8-K 1 nhi8k03e.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 30, 2004 (January 29, 2004)

National Health Investors, Inc.

(Exact name of Registrant as specified in its charter)

Maryland

(State or Other Jurisdiction of Incorporation)

333-41863

62-1470956

(Commission File No.)

(IRS Employer

Identification Number)

100 Vine Street, Suite 1202

Murfreesboro, TN 37130

(Address of principal executive offices, including zip code)

(615) 890-9100

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)





Item 12. Results of Operations and Financial Condition

On January 29, 2004, National Health Investors, Inc. made its year end earnings announcement. A copy of the press release is furnished as an exhibit to this Form 8-K and is incorporated herein by reference.



SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



National Health Investors, Inc.
By: /s/ W. Andrew Adams
Name: W. Andrew Adams
Title: Chief Executive Officer
By:/s/ Donald K. Daniel
Name: Donald K. Daniel
Title: Principal Accounting Officer
Date: January 30, 2004




Exhibit Index



Number Exhibit
99 Press release, dated January 29, 2004




EXHIBIT 99





For Release: January 29, 2004

Contact: Gerald Coggin VP and Dir. of Investor Relations

Phone: (615) 890-9100



NHI announces 2003 year end results

MURFREESBORO, Tenn. -- National Health Investors, Inc., (NYSE: NHI and NHIPr) announced income from continuing operations for the year ended Dec. 31, 2003 of $43,624,000 or $1.57 per common share, basic and $1.56 per common share, diluted, compared to income from continuing operations of $25,521,000 or 90 cents per common share, basic and diluted for 2002.

Net income for the year ended Dec. 31, 2003 was $43,808,000 or $1.58 per common share, basic and $1.57 per common share, diluted, compared to net income of $30,787,000 or $1.10 per common share, basic and diluted for 2002.

Funds from operations ("FFO") from continuing operations for the year ended Dec. 31, 2003 were $57,088,000 or $2.14 per common share basic, and $57,237,000 or $2.12 per common share, diluted, compared to $39,475,000 or $1.49 per common share, basic, and $39,776,000 or $1.48 per common share , diluted, for 2002.

Income from continuing operations for the fourth quarter ended Dec. 31, 2003 was $9,927,000 or 35 cents per common and diluted share compared to a loss from continuing operations of $4,782,000 or 20 cents per common share, basic and diluted for 2002.

Net income for the fourth quarter ended Dec. 31, 2003 was $9,817,000 or 35 cents per common share, basic and diluted, compared to a net loss of $4,892,000 or 20 cents per common share, basic and diluted for 2002.

Funds from continuing operations for the fourth quarter ended Dec. 31, 2003 were $13,319,000 or 50 cents per common share basic, and $13,353,000 or 49 cents per common share, diluted, compared to funds applied to operations of $1,179,000 or 4 cents per common share, basic and diluted for 2002.

Income and FFO during the quarter ended Dec. 31, 2003 included additional mortgage interest income of $1,465,000 compared to the previous quarter from our real estate mortgage investment conduits. Separately, NHI recorded a loss of $2,000,000 on a first mortgage loan writedown. The net effect of these items was a decline in income and FFO of $535,000 or two cents per share, basic and diluted for the fourth quarter.

"At December 31, 2003, cash and marketable securities totaled approximately 74% of total debt outstanding," said President Andy Adams. "Even with this unsurpassed liquidity, our debt to capitalization ratio declined to 28.5%, the lowest level in our 12 year history."

NHI will hold its annual meeting on April 20 at 4:00 p.m. Central Time.

NHI specializes in the financing of health care real estate by first mortgage and by purchase and leaseback transactions. The common and preferred stocks of the company trade on the New York Stock Exchange with the symbols NHI and NHIPr respectively. 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. 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.

