FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Quarterly Report Under Section 13 of 15(d)

of the Securities Exchange Act of 1934

For quarter ended June 30, 2004 Commission file number 33-41863

                           NATIONAL HEALTH INVESTORS, INC.                            

(Exact name of registrant as specified in its Charter)

               Maryland                               62-1470956               
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Vine Street
           Murfreesboro, TN                               37130                    
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (615) 890-9100
Indicate by check mark whether the registrant
          (1)     Has filed all reports required to be filed by Section 13 or 15(d), of the Securities
                    Exchange Act of 1934 during the preceding 12 months.

Yes x

No
          (2)     Has been subject to such filing requirements for the past 90 days.

Yes x

No
Indicate by check mark whether the registrant is an accelerated filer. Yes x No
27,489,036 shares of common stock were outstanding as of July 31, 2004.



PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
NATIONAL HEALTH INVESTORS, INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
June 30, December 31,
2004 2003
(unaudited)
ASSETS
     Real estate properties:
          Land $ 33,265 $ 33,600
          Buildings and improvements 364,717 366,215
          Construction in progress 426 588
398,408 400,403
          Less accumulated depreciation (116,731) (110,938)
               Real estate properties, net 281,677 289,465
     Mortgage and other notes receivable, net 143,019 149,892
     Investment in preferred stock 38,132 38,132
     Investment in real estate mortgage investment conduits - 16,043
     Cash and cash equivalents 124,776 93,687
     Marketable securities 20,639 26,835
     Accounts receivable 3,481 4,309
     Deferred costs and other assets 7,236 6,003
          Total Assets $618,960 $624,366
LIABILITIES
Unsecured public notes $100,000 $100,000
     Debt 56,608 62,100
     Convertible subordinated debentures 1,185 1,351
     Accounts payable and other accrued expenses 28,799 30,882
     Accrued interest 3,391 3,409
     Dividends payable 11,682 13,385
     Deferred income 3,422 3,595
          Total Liabilities 205,087 214,722
     Commitments and guarantees
STOCKHOLDERS' EQUITY
     Cumulative convertible preferred stock,
          $.01 par value; 10,000,000 shares authorized, 747,994
shares, issued and outstanding at December 31, 2003, stated at
           liquidation preference of $25 per share - 18,700
     Common stock, $.01 par value; 40,000,000 shares authorized; 27,486,894
          and 26,770,123 shares, respectively, issued and outstanding 274 267
     Capital in excess of par value of common stock 460,350 441,178
     Cumulative net income 527,817 502,421
     Cumulative dividends (587,263) (563,681)
     Unrealized gains on marketable securities, net 12,695 10,759
          Total Stockholders' Equity 413,873 409,644
          Total Liabilities and Stockholders' Equity $618,960 $624,366


The accompanying notes to interim condensed consolidated financial statements are an integral part of these financial statements. The interim condensed balance sheet at December 31, 2003 is taken from the audited financial statements at that date.

NATIONAL HEALTH INVESTORS, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Three Months Ended

Six Months Ended

June 30 June 30
2004

2003

2004

2003

REVENUES:
(in thousands, except share amounts)
     Mortgage interest income $ 4,818 $ 4,705 $ 9,669 $10,248
     Rental income 12,300 13,044 24,479 26,366
     Facility operating revenue 20,769 19,833 41,169 38,954
37,887 37,582 75,317 75,568
EXPENSES:
     Interest 3,083 3,176 6,203 7,164
     Depreciation 3,481 3,743 7,016 7,513
     Amortization of loan costs 37 40 74 223
     Legal expense 769 265 918 184
     Franchise and excise tax 66 67 136 463
     General and administrative 1,064 720 1,920 1,434
     Loan, REMIC, and security (recoveries) losses, net 1,093 --- (896) 1,500
     Facility operating expense 20,080 19,498 40,282 38,160
29,673 27,509 55,653 56,641
INCOME BEFORE NON-OPERATING INCOME 8,214 10,073 19,664 18,927
     Non-operating income (investment interest and other) 2,794 1,157 4,927 2,801
INCOME FROM CONTINUING OPERATIONS 11,008 11,230 24,591 21,728
Discontinued Operations
     Operating loss - discontinued (299) (414) (447) (724)
     Gain on sale of real estate 1,252 --- 1,252 1,932
953 (414) 805 1,208
NET INCOME 11,961 10,816 25,396 22,936
DIVIDENDS TO PREFERRED STOCKHOLDERS 117 398 514 795
NET INCOME APPLICABLE TO COMMON STOCK $11,844 $10,418 $24,882 $22,141
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE:
     Basic $ .40 $ .41 $ .89 $ .78
     Diluted $ .40 $ .40 $ .88 $ .78
DISCONTINUED OPERATIONS PER COMMON SHARE:
     Basic $ .03 $ (.02) $ .03 $ .05
     Diluted $ .03 $ (.01) $ .03 $ .04
NET INCOME PER COMMON SHARE:
     Basic $ .43 $ .39 $ .92 $ .83
     Diluted $ .43 $ .39 $ .91 $ .82
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
     Basic 27,267,605 26,720,197 27,021,602 26,704,594
     Diluted 27,534,171 26,976,360 27,299,444 26,960,445
Common dividends per share declared $ .425 $ .40 $ .85 $ .80





