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 March 31, 1998 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
25,360,682 shares of common stock were outstanding as of April 30, 1998.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
<CAPTION>
NATIONAL HEALTH INVESTORS, INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
March 31 Dec. 31
1998 1997
(unaudited)
<S> <C> <C>
ASSETS
Real estate properties:
Land $ 20,767 $ 20,468
Buildings and improvements 213,800 205,631
Construction in progress 5,461 10,899
240,028 236,998
Less accumulated depreciation (39,108) (36,929)
Real estate properties, net 200,920 200,069
Mortgage and other notes receivable 416,934 445,603
Investment in real estate mortgage
investment conduits 37,043 37,157
Interest and rent receivable 5,418 5,185
Cash and cash equivalents 90,765 64,915
Deferred costs and other assets 3,457 3,670
Total Assets $754,537 $756,599
LIABILITIES AND DEFERRED INCOME
Long-term debt $155,478 $155,659
Credit facilities --- ---
Convertible subordinated debentures 101,892 119,038
Accounts payable and other accrued expenses 6,460 4,266
Accrued interest 3,325 6,928
Dividends payable 18,752 18,318
Deferred income 8,114 8,310
Commitments, contingencies and guarantees --- ---
Total Liabilities and Deferred Income 294,021 312,519
STOCKHOLDERS' EQUITY
Cumulative convertible preferred stock,
$.01 par value; 10,000,000 shares
authorized; 812,014 and 833,664
shares, respectively, issued and
outstanding; stated at liquidation
preference of $25 per share 20,301 20,842
Common stock, $.01 par value:
40,000,000 shares authorized;
25,345,813 and 24,753,570 shares,
respectively, issued and outstanding 254 248
Capital in excess of par value of common stock 452,441 434,135
Cumulative net income 288,748 270,902
Cumulative dividends (301,228) (282,047)
Total Stockholders' Equity 460,516 444,080
Total Liabilities and Stockholders' Equity $754,537 $756,599
</TABLE>
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, 1997 is derived from
the audited financial statements at that date.
<PAGE>
NATIONAL HEALTH INVESTORS, INC.
<TABLE>
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Three Months Ended
March 31
1998 1997
(in thousands,
except share amounts)
<S> <C> <C>
REVENUES:
Mortgage interest income $ 14,230 $ 16,142
Rental income 10,453 9,796
Investment interest and other income 1,397 507
26,080 26,445
EXPENSES:
Interest 4,870 5,430
Depreciation of real estate 2,182 1,929
Amortization of loan and organization costs 186 199
General and administrative 996 945
8,234 8,503
NET INCOME $ 17,846 $ 17,942
DIVIDENDS TO PREFERRED STOCKHOLDERS 431 524
NET INCOME APPLICABLE TO COMMON STOCK $ 17,415 $ 17,418
NET INCOME PER COMMON SHARE:
Basic $ .70 $ .73
Diluted $ .69 $ .71
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 24,925,574 23,976,219
Diluted 29,006,468 28,492,973
Common dividends per share
declared $ .74 $ .74
</TABLE>
The accompanying notes to interim condensed consolidated financial
statements are an integral part of these financial statements.
3
<PAGE>
NATIONAL HEALTH INVESTORS, INC.
<TABLE>
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<CAPTION>
Three Months Ended
March 31
1998 1997
(in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 17,846 $ 17,942
Depreciation of real estate 2,182 1,929
Amortization of loan and organization costs 186 199
Interest on debenture conversion 299 160
Deferred income 114 301
Amortization of deferred income (310) (360)
Decrease (increase) in interest & rent receivable (233) 70
Decrease (increase) in other assets (192) (108)
Increase (decrease) in accounts payable
and accrued liabilities (1,417) 436
NET CASH PROVIDED BY OPERATING ACTIVITIES 18,475 20,569
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in mortgage notes receivable (10,989) (22,152)
Collection of mortgage notes receivable 1,185 2,090
Prepayment of mortgage notes receivable 38,588 3,240
Acquisition of property and equipment, net (3,026) (103)
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 25,758 (16,925)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of credit facilities --- (59,000)
Proceeds from credit facilities --- 14,500
Proceeds from long-term debt 229 ---
Principal payments on long-term debt (410) (421)
Proceeds from sale of subordinated
convertible debentures --- 60,000
Financing costs paid --- (1,544)
Dividends paid to shareholders (18,747) (17,894)
Sale of stock and exercise of options 545 1,071
NET CASH USED IN FINANCING ACTIVITIES (18,383) (3,288)
INCREASE IN CASH AND CASH EQUIVALENTS 25,850 356
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 64,915 3,400
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 90,765 $ 3,756
</TABLE>
4
<PAGE>
NATIONAL HEALTH INVESTORS, INC.
