NHI Reports Second Quarter Income.MURFREESBORO Murfreesboro (mûr`frēzbûr'ə), city (1990 pop. 44,922), seat of Rutherford co., central Tenn., on Stones River; inc. 1817. It is the processing center of a dairy, livestock, and farm area. , Tenn. -- National Health Investors, Inc., (NYSE NYSE See: New York Stock Exchange : NHI NHI abbr. National Health Insurance ) announced net income for the second quarter ended June June: see month. 30, 2006 of $19,780,000 or 71 cents per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. 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 attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to gains from realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. sales and mortgage prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. compared to $525,000 or two cents per basic and diluted share from realty sales gains and impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. writedowns on mortgage notes receivable in 2005. Adjusting for the above-mentioned A`bove´-men`tioned a. 1. Mentioned or named before; aforesaid; mentioned or named earlier in the same text (in written documents). Adj. 1. 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 Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. , ("FFO FFO See: Funds from operations ") 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 Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. 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 A transaction whereby land is sold and subsequently rented by the seller from the purchaser who is the new owner. transactions. The common stock of the company trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. with the symbol NHI. Additional information including NHI's most recent press releases may be obtained on our web site at www.nhinvestors.com. Statements in this press release that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . 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.
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
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.
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
======================================
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
Acute Dev. Asst. Retire-
LTC Care MOB Disab. Living ment Total
-----------------------------------------------------
Florida 15 1 14 4 34
Texas 19 2 1 22
Tennessee 20 3 3 2 28
Missouri 8 1 9
New Jersey 0 1 1
Virginia 8 8
Arizona 1 4 5
New Hampshire 3 1 4
Georgia 7 7
Massachusetts 4 4
Kansas 7 7
Kentucky 2 1 3
South Carolina 3 1 4
Idaho 1 1 2
Pennsylvania 0 1 1
Wisconsin 1 1
Alabama 2 2
Illinois 0 1 1
-----------------------------------------------------
101 1 4 17 14 6 143
=====================================================
Percent
Investment Total
Amount Portfolio
-------------------------------------
Florida $83,724,000 24.25%
Texas 74,994,000 21.72%
Tennessee 33,394,000 9.67%
Missouri 19,157,000 5.55%
New Jersey 13,103,000 3.80%
Virginia 20,002,000 5.79%
Arizona 18,221,000 5.28%
New Hampshire 14,457,000 4.19%
Georgia 14,982,000 4.34%
Massachusetts 10,775,000 3.12%
Kansas 11,168,000 3.24%
Kentucky 8,142,000 2.36%
South Carolina 7,543,000 2.19%
Idaho 5,271,000 1.53%
Pennsylvania 4,317,000 1.25%
Wisconsin 2,331,000 0.68%
Alabama 2,118,000 0.61%
Illinois 1,500,000 0.43%
-------------------------------------
$345,199,000 100.00%
=====================================
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