Revenues for the three months ended June 30, 2009 totaled $172,036,000 compared to $160,562,000 for the same three months of 2008, an increase of 7.1%. Net income was $.67 per basic common share for the quarter ended June 30, 2009 compared to $.57 per basic common share for the quarter ended June 30, 2008.

NHC operates, through various subsidiaries, for itself and third parties, 76 long-term health care centers with 9,772 beds. NHC also operates, through subsidiaries, 33 homecare programs, seven independent living centers and 23 assisted living centers. NHC's other services include Alzheimer's units, long-term care pharmacies, hospice, a rehabilitation services company, and providing management and accounting services to third parties. Other information about the company can be found on our web site at www.NHCcare.com.

Statements in this press release that are not historical facts are forward-looking statements. NHC cautions investors that any forward-looking statements made involve risks and uncertainties and are not guarantees of future performance. The risks and uncertainties are detailed from time to time in reports filed by NHC with the S.E.C., including Forms 8-K, 10-Q and 10-K, and include, among others, the following: liabilities and other claims asserted against us and patient care liabilities, as well as the resolution of current litigation; availability of insurance and assets for indemnification; national and local economic conditions; including their effect on the availability and cost of labor, utilities and materials; the effect of government regulations and changes in regulations governing the healthcare industry, including our compliance with such regulations; changes in Medicare and Medicaid payment levels and methodologies and the application of such methodologies by the government and its fiscal intermediaries, the ability of third parties for whom we have guaranteed debt to refinance certain short term debt obligations; and other factors referenced or incorporated by reference in the S.E.C. filings. The risks included here are not exhaustive. All forward-looking statements represent NHC's best judgment as of the date of this release.

  Condensed Statements of Income                                                                                                                 (in thousands, except share and per share amounts)                                                                                                                                                                                                                                                                                                               Three Months Ended                    Six Months Ended                                                                                         June 30                               June 30                               Revenues:                                                          2009               2008               2009               2008                Net patient revenues                                              $  155,849         $  143,163         $  308,916         $  287,128          Other revenues                                                       16,187             17,399             31,789             33,575            Net revenues                                                        172,036            160,562            340,705            320,703                                                                                                                                                        Costs and Expenses:                                                                                                                             Salaries, wages and benefits                                         91,875             86,312             182,601            173,853          Other operating                                                      47,421             44,639             95,389             89,953           Rent                                                                 8,064              7,876              16,032             15,794           Depreciation and amortization                                        6,287              6,024              12,530             12,021           Interest                                                             188                170                395                389               Total costs and expenses                                            153,835            145,021            306,947            292,010                                                                                                                                                        Income Before Income Taxes                                            18,201             15,541             33,758             28,693           Income Tax Provision                                                 (6,834      )      (6,055      )      (13,207     )      (11,035     )                                                                                                                                                  Net Income                                                            11,367             9,486              20,551             17,658                                                                                                                                                         Dividends to Preferred Shareholders                                   (2,168      )      (2,168      )      (4,336      )      (4,336      )                                                                                                                                                  Net income available to common shareholders                        $  9,199           $  7,318           $  16,215          $  13,322                                                                                                                                                         Earnings Per Common Share:                                                                                                                      Basic                                                             $  0.67            $  0.57            $  1.21            $  1.04             Diluted                                                           $  0.67            $  0.56            $  1.20            $  1.02                                                                                                                                                           Weighted average common shares outstanding                                                                                                      Basic                                                                13,658,141         12,779,582         13,444,679         12,773,639       Diluted                                                              13,675,285         13,125,402         13,466,047         13,121,810                                                                                                                                                                                                                                                                                                                     Balance Sheet Data                                                                                                                             (in thousands)                                    June 30            Dec. 31                                                                                                                     2009               2008                                                                      Cash and marketable securities                    $  242,042         $  232,463                                                                Current assets                                       325,305            312,752                                                                Total assets                                         793,272            777,296                                                                Current liabilities                                  242,382            251,919                                                                Long-term obligations                                25,959             25,807                                                                 Deferred lease credit                                3,029              3,635                                                                  Deferred revenue                                     17,157             15,118                                                                 Stockholders' equity                                 504,745            480,817                                                                                                                                                                                                                                                                                                                                           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  Selected Operating Statistics                                                                                                                                                           Three Months Ended        Six Months Ended                                      June 30                   June 30                                               2009         2008         2009           2008           Per Diems:                                                                      Medicare                $  381.21    $  362.45    $  381.23      $  362.95      Medicaid                   151.87       145.64       151.01         146.09      Private Pay and Other      226.10       216.44       225.22         214.72                                                                                      Patient Days:                                                                   Medicare                   105,130      102,748      210,982        206,354     Medicaid                   276,145      284,123      544,916        549,163     Private Pay and Other      169,258      165,727      337,193        330,048                                550,533      552,598      1,093,091      1,085,565                                                                                   Average Per Diem        $  218.49    $  208.03    $  218.34      $  208.18                                                                                                                                                                       -------------------------------------------------------------------------------  

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