HEALTH CARE REIT INC /DE/ 8-K (Events or Changes Between Quarterly Reports) 2009-02-24

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 24, 2009
Health Care REIT, Inc.

(Exact name of registrant as specified in its charter)
Delaware 1-8923 34-1096634

(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One SeaGate, Suite 1500, Toledo, Ohio 43604

(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (419) 247-2800
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02 Results of Operations and Financial Condition.
On February 24, 2009, Health Care REIT, Inc. (the “Company”) issued a press release that announced operating results for its fourth quarter
and year ended December 31, 2008. The press release refers to a supplemental information package that is available on the Company’s website
(www.hcreit.com), free of charge. Copies of the press release and supplemental information package have been furnished as Exhibits 99.1 and
99.2, respectively, to this Current Report, and are incorporated herein by reference.
The information included in this Current Report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), and shall not be incorporated by reference into any filing of the Company under the Securities Act of 1933,
as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.
99.1 Press release of Health Care REIT, Inc. dated February 24, 2009.
99.2 Health Care REIT, Inc. Supplemental Information Package for the quarter ended December 31, 2008.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned hereunto duly authorized.
HEALTH CARE REIT, INC.
By: /s/ GEORGE L. CHAPMAN

George L. Chapman
Its: Chairman of the Board, Chief Executive Officer and
President
Dated: February 24, 2009
Exhibit 99.1
(HEALTHCARE REIT LOGO)
F O R I M M ED I A T E R EL E A S E
February 24, 2009

For more information contact:
Scott Estes — (419) 247-2800
Mike Crabtree — (419) 247-2800
Health Care REIT, Inc.

Reports Fourth Quarter and Year End 2008 Results
Toledo, Ohio, February 24, 2009 Health Care REIT, Inc. (NYSE:HCN) today announced operating results for the company’s fourth quarter
and year ended December 31, 2008.
“In one of the toughest years on record for both REITs and the broader equity markets, we generated a positive 0.5% total return for our
shareholders in 2008,” commented George L. Chapman, chief executive officer and president of Health Care REIT, Inc. “In addition, we raised
over $775 million of opportunistic equity capital and completed in excess of $1.0 billion of net real estate investments, concentrated in
combination senior housing properties and high-quality medical facilities. As we enter 2009, we remain focused on preserving liquidity, but we
intend to take advantage of what we believe will be increasingly attractive investment opportunities over time.”
Recent Highlights.
• Achieved 4Q08 normalized FFO of $0.83 per share, up 4%
• Achieved 4Q08 normalized FAD of $0.77 per share, up 3%
• Achieved 2008 normalized FFO of $3.38 per share, up 8%
• Achieved 2008 normalized FAD of $3.16 per share, up 9%
• Completed 2008 net new investments totaling $1.0 billion
• Recognized $163.9 million of gains on sales of property, generating $287.0 million in net proceeds
• Added to the S&P 500 Index in January 2009
Key Performance Indicators.

4Q 08 4Q 07 C h an ge 2008 2007 C h an ge
Net income available to common
stockholders (NICS) per diluted
share $0.22 $0.52 -58% $2.81 $1.46 92%
Normalized FFO per diluted share $0.83 $0.80 4% $3.38 $3.12 8%
Normalized FAD per diluted share $0.77 $0.75 3% $3.16 $2.91 9%
Dividends per common share (1) $0.68 $0.66 3% $2.70 $2.62 3%
Normalized FFO Payout Ratio 82% 83% 80% 84%
Normalized FAD Payout Ratio 88% 88% 85% 90%
(1) The $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger has been
included in 2007.
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4Q08 Earnings Release February 24, 2009
4Q08 Earnings. The following table summarizes certain items impacting NICS, FFO and FAD:
NIC S FFO FAD

4Q 08 4Q 07 C h an ge 4Q 08 4Q 07 C h an ge 4Q 08 4Q 07 C h an ge
Per diluted share $ 0.22 $0.52 -58% $ 0.31 $0.86 -64% $ 0.37 $0.89 -58%
Includes impact of:
Gains on sales of real
property (1) $ 0.32 $0.14
Additional other
income (2) $ 0.02 $0.05 $ 0.02 $0.05 $ 0.02 $0.05
Impairment charges (3) $(0.31) $(0.31) $(0.31)
Realized loss on
derivatives (4) $(0.21) $(0.21) $(0.21)
Terminated
transaction costs (5) $(0.02) $(0.02) $(0.02)
Other items, net (6) $ 0.00 $0.01 $ 0.00 $0.01 $ 0.00 $0.01
Prepaid/straight-line
rent cash receipts (7) $ 0.12 $0.08
Per diluted share —
normalized (a) $ 0.83 $0.80 4% $ 0.77 $0.75 3%
(a) Amounts may not sum due to rounding

(1) $33,120,000 and $11,662,000 of gains in 4Q08 and 4Q07, respectively.
(2) $2,500,000 and $3,900,000 of additional other income in 4Q08 and 4Q07, respectively.
(3) $32,648,000 of impairment charges in 4Q08.
(4) $21,880,000 of realized loss on derivatives in 4Q08.
(5) $2,291,000 of non-recurring terminated transaction costs in 4Q08.
(6) See reconciliations for other items.
(7) $12,602,000 and $6,678,000 of receipts in 4Q08 and 4Q07, respectively.
2008 Year End Earnings. The following table summarizes certain items impacting NICS, FFO and FAD:
NIC S FFO FAD

2008 2007 C h an ge 2008 2007 C h an ge 2008 2007 C h an ge
Per diluted share $ 2.81 $ 1.46 92% $ 2.80 $ 3.16 -11% $ 2.87 $ 3.18 -10%
Includes impact of:
Gains on sales of real
property (1) $ 1.74 $ 0.18
Additional other
income (2) $ 0.03 $ 0.05 $ 0.03 $ 0.05 $ 0.03 $ 0.05
Impairment charges (3) $(0.35) $(0.35) $(0.35)
Realized loss on
derivatives (4) $(0.25) $(0.25) $(0.25)
Terminated
transaction costs (5) $(0.02) $(0.02) $(0.02)
Other items, net (6) $ 0.01 $(0.01) $ 0.01 $(0.01) $ 0.01 $(0.01)
Cash receipts —
prepaid/straight-line
rent (7) $ 0.30 $ 0.22
Per diluted share —
normalized (a) $ 3.38 $ 3.12 8% $ 3.16 $ 2.91 9%
(a) Amounts may not sum due to rounding

(1) $163,933,000 and $14,437,000 of gains in 2008 and 2007, respectively.
(2) $2,500,000 and $3,900,000 of additional other income in 2008 and 2007, respectively.
(3) $32,648,000 of impairment charges in 2008.
(4) $23,393,000 of loss on derivatives in 2008.
(5) $2,291,000 of non-recurring terminated transaction costs in 2008.
(6) See reconciliations for other items.
(7) $28,282,000 and $17,469,000 of receipts in 2008 and 2007, respectively.
Significant 2008 Items. The following items impacted 2008 earnings:

• $163.9 million of net gains ($1.74 per diluted share) were recognized in connection with the sales of 38 properties. These sales
generated $287.0 million of net proceeds.
• $2.5 million of additional other income ($0.03 per diluted share) was recognized in connection with a lease termination.
• $32.6 million of impairment charges ($0.35 per diluted share) were recognized in connection with a portfolio of medical office
buildings that the company intends to sell in fiscal 2009. The portfolio includes smaller, low occupancy buildings located generally
off campus that are inconsistent with the company’s strategy of owning larger properties affiliated with high quality health
systems. These properties have been classified as held-for-sale and historical results have been reclassified to discontinued
operations.
• $23.4 million of realized loss on derivatives ($0.25 per diluted share) was recognized in connection with the termination of two
forward-starting interest rate swap agreements. The swaps were put in place in September 2007 and were intended to hedge the 10-
year treasury rate component of an anticipated offering of 10-year unsecured notes that did not take place as a result of the severe
dislocation in the credit markets.
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• $2.3 million of non-recurring terminated transaction costs ($0.02 per diluted share) primarily related to the termination of the
Arcapita/Sunrise agreement.
Dividends for Fourth Quarter 2008. As previously announced, the Board of Directors declared a cash dividend for the quarter ended
December 31, 2008 of $0.68 per share, as compared to $0.66 per share for the same period in 2007. The cash dividend was paid on February 20,
2009 and was the company’s 151st consecutive quarterly dividend payment.
Dividends for 2009. The Board of Directors approved a quarterly cash dividend rate of $0.68 per share per quarter ($2.72 per share annually),
commencing with the May 2009 dividend. The company’s dividend policy is reviewed annually during the Board of Directors’ January
planning session. The declaration and payment of quarterly dividends remains subject to review by and approval of the Board of Directors.
Restatement of Earnings due to Convertible Debt. In May, 2008 the Financial Accounting Standards Board issued FASB Staff Position 14-1
(“FSP”) which provides guidance on accounting for debt that may be settled in cash upon conversion. This applies to the company’s
convertible senior unsecured note issuances in November 2006 and July 2007. The FSP is effective for fiscal year 2009 and requires that prior
years be restated to reflect this accounting treatment in all applicable prior periods. The following table illustrates the impact of this
restatement for the periods presented (amounts in thousands except per share amounts):
4Q 07 4Q 08 2007 2008
Additional interest expense:
November 2006 issuance $ 320 $ 320 $ 1,280 $ 1,280
July 2007 issuance $ 883 $ 883 $ 1,766 $ 3,532
Total $ 1,203 $ 1,203 $ 3,046 $ 4,812
Fully diluted weighted-average shares 82,784 103,840 79,409 94,309
Amount per share $ 0.01 $ 0.01 $ 0.04 $ 0.05
Summary of per share impacts:

Net income available to common stockholders:
As reported $ 0.52 $ 0.22 $ 1.46 $ 2.81
Convertible debt adjustment $ (0.01) $ (0.01) $ (0.04) $ (0.05)
Restated $ 0.51 $ 0.21 $ 1.42 $ 2.76
Funds from operations-normalized:

As reported $ 0.80 $ 0.83 $ 3.12 $ 3.38
Convertible debt adjustment $ (0.01) $ (0.01) $ (0.04) $ (0.05)
Restated $ 0.79 $ 0.82 $ 3.08 $ 3.33
Outlook for 2009. The company is introducing its 2009 guidance and expects to report net income available to common stockholders in a
range of $1.59 to $1.69 per diluted share; normalized FFO in a range of $3.20 to $3.30 per diluted share; and normalized FAD in a range of $3.08
to $3.18 per diluted share. FFO guidance should be compared to the $3.33 per diluted share actual 2008 results as restated for the convertible
debt accounting change. In preparing its guidance, the company made the following significant assumptions:
• Gross investments comprised of funded new development totaling $600 million with the investment balance capitalized at the
company’s average cost of debt (approximately 5.7%) and recorded as a reduction in interest expense until completion. No
acquisitions are assumed in the gross investment forecast.
• Dispositions of $200 to $300 million at average yields of 10% to 11%.
• Net investments of $300 million to $400 million.
• Development conversions of approximately $537 million heavily weighted toward the latter half of the year.
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• General and administrative expenses of approximately $46 million for the full year 2009. Our G&A forecast includes $2.9 million of
anticipated expensing of accelerated stock-based compensation in 1Q09 but excludes $3.9 million in connection with the departure of
Raymond Braun in 1Q09.
• 5.8 million shares of common stock issued on February 3, 2009 for approximately $211 million in net proceeds in connection with our
inclusion in the S&P 500 Index.
The company’s guidance excludes any impairments, unanticipated additions to the loan loss reserve or other additional one-time items,
including any additional cash payments other than normal monthly rental payments. Please see the exhibits for a reconciliation of the outlook
for net income available to common stockholders to normalized FFO and FAD.
Conference Call Information. The company has scheduled a conference call on Wednesday, February 25, 2009 at 10:00 a.m. Eastern Time to
discuss its fourth quarter and year end 2008 results, industry trends, portfolio performance and outlook for 2009. Telephone access will be
available by dialing 888-346-2469 or 706-758-4923 (international). For those unable to listen to the call live, a taped rebroadcast will be available
beginning two hours after completion of the call through March 4, 2009. To access the rebroadcast, dial 800-642-1687 or 706-645-9291
(international). The conference ID number is 82951201. To participate in the webcast, log on to www.hcreit.com or www.earnings.com 15
minutes before the call to download the necessary software. Replays will be available for 90 days through the same websites. This earnings
release is posted on the company’s website under the heading News & Events.
Supplemental Reporting Measures. The company believes that net income available to common stockholders (NICS), as defined by U.S.
generally accepted accounting principles (U.S. GAAP), is the most appropriate earnings measurement. However, the company considers funds
from operations (FFO) and funds available for distribution (FAD) to be useful supplemental measures of its operating performance. Historical
cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes
predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with
market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use
historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (NAREIT) created FFO as
a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by
NAREIT, means net income, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate, plus real estate
depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Normalized FFO represents FFO
adjusted for unusual and non-recurring items. FAD represents FFO excluding net straight-line rental adjustments, rental income related to
above/below market leases and amortization of deferred loan expenses and less cash used to fund capital expenditures, tenant improvements
and lease commissions. Normalized FAD represents FAD excluding prepaid/straight-line rent cash receipts and adjusted for unusual and non-
recurring items.
The company’s supplemental reporting measures and similarly entitled financial measures are widely used by investors and equity analysts in
the valuation, comparison and investment recommendations of companies. The company’s management uses these financial measures to
facilitate internal and external comparisons to historical operating results and in making operating decisions. Additionally, they are utilized by
the Board of Directors to evaluate management. The supplemental reporting measures do not represent net income or cash flow provided from
operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or
liquidity. Finally, the supplemental reporting measures, as defined by the company, may not be comparable to similarly entitled items reported
by other real estate investment trusts or other companies. Please see the exhibits for reconciliations of the supplemental reporting measures.
About Health Care REIT. Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is a real estate investment trust that
invests across the full spectrum of senior housing and health care real estate. The company also provides an extensive array of property
management and development services. As of December 31, 2008, the company’s broadly diversified portfolio consisted of 633 properties in 39
states. More information is available on the Internet at
Page 4 of 10
www.hcreit.com.
This document may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-
looking statements concern and are based upon, among other things, the possible expansion of the company’s portfolio; the sale of
properties; the performance of its operators/tenants and properties; its occupancy rates; its ability to acquire, develop and/or manage
properties; its ability to enter into agreements with viable new tenants for vacant space or for properties that the company takes back from
financially troubled tenants, if any; its ability to make distributions to stockholders; its policies and plans regarding investments, financings
and other matters; its tax status as a real estate investment trust; its ability to appropriately balance the use of debt and equity; its ability to
access capital markets or other sources of funds; its critical accounting policies; and its ability to meet its earnings guidance. When the
company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions,
it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and
uncertainties. The company’s expected results may not be achieved, and actual results may differ materially from expectations. This may be a
result of various factors, including, but not limited to: the status of the economy; the status of capital markets, including availability and cost
of capital; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to
government investigations and punitive settlements and operators’/tenants’ difficulty in cost-effectively obtaining and maintaining adequate
liability and other insurance; changes in financing terms; competition within the health care and senior housing industries; negative
developments in the operating results or financial condition of operators/tenants, including, but not limited to, their ability to pay rent and
repay loans; the company’s ability to transition or sell facilities with profitable results; the failure to make new investments as and when
anticipated; acts of God affecting the company’s properties; the company’s ability to re-lease space at similar rates as vacancies occur; the
company’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant bankruptcies or insolvencies; government
regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; liability or contract claims by or against
operators/tenants; unanticipated difficulties and/or expenditures relating to future acquisitions; environmental laws affecting the company’s
properties; changes in rules or practices governing the company’s financial reporting; and legal and operational matters, including real estate
investment trust qualification and key management personnel recruitment and retention. Finally, the company assumes no obligation to update
or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking
statements.
Page 5 of 10
HEALTH CARE REIT, INC.