<TABLE>
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<CAPTION>
Three Months Ended
March 31
1998 1997
(in thousands)
<S> <C> <C>
Supplemental Information:
Cash payments for interest expense $ 7,392 $ 3,701
During the three months ended March 31, 1998,
and March 31, 1997, $17,146,000 and $21,677,000
respectively, of Senior Subordinated Convertible
Debentures were converted into 553,978 shares
and 689,252 shares, respectively, of NHI's
common stock:
Senior subordinated convertible debentures $(17,146) $(21,677)
Financing costs $ 220 $ 300
Accrued interest $ (300) $ (160)
Common stock $ 6 $ 6
Capital in excess of par $ 17,220 $ 21,531
</TABLE>
The accompanying notes to interim condensed consolidated financial
statements are an integral part of these financial statements.
5
<PAGE>
<TABLE>
NATIONAL HEALTH INVESTORS, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(dollars in thousands)
<CAPTION>
Cumulative Convertible Capital in Total
Preferred Stock Common Stock Excess of Cumulative Cumulative Stockholders
Shares Amount Shares Amount Par Value Net Income Dividends Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE AT 12/31/97 833,664 $ 20,842 24,753,570 $248 $434,135 $270,902 $(282,047) $444,080
Net income -- -- -- -- -- 17,846 -- 17,846
Shares sold -- -- 18,680 -- 545 -- -- 545
Shares issued in con-
version of con-
vertible debentures
to common stock -- -- 553,979 6 17,220 -- -- 17,226
Shares issued in
conversion of pre-
ferred stock to
common stock (21,650) (541) 19,584 -- 541 -- -- --
Dividends to common
shareholders ($.74
per share) -- -- -- -- -- -- (18,749) (18,749)
Dividends to preferred
shareholders ($.5313
per share) -- -- -- -- -- -- (432) (432)
BALANCE AT 3/31/98 812,014 $ 20,301 25,345,813 $254 $452,441 $288,748 $(301,228) $460,516
BALANCE AT 12/31/96 1,050,122 $ 26,253 23,474,751 $235 $395,204 $195,514 $(207,523) $409,683
Net income -- -- -- -- -- 17,942 -- 17,942
Shares sold -- -- 34,762 -- 1,071 -- -- 1,071
Shares issued in con-
version of con-
vertible debentures
to common stock -- -- 689,252 6 21,531 -- -- 21,537
Shares issued in
conversion of pre-
ferred stock to
common stock (106,825) (2,671) 96,655 2 2,669 -- -- --
Dividends to common
shareholders ($.74
per share) -- -- -- -- -- -- (17,979) (17,979)
Dividends to preferred
shareholders ($.5313
per share) -- -- -- -- -- -- (523) (523)
BALANCE AT 3/31/97 943,297 $ 23,582 24,295,420 $243 $420,475 $213,456 $(226,025) $431,731
</TABLE>
The accompanying notes to interim condensed consolidated financial state-
ments are an integral part of these financial statements.
<PAGE>
NATIONAL HEALTH INVESTORS, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
Note 1. SIGNIFICANT ACCOUNTING POLICIES:
The unaudited financial statements furnished herein in the opinion of
the management include all adjustments which are necessary to fairly present
the financial position, results of operations and cash flows of National
Health Investors, Inc. ("NHI" or "Company"). NHI assumes that users of the
interim financial statements herein have read or have access to the audited
financial statements and Management's Discussion and Analysis of Financial
Condition and Results of Operations for the preceding fiscal years ended
December 31, 1997, 1996 and 1995 and that the adequacy of additional
disclosure needed for a fair presentation, except in regard to material
contingencies, may be determined in that context. Accordingly, footnotes and
other disclosures which would substantially duplicate the disclosure contained
in the Company's most recent annual report to stockholders have been omitted.
