Press Releases

For Release: May 2nd, 2005

Contact: Gerald Coggin, Senior VP of Corporate Relations

Phone: (615) 890-9100

NHI reports first quarter income

MURFREESBORO, Tenn. -- National Health Investors, Inc., (NYSE: NHI) announced income from continuing operations for the first quarter ended March 31, 2005 of $16,127,000 or 58 cents per basic and diluted share of common stock compared to $13,618,000 or 49 cents per basic and diluted share of common stock for the same period in 2004.

Funds from operations, (“FFO”) from continuing operations for the first quarter ended March 31, 2005 was $18,902,000 or 69 cents per basic and $18,930,000, or 68 cents per diluted share of common stock compared to $16,406,000 or 61 cents per basic and $16,438,000 or 59 cents per diluted share of common stock in 2004.

Income and FFO from continuing operations for the first quarter of 2005 includes $4,522,000 or 16 cents per basic and diluted share of common stock related to non-recurring income. This non-recurring income is attributable to security sale recoveries and gains of $9,072,000, less impairment writedowns of $4,550,000 on realty and mortgage notes receivable.

Income and FFO from continuing operations for the first quarter of 2004 included $2,657,000 or 10 cents per basic and diluted share of common stock related to non-recurring income attributable to security sale recoveries and gains and loan recoveries.

Accomplishments during the first quarter included: the investment of approximately $27,500,000 in mortgages receivable and real property; the repayment of approximately $34,500,000 of debt; improved liquidity as a result of cash and marketable securities of $142,685,000 exceeding total debt outstanding of $121,010,000 and; a debt to capitalization ratio of 22.3%, the lowest in our 13 year history.

NHI 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 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.

	Condensed Statements of Income
	(in thousands, except share and per share amounts)
				Three Months Ended March 31
	Revenues:			2005				2004
	Mortgage interest income		$	3,907		$		4,851
	Rental income			11,538				12,120
	Facility operating revenue			22,629				20,400
				38,074				37,371
	Expenses:
	Interest			2,470				3,120
	Depreciation			3,149				3,441
	Amortization of loan costs			72				37
	Legal expense			147				149
	Franchise and excise tax			67				70
	General and administrative			1,103				856
	Loan,realty & security losses (recoveries),net			(472)				(1,989)
	Facility operating expense			21,365				20,202
				27,901				25,886
	Income Before Non-Operating Income			10,173				11,485
	Non-operating income (investment interest & other)			5,954				2,133
	Income From Continuing Operations			16,127				13,618
	Discontinued Operations:
	Operating Loss – discontinued			(81)				(183)
	Gain on sale of real estate			748				---
				667				(183)
	Net Income			16,794				13,435
	Dividends to preferred stockholders			---				397
	Net income applicable to common stock		$	16,794		$		13,038

	Income from continuing operations per common share:
	Basic		$	.58		$		.49
	Diluted		$	.58		$		.49
	Discontinued operations per common share:
	Basic		$	.03		$		---
	Diluted		$	.03		$		(.01)
	Net income per common share:
	Basic		$	.61		$		.49
	Diluted		$	.61		$		.48
	Funds from operations
	Basic		$	18,902		$		16,406
	Diluted		$	18,930		$		16,438
	Funds from operations per common share
	Basic		$	.69		$		.61
	Diluted		$	.68		$		.59
	Weighted average common shares outstanding
	Basic		27,580,665			26,782,468
	Diluted		27,774,954					27,071,585
	Diluted Shares for FFO purposes		27,774,954					27,748,503

	Dividends per common share		$	.45		$		.425

Balance Sheet Data
(in thousands)		March 31									December 31
					2005							2004
Real estate properties, net		$			267,454				$			278,170
Mortgages receivable, net					130,732							112,072
Preferred stock investment					38,132							38,132
Cash and marketable securities					142,685							190,313
Debt					119,962							154,432
Convertible debt					1,048							1,116
Stockholders’ equity					420,441							425,539

Reconciliation of Funds From Operations ⁽¹⁾⁽²⁾

The following table reconciles net income to funds from operations:


	Three Months Ended March 31
		2005		2004
(in thousands, except share and per share amounts)

Net income	$	16,794	$	13,435
Dividends to preferred stockholders		---		(397)

Net income applicable to common stockholders		16,794		13,038
Elimination of non-cash items in net income:
Real estate depreciation		2,834		2,893
Real estate depreciation in discontinued operations		22		78
Gain on sale of real estate		(748)		---
Dividends to preferred stockholders, if dilutive		---		397
Basic funds from operations applicable to common stockholders		18,902		16,406

Interest on convertible subordinated debentures		28		32

Diluted funds from operations applicable to common stockholders	$	18,930	$	16,438

Basic funds from operations per share	$	.69	$	.61
Diluted funds from operations per share	$	.68	$	.59

Shares for basic funds from operations per share		27,580,665		26,782,468
Shares for diluted funds from operations per share		27,774,954		27,748,503

⁽¹⁾ We believe that funds from operations 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⁾ 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.