Financial Supplement
CONSOLIDATED BALANCE SHEETS (unaudited)

(In thousands)
De ce m be r 31,
2008 2007
Assets
Real estate investments:
Real property owned
Land and land improvements $ 504,907 $ 447,029
Buildings and improvements 4,653,871 4,224,955
Acquired lease intangibles 133,324 131,312
Real property held for sale, net of accumulated depreciation 48,054 0
Construction in progress 639,419 313,709
5,979,575 5,117,005
Less accumulated depreciation and intangible amortization (600,781) (478,373)
Total real property owned 5,378,794 4,638,632
Loans receivable 482,885 381,394
Less allowance for losses on loans receivable (7,500) (7,406)
475,385 373,988
Net real estate investments 5,854,179 5,012,620
Other assets:
Equity investments 1,030 1,408
Deferred loan expenses 23,579 30,499
Cash and cash equivalents 23,370 30,269
Restricted cash 154,070 17,575
Receivables and other assets 136,890 121,485
338,939 201,236
Total assets $ 6,193,118 $ 5,213,856
Liabilities and stockholders’ equity

Liabilities:
Borrowings under unsecured lines of credit arrangements $ 570,000 $ 307,000
Senior unsecured notes 1,847,247 1,890,192
Secured debt 446,525 507,476
Accrued expenses and other liabilities 107,157 95,145
Total liabilities 2,970,929 2,799,813
Minority interests 10,603 9,687
Stockholders’ equity:
Preferred stock 289,929 330,243
Common stock 104,635 85,412
Capital in excess of par value 3,180,628 2,370,037
Treasury stock (5,145) (3,952)
Cumulative net income 1,362,366 1,074,255
Cumulative dividends (1,723,819) (1,446,959)
Accumulated other comprehensive income (1,113) (7,381)
Other equity 4,105 2,701
Total stockholders’ equity 3,211,586 2,404,356
Total liabilities and stockholders’ equity $ 6,193,118 $ 5,213,856
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CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(In thousands, except per share data)
Th re e Mon ths En de d Twe lve Mon ths En de d

De ce m be r 31, De ce m be r 31,
2008 2007 2008 2007
Revenues:
Rental income $ 131,372 $ 111,036 $ 500,630 $ 417,673
Interest income 10,886 8,151 40,063 25,823
Other income 4,865 6,099 10,521 10,035
Gross revenues 147,123 125,286 551,214 453,531
Expenses:
Interest expense 30,426 35,340 130,813 131,893
Property operating expenses 11,389 10,286 43,990 34,707
Depreciation and amortization 41,500 36,774 156,154 135,224
General and administrative expenses 13,500 9,080 47,193 37,465
Realized loss on derivatives 21,880 0 23,393 0
Gain on extinguishment of debt 0 (1,081) (2,094) (1,081)
Provision for loan losses 94 0 94 0
Total expenses 118,789 90,399 399,543 338,208
Income from continuing operations before income taxes and minority

interests 28,334 34,887 151,671 115,323
Income tax expense (136) (269) (1,306) (188)

Income from continuing operations before minority interests 28,198 34,618 150,365 115,135
Minority interests 2 169 (126) (238)

Income from continuing operations 28,200 34,787 150,239 114,897
Discontinued operations:
Gain on sales of properties 33,120 11,662 163,933 14,437
Impairment of assets (32,648) 0 (32,648) 0
Income from discontinued operations, net (78) 2,498 6,587 12,068
394 14,160 137,872 26,505
Net income 28,594 48,947 288,111 141,402
Preferred dividends 5,541 6,179 23,201 25,130
Net income available to common stockholders $ 23,053 $ 42,768 $ 264,910 $ 116,272
Average number of common shares outstanding:

Basic 103,329 82,346 93,732 78,861
Diluted 103,840 82,784 94,309 79,409
Net income available to common stockholders per share:

Basic $ 0.22 $ 0.52 $ 2.83 $ 1.47
Diluted 0.22 0.52 2.81 1.46
Common dividends per share $ 0.68 $ 0.66 $ 2.70 $ 2.2791
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Funds From Operations Reconciliation
(Amounts in 000’s except per share data)
T hree Months Ended T welve Months Ended

December 31, December 31,
2008 2007 2008 2007
Net income available to common stockholders $ 23,053 $ 42,768 $ 264,910 $116,272
Depreciation and amortization (1) 42,150 40,081 163,045 149,626
Gain on sales of properties (33,120) (11,662) (163,933) (14,437)
Minority interests (81) (88) (342) (344)
Funds from operations 32,002 71,099 263,680 251,117
Impairment of assets 32,648 0 32,648 0
Terminated transaction costs 2,291 0 2,291 0
One-time acquisition finder’s fees 0 0 0 1,750
Additional other income (2,500) (3,900) (2,500) (3,900)
Non-recurring income tax expense 0 0 1,325 0
Funds from operations — normalized $ 86,415 $ 66,118 $ 318,837 $247,886
Average common shares outstanding:

Basic 103,329 82,346 93,732 78,861
Diluted 103,840 82,784 94,309 79,409
Per share data:

Net income available to common stockholders
Basic $ 0.22 $ 0.52 $ 2.83 $ 1.47
Diluted 0.22 0.52 2.81 1.46
Funds from operations

Basic $ 0.31 $ 0.86 $ 2.81 $ 3.18
Diluted 0.31 0.86 2.80 3.16
Funds from operations — normalized

Basic $ 0.84 $ 0.80 $ 3.40 $ 3.14
Diluted 0.83 0.80 3.38 3.12
FFO Payout Ratio

Dividends per common share (2) $ 0.68 $ 0.66 $ 2.70 $ 2.62
FFO per diluted share $ 0.31 $ 0.86 $ 2.80 $ 3.16
FFO payout ratio 219% 77% 96% 83%
FFO Payout Ratio — Normalized

Dividends per share (2) $ 0.68 $ 0.66 $ 2.70 $ 2.62
FFO per diluted share — normalized $ 0.83 $ 0.80 $ 3.38 $ 3.12
FFO payout ratio — normalized 82% 83% 80% 84%
Notes: (1) Depreciation and amortization includes depreciation and amortization from discontinued operations.
(2) The $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger has been included in
the twelve months ended December 31, 2007.
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Funds Available For Distribution Reconciliation
T hree Months Ended T welve Months Ended

December 31, December 31,
2008 2007 2008 2007
Net income available to common stockholders $ 23,053 $ 42,768 $ 264,910 $116,272
Depreciation and amortization (1) 42,150 40,081 163,045 149,626
Gain on sales of properties (33,120) (11,662) (163,933) (14,437)
Minority interests (18) (8) (44) (10)
Gross straight-line rental income (4,682) (4,365) (20,489) (17,029)
Prepaid/straight-line rent receipts 12,602 6,678 28,282 17,469
Amortization related to above/(below) market leases, net (363) (136) (1,039) (792)
Non-cash interest expense 1,696 1,790 6,419 5,366
Cap-ex, tenant improvements, lease commissions (2,865) (1,763) (6,347) (4,292)
Funds available for distribution 38,453 73,383 270,804 252,173
Impairment of assets 32,648 0 32,648 0
Terminated transaction costs 2,291 0 2,291 0
One-time acquisition finder’s fees 0 0 0 1,750
Additional other income (2,500) (3,900) (2,500) (3,900)
Non-recurring income tax expense 0 0 1,325 0
Prepaid/straight-line rent receipts (12,602) (6,678) (28,282) (17,469)
Funds available for distribution — normalized $ 80,264 $ 61,724 $ 297,679 $231,473
Average common shares outstanding:

Basic 103,329 82,346 93,732 78,861
Diluted 103,840 82,784 94,309 79,409
Per share data:

Net income available to common stockholders
Basic $ 0.22 $ 0.52 $ 2.83 $ 1.47
Diluted 0.22 0.52 2.81 1.46
Funds available for distribution

Basic $ 0.37 $ 0.89 $ 2.89 $ 3.20
Diluted 0.37 0.89 2.87 3.18
Funds available for distribution — normalized

Basic $ 0.78 $ 0.75 $ 3.18 $ 2.94
Diluted 0.77 0.75 3.16 2.91
FAD Payout Ratio

FAD per diluted share $ 0.37 $ 0.89 $ 2.87 $ 3.18
FAD payout ratio 184% 74% 94% 82%
FAD Payout Ratio — Normalized

FAD per diluted share — normalized $ 0.77 $ 0.75 $ 3.16 $ 2.91
FAD payout ratio — normalized 88% 88% 85% 90%
(2) The $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger has been included in
the twelve months ended December 31, 2007.
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Outlook Reconciliations
Current Outlook
Year Ended
December 31, 2009
Low High
FFO Reconciliation:
Net income available to common stockholders $175,691 $186,741
Depreciation and amortization (1) 174,000 174,000
Funds from operations 349,691 360,741
Non-recurring G&A expenses (2) 3,909 3,909
Funds from operations — normalized $353,600 $364,650
Per share data (diluted):

Net income available to common stockholders $ 1.59 $ 1.69
Funds from operations 3.16 3.26
Funds from operations — normalized 3.20 3.30
FAD Reconciliation:
Net income available to common stockholders $175,691 $186,741
Depreciation and amortization (1) 174,000 174,000
Gross straight-line rental income (13,800) (13,800)
Amortization related to above/(below) market leases, net (1,300) (1,300)
Non-cash interest expense 11,500 11,500
Cap-ex, tenant improvements, lease commissions (10,000) (10,000)
Funds available for distribution 336,091 347,141
Non-recurring G&A expenses (2) 3,909 3,909
Funds available for distribution — normalized $340,000 $351,050
Per share data (diluted):

