -- 6,145 36,215 42,360
Health Care Centers(2)
Tennessee -- 874 11,474 -- -- 874 11,474 12,348
Assisted Living Facilities(1)
Alabama -- 268 5,468 -- -- 268 5,468 5,736
Assisted Living Facilities(3)
Florida -- 3,414 21,698 -- -- 3,414 21,698 25,112
Assisted Living Facilities(2)
Tennessee -- 886 13,434 -- -- 886 13,434 14,320
Independent Living Centers(1)
Tennessee -- 2,019 14,931 -- -- 2,019 14,931 16,950
------- ------- ---------- ----- - ----- ------- -------- --------
$ -- $19,464 $ 147,768 $ -- $ -- $19,464 $147,768 $167,232
======= ======= ========== ===== = ===== ======= ======== ========
Column A Column F Column G Column H
-------- -------- ------- --------
Accumulated Date of Date
Description Depreciation Construction Acquired
----------- ------------ ------------ --------
Health Care Centers(6)
Florida $ 15,828 N/A 12/31/97
Health Care Centers(1)
Missouri 1,504 N/A 12/31/97
Health Care Centers(7)
South Carolina 14,507 N/A 12/31/97
Health Care Centers(2)
Tennessee 3,295 N/A 12/31/97
Assisted Living Facilities(1)
Alabama 2,301 N/A 12/31/97
Assisted Living Facilities(3)
Florida 8,178 N/A 12/31/97
Assisted Living Facilities(2)
Tennessee 3,857 N/A 12/31/97
Independent Living Centers(1)
Tennessee 2,708 N/A 12/31/97
--------
$ 52,178
========
(A) The aggregate cost for federal income tax purposes is approximately
$172,600,000.
(B) Depreciation is calculated using depreciation lives up to 40 years
for all completed facilities.
NATIONAL HEALTH REALTY, INC.
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
2005 2004 2003
--------- --------- ---------
Investment in Real Estate:
Balance at beginning of period $ 167,232 $ 167,271 $ 173,967
Recognition of sale of assets for mortgage notes receivable -- -- (6,696)
Cost of real estate sold -- (39) --
--------- --------- ---------
Balance at end of year $ 167,232 $ 167,232 $ 167,271
========= ========= =========
Accumulated Depreciation:
Balance at beginning of period $ 46,306 $ 40,340 $ 35,004
Addition charged to costs and expenses 5,872 5,966 6,322
Recognition of sale of assets for mortgage notes receivable -- -- (986)
--------- --------- ---------
Balance at end of year $ 52,178 $ 46,306 $ 40,340
========= ========= =========
NATIONAL HEALTH REALTY, INC.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 2005
Column A Column B Column C Column D Column E Column F Column G Column H
Principal Amount
of Loans Subject
Final Monthly Original Face Carrying to Delinquent
Interest Maturity Payment Amount of Amount of Principal or
Description Rate Date Terms Prior Liens Mortgages Mortgages Interest
- ------------------------------------ ------------- ----------- -------- ----------- -------------- --------- ---------------
LONG-TERM CARE FACILITIES:
First Mortgage Loans:
Brownsburg, Castleton & Plainfield,
Indiana (C) 10.50% March, 2007 $ 130 None $12,046 $ 3,874 None
Sarasota, Florida(A) Prime plus 2% Feb. 2016 52 None 6,350 5,063 None
Ocoee, Florida (B) 8.5% to 9.0% Apr. 2014 47 None 5,700 4,270 None
- ----------
(A) Balloon payments of approximately $1,578,000 due at maturity.
(B) Balloon payment of approximately $2,131,000 due at maturity.
(C) Balloon payments of approximately $3,874,000 due at maturity.
(1) See Note 5 of Notes to Consolidated Financial Statements.
NATIONAL HEALTH REALTY, INC.
SCHEDULE IV - MORTGAGE LOANS ON REAL ESTATE (Continued)
FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
2005 2004 2003
------------ ----------- ----------
Reconciliation of mortgage loans:
Balance at beginning of period $13,553 $44,595 $65,562
Additions:
Sale of assets for mortgage loans -- -- 3,740
Deductions during period:
Collection of principal 346 31,042 24,707
------------ ----------- ----------
Balance at end of period $13,207 $13,553 $44,595
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