NHI’s first quarter income

National Health Investors, Inc. Portfolio Summary March 31, 2005


Portfolio Statistics						Investment
		Properties		Investment		Percentage
	Equity Ownership	94		270,004,000		64%
	Mortgage Loan Receivables	65		132,732,000		36%
	Total Real Estate Portfolio	159		402,736,000		100%

Equity Ownership		Properties		Beds		Investments
	Nursing Home	70		9,366		$ 181,848,000
	Assisted Living	14		1,185		59,267,000
	Medical Office Buildings	4		124,427 sq.ft.		10,750,000
	Retirement Homes	5		426		10,615,000
	Hospitals	1		55		7,524,000
				94		$ 270,004,000

Mortgage Loan Receivables		Properties		Beds		Investments
	Nursing Homes	46		5,005		$ 120,786,000
	Assisted Living	1		95		5,500,000
	Retirement Homes	1		60		2,041,000
	Developmentally Disabled	17		108		4,405,000
				65		$ 132,732,000
	Remic II Investment			459
	Total Mortgage Portfolio	65				$ 132,732,000

Summary of Facilities by Type:
				Percentage of		Total
		Properties		Total Dollars		Dollars
	Nursing Homes	116		75.14%		$ 302,634,000
	Assisted Living	15		16.08%		64,767,000
	Medical Office Buildings	4		2.67%		10,750,000
	Retirement Homes	6		3.14%		12,656,000
	Hospitals	1		1.87%		7,524,000
	Developmentally Disabled	17		1.09%		4,405,000
		159		100.00%		$ 402,736,000

NHI’s first quarter income


Portfolio by Operator Type
		# of		Percentage of		Total
		Properties		Total Dollars		Dollars
	Public	72		24.76%		$ 99,733,000
	Regional	80		70.64%		284,496,000
	Small Operator	7		4.60%		18,507,000
		159		100.00%		$ 402,736,000


	Public Operators			Percentage
				Of Total		Dollar
				Portfolio		Amount

	National HealthCare Corp.			13.50%		$ 54,375,000
	Community Health Systems, Inc.			3.45%		13,909,000
	Sunrise Senior Living Services			3.38%		13,605,000
	Sun Healthcare			2.25%		9,073,000
	Res-Care, Inc.			1.09%		4,405,000
	HCA-The Healthcare Company			1.08%		4,366,000
				24.76%		$ 99,733,000

NHI’s first quarter income

Summary of Facilities by State March 31, 2005

										Percent of
			Acute		Dev.	Asst.	Retire-		Current	Total
		LTC	Care	MOB	Disab.	Living	Ment	Total	Amount	Portfolio
1	Florida	17		1	14	6		38	101,222,000	25.42%
2	Texas	27		2			1	30	86,976,000	21.84%
3	Tennessee	21			3	3	2	29	36,813,000	9.25%
4	Missouri	9					1	10	26,534,000	6.66%
5	New Jersey	2				1		3	25,871,000	6.50%
6	Virginia	8						8	20,312,000	5.10%
7	Arizona	1				4		5	18,888,000	4.74%
8	New Hampshire	3					1	4	15,376,000	3.86%
9	Georgia	7						7	14,973,000	3.76%
10	Massachusetts	4						4	11,315,000	2.84%
11	Kansas	7						7	11,226,000	2.82%
12	Kentucky	3	1					4	9,186,000	2.31%
13	South Carolina	3				1		4	8,078,000	2.03%
14	Idaho	1					1	2	5,492,000	1.38%
15	Alabama	2						2	2,285,000	0.57%
16	Wisconsin	1						1	2,071,000	0.52%
17	Illinois	0		1				1	1,568,000	0.39%
		116	1	4	17	15	6	159	398,186,000	100.00%

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