Net income available to common stockholders $ 1.59 $ 1.69
Funds available for distribution 3.04 3.14
Funds available for distribution — normalized 3.08 3.18
(2) Expenses to be recognized in connection with the departure of Raymond Braun.
Page 10 of 10
Exhibit 99.2
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Ex h i b i t 99. 2 4Q 08 S UP P LEM ENTAL I NF O RM ATI O N
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TABLE O F CO NTENTS CO RP O RATE Co r p o r a t e P r o f i l e | 2 An a l y s t Co v e r a g e | 4 I n v e s t o r Re l a t i o n s Co n t a c t s | 4 F o r wa r d - L o o k i n g S t a t e m e n t s a n d Ri s k F a c t o r s | 5 3 3 F I NANCI AL Co n s o l i d a t e d Ba l a n c e S h e e t s ( Un a u d i t e d ) | 6 Co n s o l i d a t e d S t a t e m e n t s o f I n c o m e ( Un a u d i t e d ) | 7 F u n d s f r o m Op e r a t i o n s Re c o n c i l i a t i o n | 8 F u n d s Av a i l a b l e f o r Di s t r i b u t i o n Re c o n c i l i a t i o n | 9 Ad j u s t e d E BI T DA Re c o n c i l i a t i o n | 1 0 Ne t Op e r a t i n g I n c o m e Re c o n c i l i a t i o n | 1 1 Ou t l o o k Re c o n c i l i a t i o n | 1 2 Re v e n u e a n d L e a s e M a t u r i t y | 1 3 De b t M a t u r i t i e s a n d P r i n c i p a l P a y m e n t s | 1 4 Fi xe d a nd Fl oa t i ng Ra t e De b t | 1 4 Cu r r e n t Ca p i t a l i z a t i o n | 1 5 Re s t a t e m e n t o f E a r n i n g s d u e t o Co n v e r t i b l e De b t | 1 6 2 5 I NVES TM ENT Gr o s s I n v e s t m e n t
Ac t i v i t y — Qu a r t e r | 1 8 Gr o s s I n v e s t m e n t Ac t i v i t y — Ye a r | 1 9 I n v e s t m e n t T i m i n g | 2 0 Di s p o s i t i o n Ac t i v i t y | 2 0 Di s c o n t i n u e d Op e r a t i o n s | 2 0 P O RTF O LI O P o r t f o l i o Co m p o s i t i o n | 2 1 I n v e s t m e n t M e t r i c s | 2 1 P o r t f o l i o Co n c e n t r a t i o n | 2 2 T o p T e n Op e r a t o r De s c r i p t i o n s | 2 3 M S A a n d Re g i o n Co n c e n t r a t i o n | 2 4 P o r t f o l i o P e r f o r m a n c e | 2 5 S a m e S t o r e Re v e n u e Gr o wt h | 2 5 P o r t f o l i o P e r f o r m a n c e — I n d e p e n d e n t L i v i n g / CCRC | 2 6 P o r t f o l i o P e r f o r m a n c e — As s i s t e d L i v i n g | 2 7 P o r t f o l i o P e r f o r m a n c e — S k i l l e d Nu r s i n g | 2 8 P o r t f o l i o P e r f o r m a n c e — Spe c i a l t y Ca r e | 2 9 Por t f ol i o Co m p o s i t i o n — M e d i c a l Of f i c e Bu i l d i n g s | 3 0 P o r t f o l i o P e r f o r m a n c e — M e d i c a l Of f i c e Bu i l d i n g s | 3 0 P o r t f o l i o
Co n c e n t r a t i o n — M e d i c a l Of f i c e Bu i l d i n g s | 3 1 De v e l o p m e n t Ac t i v i t y | 3 2 De v e l o p m e n t F u n d i n g P r o j e c t i o n s | 3 2 De v e l o p m e n t P r o j e c t Co n v e r s i o n E s t i m a t e s | 3 3 Un s t a b i l i z e d Co n c e n t r a t i o n | 3 4 P o r t f o l i o T r e n d s | 3 5 G LO S S ARY Gl o s s a r y | 3 6 S u p p l e m e n t a l Re p o r t i n g M e a s u r e s | 3 9
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CO RP O RATE H EALTH CARE REI T, I NC. , a r e a l e s t a t e i n v e s t m e n t t r u s t ( “ RE I T ” ) wi t h a n e n t e r p r i s e v a l u e o f $ 7 . 6 b i l l i o n , i n v e s t s i n h e a l t h c a r e r e a l e s t a t e , i n c l u d i n g i n d e p e n d e n t l i v i n g , a s s i s t e d l i v i n g a n d s k i l l e d n u r s i n g f a c i l i t i e s , c o n t i n u i n g c a r e r e t i r e m e n t c o m m u n i t i e s , h o s p i t a l s a n d m e d i c a l o f f i c e b u i l d i n g s . T h e c o m p a n y ’ s f u l l s e r v i c e p l a t f o r m a l s o o f f e r s p r o p e r t y m a n a g e m e n t a n d d e v e l o p m e n t s e r v i c e s t o i t s c u s t o m e r s . Da t a as o f : De c e m b e r 3 1 , 2 0 0 8 NYS E S y m b o l : HCN E n t e r p r i s e Va l u e : $7. 6 bi l l i on I nves t m ent Co n c e n t r a t i o n * Cl o s i n g P r i c e : $ 4 2 . 2 0 Gr o s s Re a l Es t a t e As s e t s : $ 6 . 5 b i l l i o n Own e d As s e t s : 9 3 % 5 2 W e e k Hi / L o : $ 5 3 . 9 8 / $ 3 0 . 1 4 De b t t o M a r k e t
Ca p i t a l i z a t i o n : 3 8 % T o p 5 Cu s t o m e r s : 2 5 % Di v i d e n d / Yi e l d : $ 2 . 7 2 / 6 . 4 5 % De b t t o Bo o k Ca p i t a l i z a t i o n : 4 7 % T o p 5 S t a t e s : 4 5 % S h a r e s Ou t s t a n d i n g : 1 0 4 . 7 m i l l i o n S e n i o r De b t Ra t i n g s : Ba a 2 / BBB- / BBB * % o f t o t a l i n v e s t m e n t s F ULL S ERVI CE P LATF O RM He a l t h Ca r e RE I T p r o v i d e s s e n i o r h o u s i n g o p e r a t o r s a n d h e a l t h c a r e s y s t e m s wi t h a s i n g l e s o u r c e f o r f a c i l i t y p l a n n i n g , d e s i g n a n d t u r n - k e y d e v e l o p m e n t , p r o p e r t y m a n a g e m e n t a n d m o n e t i z a t i o n or e x p a n s i o n o f e x i s t i n g r e a l e s t a t e . By e x t e n d i n g s u c c e s s f u l r el at i ons hi p i nves t m ent pr ogr am s t o heal t h car e s ys t em s acr os s hi gher acui t y as s et cl as s es , t he com pany has s i gni f i cant l y i ncr eas ed pot ent i al i nves t m ent oppor t uni t i es .
DE VE L OP M E NT F UNDI NG GROS S RE AL E S T AT E AS S E T S $ m i l l i o n s $ m i l l i o n s $ 6 2 1 $ 6 , 8 1 2 $ 5 7 0 $ 6 , 4 6 2 $ 5 , 4 9 8 $ 4 , 4 7 7 $ 3 0 8 $ 3 , 1 3 1 $ 2 , 6 6 7 $ 1 5 9 $ 1 5 9 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 E * 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 E * F u t u r e * r e p r e s e n t s p r o j e c t e d f u t u r e f u n d i n g f o r p r o j e c t s u n d e r wa y * b a s e d o n m i d - p o i n t o f HCN 2 0 0 9 n e t i n v e s t m e n t a s o f De c e m b e r 3 1 , 2 0 0 8 g u i d a n c e o f $ 3 0 0 m i l l i o n t o $ 4 0 0 m i l l i o n
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CO RP O RATE S ECURE AND G RO W I NG DI VI DEND He a l t h Ca r e RE I T m a i n t a i n s a c o m m i t m e n t t o i n v e s t m e n t g r a d e r a t i n g s , c o n s e r v a t i v e b a l a n c e s h e e t m a n a g e m e n t a n d u n d e r wr i t i n g , a s s e t a n d p r o p e r t y m a n a g e m e n t p r o t o c o l s t h a t e n s u r e p r u d e n t i n v e s t m e n t s a n d p r o a c t i v e m a n a g e m e n t o v e r t h e l i f e o f i t s l o n g - t e r m l e a s e s . T h e com pany has decl ar ed 151 cons ecut i ve quar t er l y di vi dends dur i ng i t s 39- year hi s t or y a n d r e m a i n s f o c u s e d o n d e l i v e r i n g a t t r a c t i v e s t o c k h o l d e r r e t u r n s . GROW T H S I NCE I NCE P T I ON* S OL I D DI VI DE ND P AYM E NT RE CORD* $3, 500, 000 $3, 000, 000 $3. 00 $2, 500, 000 $2. 50 $2, 000, 000 $2. 00 $1, 500, 000 $1. 50 $1, 000, 000 $1. 00 $500, 000 $0. 50 $0 $ 0. 00 71 75 79 83 87 91 95 99
0 3 0 7 7 1 7 5 7 9 8 3 8 7 9 1 9 5 9 9 0 3 0 7 * v a l u e o f $ 1 0 , 0 0 0 i n v e s t m e n t m a d e 6 / 3 0 / 1 9 7 1 , * a d j u s t e d f o r s t o c k s p l i t s a s s u m i n g r e i n v e s t m e n t o f d i v i d e n d s T OT AL RE T URNS * 1 y e a r - 0 . 1 % 3 y e a r s 1 4 . 3 % 5 y e a r s 9 . 9 % 1 0 y e a r s 1 4 . 0 % 2 0 y e a r s 1 6 . 4 % S i n c e i n c e p t i o n 1 6 . 1 % * a s s u m e s r e i n v e s t m e n t o f d i v i d e n d s RELATI O NS H I P F O CUS ED, LO NG - TERM S TRATEG Y W i t h 6 8 o p e r a t o r s a n d o v e r 8 0 0 m e d i c a l o f f i c e t e n a n t s i n 3 9 s t a t e s , t h e c o m p a n y s t r i v e s t o p r o v i d e e a c h c u s t o m e r wi t h t h e h i g h e s t q u a l i t y s e r v i c e a n d a t t e n t i o n t o d e t a i l . T h r o u g h o u t t he com pany’ s 39- year hi s t or y, i t has been a l ong- t er m capi t al pr ovi der t o s eni or hous i ng and heal t h car e s ys t em s t hr oughout al l m ar ket
c y c l e s . T h e r e l a t i o n s h i p a p p r o a c h e n a b l e s t h e c o m p a n y t o p a r t n e r wi t h t h e b e s t r e g i o n a l l y f o c u s e d o p e r a t o r s a n d h e a l t h s y s t e m s a n d h e l p t h e m g r o w p r o f i t a b l y , wh i l e c o n c e n t r a t i n g o n wh a t t h e y d o b e s t — p r o v i d e q u a l i t y c a r e t o p a t i e n t s a n d r e s i d e n t s . S P EED AND CERTAI NTY O F EXECUTI O N He a l t h Ca r e RE I T ’ s e x p e r i e n c e a n d k n o wl e d g e e n a b l e i t t o m a k e i n v e s t m e n t d e c i s i o n s wi t h i n d a y s , r a t h e r t h a n we e k s o r m o n t h s . Th e c o m p a n y h a s a c c e s s e d o v e r $ 3 . 2 b i l l i o n i n c a p i t a l i n t h e l a s t f i v e y e a r s , i n c l u d i n g $ 8 9 4 m i l l i o n i n 2 0 0 7 a n d $ 8 1 4 m i l l i o n d u r i n g t h e t we l v e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 8 . T h e c o m p a n y ’ s $ 1 . 1 5 b i l l i o n l i n e o f c r e d i t e n s u r e s n e w i n v e s t m e n t s wi l l b e
f unded on t i m e.
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CO RP O RATE G e o r g e L. Ch a p m a n ANALYS T CO VERAG E Ch a i r m a n , CEO & P r e s i d e n t Ba n k o f Am e r i c a S e c u r i t i e s L L C M r . Ch a p m a n i s c u r r e n t l y Ch a i r m a n , BM O Ca p i t a l M a r k e t s Co r p . Ch i e f E x e c u t i v e Of f i c e r a n d P r e s i d e n t Ca n t o r F i t z g e r a l d o f t h e c o m p a n y . He h a s s e r v e d a s De u t s c h e Ba n k S e c u r i t i e s I n c . Ch a i r m a n a n d Ch i e f E x e c u t i v e Of f i c e r Gr e e n S t r e e t Ad v i s o r s , I n c . s i n c e Oc t o b e r 1 9 9 6 , a n d p r e v i o u s l y Ke y Ba n c Ca p i t a l M a r k e t s M o r g a n Ke e g a n & Co . , I n c . s e r v e d a s P r e s i d e n t o f t h e c o m p a n y Ra y m o n d J a m e s & As s o c i a t e s , I n c . f r o m S e p t e m b e r 1 9 9 5 t o M a y 2 0 0 2 . Ro b e r t W . Ba i r d & Co . F r o m J a n u a r y 1 9 9 2 t o S e p t e m b e r S t i f e l Ni c o l a u s & Co m p a n y , I n c . 1 9 9 5 , h e s e r v e d a s
E x e c u t i v e Vi c e UBS S e c u r i t i e s P r e s i d e n t a n d Ge n e r a l Co u n s e l o f t h e c o m p a n y . I NVES TO R RELATI O NS J e f f r e y H . M i l l e r EVP - Op e r a t i o n s & Ge n e r a l ANAL YS T / I NVE S T OR CONT ACT Co u n s e l S c o t t A. E s t e s E VP & CF O s e s t e s @ h c r e i t . c o m M r . M i l l e r h a s s e r v e d a s E x e c u t i v e Vi c e P r e s i d e n t - Op e r a t i o n s a n d M i c h a e l A. Cr a b t r e e Ge n e r a l Co u n s e l s i n c e J a n u a r y 2 0 0 9 , VP & T r e a s u r e r E x e c u t i v e Vi c e P r e s i d e n t a n d Ge n e r a l m c r a b t r e e @ h c r e i t . c o m Co u n s e l f r o m M a r c h 2 0 0 6 t o J a n u a r y 2 0 0 9 a n d Vi c e P r e s i d e n t a n d Ge n e r a l Co u n s e l o f t h e Co m p a n y f r o m J u l y GE NE RAL I NQUI RI E S E r i n C. I b e l e 2 0 0 4 t o M a r c h 2 0 0 6 . F r o m 1 9 9 6 t o S VP - Ad m i n i s t r a t i o n & Co r p o r a t e S e c r e t a r y J u n e 2 0 0 4 , M r . M i l l e r wa s a
p a r t n e r i n f o @ h c r e i t . c o m i n t h e r e a l e s t a t e p r a c t i c e g r o u p o f t h e l a w f i r m o f S h u m a k e r , L o o p & Ke n d r i c k , L L P . S c o t t A. Es t e s EVP & CFO M r . E s t e s i s c u r r e n t l y E x e c u t i v e Vi c e P r e s i d e n t a n d Ch i e f F i n a n c i a l Of f i c e r . He s e r v e d a s S e n i o r Vi c e P r e s i d e n t a n d Ch i e f F i n a n c i a l Of f i c e r o f t h e c o m p a n y s i n c e M a r c h 2 0 0 6 a n d s e r v e d a s Vi c e P r e s i d e n t o f F i n a n c e o f t h e c o m p a n y f r o m Ap r i l 2 0 0 3 t o M a r c h 2 0 0 6 . F r o m J a n u a r y 2 0 0 0 t o Ap r i l 2 0 0 3 , M r . E s t e s s e r v e d a s a S e n i o r E q u i t y An a l y s t a n d Vi c e P r e s i d e n t wi t h De u t s c h e Ba n k S e c u r i t i e s . F r o m J a n u a r y 1 9 9 8 t o De c e m b e r 1 9 9 9 , M r . E s t e s s e r v e d a s a S e n i o r E q u i t y An a l y s t a n d Vi c e P r e s i d e n t wi t h Ba n k o f Am e r i c a S e c u r i t i e s .
