NHI Reports Second Quarter Results

MURFREESBORO, Tenn.--(BUSINESS WIRE)--National Health Investors, Inc. (NYSE:NHI) announced today its funds from operations (“FFO”) and net income for the three and six months ended June 30, 2009.

Second Quarter Highlights:

• FFO increased from $16,716,000 to $17,326,000 or 3.7% compared to the same period in 2008
• Net income increased from $14,793,000 to $15,415,000 or 4.2% compared to the same period in 2008
• Invested $43.7 million in three skilled nursing facilities and a mortgage note receivable and committed to purchase a fourth skilled nursing facility in August 2009 for $15.8 million

FFO for the three months ended June 30, 2009 was $17,326,000 or $0.63 per basic and diluted common share compared to $16,716,000 or $0.60 per basic and diluted common share for the same period in 2008 an increase of 3.7%. Net income for the three months ended June 30, 2009 was $15,415,000 or $0.55 per basic and diluted common share compared to net income of $14,793,000 or $0.53 per basic and diluted common share for the same period in 2008, an increase of 4.2%.

During the second quarter, NHI invested $39.8 million in the purchase of three skilled nursing facilities in Texas and committed to purchase a fourth facility for $15.8 million in August 2009, which it has done. NHI also invested $3.9 million in a discounted mortgage note receivable.

FFO for the six months ended June 30, 2009 was $34,304,000 or $1.24 per basic and diluted common share compared to $32,041,000 or $1.15 per basic and diluted common share for the same period in 2008, an increase of 7.1%. Net income for the six months ended June 30, 2009 was $30,464,000 or $1.10 per basic and diluted common share, compared to $28,192,000 or $1.02 per basic and $1.01 per diluted common share for the same period in 2008, an increase of 8.1%.

National Health Investors, Inc. is a real estate investment trust (REIT) that 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 NHI’s web site at www.nhinvestors.com.

Statements in this press release that are not historical facts are forward-looking statements. NHI cautions investors that any forward-looking statements may 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.

Condensed Statements of Income
(in thousands, except share and per share amounts)
		Three months ended							Six months ended
		June 30, 2009			June 30, 2008				June 30, 2009				June 30, 2008
Revenues:
Rental income		$	13,487		$	13,835			$	27,516			$	26,797
Mortgage interest income			2,590			2,417				4,503				4,814
			16,077			16,252				32,019				31,611
Expenses:
Interest expense			24			80				62				185
Depreciation			1,942			2,004				3,892				4,011
Amortization of loan costs			4			4				8				8
Legal expense			485			597				936				731
Franchise, excise and other taxes			139			194				414				417
General and administrative			1,257			341				2,845				1,788
Loan and realty losses (recoveries)			-			-				(640	)			-
			3,851			3,220				7,517				7,140
Income Before Non-Operating Income			12,226			13,032				24,502				24,471
Non-operating income (investment interest and other)			1,700			1,785				3,872				3,763
Income From Continuing Operations			13,926			14,817				29,016				28,234
Discontinued Operations
Income from operations - discontinued			1,489			(24	)			2,090				(42	)
Net income		$	15,415		$	14,793			$	30,464			$	28,192
Weighted average common shares outstanding:
Basic			27,578,000			27,753,051				27,576,272				27,741,868
Diluted			27,592,050			27,777,291				27,587,139				27,781,858
Earnings per share:
Basic:
Income from continuing operations		$	0.50		$	0.53			$	1.03			$	1.02
Discontinued operations			0.05			-				0.07				-
Net income available to common stockholders		$	0.55		$	0.53			$	1.10			$	1.02
Diluted:
Income from continuing operations		$	0.50		$	0.53			$	1.03			$	1.01
Discontinued operations			0.05			-				0.07				-
Net income available to common stockholders		$	0.55		$	0.53			$	1.10			$	1.01
Funds from operations		$	17,326		$	16,716			$	34,304			$	32,041
Funds from operations per common share
Basic		$	0.63		$	0.60			$	1.24			$	1.15
Diluted		$	0.63		$	0.60			$	1.24			$	1.15
Quarterly dividend declared per common share		$	0.55		$	0.55			$	1.10			$	1.10
In accordance with Statement of Financial Accounting Standard No. 144, the results of operations for facilities sold, including the gain or loss on such sales, have been reported in the current and prior periods as discontinued operations.