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Page 2 NHI's year end results



Condensed Statements of Income
(in thousands except share and per share Three Months Ended December 31 Year Ended December 31
2003 2002 2003 2002
Revenues:
Mortgage interest income $ 6,151 $ 4,925 $ 21,046 $ 29,891
Rental income 11,934 11,690 56,243 47,737
Facility operating revenues 20,335 17,959 79,272 73,006
Investment interest and other 1,344 1,640 5,931 6,655
$ 39,764 $ 36,214 $ 162,492 $ 157,289
Expenses:
Interest $ 3,239 $ 4,020 $ 13,840 $ 17,000
Depreciation of real estate 3,789 4,000 15,053 15,543
Amortization of loan costs 37 128 297 738
Facility operating expenses 19,210 18,266 76,132 72,017
Loan, realty & security loss 2,234 13,555 9,134 23,055
Legal expense 286 152 729 652
Franchise and excise tax 20 (26) 548 337
General and administrative 1,022 901 3,135 2,426
$ 29,837 $ 40,996 $ 118,868 $ 131,768
Income (Loss) From Continuing Operations $ 9,927 $ (4,782) $ 43,624 $ 25,521
Discontinued Operations
Operating Income (Loss) - Discontinued (110) (110) (1,351) 183
Net gain on sale of real estate --- --- 1,535 5,083
$ (110) $ (110) $ 184 $ 5,266
Net Income (Loss) $ 9,817 $ (4,892) $ 43,808 $ 30,787
Dividends to preferred stockholders 397 397 1,589 1,589
Net income (loss) applicable to common $ 9,420 $ (5,289) $ 42,219 $ 29,198
Income (Loss) from continuing operations per common share
Basic $ .35 $ (.20) $ 1.57 $ .90
Diluted $ .35 $ (.20) $ 1.56 $ .90
Discontinued operations per common
Basic $ .00 $ .00 $ .01 $ .20
Diluted $ .00 $ .00 $ .01 $ .20
Net income (loss) per common share
Basic $ .35 $ (.20) $ 1.58 $ 1.10
Diluted $ .35 $ (.20) $ 1.57 $ 1.10
Funds from(to) operations
Basic $ 13,319 $ (1,179) $ 57,088 $ 39,475
Diluted $ 13,353 $ (1,179) $ 57,237 $ 39,776
Funds from (to) operations per common share
Basic $ .50 $ (.04) $ 2.14 $ 1.49
Diluted $ .49 $ (.04) $ 2.12 $ 1.48
Weighted average common shares outstanding
Basic 26,766,300 26,648,319 26,727,814 26,453,053
Diluted 27,026,532 26,648,31 26,985,571 26,853,420
Dividends per common share $ .50 $ .35 $ 1.70 $ 1.40
Balance Sheet Data
(in thousands) Dec. 31 Dec. 31
2003 2002
Real estate properties, net $ 289,465 $ 304,394
Mortgages receivable, net 149,892 201,236
Preferred stock investment 38,132 38,132
REMIC investments 16,043 36,366
Cash and marketable securities 120,522 58,825
Debt and credit facilities 162,100 161,763
Convertible debt 1,351 41,633
Stockholders' equity 409,644 400,429

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Page3 NHI's Year End Results



Reconciliation of Funds From Operations (1)



The following table reconciles net income applicable to common stockholders to funds from operations applicable to common stockholders:



(in thousands, except share and per share amounts)

Three Months Ended Dec. Year Ended Dec. 31
2003 2002 2003 2002
Net income (loss) applicable to common $ 9,420 $ (5,289) $ 42,219 $ 29,198
Adjustments:
Real estate depreciation 3,789 4,000 15,053 15,543
Other Items:
Discontinued operations:
Operating (Income) loss - discontinued 110 110 1,351 (183)
(Gain) loss on sale of real estate --- --- (1,535) (5,083)
Basic funds from (to) operations applicable to
common stockholders 13,319 (1,179) 57,088 39,475
Interest on convertible subordinated debentures 34 --- 149 301
Diluted funds from (to) operations applicable to
common stockholders $ 13,353 $ (1,179) $ 57,237 $ 39,776
Basic funds from (to) operations per share $ .50 $ (.04) $ 2.14 $ 1.49
Diluted funds from (to) operations per share $ .49 $ (.04) $ 2.12 $ 1.48
Shares for basic funds from operations per share 26,766,300 26,648,319 26,727,814 26,453,053
Shares for diluted funds from operations per share 27,026,532 26,648,319 26,985,571 26,853,420




(1) We believe that funds from operations is an important supplemental measure of operating performance. We, therefore, disclose funds from operations, although it is a measurement that is not defined by accounting principles generally accepted in the United States. We generally use the National Association of Real Estate Investment Trusts (NAREIT) measure of funds from operations. We define funds from operations as income before extraordinary items adjusted for certain non-cash items, primarily real estate depreciation, less gains/losses on sales of facilities. 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. Funds from operations does not represent cash generated from operating activities as defined by accounting principles generally accepted in the United States (funds from operations does not include changes in operating assets and liabilities) and, therefore, should not be considered as an alternative to net income as the primary indicator of operating performance or to cash flow as a measure of liquidity.