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CO RP O RATE F o r wa r d - Lo o k i n g S t a t e m e n t s a n d Ri s k F a c t o r s T h i s d o c u m e n t m a y c o n t a i n “ f o r wa r d - l o o k i n g ” s t a t e m e n t s a s d e f i n e d i n t h e P r i v a t e S e c u r i t i e s L i t i g a t i o n Re f o r m Ac t o f 1 9 9 5 . T h e s e f o r wa r d - l o o k i n g s t a t e m e n t s c o n c e r n a n d a r e b a s e d u p o n , a m o n g o t h e r t h i n g s , t h e p o s s i b l e e x p a n s i o n o f t h e c o m p a n y ’ s p o r t f o l i o ; t h e s a l e o f p r o p e r t i e s ; t h e p e r f o r m a n c e o f i t s o p e r a t o r s / t e n a n t s a n d p r o p e r t i e s ; i t s o c c u p a n c y r a t e s ; i t s a b i l i t y t o a c q u i r e , d e v e l o p a n d / o r m a n a g e p r o p e r t i e s ; i t s a b i l i t y t o e n t e r i n t o a g r e e m e n t s wi t h v i a b l e n e w t e n a n t s f o r v a c a n t s p a c e o r f o r p r o p e r t i e s t h a t t h e c o m p a n y t a k e s b a c k f r o m f i n a n c i a l l y t r o u b l e d t e n a n t s , i f a n y ; i t s a b i l i t y t o m a k e
d i s t r i b u t i o n s t o s t o c k h o l d e r s ; i t s p o l i c i e s a n d p l a n s r e g a r d i n g i n v e s t m e n t s , f i n a n c i n g s a n d o t h e r m a t t e r s ; i t s t a x s t a t u s a s a r e a l e s t a t e i n v e s t m e n t t r u s t ; i t s a b i l i t y t o a p p r o p r i a t e l y b a l a n c e t h e u s e o f d e b t a n d e q u i t y ; i t s a b i l i t y t o a c c e s s c a p i t a l m a r k e t s o r o t h e r s o u r c e s o f f u n d s ; i t s c r i t i c a l a c c o u n t i n g p o l i c i e s ; a n d i t s a b i l i t y t o m e e t i t s e a r n i n g s g u i d a n c e . W h e n t h e c o m p a n y u s e s wo r d s s u c h a s “ m a y , ” “ wi l l , ” “ i n t e n d , ” “ s h o u l d , ” “ b e l i e v e , ” “ e x p e c t , ” “ a n t i c i p a t e , ” “ p r o j e c t , ” “ e s t i m a t e ” o r s i m i l a r e x p r e s s i o n s , i t i s m a k i n g f o r wa r d - l o o k i n g s t a t e m e n t s . F o r wa r d - l o o k i n g s t a t e m e n t s a r e n o t g u a r a n t e e s o f f u t u r e p e r f o r m a n c e a n d i n v o l v e r i s k s a n d
u n c e r t a i n t i e s . T h e c o m p a n y ’ s e x p e c t e d r e s u l t s m a y n o t b e a c h i e v e d , a n d a c t u a l r e s u l t s m a y d i f f e r m a t e r i a l l y f r o m e x p e c t a t i o n s . T h i s m a y b e a r e s u l t o f v a r i o u s f a c t o r s , i n c l u d i n g , b u t n o t l i m i t e d t o : t h e s t a t u s o f t h e e c o n o m y ; t h e s t a t u s o f c a p i t a l m a r k e t s , i n c l u d i n g a v a i l a b i l i t y a n d c o s t o f c a p i t a l ; i s s u e s f a c i n g t h e h e a l t h c a r e i n d u s t r y , i n c l u d i n g c o m p l i a n c e wi t h , a n d c h a n g e s t o , r e g u l a t i o n s a n d p a y m e n t p o l i c i e s , r e s p o n d i n g t o g o v e r n m e n t i n v e s t i g a t i o n s a n d p u n i t i v e s e t t l e m e n t s a n d o p e r a t o r s ’ / t e n a n t s ’ d i f f i c u l t y i n c o s t - e f f e c t i v e l y o b t a i n i n g a n d m a i n t a i n i n g a d e q u a t e l i a b i l i t y a n d o t h e r i n s u r a n c e ; c h a n g e s i n f i n a n c i n g t e r m s ; c o m p e t i t i o n wi t h i n t h e
h e a l t h c a r e a n d s e n i o r h o u s i n g i n d u s t r i e s ; n e g a t i v e d e v e l o p m e n t s i n t h e o p e r a t i n g r e s u l t s o r f i n a n c i a l c o n d i t i o n o f o p e r a t o r s / t e n a n t s , i n c l u d i n g , b u t n o t l i m i t e d t o , t h e i r a b i l i t y t o p a y r e n t a n d r e p a y l o a n s ; t h e c o m p a n y ’ s a b i l i t y t o t r a n s i t i o n o r s e l l f a c i l i t i e s wi t h p r o f i t a b l e r e s u l t s ; t h e f a i l u r e t o m a k e n e w i n v e s t m e n t s a s a n d wh e n a n t i c i p a t e d ; a c t s o f Go d a f f e c t i n g t h e c o m p a n y ’ s p r o p e r t i e s ; t h e c o m p a n y ’ s a b i l i t y t o r e - l e a s e s p a c e a t s i m i l a r r a t e s a s v a c a n c i e s o c c u r ; t h e c o m p a n y ’ s a b i l i t y t o t i m e l y r e i n v e s t s a l e p r o c e e d s a t s i m i l a r r a t e s t o a s s e t s s o l d ; o p e r a t o r / t e n a n t b a n k r u p t c i e s o r i n s o l v e n c i e s ; g o v e r n m e n t r e g u l a t i o n s a f f e c t i n g M e d i c a r e a n d
M e d i c a i d r e i m b u r s e m e n t r a t e s a n d o p e r a t i o n a l 4 r e q u i r e m e n t s ; l i a b i l i t y o r c o n t r a c t c l a i m s b y o r a g a i n s t o p e r a t o r s / t e n a n t s ; u n a n t i c i p a t e d d i f f i c u l t i e s a n d / o r e x p e n d i t u r e s r e l a t i n g t o f u t u r e a c q u i s i t i o n s ; e n v i r o n m e n t a l l a ws a f f e c t i n g t h e c o m p a n y ’ s p r o p e r t i e s ; c h a n g e s i n r u l e s o r p r a c t i c e s g o v e r n i n g t h e c o m p a n y ’ s f i n a n c i a l r e p o r t i n g ; a n d l e g a l a n d o p e r a t i o n a l m a t t e r s , i n c l u d i n g r e a l e s t a t e i n v e s t m e n t t r u s t q u a l i f i c a t i o n a n d k e y m a n a g e m e n t p e r s o n n e l r e c r u i t m e n t a n d r e t e n t i o n . F i n a l l y , t h e c o m p a n y a s s u m e s n o o b l i g a t i o n t o u p d a t e o r r e v i s e a n y f o r wa r d - l o o k i n g s t a t e m e n t s o r t o u p d a t e t h e r e a s o n s wh y a c t u a l r e s u l t s c o u l d d i f f e r f r o m t h o s e p r o j e c t e d i n a n y
f o r wa r d - l o o k i n g s t a t e m e n t s .
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F I NANCI AL Co n s o l i d a t e d Ba l a n c e S h e e t s ( u n a u d i t e d ) ( d o l l a r s i n t h o u s a n d s ) De c e m b e r 3 1 , 2 0 0 8 2 0 0 7 As s e t s Re a l e s t a t e i n v e s t m e n t s : Re a l p r o p e r t y o wn e d L a n d a n d l a n d i m p r o v e m e n t s $ 5 0 4 , 9 0 7 $ 4 4 7 , 0 2 9 Bu i l d i n g s a n d i m p r o v e m e n t s 4 , 6 5 3 , 8 7 1 4 , 2 2 4 , 9 5 5 Ac q u i r e d l e a s e i n t a n g i b l e s 1 3 3 , 3 2 4 1 3 1 , 3 1 2 Re a l p r o p e r t y h e l d f o r s a l e , n e t o f a c c u m u l a t e d d e p r e c i a t i o n 4 8 , 0 5 4 - Co n s t r u c t i o n i n p r o g r e s s 6 3 9 , 4 1 9 3 1 3 , 7 0 9 G r o s s r e a l p r o p e r t y o wn e d 5 , 9 7 9 , 5 7 5 5 , 1 1 7 , 0 0 5 L e s s a c c u m u l a t e d d e p r e c i a t i o n a n d a m o r t i z a t i o n ( 6 0 0 , 7 8 1 ) ( 4 7 8 , 3 7 3 ) Ne t r e a l p r o p e r t y o wn e d 5 , 3 7 8 , 7 9 4 4 , 6 3 8 , 6 3 2 Re a l e s t a t e l o a n s r e c e i v a b l e 4 8 2 , 8 8 5 3 8 1 , 3 9 4 L e s s a l l o wa n c e f o r l o s s e s o n l o a n s r e c e i v a b l e ( 7 , 5 0 0 ) ( 7 , 4 0 6 ) Ne t
r e a l e s t a t e l o a n s r e c e i v a b l e 4 7 5 , 3 8 5 3 7 3 , 9 8 8 Ne t r e a l e s t a t e i n v e s t m e n t s 5 , 8 5 4 , 1 7 9 5 , 0 1 2 , 6 2 0 O t h e r a s s e t s : E q u i t y i n v e s t m e n t s 1 , 0 3 0 1 , 4 0 8 De f e r r e d l o a n e x p e n s e s 2 3 , 5 7 9 3 0 , 4 9 9 Ca s h a n d c a s h e q u i v a l e n t s 2 3 , 3 7 0 3 0 , 2 6 9 Re s t r i c t e d c a s h 1 5 4 , 0 7 0 1 7 , 5 7 5 Re c e i v a b l e s a n d o t h e r a s s e t s ( 1 ) 1 3 6 , 8 9 0 1 2 1 , 4 8 5 To t a l o t h e r a s s e t s 3 3 8 , 9 3 9 2 0 1 , 2 3 6 To t a l a s s e t s $ 6 , 1 9 3 , 1 1 8 $ 5 , 2 1 3 , 8 5 6 Li a b i l i t i e s a n d s t o c k h o l d e r s ’ e q u i t y Li a b i l i t i e s : Bo r r o wi n g s u n d e r u n s e c u r e d l i n e s o f c r e d i t a r r a n g e m e n t s $ 5 7 0 , 0 0 0 $ 3 0 7 , 0 0 0 S e n i o r u n s e c u r e d n o t e s 1 , 8 4 7 , 2 4 7 1 , 8 9 0 , 1 9 2 S e c u r e d d e b t 4 4 6 , 5 2 5 5 0 7 , 4 7 6 Ac c r u e d e x p e n s e s a n d o t h e r l i a b i l i t i e s 1 0 7 , 1 5 7 9 5 , 1 4 5 To t a l l i a b i l i t i e s 2 , 9 7 0 , 9 2 9 2 , 7 9 9 , 8 1 3 M i nor i t y
i n t e r e s t s 1 0 , 6 0 3 9 , 6 8 7 S t o c k h o l d e r s ’ e q u i t y : P r e f e r r e d s t o c k 2 8 9 , 9 2 9 3 3 0 , 2 4 3 Co m m o n s t o c k 1 0 4 , 6 3 5 8 5 , 4 1 2 Ca p i t a l i n e x c e s s o f p a r v a l u e 3 , 1 8 0 , 6 2 8 2 , 3 7 0 , 0 3 7 T r e a s u r y s t o c k ( 5 , 1 4 5 ) ( 3 , 9 5 2 ) Cu m u l a t i v e n e t i n c o m e 1 , 3 6 2 , 3 6 6 1 , 0 7 4 , 2 5 5 Cu m u l a t i v e d i v i d e n d s ( 1 , 7 2 3 , 8 1 9 ) ( 1 , 4 4 6 , 9 5 9 ) Ac c u m u l a t e d o t h e r c o m p r e h e n s i v e i n c o m e ( 1 , 1 1 3 ) ( 7 , 3 8 1 ) Ot h e r e q u i t y 4 , 1 0 5 2 , 7 0 1 To t a l s t o c k h o l d e r s ’ e q u i t y 3 , 2 1 1 , 5 8 6 2 , 4 0 4 , 3 5 6 To t a l l i a b i l i t i e s a n d s t o c k h o l d e r s ’ e q u i t y $ 6 , 1 9 3 , 1 1 8 $ 5 , 2 1 3 , 8 5 6 No t e s : ( 1 ) I n c l u d e s s t r a i g h t - l i n e r e c e i v a b l e b a l a n c e o f $ 4 4 , 9 6 3 , 0 0 0 a n d $ 5 2 , 7 5 6 , 0 0 0 a t De c e m b e r 3 1 , 2 0 0 8 a n d 2 0 0 7 , r e s p e c t i v e l y .
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F I NANCI AL Co n s o l i d a t e d S t a t e m e n t s o f I n c o m e ( u n a u d i t e d ) ( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) T h r e e M o n t h s E n d e d Ye a r E n d e d De c e m b e r 3 1 , De c e m b e r 3 1 , 2 0 0 8 2 0 0 7 2 0 0 8 2 0 0 7 Re v e n u e s : Re n t a l i n c o m e $ 1 3 1 , 3 7 2 $ 1 1 1 , 0 3 6 $ 5 0 0 , 6 3 0 $ 4 1 7 , 6 7 3 I n t e r e s t i n c o m e 1 0 , 8 8 6 8 , 1 5 1 4 0 , 0 6 3 2 5 , 8 2 3 Ot h e r i n c o m e 4 , 8 6 5 6 , 0 9 9 1 0 , 5 2 1 1 0 , 0 3 5 To t a l r e v e n u e s 1 4 7 , 1 2 3 1 2 5 , 2 8 6 5 5 1 , 2 1 4 4 5 3 , 5 3 1 Ex p e n s e s : I n t e r e s t e x p e n s e 3 0 , 4 2 6 3 5 , 3 4 0 1 3 0 , 8 1 3 1 3 1 , 8 9 3 P r o p e r t y o p e r a t i n g e x p e n s e s 1 1 , 3 8 9 1 0 , 2 8 6 4 3 , 9 9 0 3 4 , 7 0 7 De p r e c i a t i o n a n d a m o r t i z a t i o n 4 1 , 5 0 0 36, 774 156, 154 135, 224 Ge n e r a l a n d a d m i n i s t r a t i v e e x p e n s e s 1 3 , 5 0 0 9 , 0 8 0 4 7 , 1 9 3 3 7 , 4 6 5 Re a l i z e d l os s on der i vat i ves 21, 880 — 23, 393 - Ga i n o n
e x t i n g u i s h m e n t o f d e b t — ( 1 , 0 8 1 ) ( 2 , 0 9 4 ) ( 1 , 0 8 1 ) P r o v i s i o n f o r l o a n l o s s e s 9 4 — 9 4 - To t a l e x p e n s e s 1 1 8 , 7 8 9 9 0 , 3 9 9 3 9 9 , 5 4 3 3 3 8 , 2 0 8 I n c o m e f r o m c o n t i n u i n g o p e r a t i o n s b e f o r e i n c o m e t a x e s a n d m i n o r i t y i n t e r e s t s 2 8 , 3 3 4 3 4 , 8 8 7 1 5 1 , 6 7 1 1 1 5 , 3 2 3 I n c o m e t a x e x p e n s e ( 1 3 6 ) ( 2 6 9 ) ( 1 , 3 0 6 ) ( 1 8 8 ) I n c o m e f r o m c o n t i n u i n g o p e r a t i o n s b e f o r e m i n o r i t y i n t e r e s t s 2 8 , 1 9 8 3 4 , 6 1 8 1 5 0 , 3 6 5 1 1 5 , 1 3 5 M i n o r i t y i n t e r e s t s , n e t o f t a x 2 1 6 9 ( 1 2 6 ) ( 2 3 8 ) I n c o m e f r o m c o n t i n u i n g o p e r a t i o n s 2 8 , 2 0 0 3 4 , 7 8 7 1 5 0 , 2 3 9 1 1 4 , 8 9 7 Di s c o n t i n u e d o p e r a t i o n s : Ga i n on s al es of pr oper t i es 33, 120 11, 662 163, 933 14, 437 I m pai r m ent of as s et s ( 32, 648) — ( 32, 648) - - I ncom e ( l os s ) f r om di s cont i nued oper at i ons ,
n e t ( 7 8 ) 2 , 4 9 8 6 , 5 8 7 1 2 , 0 6 8 Di s c o n t i n u e d o p e r a t i o n s , n e t 3 9 4 1 4 , 1 6 0 1 3 7 , 8 7 2 2 6 , 5 0 5 Ne t i n c o m e 2 8 , 5 9 4 4 8 , 9 4 7 2 8 8 , 1 1 1 1 4 1 , 4 0 2 P r e f e r r e d s t o c k d i v i d e n d s 5 , 5 4 1 6 , 1 7 9 2 3 , 2 0 1 2 5 , 1 3 0 Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s $ 2 3 , 0 5 3 $ 4 2 , 7 6 8 $ 2 6 4 , 9 1 0 $ 1 1 6 , 2 7 2 Av e r a g e n u m b e r o f c o m m o n s h a r e s o u t s t a n d i n g : Ba s i c 1 0 3 , 3 2 9 8 2 , 3 4 6 9 3 , 7 3 2 7 8 , 8 6 1 Di l u t e d 1 0 3 , 8 4 0 8 2 , 7 8 4 9 4 , 3 0 9 7 9 , 4 0 9 Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s p e r s h a r e : Ba s i c $ 0 . 2 2 $ 0 . 5 2 $ 2 . 8 3 $ 1 . 4 7 Di l u t e d $ 0 . 2 2 $ 0 . 5 2 $ 2 . 8 1 $ 1 . 4 6
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F I NANCI AL F u n d s F r o m O p e r a t i o n s Re c o n c i l i a t i o n ( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) T h r e e M o n t h s E n d e d Ye a r E n d e d De c e m b e r 3 1 , De c e m b e r 3 1 , 2 0 0 8 2 0 0 7 2 0 0 8 2 0 0 7 Ne t i nc om e avai l abl e t o c om m on s t oc khol de r s $ 23, 053 $ 42, 768 $ 264, 910 $ 1 1 6 , 2 7 2 De p r e c i a t i o n a n d a m o r t i z a t i o n ( 1 ) 4 2 , 1 5 0 4 0 , 0 8 1 1 6 3 , 0 4 5 1 4 9 , 6 2 6 Ga i n 3 o n s a l e s o f p r o p e r t i e s ( 3 3 , 1 2 0 ) ( 1 1 , 6 6 2 ) ( 1 6 3 , 9 3 3 ) ( 1 4 , 4 3 7 ) M i n o r i t y i n t e r e s t s ( 8 1 ) ( 8 8 ) ( 3 4 2 ) ( 3 4 4 ) F u n d s f r o m o p e r a t i o n s 3 2 , 0 0 2 7 1 , 0 9 9 2 6 3 , 6 8 0 2 5 1 , 1 1 7 I m p a i r m e n t o f a s s e t s 3 2 , 6 4 8 — 3 2 , 6 4 8 - Re a l i z e d l o s s o n d e r i v a t i v e s 2 1 , 8 8 0 — 2 3 , 3 9 3 - T e r m i n a t e d t r a n s a c t i o n c o s t s 2 , 2 9 1 — 2 , 2 9 1 - On e - t i m e a c q u i s i t i o n f i n d e r ’ s f e e s — - — 1 , 7 5 0 Ga i n o n