Selected Balance Sheet Data
(in thousands)
		June 30, 2009			December 31, 2008
Real estate properties, net		$	217,956		$	181,332
Mortgages receivable, net			105,745			108,640
Preferred stock investment, at cost			38,132			38,132
Cash and cash equivalents			65,254			100,242
Marketable securities			23,726			26,594
Bonds payable			2,762			3,987
Stockholders' equity			430,424			429,615

Reconciliation of Funds From Operations (1)(2)
The following table reconciles net income to funds from operations available to common stockholders:
(in thousands, except share and per share amounts)
			Three months ended						Six months ended
			June 30, 2009			June 30, 2008			June 30, 2009			June 30, 2008
Net income			$	15,415		$	14,793		$	30,464		$	28,192
Elimination of non-cash items in net income:
	Real estate depreciation			1,911			1,910			3,840			3,823
	Real estate depreciation in discontinued operations			-			13			-			26
Funds from operations			$	17,326		$	16,716		$	34,304		$	32,041
Basic funds from operations per share			$	0.63		$	0.60		$	1.24		$	1.15
Diluted funds from operations per share			$	0.63		$	0.60		$	1.24		$	1.15
Shares for basic funds from operations per share				27,578,000			27,753,051			27,576,272			27,741,868
Shares for diluted funds from operations per share				27,592,050			27,777,291			27,587,139			27,781,858
	(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.  FFO 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.

National Health Investors, Inc.
Investments in Real Estate (excluding corporate office) and Mortgage Notes Receivable
June 30, 2009
Portfolio Statistics					Investment
			Properties		Percentage			Investment
	Real Estate Properties		75		67.3	%		$	217,166,000
	Mortgages and Notes Receivables		50		32.7	%			105,745,000
	Total Real Estate Portfolio		121		100.0	%		$	322,911,000
Real Estate Properties			Properties		Beds			Investment
	Long Term Care Centers		52		7,158			$	139,450,000
	Assisted Living Facilities		14		1,141				55,280,000
	Medical Office Buildings		4		124,427 sq.ft.				8,938,000
	Independent Living Facilities		4		456				7,354,000
	Hospitals		1		55				6,144,000
	Total Real Estate Properties		75					$	217,166,000
Mortgage Notes Receivables			Properties		Beds			Investment
	Long Term Care Centers		32		3,481			$	98,193,000
	Assisted Living		1		70			$	3,911,000
	Developmentally Disabled		17		108				3,641,000
	Total Mortgage Notes Receivable		50		3,659				105,745,000
	Total Real Estate Portfolio		125					$	322,911,000
Summary of Facilities by Type:
					Investment
			Properties		Percentage			Investment
	Long Term Care Centers		84		73.6	%		$	237,643,000
	Assisted Living Facilities		15		18.3	%			59,191,000
	Medical Office Buildings		4		2.8	%			8,938,000
	Independent Living Facilities		4		2.3	%			7,354,000
	Hospitals		1		1.9	%			6,144,000
	Developmentally Disabled		17		1.1	%			3,641,000
	Total Real Estate Portfolio		125		100.0	%		$	322,911,000
Portfolio by Operator Type
					Investment
			Properties		Percentage			Investment
	Public		65		27.9	%		$	90,356,000
	Regional		51		62.7	%			202,351,000
	Small Operator		9		9.4	%			30,204,000
			125		100.0	%		$	322,911,000

Public Operators
						Investment
				Investment		Percentage
	National HealthCare Corp.			$ 55,269,000		17.0%
	Sunrise Senior Living, Inc.			12,122,000		3.8%
	Community Health Systems, Inc.			11,520,000		3.6%
	Sun Healthcare Group, Inc.			7,804,000		2.4%
	Res-Care, Inc.			3,641,000		1.1%
	Total Public Operators			$ 90,356,000		27.9%

National Health Investors, Inc. Summary of Facilities by State June 30, 2009
																				Percent
					Asst.				Independent				Dev.				Investment			Total
			LTC		Living		MOB		Living		Hospitals		Disab.		Total		Amount			Portfolio
	Texas		11		-		2		-		-		-		13			86,426,000		26.8	%
	Florida		11		4		1		-		-		14		30		$	70,372,000		21.8	%
	Tennessee		20		3		-		2		-		3		28			25,287,000		7.8	%
	Missouri		8		-		-		1		-		-		9			19,977,000		6.2	%
	Arizona		1		4		-		-		-		-		5			16,644,000		5.1	%
	Virginia		7		-		-		-		-		-		7			15,989,000		4.9	%
	Massachusetts		4		-		-		-		-		-		4			13,939,000		4.3	%
	Kansas		5		-		-		-		-		-		5			13,297,000		4.1	%
	New Jersey		-		1		-		-		-		-		1			12,122,000		3.8	%
	South Carolina		4		1		-		-		-		-		5			10,335,000		3.2	%
	New Hampshire		3		-		-		-		-		-		3			8,463,000		2.6	%
	Georgia		5		-		-		-		-		-		5			7,282,000		2.3	%
	Kentucky		2		-		-		-		1		-		3			6,959,000		2.2	%
	Idaho		1		-		-		1		-		-		2			4,740,000		1.5	%
	Pennsylvania		-		1		-		-		-		-		1			4,020,000		1.2	%
	Minnesota		-		1		-		-		-		-		1			3,911,000		1.2	%
	Alabama		2		-		-		-		-		-		2			1,810,000		0.6	%
	Illinois		-		-		1		-		-		-		1			1,338,000		0.4	%
			84		15		4		4		1		17		125		$	322,911,000		100.0	%