The accompanying notes to interim condensed consolidated financial statements are an integral part of these financial statements.

NATIONAL HEALTH INVESTORS, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30
2004 2003

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income $ 25,396 $ 22,936
     Depreciation 7,058 7,751
     Loan, REMIC, and security (recoveries) losses, net (896) 1,500
Gain on sale of real estate (1,252) (1,932)
     Amortization of loan costs 74 223
Realized gain on sale of marketable securities (1,995) (12)
     Amortization of bond discount (9) (16)
Amortization of REMIC discount (1,182) --
     Amortization of deferred income (173) (303)
     Decrease (increase) in accounts receivable 828 (1,669)
     Increase in deferred costs and other assets (1,307) (1,550)
     Increase in accounts payable and accrued liabilities 923 1,916
Decrease in accrued interest payable (18) (1,182)
          NET CASH PROVIDED BY OPERATING ACTIVITIES 27,447 27,662
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in mortgage and other notes receivable (875) (1,681)
     Collection of mortgage and other notes receivable 7,299 14,429
Disposition of mortgage notes receivable 1,750 --
Collection of real estate mortgage investment conduits 13,126 --
     Acquisition of property and equipment, net (806) (604)
Disposition of property and equipment, net 2,789 4,045
     Decrease in marketable securities, net 10,823 198
          NET CASH PROVIDED BY INVESTING ACTIVITIES 34,106 16,387
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt -- 6,215
     Principal payments on debt (5,492) (2,014)
     Redemption of subordinated convertible debentures -- (39,917)
Sale of common stock 891 149
Repurchase of common stock (578) --
     Dividends paid to stockholders (25,285) (20,815)
          NET CASH USED IN FINANCING ACTIVITIES (30,464) (56,382)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 31,089 (12,333)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 93,687 43,062
CASH AND CASH EQUIVALENTS, END OF PERIOD $124,776 $ 30,729

(continued)



NATIONAL HEALTH INVESTORS, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended
June 30
2004 2003
(in thousands)
Supplemental Information:
     Cash payments for interest expense $ 3,890 $ 5,309
During the six months ended June 30, 2004 and 2003, $166,000 and
$216,000 of Senior Subordinated Convertible Debentures were con-
verted into 23,709 and 30,849 shares of NHI's common stock:
                 Senior subordinated convertible debentures $ (166) $ (216)
                 Financing costs --- ---
                 Accrued interest --- (3)
                 Common stock --- ---
                 Capital in excess of par 166 219
During the six months ended June 30, 2004, $18,700,000 or 747,994 shares
of 8.5% Cumulative Convertible Preferred stock was called by NHI

for redemption into 676,922 shares of NHI's common stock:

Cumulative convertible preferred stock $(18,700) $ ---
Common stock 7 ---
Capital in excess of par 18,693 ---
During the six months ended June 30, 2003, NHI acquired
property in exchange for its rights under mortgage notes receivable:
Mortgage notes receivable $ --- $ 13,069
Land --- (1,096)
Buildings and improvements --- (11,973)













The accompanying notes to interim condensed consolidated financial statements are an integral part of these financial statements.

NATIONAL HEALTH INVESTORS, INC.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX ENDED JUNE 30, 2004 AND 2003
(in thousands, except share and per share amounts)

Cumulative Convertible

 Unrealized Total
Preferred Stock Capital in Gains Stock-
Shares Amount Common Stock Excess of Cumulative Cumulative (losses) on holders'
at $25 per Share Shares Amount Par Value Net Income Dividends Securities Equity
BALANCE AT 12/31/03 747,994 $18,700 26,770,123 $267 $441,178 $502,421 $(563,681) $ 10,759 $409,644
Net income --- --- --- --- --- 25,396 --- --- 25,396
Unrealized gains on securities --- --- --- --- --- --- --- 1,936 1,936
Total Comprehensive Income 27,332
Shares sold --- --- 40,000 --- 891 --- --- --- 891
Shares repurchased --- --- (23,860) --- (578) --- --- --- (578)
Shares issued in conversion of convertible