e x t i n g u i s h m e n t o f d e b t — ( 1 , 0 8 1 ) ( 2 , 0 9 4 ) ( 1 , 0 8 1 ) P r o v i s i o n f o r l o a n l o s s e s 9 4 — 9 4 - Ad d i t i o n a l o t h e r i n c o m e ( 2 , 5 0 0 ) ( 3 , 9 0 0 ) ( 2 , 5 0 0 ) ( 3 , 9 0 0 ) No n - r e c u r r i n g i n c o m e t a x e x p e n s e — - 1 , 3 2 5 - Fu n d s f r o m o p e r a t i o n s — n o r m a l i z e d $ 8 6 , 4 1 5 $ 6 6 , 1 1 8 $ 3 1 8 , 8 3 7 $ 2 4 7 , 8 8 6 Av e r a g e c o m m o n s h a r e s o u t s t a n d i n g : Ba s i c 1 0 3 , 3 2 9 8 2 , 3 4 6 9 3 , 7 3 2 7 8 , 8 6 1 Di l u t e d 1 0 3 , 8 4 0 8 2 , 7 8 4 9 4 , 3 0 9 7 9 , 4 0 9 P e r s h a r e d a t a : Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s Ba s i c $ 0 . 2 2 $ 0 . 5 2 $ 2 . 8 3 $ 1 . 4 7 Di l u t e d $ 0 . 2 2 $ 0 . 5 2 $ 2 . 8 1 $ 1 . 4 6 F u n d s f r o m o p e r a t i o n s Ba s i c $ 0 . 3 1 $ 0 . 8 6 $ 2 . 8 1 $ 3 . 1 8 Di l u t e d $ 0 . 3 1 $ 0 . 8 6 $ 2 . 8 0 $ 3 . 1 6 F u n d s f r o m o p e r a t i o n s — n o r m a l i z e d Ba s i c $ 0 . 8 4 $ 0 . 8 0 $ 3 . 4 0 $ 3 . 1 4
Di l u t e d $ 0 . 8 3 $ 0 . 8 0 $ 3 . 3 8 $ 3 . 1 2 F F O P a y o u t Ra t i o Di v i d e n d s p e r s h a r e ( 2 ) $ 0 . 6 8 $ 0 . 6 6 $ 2 . 7 0 $ 2 . 6 2 F F O p e r d i l u t e d s h a r e $ 0 . 3 1 $ 0. 86 $ 2. 80 $ 3. 16 FFO pa yout r a t i o 219% 7 7 % 9 6 % 8 3 % F F O P a y o u t Ra t i o — No r m a l i z e d Di v i d e n d s p e r s h a r e ( 2 ) $ 0 . 6 8 $ 0 . 6 6 $ 2 . 7 0 $ 2 . 6 2 F F O p e r d i l u t e d s h a r e — n o r m a l i z e d $ 0 . 8 3 $ 0 . 8 0 $ 3 . 3 8 $ 3 . 1 2 F F O p a y o u t r a t i o — n o r m a l i z e d 8 2 % 8 3 % 8 0 % 8 4 % No t e s : ( 1 ) De p r e c i a t i o n a n d a m o r t i z a t i o n i n c l u d e s d e p r e c i a t i o n a n d a m o r t i z a t i o n f r o m d i s c o n t i n u e d o p e r a t i o n s . ( 2 ) T h e $ 0 . 3 4 0 9 p r o r a t e d d i v i d e n d p a i d o n De c e m b e r 2 8 , 2 0 0 6 i n c o n n e c t i o n wi t h t h e W i n d r o s e m e r g e r h a s b e e n i n c l u d e d i n t h e t we l v e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 7 .
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F u n d s Av a i l a b l e f o r Di s t r i b u t i o n Re c o n c i l i a t i o n ( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) T h r e e M o n t h s E n d e d Ye a r E n d e d De c e m b e r 3 1 , De c e m b e r 3 1 , 2 0 0 8 2 0 0 7 2 0 0 8 2 0 0 7 Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s $ 2 3 , 0 5 3 $ 4 2 , 7 6 8 $ 2 6 4 , 9 1 0 $ 1 1 6 , 2 7 2 De p r e c i a t i o n a n d a m o r t i z a t i o n ( 1 ) 4 2 , 1 5 0 4 0 , 0 8 1 1 6 3 , 0 4 5 1 4 9 , 6 2 6 Ga i n 3 o n s a l e s o f p r o p e r t i e s ( 3 3 , 1 2 0 ) ( 1 1 , 6 6 2 ) ( 1 6 3 , 9 3 3 ) ( 1 4 , 4 3 7 ) M i n o r i t y i n t e r e s t s ( 1 8 ) ( 8 ) ( 4 4 ) ( 1 0 ) Gr o s s s t r a i g h t - l i n e r e n t a l i n c o m e ( 4 , 6 8 2 ) ( 4 , 3 6 5 ) ( 2 0 , 4 8 9 ) ( 1 7 , 0 2 9 ) P r e p a i d / s t r a i g h t - l i n e r e n t r e c e i p t s 1 2 , 6 0 2 6 , 6 7 8 2 8 , 2 8 2 1 7 , 4 6 9 Am o r t i z a t i o n r e l a t e d t o a b o v e / ( b e l o w) m a r k e t l e a s e s , n e t ( 3 6 3 ) ( 1 3 6 ) ( 1 , 0 3 9 ) ( 7 9 2 ) No n - c a s h i n t e r e s t e x p e n s e 1 , 6 9 6
1 , 7 9 0 6 , 4 1 9 5 , 3 6 6 Ca p - e x , t e n a n t i m p r o v e m e n t s , l e a s e c o m m i s s i o n s ( 2 , 8 6 5 ) ( 1 , 7 6 3 ) ( 6 , 3 4 7 ) ( 4 , 2 9 2 ) F u n d s a v a i l a b l e f o r d i s t r i b u t i o n 3 8 , 4 5 3 7 3 , 3 8 3 2 7 0 , 8 0 4 2 5 2 , 1 7 3 I m p a i r m e n t o f a s s e t s 3 2 , 6 4 8 — 3 2 , 6 4 8 - Re a l i z e d l o s s o n d e r i v a t i v e s 2 1 , 8 8 0 — 2 3 , 3 9 3 - T e r m i n a t e d t r a n s a c t i o n c o s t s 2 , 2 9 1 — 2 , 2 9 1 - On e - t i m e a c q u i s i t i o n f i n d e r ’ s f e e s — - — 1 , 7 5 0 Ga i n o n e x t i n g u i s h m e n t o f d e b t — ( 1 , 0 8 1 ) ( 2 , 0 9 4 ) ( 1 , 0 8 1 ) P r o v i s i o n f o r l o a n l o s s e s 9 4 — 9 4 - Ad d i t i o n a l o t h e r i n c o m e ( 2 , 5 0 0 ) ( 3 , 9 0 0 ) ( 2 , 5 0 0 ) ( 3 , 9 0 0 ) No n - r e c u r r i n g i n c o m e t a x e x p e n s e — - 1 , 3 2 5 - - P r e p a i d / s t r a i g h t - l i n e r e n t r e c e i p t s ( 1 2 , 6 0 2 ) ( 6 , 6 7 8 ) ( 2 8 , 2 8 2 ) ( 1 7 , 4 6 9 ) F u n d s a v a i l a b l e f o r d i s t r i b u t i o n — n o r m a l i z e d $ 8 0 , 2 6 4
$ 6 1 , 7 2 4 $ 2 9 7 , 6 7 9 $ 2 3 1 , 4 7 3 Av e r a g e c o m m o n s h a r e s o u t s t a n d i n g : Ba s i c 1 0 3 , 3 2 9 8 2 , 3 4 6 9 3 , 7 3 2 7 8 , 8 6 1 Di l u t e d 1 0 3 , 8 4 0 8 2 , 7 8 4 9 4 , 3 0 9 7 9 , 4 0 9 P e r s h a r e d a t a : Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s Ba s i c $ 0 . 2 2 $ 0 . 5 2 $ 2 . 8 3 $ 1 . 4 7 Di l u t e d $ 0 . 2 2 $ 0 . 5 2 $ 2 . 8 1 $ 1 . 4 6 F u n d s a v a i l a b l e f o r d i s t r i b u t i o n Ba s i c $ 0 . 3 7 $ 0 . 8 9 $ 2 . 8 9 $ 3 . 2 0 Di l u t e d $ 0 . 3 7 $ 0 . 8 9 $ 2 . 8 7 $ 3 . 1 8 F u n d s a v a i l a b l e f o r d i s t r i b u t i o n — n o r m a l i z e d Ba s i c $ 0 . 7 8 $ 0 . 7 5 $ 3 . 1 8 $ 2 . 9 4 Di l u t e d $ 0 . 7 7 $ 0 . 7 5 $ 3 . 1 6 $ 2 . 9 1 F AD P a y o u t Ra t i o Di v i d e n d s p e r s h a r e ( 2 ) $ 0 . 6 8 $ 0 . 6 6 $ 2 . 7 0 $ 2 . 6 2 F AD p e r d i l u t e d s h a r e $ 0 . 3 7 $ 0 . 8 9 $ 2 . 8 7 $ 3 . 1 8 F AD p a y o u t r a t i o 1 8 4 % 7 4 % 9 4 % 8 2 % F AD P a y o u t Ra t i o —
No r m a l i z e d Di v i d e n d s p e r s h a r e ( 2 ) $ 0 . 6 8 $ 0 . 6 6 $ 2 . 7 0 $ 2 . 6 2 F AD p e r d i l u t e d s h a r e — n o r m a l i z e d $ 0 . 7 7 $ 0 . 7 5 $ 3 . 1 6 $ 2 . 9 1 F AD p a y o u t r a t i o — n o r m a l i z e d 8 8 % 8 8 % 8 5 % 9 0 % No t e s : ( 1 ) De p r e c i a t i o n a n d a m o r t i z a t i o n i n c l u d e s d e p r e c i a t i o n a n d a m o r t i z a t i o n f r o m d i s c o n t i n u e d o p e r a t i o n s . ( 2 ) T h e $ 0 . 3 4 0 9 p r o r a t e d d i v i d e n d p a i d o n De c e m b e r 2 8 , 2 0 0 6 i n c o n n e c t i o n wi t h t h e W i n d r o s e m e r g e r h a s b e e n i n c l u d e d i n t h e t we l v e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 7 .
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F I NANCI AL Ad j u s t e d EBI TDA Re c o n c i l i a t i o n ( d o l l a r s i n t h o u s a n d s ) T we l v e M o n t h s E n d e d De c e m b e r 3 1 , M a r c h 3 1 , J u n e 3 0 , S e p t e m b e r 3 0 , De c e m b e r 3 1 , 2 0 0 7 2 0 0 8 2 0 0 8 2 0 0 8 2 0 0 8 Ne t i n c o m e $ 1 4 1 , 4 0 2 $ 1 4 8 , 3 2 9 $ 2 7 8 , 7 8 9 $ 3 0 8 , 4 6 5 $ 2 8 8 , 1 1 1 I n t e r e s t e x p e n s e ( 3 ) 1 4 2 , 2 7 9 1 4 5 , 1 2 7 1 4 5 , 2 1 9 1 4 2 , 7 8 4 1 3 6 , 2 4 7 I n c o m e t a x e x p e n s e 1 8 8 1 , 4 5 6 1 , 5 6 9 1 , 4 3 9 1 , 3 0 6 De p r e c i a t i o n a n d a m o r t i z a t i o n ( 3 ) 1 4 9 , 6 2 6 1 5 5 , 3 3 9 1 5 9 , 4 2 2 1 6 0 , 9 7 5 1 6 3 , 0 4 5 S t o c k - b a s e d c o m p e n s a t i o n ( 4 ) 7 , 0 5 0 7 , 7 2 3 7 , 8 5 3 8 , 0 2 4 8 , 5 3 0 P r o v i s i o n f o r l o a n l o s s e s — - — - 9 4 Ga i n o n e x t i n g u i s h m e n t o f d e b t ( 1 , 0 8 1 ) ( 2 , 4 0 7 ) ( 2 , 4 0 7 ) ( 3 , 1 7 5 ) ( 2 , 0 9 4 ) Ad j u s t e d EBI TDA $ 4 3 9 , 4 6 4 $ 4 5 5 , 5 6 7 $ 5 9 0 , 4 4 5 $ 6 1 8 , 5 1 2 $ 5 9 5 , 2 3 9 I n t e r e s t Co v e r a g e
Ra t i o ( 1 ) I n t e r e s t e x p e n s e ( 3 ) $ 1 4 2 , 2 7 9 $ 1 4 5 , 1 2 7 $ 1 4 5 , 2 1 9 $ 1 4 2 , 7 8 4 $ 1 3 6 , 2 4 7 No n - c a s h i n t e r e s t e x p e n s e ( 5 , 3 6 6 ) ( 5 , 8 2 3 ) ( 6 , 2 3 5 ) ( 6 , 5 1 3 ) ( 6 , 4 1 9 ) Ca p i t a l i z e d i n t e r e s t ( 5 ) 1 2 , 5 2 6 1 5 , 3 6 7 1 7 , 8 6 0 2 1 , 0 6 2 2 5 , 0 2 9 To t a l i n t e r e s t $ 1 4 9 , 4 3 9 $ 1 5 4 , 6 7 1 $ 1 5 6 , 8 4 4 $ 1 5 7 , 3 3 3 $ 1 5 4 , 8 5 7 Ad j u s t e d E BI T DA $ 4 3 9 , 4 6 4 $ 4 5 5 , 5 6 7 $ 5 9 0 , 4 4 5 $ 6 1 8 , 5 1 2 $ 5 9 5 , 2 3 9 Ad j u s t e d i n t e r e s t c o v e r a g e r a t i o 2 . 9 4 x 2 . 9 5 x 3 . 7 6 x 3 . 9 3 x 3 . 8 4 x F i x e d Ch a r g e Co v e r a g e Ra t i o ( 2 ) T o t a l i n t e r e s t ( 3 ) $ 1 4 9 , 4 3 9 $ 1 5 4 , 6 7 1 $ 1 5 6 , 8 4 4 $ 1 5 7 , 3 3 3 $ 1 5 4 , 8 5 7 S e c u r e d d e b t p r i n c i p a l a m o r t i z a t i o n 7 , 9 5 0 8 , 1 4 9 8 , 0 6 6 8 , 1 3 7 8 , 1 1 9 P r e f e r r e d d i v i d e n d s 2 5 , 1 3 0 2 4 , 9 6 0 2 4 , 4 2 7 2 3 , 8 4 0 2 3 , 2 0 1 To t a l f i x e d c h a r g e s $ 1 8 2 , 5 1 9 $ 1 8 7 , 7 8 0 $ 1 8 9 , 3 3 7 $
1 8 9 , 3 1 0 $ 1 8 6 , 1 7 7 Ad j u s t e d E BI T DA $ 4 3 9 , 4 6 4 $ 4 5 5 , 5 6 7 $ 5 9 0 , 4 4 5 $ 6 1 8 , 5 1 2 $ 5 9 5 , 2 3 9 Ad j u s t e d f i x e d c h a r g e c o v e r a g e r a t i o 2 . 4 1 x 2 . 4 3 x 3 . 1 2 x 3 . 2 7 x 3 . 2 0 x No t e s : ( 1 ) A c o m p a r a b l e c o v e n a n t i n o u r s e n i o r u n s e c u r e d n o t e s i s a m i n i m u m o f 1 . 5 0 t i m e s . ( 2 ) A c o m p a r a b l e c o v e n a n t i n o u r u n s e c u r e d l i n e o f c r e d i t a r r a n g e m e n t i s a m i n i m u m o f 1 . 7 5 t i m e s . ( 3 ) I n t e r e s t e x p e n s e a n d d e p r e c i a t i o n a n d a m o r t i z a t i o n i n c l u d e d i s c o n t i n u e d o p e r a t i o n s . ( 4 ) S t o c k - b a s e d c o m p e n s a t i o n e x p e n s e wa s $ 1 , 8 0 4 , 0 0 0 a n d $ 8 , 5 3 0 , 0 0 0 f o r t h e t h r e e a n d t we l v e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 8 , r e s p e c t i v e l y . ( 5 ) Ca p i t a l i z e d i n t e r e s t wa s $ 8 , 4 3 5 , 0 0 0 a n d $ 2 5 , 0 2 9 , 0 0 0 f o r t h e t h r e e a n d t we l v e m o n t h s e n d e d
De c e m b e r 3 1 , 2 0 0 8 , r e s p e c t i v e l y .
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Ne t Op e r a t i n g I n c o m e Re c o n c i l i a t i o n ( d o l l a r s i n t h o u s a n d s ) F I NANCI AL T h r e e M o n t h s E n d e d Ye a r E n d e d De c e m b e r 3 1 , De c e m b e r 3 1 , 2 0 0 8 2 0 0 7 2 0 0 8 2 0 0 7 T o t a l r e v e n u e s : I n v e s t m e n t p r o p e r t i e s : Re n t a l i n c o m e : ( 1 ) I n d e p e n d e n t l i v i n g / CCRCs $ 1 9 , 5 6 2 $ 1 2 , 4 4 3 $ 6 6 , 4 0 2 $ 4 3 , 0 7 2 As s i s t e d l i v i n g f a c i l i t i e s 2 7 , 5 2 1 2 8 , 6 4 6 1 1 7 , 0 0 9 1 0 8 , 4 7 5 S k i l l e d n u r s i n g f a c i l i t i e s 4 0 , 5 9 5 4 1 , 0 2 5 1 6 1 , 6 4 2 1 6 7 , 7 1 8 S p e c i a l t y c a r e f a c i l i t i e s 1 2 , 3 5 9 7 , 0 1 2 4 3 , 7 9 6 2 6 , 4 1 8 S u b - t o t a l r e n t a l i n c o m e 1 0 0 , 0 3 7 8 9 , 1 2 6 3 8 8 , 8 4 9 3 4 5 , 6 8 3 I n t e r e s t i ncom e 1 0 , 8 8 6 8 , 1 5 1 4 0 , 0 6 3 2 5 , 8 2 3 Ot h e r i n c o m e 3 , 8 5 0 5 , 2 1 8 7 , 8 9 9 8 , 0 1 0 T o t a l i n v e s t m e n t p r o p e r t y i n c o m e 1 1 4 , 7 7 3 1 0 2 , 4 9 5 4 3 6 , 8 1 1 3 7 9 , 5 1 6 M e d i c a l o f f i c e b u i l d i n g s : Re n t a l
i n c o m e ( 1 ) 3 3 , 1 3 8 3 0 , 8 7 7 1 3 3 , 3 3 2 1 1 1 , 6 1 4 Ot h e r i n c o m e 2 2 2 4 9 7 9 3 0 4 9 7 T o t a l M OB i n c o m e 3 3 , 3 6 0 3 1 , 3 7 4 1 3 4 , 2 6 2 1 1 2 , 1 1 1 No n - s e g m e n t / c o r p o r a t e o t h e r i n c o m e 7 9 3 3 8 4 1 , 6 9 2 1 , 5 2 8 T o t a l r e v e n u e s 1 4 8 , 9 2 6 1 3 4 , 2 5 3 5 7 2 , 7 6 5 4 9 3 , 1 5 5 P r o p e r t y o p e r a t i n g e x p e n s e s : I n v e s t m e n t p r o p e r t i e s — - — - M e d i c a l o f f i c e b u i l d i n g s ( 1 ) 1 2 , 0 1 9 1 1 , 2 2 4 4 6 , 6 2 9 3 7 , 4 7 5 No n - s e g m e n t / c o r p o r a t e — - — - T o t a l p r o p e r t y o p e r a t i n g e x p e n s e s 1 2 , 0 1 9 1 1 , 2 2 4 4 6 , 6 2 9 3 7 , 4 7 5 Ne t o p e r a t i n g i n c o m e : I n v e s t m e n t p r o p e r t i e s 1 1 4 , 7 7 3 1 0 2 , 4 9 5 436, 811 3 7 9 , 5 1 6 M e d i c a l o f f i c e b u i l d i n g s 2 1 , 3 4 1 2 0 , 1 5 0 8 7 , 6 3 3 7 4 , 6 3 6 No n - s e g m e n t / c o r p o r a t e 7 9 3 3 8 4 1 , 6 9 2 1 , 5 2 8 Ne t o p e r a t i n g i n c o m e $ 1 3 6 , 9 0 7 $ 1 2 3 , 0 2 9 $ 5 2 6 , 1 3 6 $ 455, 680
