Note 5 - Long-term Leases

9 Months Ended

Sep. 30, 2015

Leases of Lessee Disclosure [Text Block]

Note 5 – Long-Term Leases

Capital Leases

Fixed assets recorded under the capital leases, which are included in property and equipment in the interim condensed consolidated balance sheets, are as follows:

	September 30, 2015			December 31, 2014
	(in thousands)
Buildings and personal property	$	39,032		$	39,032
Accumulated amortization		(6,214	)		(3,271	)
	$	32,818		$	35,761

Operating Leases

At September 30, 2015, NHC leases from National Health Investors, Inc. (“NHI”) the real property of 35 skilled nursing facilities, seven assisted living facilities and three independent living facilities under two separate lease agreements. Base rent expense under both lease agreements totals $34,200,000 annually with rent thereafter escalating by 4% of the increase in facility revenue over the base year. Total facility rent expense to NHI was $27,533,000 and $27,400,000 for the nine months ended September 30, 2015 and 2014, respectively.

Minimum Lease Payments

The approximate future minimum lease payments required under all leases that have remaining non-cancelable lease terms at September 30, 2015 are as follows:

	Operating Leases		Capital Leases
	(in thousands)
2016	$	34,200	$	5,200
2017		34,200		5,200
2018		34,200		5,200
2019		34,200		5,200
2020		34,200		5,200
Thereafter		219,500		17,767
Total minimum lease payments	$	390,500	$	43,767
Less: Amounts representing interest				(9,470	)
Present value of minimum lease payments				34,297
Less: Current portion				(3,230	)
Long-term capital lease obligations			$	31,067