NHR North Asia Investment Corp.

National Health Realty, Inc., (AMEX: NHR) a long-term health care real estate investment trust, announced net income for the quarter ended June 30, 2006 of $2,933,000 compared to $2,828,000 last year, an increase of 3.7%. For the three months ended June 30, net income per share was 29 cents basic and diluted compared to 29 cents basic and diluted, for the same period last year. Basic and diluted funds from operations were 42 cents per share compared to 42 cents basic and diluted, last year. Revenues for the quarter totaled $4,980,000 compared to $4,938,000 last year. For the six months ended June 30, net income was $6,036,000 compared to $5,611,000 for the same six months last year. Net income per share was 61 cents basic and diluted compared to 57 cents basic and diluted last year. Funds from operations per share were 86 cents basic and diluted compared to 84 cents basic and diluted in 2005. Revenues for the six months totaled $10,143,000 compared to $9,838,000 for the same period of the prior year. NHR owns the real property of 16 skilled nursing facilities, six assisted living centers and one retirement center. NHR also owns first and second mortgage notes having a carrying value of $12.8 million. These notes are secured by operating skilled nursing facilities and other health care properties. Additional information including NHR's most recent press releases may be obtained on NHR's web site at www.nationalhealthrealty.com. The company trades on the American Stock Exchange with the symbol NHR. Statements in this press release that are not historical facts are forward looking statements. NHR cautions investors that any forward-looking statements made involve risks and uncertainties and are not guarantees of future performance. All forward-looking statements represent NHR's best judgment as of the date of this release. -0- *T Condensed Statements of Income (in thousands except share & per share amounts) Three Months Ended Six Months Ended June 30 June 30 2006 2005 2006 2005 ---------- ----------- ---------- ---------- Revenues: Rental income $ 4,444 $ 4,338 $ 9,072 $ 8,645 Mortgage interest income 536 600 1,071 1,193 ---------- ---------- ---------- ---------- 4,980 4,938 10,143 9,838 ---------- ---------- ---------- ---------- Expenses: Interest 152 180 301 344 Depreciation of real estate 1,423 1,468 2,846 2,936 General and administrative 304 254 539 520 ---------- ---------- ---------- ---------- 1,879 1,902 3,686 3,800 ---------- ---------- ---------- ---------- Income before minority interest in consolidated subsidiaries and non-operating income 3,101 3,036 6,457 6,038 Non-operating Income (investment and interest income) 190 138 315 261 Minority interest in consolidated subsidiaries (358) (346) (736) (688) ---------- ---------- ---------- ---------- Net Income $ 2,933 $ 2,828 $ 6,036 $ 5,611 ========== ========== -==========-========== Net income per common share: Basic $ .29 $ .29 $ .61 $ .57 Diluted $ .29 $ .29 $ .61 $ .57 Funds from operations Basic $ 4,201 $ 4,135 $ 8,572 $ 8,226 Diluted $ 4,201 $ 4,135 $ 8,572 $ 8,226 Funds from operations per share Basic $ .42 $ .42 $ .86 $ .84 Diluted $ .42 $ .42 $ .86 $ .84 Weighted average common shares outstanding Basic 9,943.199 9,871,919 9,941,341 9,793,657 Diluted 9,946,835 9,908,976 9,946,697 9,843,104 Common dividends declared per share $ .3325 $ .3325 $ .6650 $ .6650 Balance Sheet Data June 30 Dec. 31 (in thousands) 2006 2005 ---------- ---------- Real estate properties, net $ 112,208 $ 115,054 Mortgages and other notes receivable 12,848 13,207 Debt 9,600 10,450 Stockholders' equity 112,126 112,390 Reconciliation of Funds from Operations(1) The following table reconciles net income applicable to common stockholders to funds from operations applicable to common stockholders: Three Months Ended Six Months Ended June 30 June 30 ---------------------------------------------- (in thousands) 2006 2005 2006 2005 ---------------------------------------------- Net income applicable to common stockholder's $ 2,933 $ 2,828 $ 6,036 $ 5,611 Adjustments: Real estate depreciation 1,423 1,468 2,846 2,936 Minority interest in NHR/OP, L.P. share of add back for real estate related depreciation (155) (161) (310) (321) ------ ------ ------ ------ Funds from operations applicable to common stockholders $ 4,201 $ 4,135 $ 8,572 $ 8,226 Basic funds from operations per share $ .42 $ .42 $ .86 $ .84 Diluted funds from operations per share $ .42 $ .42 $ .86 $ .84 Weighted average shares: Basic 9,943,199 9,871,919 9,941,341 9,793,657 Diluted 9,946,835 9,908,976 9,946,697 9,843,104 (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, for example, 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. National Health Realty, Inc. Portfolio Summary June 30, 2006 Portfolio Statistics Investment Properties Investment Percentage ---------------------------- ------------- Equity Ownership 23 $112,208,000 90% Mortgage Loan Receivables 5 12,848,000 10% --------------- ------------ ------------ Total Real Estate Portfolio 28 $125,056,000 100% Equity Ownership Properties Beds Investments ------------------------------------------ Nursing Homes 16 1,908 $ 68,149,000 Assisted Living 6 488 30,010,000 Retirement Homes 1 58 14,049,000 ------------------------------------------ 23 2,454 $112,208,000 Mortgage Loan Receivables Properties Beds Investment ------------------------------------------ Nursing Homes 5 714 $ 12,848,000 Summary of Facilities By Percentage of Total Type: Properties Total Dollars Dollars ------------------------------------------ Nursing Homes 21 64.77% $ 80,997,000 Assisted Living 6 24.00% 30,010,000 Retirement Homes 1 11.23% 14,049,000 ------------------------------------------ 28 100.00% $125,056,000 ========================================== Summary of Facilities By State: Percent Asst. Retire- Investment Total LTC Living ment Amount Portfolio ---------------------------------------------------- 1 Florida 8 3 --- $ 55,461,000 44.35% 2 Tennessee 2 2 1 33,140,000 26.50% 3 South Carolina 7 --- --- 27,144,000 21.71% 4 Indiana 3 --- --- 3,718,000 2.97% 5 Alabama --- 1 --- 3,323,000 2.66% 6 Missouri 1 --- --- 2,270,000 1.82% ---------------------------------------------------- 21 6 1 $125,056,000 100.00% ======================================== *T