No t e : ( 1 ) T h e t h r e e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 8 i n c l u d e s t h e f o l l o wi n g a m o u n t s ( i n t h o u s a n d s ) : Re n t a l i n c o m e f r o m d i s c o n t i n u e d o p e r a t i o n s : As s i s t e d l i v i n g f a c i l i t i e s $ 2 0 6 S k i l l e d n u r s i n g f a c i l i t i e s 2 7 S p e c i a l t y c a r e f a c i l i t i e s 9 8 9 M e d i c a l o f f i c e b u i l d i n g s 5 8 1 T o t a l $ 1 , 8 0 3 No n - c a s h r e n t a l i n c o m e f r o m c o n t i n u i n g o p e r a t i o n s : I n d e p e n d e n t l i v i n g / CCRCs $ 1 , 3 9 7 As s i s t e d l i v i n g f a c i l i t i e s 1 , 2 5 4 S k i l l e d n u r s i n g f a c i l i t i e s 9 4 8 S p e c i a l t y c a r e f a c i l i t i e s 3 9 2 M e d i c a l o f f i c e b u i l d i n g s 1 , 4 1 1 T o t a l $ 5, 402 Pr ope r t y ope r a t i ng e xpe ns e s f r om di s c ont i nue d ope r a t i ons : M e di c a l of f i c e bui l di ngs $630 11
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F I NANCI AL O u t l o o k Re c o n c i l i a t i o n ( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) Ye a r E n d e d De c e m b e r 3 1 , 2 0 0 9 L o w Hi g h I n v e s t m e n t s : Ac q u i s i t i o n s $ — $ - De v e l o p m e n t 6 0 0 , 0 0 0 6 0 0 , 0 0 0 Gr o s s n e w i n v e s t m e n t s 6 0 0 , 0 0 0 6 0 0 , 0 0 0 Di s p o s i t i o n s ( 3 0 0 , 0 0 0 ) ( 2 0 0 , 0 0 0 ) Ne t n e w i n v e s t m e n t s 3 0 0 , 0 0 0 4 0 0 , 0 0 0 F F O Re c o n c i l i a t i o n : Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s $ 1 7 5 , 6 9 1 $ 1 8 6 , 7 4 1 De p r e c i a t i o n a n d a m o r t i z a t i o n ( 1 ) 1 7 4 , 0 0 0 1 7 4 , 0 0 0 F u n d s f r o m o p e r a t i o n s $ 3 4 9 , 6 9 1 $ 3 6 0 , 7 4 1 No n - r e c u r r i n g G& A e x p e n s e s ( 2 ) 3 , 9 0 9 3 , 9 0 9 Fu n d s f r o m ope r at i ons — nor m al i z e d $ 353, 600 $ 364, 650 Pe r s ha r e da t a ( di l ut e d) : Ne t i n c o m e avai l abl e t o com m on s t ockhol der s $ 1. 59 $ 1 . 6 9 Fu n d s f r o m
o p e r a t i o n s 3 . 1 6 3 . 2 6 Fu n d s f r o m o p e r a t i o n s — n o r m a l i z e d 3 . 2 0 3 . 3 0 F AD Re c o n c i l i a t i o n : Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s $ 1 7 5 , 6 9 1 $ 1 8 6 , 7 4 1 De p r e c i a t i o n a n d a m o r t i z a t i o n ( 1 ) 1 7 4 , 0 0 0 1 7 4 , 0 0 0 Gr o s s s t r a i g h t - l i n e r e n t a l i n c o m e ( 1 3 , 8 0 0 ) ( 1 3 , 8 0 0 ) Am o r t i z a t i o n r e l a t e d t o a b o v e ( b e l o w) m a r k e t l e a s e s , n e t ( 1 , 3 0 0 ) ( 1 , 3 0 0 ) No n - c a s h i n t e r e s t e x p e n s e 1 1 , 5 0 0 1 1 , 5 0 0 Ca p - e x , t e n a n t i m p r o v e m e n t s , l e a s e c o m m i s s i o n s ( 1 0 , 0 0 0 ) ( 1 0 , 0 0 0 ) F u n d s a v a i l a b l e f o r d i s t r i b u t i o n $ 3 3 6 , 0 9 1 $ 3 4 7 , 1 4 1 No n - r e c u r r i n g G& A e x p e n s e s ( 2 ) 3 , 9 0 9 3 , 9 0 9 Fu n d s a v a i l a b l e f or di s t r i but i on — nor m al i z e d $ 340, 000 $ 351, 050 Pe r s har e dat a ( di l ut ed) : Ne t i n c o m e a v a i l a b l e t o com m on
s t o c k h o l d e r s $ 1 . 5 9 $ 1 . 6 9 Fu n d s a v a i l a b l e f o r d i s t r i b u t i o n 3 . 0 4 3 . 1 4 F u n d s a v a i l a b l e f o r d i s t r i b u t i o n — n o r m a l i z e d 3 . 0 8 3 . 1 8 No t e s : ( 1 ) De p r e c i a t i o n a n d a m o r t i z a t i o n i n c l u d e s d e p r e c i a t i o n a n d a m o r t i z a t i o n f r o m d i s c o n t i n u e d o p e r a t i o n s . ( 2 ) E x p e n s e s t o b e r e c o g n i z e d i n c o n n e c t i o n wi t h t h e d e p a r t u r e o f Ra y m o n d Br a u n .
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Re v e n u e a n d Le a s e M a t u r i t y ( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) Re n t a l I n c o m e ( 1 ) I n d e p e n d e n t As s i s t e d S k i l l e d S p e c i a l t y M e d i c a l T o t a l Re n t a l I n t e r e s t T o t a l % o f Ye a r L i v i n g / CCRC L i v i n g Nu r s i n g Ca r e Of f i c e I ncom e I ncom e ( 2) Re v e n u e s To t a l 2 0 0 9 $ — $ — $ 332 $ — $ 12, 443 $ 12, 775 $ 6, 992 $ 19, 767 3. 6% 2010 — - — - 9, 181 9, 181 2, 889 12, 070 2. 2% 2011 9 1, 681 5, 295 — 10, 526 17, 511 10, 122 27, 633 5. 0% 2012 5, 056 3, 754 6, 904 — 11, 468 27, 182 1, 980 29, 162 5. 3% 2013 7, 909 567 — - 8, 368 16, 844 12, 645 29, 489 5. 4% 2014 — 2, 872 8, 356 - 8, 029 19, 257 1, 090 20, 347 3. 7% 2015 — - 1, 927 — 7, 852 9, 779 262 10, 041 1. 8% 2016 — 582 6, 435 - 13, 319 20, 336 6
20, 342 3. 7% 2017 — 14, 780 3 , 6 2 7 2 , 1 0 6 5 , 4 5 5 2 5 , 9 6 8 2 , 3 4 0 2 8 , 3 0 8 5 . 2 % 2 0 1 8 3 , 5 9 4 3 5 , 8 7 7 1 6 , 2 4 1 6 , 3 3 0 2 , 0 8 0 6 4 , 1 2 2 2 , 0 0 9 6 6 , 1 3 1 1 2 . 1 % Th e r e a f t e r 6 2 , 9 1 2 4 9 , 6 6 5 1 1 4 , 9 2 9 4 1 , 5 2 6 1 0 , 8 8 5 2 7 9 , 9 1 7 4 , 4 1 3 2 8 4 , 3 3 0 5 2 . 0 % $ 79, 480 $ 109, 778 $ 164, 046 $ 49, 962 $ 99, 606 $ 502, 872 $ 4 4 , 7 4 8 $ 5 4 7 , 6 2 0 1 0 0 . 0 % No t e s : ( 1 ) Re n t a l i n c o m e r e p r e s e n t s annual i zed b a s e r e n t f o r a c t i v e l e a s e a g r e e m e n t s . T h e a m o u n t s a r e d e r i v e d f r o m t h e c u r r e n t c o n t r a c t e d m o n t h l y b a s e r e n t i n c l u d i n g s t r a i g h t - l i n e f o r l e a s e s wi t h f i x e d e s c a l a t o r s o r a n n u a l c a s h r e n t f o r l e a s e s wi t h c o n t i n g e n t e s c a l a t o r s , n e t o f c o l l e c t a b i l i t y r e s e r v e s , i f a p p l i c a b l e . Re n t a l i n c o m e d o e s n o t i n c l u d e c o m m o n a r e a
m ai nt enance char ges or t he a m o r t i z a t i o n o f a b o v e / b e l o w m a r k e t l e a s e i n t a n g i b l e s . ( 2 ) Re f l e c t s c o n t r a c t r a t e o f i n t e r e s t f o r l o a n s , n e t o f c o l l e c t a b i l i t y r e s e r v e s i f a p p l i c a b l e .
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F I NANCI AL De b t M a t u r i t i e s a n d P r i n c i p a l P a y m e n t s ( d o l l a r s i n t h o u s a n d s ) % o f Ye a r L i n e o f Cr e d i t ( 1 ) S e n i o r No t e s ( 2 , 4 ) S e c u r e d De b t ( 2 , 5 ) T o t a l T o t a l 2 0 0 9 $ — $ — $ 3 9 , 6 5 7 $ 3 9 , 6 5 7 1 . 4 % 2 0 1 0 — - 1 5 , 1 2 0 1 5 , 1 2 0 0 . 5 % 2 0 1 1 5 7 0 , 0 0 0 — 5 2 , 3 1 4 6 2 2 , 3 1 4 2 1 . 7 % 2 0 1 2 — 2 5 0 , 0 0 0 1 3 , 7 1 0 2 6 3 , 7 1 0 9 . 2 % 2 0 1 3 — 3 0 0 , 0 0 0 6 2 , 1 9 8 3 6 2 , 1 9 8 1 2 . 6 % 2 0 1 4 — - 1 2 2 , 3 7 2 1 2 2 , 3 7 2 4 . 3 % 2 0 1 5 - 2 5 0 , 0 0 0 7 0 , 6 5 4 3 2 0 , 6 5 4 1 1 . 2 % T h e r e a f t e r — 1 , 0 4 5 , 0 0 0 7 2 , 3 5 3 1 , 1 1 7 , 3 5 3 3 9 . 1 % To t a l s $ 5 7 0 , 0 0 0 $ 1 , 8 4 5 , 0 0 0 $ 4 4 8 , 3 7 8 $ 2 , 8 6 3 , 3 7 8 1 0 0 . 0 % W e i g h t e d Av g I n t e r e s t Ra t e ( 3 ) 1 . 2 % 5 . 8 % 6 . 1 % 4 . 9 % W e i g h t e d Av g M a t u r i t y ( 4 ) 2 . 8 1 0 . 7 5 . 7 8 . 4 F i x e d a n d F l o a t i n g Ra t e De b t ( d o l l a r s i n t h o u s a n d s )
Pr i nc i pa l % o f De b t F i x e d Ra t e De b t S e n i o r n o t e s ( 2 ) $ 1 , 8 4 5 , 0 0 0 6 4 . 4 % S e c u r e d d e b t ( 2 ) $ 4 4 8 , 3 7 8 1 5 . 7 % To t a l f i x e d $ 2 , 2 9 3 , 3 7 8 8 0 . 1 % F l o a t i n g Ra t e De b t L i n e o f c r e d i t ( 1 ) $ 5 7 0 , 0 0 0 1 9 . 9 % To t a l f l o a t i n g $ 5 7 0 , 0 0 0 1 9 . 9 % To t a l d e b t $ 2 , 8 6 3 , 3 7 8 1 0 0 . 0 % No t e s : ( 1 ) Cu r r e n t l i n e o f c r e d i t c a p a c i t y o f $ 1 . 1 5 b i l l i o n wi t h r e m a i n i n g a v a i l a b i l i t y o f $ 5 8 0 m i l l i o n a t De c e m b e r 3 1 , 2 0 0 8 . L i n e o f c r e d i t c u r r e n t l y m a t u r e s o n Au g u s t 5 , 2 0 1 1 b u t c a n b e e x t e n d e d f o r o n e y e a r a t o u r d i s c r e t i o n . ( 2 ) Am o u n t s a b o v e r e p r e s e n t p r i n c i p a l a m o u n t s d u e a n d d o n o t i n c l u d e u n a m o r t i z e d p r e m i u m s / d i s c o u n t s o r o t h e r f a i r v a l u e a d j u s t m e n t s a s r e f l e c t e d o n t h e b a l a n c e s h e e t . ( 3 ) Li n e
o f c r e d i t i n t e r e s t r a t e r e p r e s e n t s 1 - m o n t h L I BOR + 6 0 b p s a t De c e m b e r 3 1 , 2 0 0 8 . S e n i o r n o t e s a n d s e c u r e d d e b t a v e r a g e i n t e r e s t r a t e r e p r e s e n t s t h e f a c e v a l u e n o t e r a t e . ( 4 ) $ 3 4 5 m i l l i o n o f c o n v e r t i b l e s e n i o r n o t e s a r e p u t t a b l e o n De c e m b e r 1 , 2 0 1 1 a n d $ 4 0 0 m i l l i o n o f c o n v e r t i b l e s e n i o r n o t e s a r e p u t t a b l e o n J u l y 1 5 , 2 0 1 2 . W e i g h t e d a v e r a g e m a t u r i t i e s wo u l d b e 4 . 7 y e a r s a n d 4 . 5 y e a r s f o r s e n i o r n o t e s a n d t o t a l d e b t , r e s p e c t i v e l y , u s i n g t h e p u t t a b l e d a t e s . ( 5 ) $ 6 , 3 0 8 , 0 0 0 o f s e c u r e d d e b t t h a t m a t u r e s i n 2 0 1 3 a n d $ 8 , 2 0 5 , 0 0 0 o f s e c u r e d d e b t t h a t m a t u r e s i n 2 0 1 5 r e l a t e s t o a s s e t s - h e l d - f o r s a l e . W e i g h t e d - a v e r a g e m a t u r i t i e s wo u l d b e 5 . 5 y e a r s a n d 8 . 4 y e a r s f o r
s ecur ed debt and t ot al debt , r es pect i vel y, i f one us ed a 12/ 31/ 09 ext i ngui s hm ent dat e.
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F I NANCI AL Cu r r e n t Ca p i t a l i z a t i o n ( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) Ba l a n c e % o f T o t a l Bo o k Ca p i t a l i z a t i o n ( 1 ) L i n e o f c r e d i t $ 5 7 0 , 0 0 0 9 . 3 % L o n g - t e r m d e b t o b l i g a t i o n s 2 , 2 9 3 , 7 7 2 3 7 . 8 % De b t t o t o t a l b o o k c a p i t a l i z a t i o n 2 , 8 6 3 , 7 7 2 4 7 . 1 % S t o c k h o l d e r s ’ e q u i t y 3 , 2 1 1 , 5 8 6 5 2 . 9 % To t a l b o o k c a p i t a l i z a t i o n $ 6 , 0 7 5 , 3 5 8 1 0 0 . 0 % Un d e p r e c i a t e d Bo o k Ca p i t a l i z a t i o n L i n e o f c r e d i t $ 5 7 0 , 0 0 0 8 . 5 % L o n g - t e r m d e b t o b l i g a t i o n s 2 , 2 9 3 , 7 7 2 3 4 . 4 % De b t t o u n d e p r e c i a t e d b o o k c a p i t a l i z a t i o n 2 , 8 6 3 , 7 7 2 4 2 . 9 % Ac c u m u l a t e d d e p r e c i a t i o n a nd a m or t i z a t i on 600, 781 9. 0% St oc khol de r s ’ e q u i t y 3 , 2 1 1 , 5 8 6 4 8 . 1 % To t a l unde pr e c i at e d book c api t al i z at i on $ 6, 676, 139 100. 0% E n t e r p r i s e Va l u e
L i n e o f c r e d i t $ 5 7 0 , 0 0 0 7 . 5 % L o n g - t e r m d e b t o b l i g a t i o n s 2 , 2 9 3 , 7 7 2 3 0 . 3 % De b t t o t o t a l e n t e r p r i s e v a l u e 2 , 8 6 3 , 7 7 2 3 7 . 8 % Co m m o n s h a r e s o u t s t a n d i n g 1 0 4 , 7 0 4 P e r i o d e n d s h a r e p r i c e $ 4 2 . 2 0 Co m m o n e q u i t y m a r k e t c a p i t a l i z a t i o n 4 , 4 1 8 , 5 0 9 5 8 . 4 % P r e f e r r e d s t o c k 2 8 9 , 9 2 9 3 . 8 % To t a l e n t e r p r i s e v a l u e $ 7 , 5 7 2 , 2 1 0 1 0 0 . 0 % S e c u r e d De b t a s % o f T o t a l As s e t s ( 2 ) S e c u r e d d e b t $ 4 4 6 , 5 2 5 7 . 2 % T o t a l a s s e t s $ 6 , 1 9 3 , 1 1 8 T o t a l De b t a s % o f T o t a l As s e t s ( 3 ) To t a l d e b t $ 2 , 8 6 3 , 7 7 2 4 6 . 2 % T o t a l a s s e t s $ 6 , 1 9 3 , 1 1 8 Un e n c u m b e r e d As s e t s a s % o f Un s e c u r e d De b t ( 4 ) Un e n c u m b e r e d a s s e t s $ 5 , 6 3 5 , 6 7 8 2 3 3 . 1 % Un s e c u r e d d e b t $ 2 , 4 1 7 , 2 4 7 No t e s : ( 1 ) A c o m p a r a b l e c o v e n a n t i n our uns ecur ed
l i ne of cr edi t ar r angem ent i s a m axi m um of 60% . ( 2) A com par abl e covenant i n our s eni or uns ecur ed not es i s a m axi m um of 40% . A com par abl e covenant i n our uns ecur ed l i ne of cr edi t ar r angem ent i s a m axi m um of 30% . ( 3) A com par abl e covenant i n our s eni or uns ecur ed not es i s a m axi m um of 60% . ( 4) A com par abl e covenant i n our uns ecur ed l i ne of cr edi t ar r angem ent i s a m i ni m um of 167% . A com par abl e covenant i n our s eni or uns ecur ed not es i s a m i ni m um of 150% .
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F I NANCI AL Re s t a t e m e n t o f Ea r n i n g s d u e t o Co n v e r t i b l e De b t ( a m o u n t s i n t h o u s a n d s e x c e p t p e r s h a r e d a t a ) 1 Q 2 Q 3 Q 4 Q F u l l Ye a r Ye a r e n d e d De c e m b e r 3 1 , 2 0 0 7 Ad d i t i o n a l i n t e r e s t e x p e n s e No v e m b e r 2 0 0 6 i s s u a n c e $ 3 2 0 $ 3 2 0 $ 3 2 0 $ 3 2 0 $ 1 , 2 8 0 J u l y 2 0 0 7 i s s u a n c e $ — $ — $ 8 8 3 $ 8 8 3 $ 1 , 7 6 6 T o t a l $ 3 2 0 $ 3 2 0 $ 1 , 2 0 3 $ 1 , 2 0 3 $ 3 , 0 4 6 F u l l y d i l u t e d we i g h t e d - a v e r a g e s h a r e s 7 3 , 7 9 1 7 9 , 5 4 6 8 1 , 1 6 3 8 2 , 7 8 4 7 9 , 4 0 9 Am o u n t p e r s h a r e $ — $ — $ 0 . 0 1 $ 0 . 0 1 $ 0 . 0 4 S u m m a r y o f p e r s h a r e i m p a c t s : Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s As r e p o r t e d $ 0 . 3 2 $ 0 . 3 2 $ 0 . 3 0 $ 0 . 5 2 $ 1 . 4 6 Co n v e r t i b l e d e b t a d j u s t m e n t $ — $ — $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 4 ) Re s t a t e d $ 0 . 3 2 $ 0 . 3 2 $ 0 . 2 9