The interim financial information contained herein is not necessarily
indicative of the results that may be expected for a full year because of
various reasons including changes in interest rates, rents and the timing of
debt and equity financings.
Note 2. EARNINGS PER SHARE:
Basic earnings per share is based on the weighted average number of
common and common equivalent shares outstanding. Net income is reduced by
dividends to holders of cumulative convertible preferred stock.
Diluted earnings per share assumes the conversion of convertible
subordinated debentures, the conversion of cumulative convertible preferred
stock and the exercise of all stock options using the treasury stock method.
Net income is increased for interest expense on the convertible subordinated
debentures.
The following table summarizes the earnings and the average number of
common shares and the net income used in the calculation of basic and diluted
earnings per share.
7
<PAGE>
NATIONAL HEALTH INVESTORS, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
1998 1997
<S> <C> <C>
BASIC:
Weighted avg. common shares 24,925,574 23,976,219
Net income $17,846,000 17,942,000
Dividends paid to preferred shareholders (431,000) (524,000)
Net income available to
common stockholders $17,415,000 $17,418,000
Net income per common share $ .70 $ .73
DILUTED:
Weighted average common shares 24,925,574 23,976,219
Stock options 37,718 33,611
Convertible subordinated debentures 3,295,240 3,563,116
Cumulative convertible preferred stock 747,936 920,027
Average common shares outstanding 29,006,468 28,492,973
Net income $17,846,000 $17,942,000
Interest expense on convertible
subordinated debentures 2,081,000 2,212,000
Net income assuming conversion
of subordinated convertible
debentures to common stock $19,927,000 $20,154,000
Net income per common share $ .69 $ .71
</TABLE>
Note 3. COMMITMENTS, CONTINGENCIES AND GUARANTEES:
At March 31, 1998, NHI was committed, subject to due diligence and
financial performance goals, to fund approximately $140,312,000 in health care
real estate projects of which approximately $43,782,000 is expected to be
funded within the next 12 months. The commitments include mortgage loans or
purchase leaseback agreements for five long-term care centers, two medical
office buildings, 13 assisted living facilities and approximately 80
residential projects for the developmentally disabled, all at rates ranging
from 9.0% to 11.5%.
8
<PAGE>
NATIONAL HEALTH INVESTORS, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
In order to obtain the consent of appropriate lenders to NHC's transfer
of assets to NHI, NHI guaranteed certain debt ($21,038,000 at March 31, 1998)
of NHC. The debt is at fixed and variable interest rates with a weighted
average interest rate of 8.3% at March 31, 1998. NHI receives from NHC
compensation of approximately $105,000 per annum for the guarantees which is
credited against NHC's base rent requirements.
In management's opinion, these guarantee fees approximate the guarantee
fees that NHI would currently charge to enter into similar guarantees.
All of the guaranteed indebtedness discussed above is secured by first
mortgages and rights which may be enforced if either party is required to pay
under their respective guarantees. NHC has agreed to indemnify and hold
harmless NHI against any and all loss, liability or harm incurred by NHI as a
result of having to perform under its guarantee of any or all of the
guaranteed debt.
Additionally, NHI has guaranteed bank loans in the amount of
$1,418,594 to key employees and directors which amount was utilized for the
exercise of NHI stock options. Shares of NHI stock are held as security by
NHI and the loans are limited to $100,000 per individual per year.
Note 4. CONVERTIBLE SUBORDINATED DEBENTURES:
At March 31, 1998, $56,568,000 of 7% convertible subordinated debentures
(the "1997 debentures") remain outstanding. The 1997 debentures are
convertible at the option of the holder into common stock at a conversion
price of $37.50, subject to adjustment. During the three months ended March
31, 1998, $3,049,000 of the 1997 debentures have been converted into 81,303
shares of common stock. NHI has reserved 1,508,480 shares of common stock for
conversions of 1997 debentures.
