News Details

NHI Reports Third Quarter Normalized FFO of $0.61

October 30, 2009

MURFREESBORO, Tenn.--(BUSINESS WIRE)-- National Health Investors, Inc. (NYSE:NHI) announced today its normalized Funds From Operations ("FFO") and net income for the three and nine months ended September 30, 2009.

Third Quarter Highlights:

    --  Normalized FFO improved to $0.61 per basic and diluted common share as
        compared to $0.59 for the same period in 2008
    --  FFO increased 10.2% compared to the same period in 2008
    --  NHI completed a previously announced $15.8 million purchase/leaseback of
        a skilled nursing facility built in 2007 in Texas operated by affiliates
        of Legend Healthcare, LLC

Normalized FFO for the three months ended September 30, 2009 was $16,900,000 or $0.61 per basic and diluted common share compared to $16,460,000 or $0.59 per basic and diluted common share for the same period in 2008. Normalized FFO for the three months ended September 30, 2009 excludes the collection of past due rent and interest from two customers totaling $2,654,000 and other one-time items totaling $141,000. Normalized FFO for the three months ended September 30, 2008 excludes asset write-downs of $2,712,000 and the recognition into income of deferred credits totaling $4,121,000.

FFO, as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), for the three months ended September 30, 2009 was $19,695,000 or $0.71 per basic and diluted common share compared to $17,869,000 or $0.64 per basic and diluted common share for the same period in 2008. Net income for the three months ended September 30, 2009 was $17,473,000 or $0.63 per basic and diluted common share compared to net income of $15,951,000 or $0.57 per basic and diluted common share for the same period in 2008.

Normalized FFO for the nine months ended September 30, 2009 was $47,690,000 or $1.73 per basic and diluted common share compared to $48,199,000 or $1.74 per basic and $1.73 per diluted common share for the same period in 2008. Normalized FFO for the nine months ended September 30, 2009 excludes the collection of past due rent and interest from two customers totaling $2,654,000, recoveries of previous write-downs and gains of $1,719,000, the recognition into income of deferred credits totaling $1,493,000 and other one-time items totaling $443,000. Normalized FFO for the nine months ended September 30, 2008 excludes asset write-downs of $2,976,000, a restricted stock forfeiture of $566,000 and the recognition into income of deferred credits totaling $4,121,000.

FFO for the nine months ended September 30, 2009 was $53,999,000 or $1.96 per basic and diluted common share compared to $49,910,000 or $1.80 per basic and diluted common share for the same period in 2008. Net income for the nine months ended September 30, 2009 was $47,938,000 or $1.74 per basic and diluted common share, compared to $44,143,000 or $1.59 per basic and diluted common share for the same period in 2008.

National Health Investors, Inc. is a healthcare real estate investment trust that specializes in the financing of healthcare real estate by purchase and leaseback transactions and by mortgage loans. NHI's investments involve 125 properties in 18 states and include skilled nursing facilities, assisted living facilities, independent living facilities, medical office buildings, residential projects for the developmentally disabled and an acute care hospital. The common stock of the company trades on the New York Stock Exchange with the symbol NHI. Additional information about NHI, including its 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.

Reconciliation of Funds From Operations and Normalized Funds From Operations(1)(2)(3)

(in thousands, except share and per share amounts)

                                                                                 Table
                                                                                 1

               Three months ended                Nine months ended

               September                         September

               2009             2008             2009             2008

Net income     $ 17,473         $ 15,951         $ 47,938         $ 44,143

Elimination
of non-cash
items in net
income:

Real estate      2,222            1,905            6,061            5,728
depreciation

Real estate
depreciation
in               -                13               -                39
discontinued
operations

Funds from     $ 19,695         $ 17,869         $ 53,999         $ 49,910
operations

Collection
of past due
rent and         (2,654     )     -                (2,654     )     -
interest
amounts

Asset
write-downs
and              -                2,712            (1,719     )     2,976
(recoveries
of previous
writedowns)

Recognition
of deferred      -                (4,121     )     (1,493     )     (4,121     )
credits

Restricted
stock            -                -                -                (566       )
forfeiture