$ 0 . 5 1 $ 1 . 4 2 F u n d s f r o m o p e r a t i o n s — n o r m a l i z e d As r e p o r t e d $ 0 . 7 6 $ 0 . 7 8 $ 0 . 7 9 $ 0 . 8 0 $ 3 . 1 2 Co n v e r t i b l e d e b t a d j u s t m e n t $ — $ — $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 4 ) Re s t a t e d $ 0 . 7 6 $ 0 . 7 8 $ 0 . 7 8 $ 0 . 7 9 $ 3 . 0 8 Ye a r e n d e d De c e m b e r 3 1 , 2 0 0 8 Ad d i t i o n a l i n t e r e s t e x p e n s e No v e m b e r 2 0 0 6 i s s u a n c e $ 3 2 0 $ 3 2 0 $ 3 2 0 $ 3 2 0 $ 1 , 2 8 0 J u l y 2 0 0 7 i s s u a n c e $ 8 8 3 $ 8 8 3 $ 8 8 3 $ 8 8 3 $ 3 , 5 3 2 T o t a l $ 1 , 2 0 3 $ 1 , 2 0 3 $ 1 , 2 0 3 $ 1 , 2 0 3 $ 4 , 8 1 2 F u l l y d i l u t e d we i g h t e d - a v e r a g e s h a r e s 8 6 , 6 1 0 8 9 , 8 5 3 9 6 , 8 4 9 1 0 3 , 8 4 0 9 4 , 3 0 9 Am o u n t p e r s h a r e $ 0 . 0 1 $ 0 . 0 1 $ 0 . 0 1 $ 0 . 0 1 $ 0 . 0 5 S u m m a r y o f p e r s h a r e i m p a c t s : Ne t i n c o m e a v a i l a b l e t o c o m m o n s t o c k h o l d e r s As r e p o r t e d $ 0 . 3 5 $ 1 . 7 4 $ 0 . 5 7 $ 0 . 2 2 $ 2 . 8 1
Co n v e r t i b l e d e b t a d j u s t m e n t $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 5 ) Re s t a t e d $ 0 . 3 4 $ 1 . 7 3 $ 0 . 5 6 $ 0 . 2 1 $ 2 . 7 6 F u n d s f r o m o p e r a t i o n s — n o r m a l i z e d As r e p o r t e d $ 0 . 8 1 $ 0 . 8 7 $ 0 . 8 6 $ 0 . 8 3 $ 3 . 3 8 Co n v e r t i b l e d e b t a d j u s t m e n t $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 1 ) $ ( 0 . 0 5 ) Re s t a t e d $ 0 . 8 0 $ 0 . 8 6 $ 0 . 8 5 $ 0 . 8 2 $ 3 . 3 3 I n M a y , 2 0 0 8 t h e F i n a n c i a l Ac c o u n t i n g S t a n d a r d s Bo a r d i s s u e d F AS B S t a f f P o s i t i o n 1 4 - 1 ( “ F S P ” ) wh i c h p r o v i d e s g u i d a n c e o n a c c o u n t i n g f o r d e b t t h a t m a y b e s e t t l e d i n c a s h u p o n c o n v e r s i o n . T h i s a p p l i e s t o t h e c o m p a n y ’ s c o n v e r t i b l e s e n i o r u n s e c u r e d n o t e i s s u a n c e s i n No v e m b e r 2 0 0 6 a n d J u l y 2 0 0 7 . T h e F S P i s e f f e c t i v e f o r f i s c a l y e a r 2 0 0 9 a n d r e q u i r e s t h a t
pr i or year s be r es t at ed t o r ef l ect t hi s account i ng t r eat m ent i n al l appl i cabl e pr i or per i ods .
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I NVES TM ENT G r o s s I n v e s t m e n t Ac t i v i t y F o u r t h Qu a r t e r 2 0 0 8 Be d s / Un i t s / Am o u n t I n v e s t m e n t P e r Be d / I n i t i a l P r o p e r t i e s S q u a r e F e e t ( $ 0 0 0 ) Un i t / S q u a r e F o o t Ca s h Yi e l d Re a l P r o p e r t y Ac q u i s i t i o n s S p e c i a l t y car e f aci l i t i es 1 42 beds $ 14, 000 3 3 3 , 3 3 3 1 1 . 0 % To t a l a c q u i s i t i o n s 1 $ 1 4 , 0 0 0 1 1 . 0 % Co n s t r u c t i o n i n P r o g r e s s De v e l o p m e n t pr oj ect s : CCRC — ent r ance f ee 3 757 uni t s $ 43, 947 CCRC — r ent al 1 24 uni t s 231 Co m b i n a t i o n — ent r ance f ee 4 618 uni t s 23, 482 Co m b i n a t i o n — r ent al 16 1, 871 uni t s 62, 872 Fr e e s t a ndi ng dem ent i a car e 3 161 uni t s 3, 883 Fr e e s t a ndi ng s ki l l ed nur s i ng 2 240 beds 3, 511 Spe c i a l t y car e 3 212 beds 17, 082 M edi cal of f i ce 4 688, 081 sf 31, 777 To t a l
d e v e l o p m e n t p r o j e c t s 3 6 1 8 6 , 7 8 5 E x p a n s i o n p r o j e c t s : CCRC — e n t r a n c e f e e 3 4 1 u n i t s 1 , 7 9 1 Co m b i n a t i o n — e n t r a n c e f e e 3 3 0 u n i t s 8 4 7 To t a l e x p a n s i o n p r o j e c t s 6 2 , 6 3 8 To t a l c o n s t r u c t i o n i n p r o g r e s s 4 2 1 8 9 , 4 2 3 Ca p i t a l i m p r o v e m e n t s t o exi s t i ng p r o p e r t i e s 2 , 9 2 8 1 0 . 0 % Lo a n a d v a n c e s 8, 756 10. 7% G r os s i nve s t m e nt s $ 215, 107
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I NVES TM ENT G r o s s I n v e s t m e n t Ac t i v i t y Ye a r E n d e d 2 0 0 8 I n v e s t m e n t P e r Be d s / Un i t s / Am o u n t Be d / Un i t / I n i t i a l P r o p e r t i e s S q u a r e F e e t ( $ 0 0 0 ) S q u a r e F o o t Ca s h Yi e l d Re a l P r o p e r t y Ac q u i s i t i o n s CCRC — e n t r a n c e f e e 1 192 uni t s $ 56, 500 $ 2 9 4 , 2 7 1 8 . 0 % CCRC — r e n t a l 1 1 8 1 u n i t s 1 1 , 8 0 0 6 5 , 1 9 3 8 . 1 % Co m b i n a t i o n — r e n t a l 1 1 1 0 u n i t s 3 4 , 5 0 0 3 1 3 , 6 3 6 7 . 5 % Fr e e s t a ndi ng a s s i s t e d l i vi ng 1 45 uni t s 4, 600 102, 222 8. 5% Fr e e s t a ndi ng de m e nt i a c a r e 1 44 uni t s 6, 390 145, 227 9. 0% Fr e e s t a ndi ng s ki l l e d nur s i ng 1 164 beds 11, 360 69, 268 8. 5% Spe c i a l t y c a r e f a c i l i t i e s 7 450 beds 196, 303 436, 229 9. 6% M edi cal of f i ce b u i l d i n g 7 4 1 4 , 7 9 3 s f 1 2 1 , 8 0 9 2 9 4 7 . 7 % La n d p a r c e l s 1 1 0 , 0 0 0
8 . 0 % To t a l a c q u i s i t i o n s 2 1 $ 4 5 3 , 2 6 2 8 . 6 % Co n s t r u c t i o n i n P r o g r e s s De v e l o p m e n t p r o j e c t s : CCRC — e n t r a n c e f e e 3 7 5 7 u n i t s $ 1 2 3 , 4 4 8 CCRC — r e n t a l 3 2 7 5 u n i t s 4 , 5 7 3 Co m b i n a t i o n — e n t r a n c e f e e 5 8 3 2 u n i t s 1 0 1 , 2 0 8 Co m b i n a t i o n — r e n t a l 21 2, 201 uni t s 165, 254 Fr e e s t a ndi ng de m e nt i a c a r e 4 203 uni t s 14, 422 Fr e e s t a ndi ng s ki l l e d nur s i ng 2 240 be ds 16, 327 S p e c i a l t y c a r e 5 3 1 2 b e d s 7 7 , 6 4 2 M e d i c a l o f f i c e 5 6 8 8 , 0 8 1 s f 9 3 , 9 0 7 To t a l d e v e l o p m e n t p r o j e c t s 4 8 5 9 6 , 7 8 1 E x p a n s i o n p r o j e c t s : CCRC — e n t r a n c e f e e 3 9 1 uni t s 6, 498 Co m b i n a t i o n — ent r ance f ee 5 129 uni t s 1 7 , 3 2 1 To t a l e x p a n s i o n p r o j e c t s 8 2 3 , 8 1 9 To t a l c o n s t r u c t i o n i n p r o g r e s s 5 6 6 2 0 , 6 0 0 Ca p i t a l i m p r o v e m e n t s t o
e x i s t i n g p r o p e r t i e s 1 7 , 4 6 8 9 . 8 % Lo a n a d v a n c e s 1 4 2 , 7 5 8 8 . 8 % G r o s s i n v e s t m e n t s $ 1 , 2 3 4 , 0 8 8
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I NVES TM ENT I n v e s t m e n t Ti m i n g 1 6 ( d o l l a r s i n t h o u s a n d s ) I n i t i a l Ca s h L o a n I n i t i a l Ca s h Co n s t r u c t i o n I n i t i a l Ca s h Ac q u i s i t i o n s Yi e l d Ad v a n c e s Yi e l d Co n v e r s i o n s Yi e l d Di s p o s i t i o n s Yi e l d o n S a l e J a n u a r y $ 4 2 , 5 0 0 1 0 . 3 % $ 8 1 4 1 1 . 4 % $ 6 8 7 9 . 1 % $ — 0 . 0 % F e b r u a r y 3 8 , 9 2 8 7 . 5 % 5 , 9 5 7 1 0 . 4 % — 0 . 0 % - 0 . 0 % M a r c h 1 1 , 8 0 0 8 . 1 % 9 8 0 1 1 . 5 % 2 0 , 7 4 8 8 . 5 % — 0 . 0 % Ap r i l — 0 . 0 % 3 , 0 2 4 1 0 . 6 % 2 2 , 7 5 3 9 . 8 % 6 , 0 4 1 1 0 . 4 % M a y 1 2 3 , 4 9 0 9 . 1 % 1 , 5 7 9 1 1 . 1 % 9 5 , 7 9 5 9 . 9 % 1 , 9 3 1 1 1 . 6 % J u n e 9 7 , 2 2 5 7 . 9 % 1 1 4 , 6 4 7 8 . 4 % 2 4 , 6 1 9 9 . 5 % 1 2 5 , 3 0 6 6 . 2 % J u l y 6 5 , 6 4 7 8 . 9 % 2 , 0 0 3 1 0 . 9 % — 0 . 0 % — 0 . 0 % Au g u s t — 0 . 0 % 1 , 0 5 7 1 1 . 6 % 5 5 1 1 0 . 0 % 2 , 3 1 3 9 . 5 % S e p t e m b e r 5 9 , 6 7 2 7 . 4 % 3 , 9 4 1 1 0 . 3 % 7 0 , 2 3 7
9 . 2 % 1 5 , 5 1 6 5 . 8 % Oc t o b e r — 0 . 0 % 1 , 4 6 1 1 1 . 6 % 6 1 4 9 . 5 % 4 3 , 1 3 6 7 . 4 % No v e m b e r — 0 . 0 % 3 , 0 3 1 9 . 4 % 6 , 5 1 0 8 . 5 % — 0 . 0 % De c e m b e r 1 4 , 0 0 0 1 1 . 0 % 4 , 2 6 4 1 1 . 4 % 4 0 , 5 5 4 8 . 6 % — 0 . 0 % To t a l $ 4 5 3 , 2 6 2 8 . 6 % $ 1 4 2 , 7 5 8 8 . 8 % $ 2 8 3 , 0 6 8 9 . 4 % $ 1 9 4 , 2 4 3 6 . 6 % Di s p o s i t i o n Ac t i v i t y ( d o l l a r s i n t h o u s a n d s ) F o u r t h Qu a r t e r 2 0 0 8 Ye a r E n d e d 2 0 0 8 Am o u n t % o f T o t a l Am o u n t % o f T o t a l p Di s p o s i t i o n s b y I n v e s t m e n t T y p e Re a l p r o p e r t y $ 4 3 , 1 3 6 1 0 0 . 0 % $ 1 8 5 , 4 2 8 9 5 . 5 % Re a l e s t a t e l o a n s r e c e i v a b l e — 0 . 0 % 8 , 8 1 5 4 . 5 % To t a l $ 4 3 , 1 3 6 1 0 0 . 0 % $ 1 9 4 , 2 4 3 1 0 0 . 0 % Di s p o s i t i o n s b y P r o p e r t y T y p e Co m b i n a t i o n — r e n t a l $ 7 , 9 6 0 1 8 . 4 % $ 1 6 , 5 8 6 8 . 5 % F r e e s t a n d i n g i n d e p e n d e n t l i v i n g —
1 7 , 4 7 8 9 . 0 % F r e e s t a n d i n g a s s i s t e d l i v i n g 3 3 , 3 7 6 7 7 . 4 % 1 3 3 , 0 1 1 6 8 . 5 % F r e e s t a n d i n g s k i l l e d n u r s i n g 1 , 8 0 0 4 . 2 % 4 , 7 6 8 2 . 5 % S p e c i a l t y c a r e f a c i l i t y — 8 , 7 3 5 4 . 5 % M e d i c a l o f f i c e b u i l d i n g — 6 , 7 8 1 3 . 5 % Re a l e s t a t e l o a n s r e c e i v a b l e — 6 , 8 8 4 3 . 5 % To t a l $ 4 3 , 1 3 6 1 0 0 . 0 % $ 1 9 4 , 2 4 3 1 0 0 . 0 % Di s c o n t i n u e d O p e r a t i o n s ( d o l l a r s i n t h o u s a n d s ) F o u r t h Qu a r t e r Ye a r E n d e d 2 0 0 8 2 0 0 7 2 0 0 8 2 0 0 7 Re v e n u e s Re n t a l i n c o m e $ 1 , 8 0 3 $ 8 , 9 6 7 $ 2 1 , 5 5 1 $ 3 9 , 6 2 4 E x p e n s e s I n t e r e s t e x p e n s e 6 0 1 2 , 2 2 4 5 , 4 3 4 1 0 , 3 8 6 P r o p e r t y o p e r a t i n g e x p e n s e s 6 3 0 9 3 8 2 , 6 3 9 2 , 7 6 8 De p r e c i a t i o n a n d a m o r t i z a t i o n 6 5 0 3 , 3 0 7 6 , 8 9 1 1 4 , 4 0 2 I n c o m e / ( l o s s ) f r o m d i s c o n t i n u e d o p e r a t i o n s , n e t $ ( 7 8 ) $ 2 , 4 9 8 $ 6 , 5 8 7 $ 1 2 , 0 6 8
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P o r t f o l i o Co m p o s i t i o n 1 7 ( d o l l a r s i n t h o u s a n d s ) P r o p e r t i e s I n v e s t m e n t Ba l a n c e % o f T o t a l Co m m i t t e d Ba l a n c e % o f T o t a l Ba l a n c e S h e e t Da t a Re a l p r o p e r t y 6 0 0 $ 5 , 3 7 8 , 7 9 4 9 1 . 8 % $ 6 , 1 0 8 , 0 7 1 9 2 . 7 % L o a n s 3 3 4 8 2 , 8 8 5 8 . 2 % 4 8 2 , 8 8 6 7 . 3 % To t a l 6 3 3 $ 5 , 8 6 1 , 6 7 9 1 0 0 . 0 % $ 6 , 5 9 0 , 9 5 7 1 0 0 . 0 % I n v e s t m e n t Co n c e n t r a t i o n — By P r e d o m i n a n t S e r v i c e T y p e I n d e p e n d e n t l i v i n g / CCRC 6 3 $ 1 , 1 0 5 , 4 6 0 1 8 . 9 % $ 1 , 2 8 8 , 9 7 3 1 9 . 5 % As s i s t e d l i v i n g 1 8 6 1 , 1 7 3 , 7 4 8 2 0 . 0 % 1 , 3 1 7 , 5 1 6 2 0 . 0 % S k i l l e d n u r s i n g 2 2 5 1 , 5 8 3 , 0 8 4 2 7 . 0 % 1 , 6 0 7 , 6 7 6 2 4 . 4 % S p e c i a l t y c a r e 3 1 6 1 9 , 6 7 0 1 0 . 6 % 8 8 4 , 8 6 7 1 3 . 5 % M e d i c a l o f f i c e 1 2 8 1 , 3 7 9 , 7 1 7 2 3 . 5 % 1 , 4 9 1 , 9 2 5 2 2 . 6 % To t a l 6 3 3 $ 5 , 8 6 1 , 6 7 9 1 0 0 . 0 % $ 6 , 5 9 0 , 9 5 7 1 0 0 . 0 %
I n v e s t m e n t Co n c e n t r a t i o n — S e n i o r Ho u s i n g & Ca r e a n d M e d i c a l F a c i l i t i e s S e n i o r h o u s i n g & c a r e p o r t f o l i o CCRC — e n t r a n c e f e e 6 $ 2 8 6 , 7 4 2 4 . 9 % $ 3 8 2 , 1 6 5 5 . 8 % CCRC — r e n t a l 1 2 1 8 6 , 3 7 2 3 . 2 % 1 8 9 , 7 4 1 2 . 9 % Co m b i n a t i o n — e n t r a n c e f e e 9 3 0 3 , 9 5 3 5 . 2 % 3 8 8 , 6 7 5 5 . 9 % Co m b i n a t i o n — r e n t a l 1 2 8 1 , 0 6 3 , 7 2 9 1 8 . 1 % 1 , 2 1 3 , 3 3 8 1 8 . 4 % S u b t o t a l c o m b i n a t i o n / CCRC 1 5 5 1 , 8 4 0 , 7 9 6 31. 4% 2, 173, 919 33. 0% Fr e e s t a ndi ng i nde pe nde nt l i vi ng 22 157, 396 2. 7% 157, 396 2. 4% Fr e e s t a ndi ng a s s i s t e d l i vi ng 67 230, 015 3. 9% 230, 015 3. 5% Fr e e s t a ndi ng de m e nt i a c a r e 33 159, 573 2. 7% 172, 529 2. 6% Fr e e s t a ndi ng s ki l l e d nur s i ng 192 1, 184, 885 20. 2% 1, 190, 679 18. 1% Subt ot al f r e e s t andi ng 314
1 , 7 3 1 , 8 6 9 2 9 . 5 % 1 , 7 5 0 , 6 1 9 2 6 . 6 % L a n d 5 1 6 , 5 1 0 0 . 3 % 1 6 , 5 1 0 0 . 3 % Ot h e r L o a n s — 2 7 3 , 1 1 7 4 . 7 % 2 7 3 , 1 1 7 4 . 0 % S e n i o r h o u s i n g & c a r e t o t a l 4 7 4 3 , 8 6 2 , 2 9 2 6 5 . 9 % 4 , 2 1 4 , 1 6 5 6 3 . 9 % M e d i c a l f a c i l i t i e s p o r t f o l i o S p e c i a l t y c a r e 3 1 6 1 9 , 6 7 0 1 0 . 6 % 8 8 4 , 8 6 7 1 3 . 5 % M e d i c a l o f f i c e 1 2 8 1 , 3 7 9 , 7 1 7 2 3 . 5 % 1 , 4 9 1 , 9 2 5 2 2 . 6 % M e d i c a l f a c i l i t i e s t o t a l 1 5 9 1, 999, 387 34. 1% 2, 376, 792 36. 1% To t a l p o r t f o l i o 6 3 3 $ 5 , 8 6 1 , 6 7 9 1 0 0 . 0 % $ 6 , 5 9 0 , 9 5 7 1 0 0 . 0 % Be d / Un i t Co m m i t t e d P e r Be d / Un i t / S q u a r e F o o t Ba l a n c e ( $ 0 0 0 ) / S q u a r e F o o t I n v e s t m e n t M e t r i c s I n d e p e n d e n t l i v i n g / CCRC 7 , 5 4 4 u n i t s $ 1 , 2 8 8 , 9 7 3 $ 1 7 0 , 8 6 1 As s i s t e d l i v i n g 1 1 , 2 9 7 u n i t s 1 , 3 1 7 , 5 1 6 1 1 6 , 6 2 5 S k i l l e d n u r s i n g 3 0 , 6 6 9 b e d s