(2)We have complied 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.





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Page 4 NHI's Year End Results

National Health Investors, Inc. Portfolio Summary December 31, 2003



Portfolio Statistics Investment

Percentage

Properties Investment
Equity Ownership 94 289,465,000 64%
Mortgage Loan Receivables 73 161,342,000 36%
Total Real Estate Portfolio 167   450,807,000   100%
Equity Ownership Properties   Beds   Investments
Nursing Homes 68 9,142 $ 186,110,000
Assisted Living 16 1,350 72,701,000
Medical Office Buildings 4 124,427 sq.ft. 11,335,000
Retirement Homes 5 471 11,334,000
Hospitals 1   55   7,985,000
94 $ 289,465,000
Mortgage Loan Receivables Properties Beds Investments
Nursing Homes 50 5,512 $ 132,376,000
Assisted Living 2 156 6,164,000
Retirement Homes 1 60 2,185,000
Developmentally Disabled 17 108 4,574,000
70     $ 145,299,000
Remic 3 390 9,697,000
Remic II Investment   2,313 6,346,000
Total Mortgage Portfolio 73 $ 161,342,000
Summary of Facilities by Type:
Percentage of Total
Properties   Total Dollars   Dollars
Nursing Homes 121 74.21% $ 334,529,000
Assisted Living 18 17.49% 78,865,000
Medical Office Buildings 4 2.51% 11,335,000
Retirement Homes 6 3.00% 13,519,000
Hospitals 1 1.77% 7,985,000
Developmentally Disabled 17   1.01%   4,574,000
167   100.00%  $ 450,807,000
Portfolio by Operator Type
# of   Percentage of   Total
Public 98 47.79% $ 215,443,000
Regional 56 43.58% 196,455,000
Small Operator 13   8.63%   38,909,000
167   100.00% 450,807,000
Public Operators:
Percentage

Of Total

Portfolio

Dollar

Amount

National HealthCare Corp. 13.41% $ 60,457,000
National Health Investors, Inc. 5.04% 22,735,000
Community Health Systems, Inc. 3.26% 14,676,000
Sunrise Senior Living Services 3.13% 14,132,000
Mariner Post Acute Network 2.48% 11,197,000
Sun Healthcare 2.10% 9,454,000
HCA-The Healthcare Company 1.03% 4,644,000
Res-Care, Inc. 1.01% 4,574,000
Centennial HealthCare Corp. 0.08% 382,000
31.55% $ 142,251,000



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Page 5 NHI's Year End Results



Summary of Facilities by State December 31, 2003
Percent of
Acute Dev. Asst. Retire- Current Total
LTC Care MOB Disab. Living ment Total Amount Portfolio
1 Florida 20 1 14 7 42 117,972,000 26.17%
2 Texas 28 2 1 1 32 98,838,000 21.92%
3 Tennessee 21 3 3 2 29 39,558,000 8.77%
4 Missouri 9 1 10 27,388,000 6.08%
5 New Jersey 2 1 3 26,844,000 5.95%
6 Arizona 1 4 5 19,556,000 4.34%
7 Virginia 7 7 19,347,000 4.29%
8 New Hampshire 3 1 4 17,192,000 3.81%
9 Georgia 7 7 17,082,000 3.79%
10 Massachusetts 4 4 12,479,000 2.77%
11 Kansas 7 7 11,639,000 2.58%
12 Kentucky 3 1 4 9,438,000 2.09%
13 South Carolina 3 1 4 8,655,000 1.91%
14 Idaho 1 1 2 5,713,000 1.27%
15 Colorado 1 1 3,735,000 0.83%
16 Alabama 2 2 2,512,000 0.56%
17 North Carolina 0 1 1 2,011,000 0.45%
18 Illinois 0 1 1 1,636,000 0.36%
19 Wisconsin 1 1 1,441,000 0.32%
20 Washington 1 1 1,425,000 0.32%
121 1 4 17 18 6 167 444,461,000 98.59%
Remic II 6,346,000 1.41%
450,807,000 100.00%




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