At March 31, 1998, $38,630,000 of 7.75% convertible subordinated
debentures (the "1995 debentures") remain outstanding. The 1995 debentures
are convertible at the option of the holder into the common stock of NHI at a
conversion price of $31.625, subject to adjustment. During the three months
ended March 31, 1998, $8,792,000 of the 1995 debentures have been converted
into 278,005 shares of common stock. NHI has reserved 1,221,502 shares of
common stock for conversions of 1995 debentures.
9
<PAGE>
NATIONAL HEALTH INVESTORS, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
At March 31, 1998, debentures in the amount of $6,406,000 (the "1995
debt service debentures") have been issued to mortgagees or lessees to satisfy
debt service escrow requirements. The debentures are convertible at the
option of the holder into common stock of the Company at a conversion price of
110% of the market price on the date of issuance of the debentures, subject to
adjustment. At March 31, 1998, none of the debentures have been converted.
At March 31, 1998, $40,000 of 7.375% convertible subordinated debentures
(the "1993 debentures") remain outstanding. The 1993 debentures are
convertible at the option of the holder into the common stock of the Company
at a conversion price of $27.25 per share, subject to adjustment. During the
three months ended March 31, 1998, $5,305,000 of the 1993 debentures were
converted into 194,671 shares of common stock. The Company has reserved 1,468
shares of common stock for conversion of the 1993 debentures.
At March 31, 1998, $230,000 of the 10% senior convertible subordinated
debentures (the "senior debentures") remain outstanding. The senior
debentures are convertible into the common stock of the Company at $20 per
share. During the three months ended March 31, 1998, none of the senior
debentures were converted. The Company has reserved 11,500 shares of common
stock for conversion of the senior debentures.
Note 5. CUMULATIVE CONVERTIBLE PREFERRED STOCK:
In February and March, 1994, NHI issued $109,558,000 of 8.5% Cumulative
Convertible Preferred Stock ("Preferred Stock") with a liquidation preference
of $25 per share. Dividends at an annual rate of $2.125 are cumulative from
the date of issuance and are paid quarterly.
The Preferred Stock is convertible into NHI common stock at the option
of the holder at any time at a conversion price of $27.625 per share of common
stock, which is equivalent to a conversion rate of 0.905 per share of common
stock for each share of Preferred Stock, subject to adjustment in certain
circumstances.
The Preferred Stock is not redeemable by NHI prior to February 15, 1999
and is not redeemable for cash. On or after February 15, 1999, the Preferred
Stock will be redeemable by NHI for common stock. NHI may redeem the
Preferred Stock only if the trading price of the Common Stock on the New York
Stock Exchange (NYSE) exceeds $27.625 per share for 20 trading days within a
period of 30 trading days prior to the exercise. NHI has reserved 734,854
shares of common stock for Preferred Stock conversions.
The Preferred Stock is listed on the NYSE under the symbol "NHIPr."
10
<PAGE>
NATIONAL HEALTH INVESTORS, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(Unaudited)
Note 6. NEW ACCOUNTING PRONOUNCEMENT:
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures About Segments of an Enterprise and Related
Information" ("SFAS 131") effective for fiscal years beginning after December
15, 1997. This statement establishes standards for the way that public
business enterprises report information about operating segments in annual
financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports. It also
establishes standards for related disclosures about products and services,
geographic areas, and major customers. NHI will be required to adopt SFAS 131
in the fourth quarter of 1998 and is currently determining the impact that
SFAS 131 will have on its financial statements. If appropriate, NHI will
begin disclosing the required information accordingly.
Note 7. STOCK OPTION PLAN:
On March 31, 1998, NHI granted options to purchase 45,000 shares of
common stock of NHI at $39.875 per share. During the three months ended March
31, 1998, options to purchase 25,133 shares of NHI were exercised at exercise
prices ranging from $25.00 to $36.00.