Other
one-time         (141       )     -                (443       )     -
items

Normalized
funds from     $ 16,900         $ 16,460         $ 47,690         $ 48,199
operations

Weighted
average
common
shares
outstanding

Basic            27,589,161       27,767,394       27,580,568       27,750,377

Diluted          27,642,237       27,785,708       27,605,504       27,783,141

Funds from
operations
per share:

Basic          $ 0.71           $ 0.64           $ 1.96           $ 1.80

Diluted        $ 0.71           $ 0.64           $ 1.96           $ 1.80

Normalized
FFO per
share:

Basic          $ 0.61           $ 0.59           $ 1.73           $ 1.74

Diluted        $ 0.61           $ 0.59           $ 1.73           $ 1.73



     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
(1)  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.

     Normalized FFO excludes from FFO any material one-time items reflected in
     GAAP net income. Excluded items may include, but are not limited to,
(2)  impairments of assets, gains and losses attributable to the acquisition and
     disposition of assets and liabilities, and recoveries of previous
     write-downs.

     Our computations above are intended to comply with the SEC's interpretation
(3)  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.



Selected Balance Sheet Data

(in thousands)

                                                                        Table 2

                                 September 30, 2009   December 31, 2008

Real estate properties, net      $ 231,442            $ 181,332

Mortgages receivable, net          98,372               108,640

Preferred stock investment, at     38,132               38,132
cost

Cash and cash equivalents          63,571               100,242

Marketable securities              22,960               26,594

Bonds payable                      1,400                3,987

Stockholders' equity               435,872              429,615



Condensed Statements of Income

(in thousands, except share and per share amounts)

                                                                               Table
                                                                               3

                 Three months ended              Nine months ended

                 September 30,                   September 30,

                 2009             2008           2009             2008

Revenues:

Rental income    $ 17,054         $ 13,220       $ 44,570         $ 40,017

Mortgage
interest           2,568            2,400          7,071            7,214
income

                   19,622           15,620         51,641           47,231

Expenses:

Interest           15               62             77               247
expense

Depreciation       2,317            1,925          6,210            5,935

Amortization       3                3              9                11
of loan costs

Legal expense      337              310            1,272            1,041

Franchise,
excise and         135              108            549              525
other taxes

General and        1,194            453            4,040            2,242
administrative

Loan and
realty losses      -                -              (640       )     -
(recoveries)

                   4,001            2,861          11,517           10,001

Income Before
Non-Operating      15,621           12,759         40,124           37,230
Income

Non-operating
income
(investment        1,856            701            5,728            4,464
interest and
other)

Income From
Continuing         17,477           13,460         45,852           41,694
Operations

Discontinued
Operations

Income from
operations -       (4         )     2,491          2,086            2,449
discontinued

Net income       $ 17,473         $ 15,951       $ 47,938         $ 44,143

Weighted
average common
shares
outstanding:

Basic              27,589,161       27,767,394     27,580,568       27,750,377

Diluted            27,642,237       27,785,708     27,605,504       27,783,141

Earnings per
share:

Basic:

Income from
continuing       $ 0.63           $ 0.48         $ 1.66           $ 1.50
operations

Discontinued       -                0.09           0.08             0.09
operations

Net income
available to     $ 0.63           $ 0.57         $ 1.74           $ 1.59
common
stockholders

Diluted:

Income from
continuing       $ 0.63           $ 0.48         $ 1.66           $ 1.50
operations

Discontinued       -                0.09           0.08             0.09
operations

Net income
available to     $ 0.63           $ 0.57         $ 1.74           $ 1.59
common
stockholders

Funds from       $ 19,695         $ 17,869       $ 53,999         $ 49,910
operations

Funds from
operations per
common share

Basic            $ 0.71           $ 0.64         $ 1.96           $ 1.80

Diluted          $ 0.71           $ 0.64         $ 1.96           $ 1.80

Quarterly
dividend         $ 0.55           $ 0.55         $ 1.65           $ 1.65
declared per
common share



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.

    Source: National Health Investors, Inc.
Contact: National Health Investors, Inc. Roger R Hopkins, 615-890-9100 Chief Accounting Officer