In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-
based Compensation ("SFAS 123"). SFAS 123 establishes new financial
accounting and reporting standards for stock-based compensation plans. NHI
has adopted the disclosure-only provisions of SFAS 123. As a result, no
compensation cost has been recognized for NHI's stock option plans. Based on
the number of options outstanding and the historical and expected future
trends of factors affecting valuation of those options, any compensation
cost attributable to options granted is immaterial.
Item 2. Management's Discussion and Analysis of Financial Conditions and
Results of Operations
Overview
National Health Investors, Inc. ("NHI" or the "Company") is a real
estate investment trust which invests primarily in income producing health
care properties with emphasis on the long-term care sector. As of March 31,
1998, NHI had interests in net real estate owned by it and mortgage
investments totaling $654.9 million. NHI's strategy is to invest in health
care real estate which generates current income which will be distributed to
stockholders. NHI intends to implement this strategy by making mortgage loans
and acquiring properties to lease nationwide.
11
<PAGE>
NATIONAL HEALTH INVESTORS, INC.
March 31, 1998
(Unaudited)
As of March 31, 1998, the Company has investments in 224 health care
facilities located in 27 states consisting of 178 long-term care facilities,
two acute care hospitals, nine medical office buildings, eleven assisted
living facilities, seven retirement centers, and 17 residential projects for
the developmentally disabled. These investments consist of approximately
$417.0 million aggregate principal amount of loans to 50 borrowers, $200.9
million of purchase leaseback transactions with five lessees and $37.0 million
invested in REMIC pass through certificates backed by first mortgage loans to
four operators. Of these 224 facilities, 43 are leased to NHC and nine
additional facilities are managed by NHC. (NHC is the Company's investment
advisor.) Consistent with its strategy of diversification, the Company has
reduced the portion of its portfolio operated by NHC from 100.0% of total real
estate assets on October 17, 1991 to approximately 24.0% of total real estate
assets on March 31, 1998.
Capital Resources and Liquidity
NHI has generated net cash from operating activities for the first three
months of 1998 in the amount of $18.5 million. The funds were used along with
$39.8 million from the collection of mortgage notes receivable, $0.5 million
from the sale of common stock and $0.2 million proceeds from long-term debt to
make additional investments in income producing assets and real estate
properties totaling approximately $14.0 million, to repay long-term debt in a
net amount of $0.4 million and to pay dividends to stockholders of $18.7
million.
The entire amount of NHI's $100 million revolving line of credit was
available to be drawn at March 31, 1998.
The Company's balance sheet was strengthened during the quarter by the
conversion of $0.5 million of NHI's outstanding convertible preferred stock
and $17.1 million of convertible debentures to common equity. NHI's
nonconvertible debt as a percentage of total capitalization was 22% at
December 31, 1997 and remained constant at 22% at March 31, 1998. The Company
continues to be well positioned to take advantage of new investment
opportunities.
At March 31, 1998, the Company was committed, subject to due diligence
and financial performance goals, to fund approximately $140.3 million in
health care real estate projects, of which approximately $43.8 million is
expected to be funded within the next 12 months. The commitments include
mortgage loans or purchase leaseback agreements for five long-term health care
centers, two medical office buildings, 13 assisted living facilities and
approximately 80 residential projects for the developmentally disabled, all at
rates ranging from 9.0% to 11.5%.
Financing for NHI's current commitments and future commitments to others
may be provided by borrowings under NHI's bank credit facilities, new lines of
credit, private placements or public offerings of debt or equity, and the
assumption of secured or unsecured indebtedness or by the sale of all or a
portion of certain currently held investments.
12
<PAGE>
NATIONAL HEALTH INVESTORS, INC.
March 31, 1998
(Unaudited)
Results of Operations
Three Months Ended March 31, 1998 Compared to Three Months Ended March 31,
1997
Net income for the three months ended March 31, 1998 is $17.8 million
versus $17.9 million for the same period of 1997, a decrease of 0.5%. Diluted
earnings per common share decreased two cents or 2.8% to $0.69 in the 1998
period from $0.71 in the 1997 period.
Total revenues for the three months ended March 31, 1998 decreased $0.4
million or 1.4% to $26.1 million from $26.4 million for the three months ended
March 31, 1997. Revenues from mortgage interest income decreased $1.9 million
or 11.8% in the 1998 period as compared to the 1997 period. Revenues from
rental income increased $0.7 million or 6.7% when compared to the same period
in 1997. The decrease in mortgage interest income is due to the prepayment of
a $150 million first mortgage receivable in the fourth quarter of 1997 as well
as $11.0 million of mortgage receivable prepayments in the first quarter of
1998. The increase in revenues from rental income resulted primarily from
investments in additional facilities during the last 12 months and increased
"revenue participations" and "additional rent" earned under the Company's
existing mortgages and leases.
Earnings for the quarter include $1.9 million or seven cents per share
basic or six cents per share diluted of nonrecurring net income. The quarter
a year ago included nonrecurring income of $1.2 million or five cents per
share basic. This nonrecurring income is primarily from the receipt of
commitment fees and prepayment penalties from early loan repayments.
Total expenses for the 1998 three month period decreased $0.3 million or
3.2% to $8.2 million from $8.5 million for the 1997 three month period.
Interest expenses decreased $0.6 million or 10.3% in the 1998 three month
period as compared to the 1997 three month period. Depreciation and
amortization increased $0.3 million or 13.1% when compared to the same period
in 1997. General and administrative expenses in 1998 increased $0.1 million
or 5.4% to $1.0 million from $0.9 million when compared to the 1997 period.
Interest expenses decreased due to lower levels of long-term debt and
subordinated debt. Depreciation increased as a result of the Company's
placing of newly constructed assets in service.
Future Growth
The Company expects increases in both mortgage interest income and
rental income from additional investments in mortgage loans and owned
facilities during 1998 assuming prepayments do not continue to outpace new
investments. The Company expects to continue to make additional investments in
health care facilities that would increase interest and rental revenues as
well as interest and depreciation expense. Increases in revenues are expected
to more than offset increases in associated expenses.
<PAGE>
Year 2000 Compliance
The Company is currently in the process of evaluating its information
technology infrastructure for Year 2000 compliance. The Company does not
expect that the cost to modify its information technology infrastructure
to be Year 2000 compliant will be material to its financial condition or
results of operation. The Company does not anticipate any material disruption
in its operations as a result of any failure by the Company to be in compliance.
The Company does not currently have any information concerning the Year 2000
compliance status of its suppliers and other customers. In the event that
any of the Company's significant suppliers or customers do not successfully
and timely achieve Year 2000 compliance, the Company's business or operations
could be adversely affected.
Item 3. Quantitative and Qualitative Information About Market Risk
Not Applicable.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. None
Item 2. Changes in Securities. Not applicable
Item 3. Defaults Upon Senior Securities. None
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The annual meeting of the shareholders was held on March 31, 1998.
(b) Matters voted upon at the meeting are as follows:
PROPOSAL NO. 1: Election of Ted H. Welch and Richard F. LaRoche, Jr. to serve
as directors for terms of three years or until their successors have been
fully elected and qualified. Other directors whose terms of office continue
are Mr. Robert T. Webb, Mr. Jack Tyrrell and Mr. W. Andrew Adams.
Voting For Withholding Percent For
Authority
Ted Welch 23,380,287 63,838 94.2%
Richard F. LaRoche, Jr. 23,284,029 60,096 94.2%
<PAGE>
PROPOSAL NO. 2: Ratify the appointment of Arthur Andersen LLP as the Company's
independent accountants for the fiscal year 1998.
Voting For Voting Against Abstaining Percent For
23,341,939 29,149 73,037 94.0%
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K.
(a) List of exhibits - Exhibit 27 - Financial Data Schedule
(for SEC purposes only)
(b) Reports on Form 8-K - none required
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NATIONAL HEALTH INVESTORS, INC.
(Registrant)
Date May 14, 1998 /s/ Richard F. LaRoche, Jr.
Richard F. LaRoche, Jr.
Secretary
Date May 14, 1998 /s/ Donald K. Daniel
Donald K. Daniel
Principal Accounting Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000877860
<NAME> NATIONAL HEALTH INVESTORS, INC.
<S> <C>
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<NAME>NATIONAL HEALTH INVESTORS, INC.
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