1 , 6 0 7 , 6 7 6 5 2 , 4 2 0 S p e c i a l t y c a r e 1 , 9 1 1 b e d s 8 8 4 , 8 6 7 4 6 3 , 0 3 9 M e d i c a l o f f i c e 5 , 6 0 4 , 8 0 2 s f 1 , 4 9 1 , 9 2 5 2 6 6 To t a l $ 6 , 5 9 0 , 9 5 7
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P O RTF O LI O 1 8 P o r t f o l i o Co n c e n t r a t i o n ( d o l l a r s i n t h o u s a n d s ) T o t a l I n v e s t m e n t % o f To t a l % o f P r o p e r t i e s Ba l a n c e Ba l a n c e s Re v e n u e s ( 1 ) Re v e n u e s By Op e r a t o r / T e n a n t S e n i o r L i v i n g Co m m u n i t i e s , L L C 1 0 $ 3 4 5 , 9 7 4 5 . 9 % $ 5 , 4 5 9 3 . 8 % S i g n a t u r e He a l t h c a r e L L C 3 4 3 1 7 , 2 8 4 5 . 4 % 1 0 , 1 2 1 7 . 0 % Br o o k d a l e S e n i o r L i v i n g , I n c . 8 6 2 9 8 , 1 4 3 5 . 1 % 9 , 8 9 4 6 . 9 % L i f e Ca r e Ce n t e r s o f Am e r i c a , I n c . 2 5 2 6 4 , 5 7 8 4 . 5 % 7 , 6 4 4 5 . 3 % E m e r i t u s Co r p o r a t i o n 2 1 2 4 5 , 7 4 1 4 . 2 % 7 , 8 0 6 5 . 4 % M e r r i l l Ga r d e n s L L C 1 3 1 7 0 , 8 3 2 2 . 9 % 5 , 4 0 1 3 . 7 % Gu l f Co a s t He a l t h Ca r e 2 5 1 5 7 , 5 5 8 2 . 7 % 4 , 4 7 8 3 . 1 % T a r a Ca r e s , L L C 3 3 1 4 7 , 9 8 8 2 . 5 % 4 , 5 1 5 3 . 1 % L y r i c He a l t h Ca r e , L L C 2 7 1 4 7 , 6 6 7 2 . 5 % 4 , 6 0 7 3 . 2 %
Vi b r a He a l t h c a r e , L L C 5 1 4 5 , 2 5 0 2 . 5 % 3 , 6 0 2 2 . 5 % Re m a i n i n g p o r t f o l i o 3 5 4 3 , 6 2 0 , 6 6 4 6 1 . 8 % 8 0 , 5 3 4 5 6 . 0 % To t a l 6 3 3 $ 5 , 8 6 1 , 6 7 9 1 0 0 . 0 % $ 1 4 4 , 0 6 1 1 0 0 . 0 % I n d e p e n d e n t As s i s t e d S k i l l e d S p e c i a l t y M e d i c a l T o t a l I n v e s t m e n t % o f L i v i n g / CCRC L i v i n g Nu r s i n g Ca r e Of f i c e P r o p e r t i e s Ba l a n c e T o t a l Ba l a n c e s By S t a t e F l o r i d a $ 1 9 3 , 9 8 1 $ 4 4 , 1 7 3 $ 2 8 6 , 7 0 6 $ — $ 2 6 8 , 8 5 2 9 1 $ 7 9 3 , 7 1 2 1 3 . 5 % T e x a s 1 8 , 1 1 6 9 3 , 2 8 4 1 6 9 , 5 3 3 1 6 7 , 2 1 9 2 0 3 , 6 7 0 7 7 6 5 1 , 8 2 2 1 1 . 1 % Ca l i f o r n i a 1 6 6 , 9 8 8 5 6 , 8 7 9 — 1 1 9 , 5 9 7 1 2 2 , 3 6 6 2 9 4 6 5 , 8 3 0 7 . 9 % M a s s a c h u s e t t s 5 9 , 5 5 1 9 4 , 0 0 8 2 0 9 , 1 5 6 4 3 , 4 5 0 — 3 7 4 0 6 , 1 6 5 6 . 9 % T e n n e s s e e — 4 5 , 3 9 3 2 1 4 , 2 8 9 — 6 7 , 1 7 1 3 4 3 2 6 , 8 5 3 5 . 6 % Oh i o 4 9 , 1 1 7 3 8 , 5 6 2 1 8 0 , 1 3 1 4 0 , 2 1 1 7 , 3 5 2 3 1
3 1 5 , 3 7 3 5 . 4 % S o u t h Ca r o l i n a 2 1 0 , 8 0 0 6 , 6 3 8 - - - 1 6 , 9 8 7 1 3 2 3 4 , 4 2 5 4 . 0 % No r t h Ca r o l i n a 4 6 , 3 5 2 1 6 2 , 7 9 6 — - 2 3 , 8 5 4 5 3 2 3 3 , 0 0 2 4 . 0 % I l l i n o i s — 9 6 , 5 9 2 2 8 , 4 2 5 5 1 , 0 1 2 1 6 , 9 8 1 1 5 1 9 3 , 0 1 0 3 . 3 % I n d i a n a 1 0 1 , 0 7 7 4 , 5 8 5 3 1 , 0 5 2 3 0 , 1 4 7 2 1 , 9 5 3 1 4 1 8 8 , 8 1 4 3 . 2 % Re m a i n i n g p o r t f o l i o 2 5 9 , 4 7 8 5 3 0 , 8 3 8 4 6 3 , 7 9 2 1 6 8 , 0 3 4 6 3 0 , 5 3 1 2 3 9 2 , 0 5 2 , 6 7 3 3 5 . 1 % To t a l $ 1 , 1 0 5 , 4 6 0 $ 1 , 1 7 3 , 7 4 8 $ 1 , 5 8 3 , 0 8 4 $ 6 1 9 , 6 7 0 $ 1 , 3 7 9 , 7 1 7 6 3 3 $ 5 , 8 6 1 , 6 7 9 1 0 0 . 0 % I n d e p e n d e n t As s i s t e d S k i l l e d S p e c i a l t y M e d i c a l T o t a l T o t a l % o f L i v i n g / CCRC L i v i n g Nu r s i n g Ca r e Of f i c e P r o p e r t i e s Re v e n u e s ( 1 ) T o t a l Re v e n u e s By S t a t e F l o r i d a $ 3 , 6 3 3 $ 1 , 1 0 5 $ 8 , 9 3 7 $ — $ 6 , 4 2 1 9 1 $ 2 0 , 0 9 6 1 3 . 9 % T e x a s 5 9 8 2 , 7 0 8 4 , 5 1 6 4 , 2 5 4 4 , 8 3 4 7 7
1 6 , 9 1 0 1 1 . 7 % Ca l i f o r n i a 4 , 6 0 3 1 , 9 3 4 — 1 , 9 8 8 3 , 5 2 4 2 9 1 2 , 0 4 9 8 . 4 % T e n n e s s e e — 1 , 0 6 4 6 , 9 3 7 6 5 2 , 0 9 0 3 4 1 0 , 1 5 6 7 . 0 % M a s s a c h u s e t t s 2 2 2 , 6 6 1 5 , 9 1 2 1 , 1 2 5 — 3 7 9 , 7 2 0 6 . 7 % No r t h Ca r o l i n a 1 , 1 8 6 5 , 6 3 3 — - 5 1 3 5 3 7 , 3 3 2 5 . 1 % Oh i o — 6 3 8 4 , 9 4 2 1 , 0 5 5 2 1 3 3 1 6 , 8 4 8 4 . 8 % I n d i a n a 1 , 8 8 9 1 4 0 4 9 9 — 1 , 8 3 9 1 4 4 , 3 6 7 3 . 0 % Ge o r g i a 2 , 8 2 8 1 8 0 9 8 9 7 6 8 5 3 1 2 4 5 , 2 9 6 3 . 7 % I l l i n o i s 2 3 5 4 0 3 4 2 7 — 2 , 3 7 1 1 5 3 , 4 3 6 2 . 4 % Re m a i n i n g p o r t f o l i o 5 , 6 8 6 1 3 , 5 3 9 1 3 , 1 4 7 4 , 6 7 7 1 0 , 8 0 2 2 2 8 4 7 , 8 5 1 3 3 . 3 % To t a l $ 2 0 , 6 8 0 $ 3 0 , 0 0 5 $ 4 6 , 3 0 6 $ 1 3 , 9 3 2 $ 3 3 , 1 3 8 6 3 3 $ 1 4 4 , 0 6 1 1 0 0 . 0 % No t e s : ( 1 ) Re v e n u e s r e p r e s e n t r e n t a n d i n t e r e s t i n c o m e i n c l u d i n g r e n t f r o m d i s c o n t i n u e d o p e r a t i o n s f o r t h e t h r e e m o n t h s e n d e d
De c e m b e r 3 1 , 2 0 0 8 . Re v e n u e s e x c l u d e o t h e r i n c o m e t o t a l i n g $ 4 , 8 6 5 , 0 0 0 f o r t h e t h r e e m o n t h s e n d e d De c e m b e r 3 1 , 2 0 0 8 . 2 2
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P O RTF O LI O To p Te n O p e r a t o r De s c r i p t i o n s S e n i o r Li v i n g Co m m u n i t i e s , LLC, l o c a t e d i n Ch a r l o t t e , NC, o p e r a t e s p r e m i e r c o n t i n u i n g c a r e r e t i r e m e n t c o m m u n i t i e s ( CCRCs ) t h r o u g h o u t t h e s o u t h e a s t e r n Un i t e d S t a t e s . T h e c o m p a n y o p e r a t e s t e n c a m p u s e s i n f o u r s t a t e s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f t e n p r o p e r t i e s i n f o u r s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 3 4 6 . 0 m i l l i o n . S i g n a t u r e H e a l t h c a r e LLC, l o c a t e d i n P a l m Be a c h Ga r d e n s , F L , i s a p r i v a t e o p e r a t o r o f s k i l l e d n u r s i n g f a c i l i t i e s s p r e a d a m o n g s e v e n s t a t e s . T h e c o m p a n y o p e r a t e s 6 5 s k i l l e d n u r s i n g f a c i l i t i e s wi t h 7 , 6 4 6 b e d s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 3 4
p r o p e r t i e s i n f o u r s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 3 1 7 . 3 m i l l i o n . Br o o k d a l e S e n i o r Li v i n g , I n c . ( NYS E : BKD) , l o c a t e d i n Ch i c a g o , I L , i s a n a t i o n a l p u b l i c p r o v i d e r o f i n d e p e n d e n t l i v i n g a n d a s s i s t e d l i v i n g s e r v i c e s . T h e c o m p a n y o p e r a t e s 5 5 0 f a c i l i t i e s i n 3 5 s t a t e s wi t h t h e a b i l i t y t o s e r v e o v e r 5 2 , 0 0 0 r e s i d e n t s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 8 6 p r o p e r t i e s i n 1 6 s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 2 9 8 . 1 m i l l i o n . Li f e Ca r e Ce n t e r s o f Am e r i c a , I n c . , l o c a t e d i n Cl e v e l a n d , T N, i s o n e o f t h e l a r g e s t p r i v a t e o wn e r s a n d o p e r a t o r s o f s k i l l e d n u r s i n g f a c i l i t i e s i n t h e c o u n t r y . T h e c o m p a n y h a s g r o wn t o m o r e t h a n 2 6 0 s k i l l e d n u r s i n g ,
a s s i s t e d l i v i n g , r e t i r e m e n t , h o m e c a r e a n d Al z h e i m e r ’ s c e n t e r s i n 2 8 s t a t e s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 2 5 p r o p e r t i e s i n 1 2 s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 2 6 4 . 6 m i l l i o n . Em e r i t u s Co r p o r a t i o n ( AM E X: E S C) , l o c a t e d i n S e a t t l e , W A, i s a n a t i o n a l p u b l i c p r o v i d e r o f i n d e p e n d e n t l i v i n g , a s s i s t e d l i v i n g a n d Al z h e i m e r ’ s s e r v i c e s . T h e c o m p a n y o p e r a t e s 2 8 9 c o m m u n i t i e s r e p r e s e n t i n g c a p a c i t y f o r a p p r o x i m a t e l y 2 5 , 0 0 0 r e s i d e n t s i n 3 4 s t a t e s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 2 1 p r o p e r t i e s i n 1 6 s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 2 4 5 . 7 m i l l i o n . M e r r i l l G a r d e n s LLC, l o c a t e d i n S e a t t l e , W A, i s a p r i v a t e l y
h e l d c o r p o r a t i o n o r g a n i z e d u n d e r t h e l a ws o f W a s h i n g t o n S t a t e . T h e c o m p a n y o wn s , o p e r a t e s a n d / o r m a n a g e s 5 5 I L / AL f a c i l i t i e s wi t h 6 , 4 5 5 u n i t s i n e i g h t s t a t e s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 1 3 p r o p e r t i e s i n s e v e n s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 1 7 0 . 8 m i l l i o n . G u l f Co a s t H e a l t h Ca r e , l o c a t e d i n P e n s a c o l a , F L , i s a p r i v a t e o p e r a t o r o f s k i l l e d n u r s i n g f a c i l i t i e s . T h e c o m p a n y o p e r a t e s 4 3 s k i l l e d n u r s i n g f a c i l i t i e s wi t h 5 , 4 8 0 b e d s / u n i t s l o c a t e d i n F l o r i d a , Al a b a m a , a n d M i s s i s s i p p i . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 2 5 p r o p e r t i e s i n t h r e e s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 1 5 7 . 6 m i l l i o n . Ta r a Ca r e s , LLC,
l o c a t e d i n Or c h a r d P a r k , NY, i s a p r i v a t e o p e r a t o r o f s k i l l e d n u r s i n g a n d a s s i s t e d l i v i n g f a c i l i t i e s i n s e v e n s t a t e s . Cu r r e n t l y , t h e c o m p a n y o p e r a t e s 3 6 f a c i l i t i e s wi t h 5 , 0 0 6 b e d s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 3 3 p r o p e r t i e s i n s e v e n s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 1 4 8 . 0 m i l l i o n . Ly r i c H e a l t h Ca r e , LLC, l o c a t e d i n Co l u m b i a , M D, i s a p r i v a t e o p e r a t o r o f 3 1 s k i l l e d n u r s i n g f a c i l i t i e s a n d l o n g t e r m a c u t e c a r e h o s p i t a l s wi t h 3 , 8 0 0 b e d s / u n i t s i n 1 0 s t a t e s a n d h a s a m a n a g e m e n t a g r e e m e n t wi t h E n c o r e He a l t h c a r e L L C t o o p e r a t e t h e f a c i l i t i e s . As o f De c e m b e r 3 1 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f 2 7 p r o p e r t i e s i n n i n e s t a t e s wi t h a n
i n v e s t m e n t b a l a n c e o f $ 1 4 7 . 7 m i l l i o n . Vi b r a H e a l t h c a r e , LLC, l o c a t e d i n M e c h a n i c s b u r g , P A, i s a p r i v a t e o p e r a t o r o f i n p a t i e n t r e h a b i l i t a t i o n f a c i l i t i e s a n d l o n g t e r m a c u t e c a r e h o s p i t a l s i n n i n e s t a t e s . T h e c o m p a n y o p e r a t e s 1 5 p r o p e r t i e s wi t h 9 9 8 b e d s . As o f S e p t e m b e r 3 0 , 2 0 0 8 , t h e HCN p o r t f o l i o c o n s i s t e d o f f i v e p r o p e r t i e s i n t h r e e s t a t e s wi t h a n i n v e s t m e n t b a l a n c e o f $ 1 4 5 . 2 5 m i l l i o n .
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P O RTF O LI O M e t r o p o l i t a n S t a t i s t i c a l Ar e a Co n c e n t r a t i o n * 1 9 ( d o l l a r s i n t h o u s a n d s ) T o p 3 1 T o p 7 5 To p 1 0 0 I n d e p e n d e n t l i v i n g / CCRC $ 3 0 8 , 7 0 3 $ 5 3 2 , 5 2 1 $ 696, 739 % o f i n d e p e n d e n t l i v i n g / CCRC 2 7 . 9 % 4 8 . 2 % 6 3 . 0 % As s i s t e d l i vi ng 423, 380 661, 366 703, 475 % of as s i s t ed l i vi ng 36. 1% 56. 3% 59. 9% Ski l l e d nur s i ng 462, 161 831, 492 921, 047 % of s ki l l e d nur s i ng 29. 2% 52. 5% 58. 2% Spe c i a l t y car e 269, 317 472, 406 510, 335 % of s peci al t y car e 43. 5% 76. 2% 82. 4% M edi cal of f i ce 984, 258 1, 262, 414 1, 264, 279 % of m edi cal of f i ce 71. 3% 91. 5% 91. 6% To t a l por t f ol i o $ 2, 447, 819 $ 3, 760, 199 $ 4, 095, 875 % of t ot al por t f ol i o 41. 8% 64. 1% 69. 9% * M e t r opol i t a n s t a t i s t i c a l
a r e a s a r e a s d e f i n e d b y t h e U. S . Ce n s u s Bu r e a u . T o p 3 1 , 7 5 a n d 1 0 0 c l a s s i f i c a t i o n s a r e r e p o r t e d p e r t he Na t i o n a l I n v e s t m e n t Ce n t e r M a r k e t Ar e a P r o f i l e s Subs c r i pt i on S e r v i c e . Re g i o n Co n c e n t r a t i o n ( d o l l a r s i n t h o u s a n d s ) T o t a l I n v e s t m e n t % o f P r o p e r t i e s Ba l a n c e T o t a l By Re g i o n * S o u t h At l a n t i c 2 0 0 $ 1 , 5 6 5 , 6 5 0 2 6 . 7 % E a s t No r t h Ce n t r a l 7 3 8 7 6 , 7 0 3 1 5 . 0 % W e s t S o u t h Ce n t r a l 1 0 9 7 7 5 , 8 8 4 1 3 . 2 % P a c i f i c 3 9 6 0 3 , 5 0 0 1 0 . 3 % E a s t S o u t h Ce n t r a l 7 0 5 6 1 , 3 0 7 9 . 6 % M o u n t a i n 4 8 5 2 8 , 3 1 0 9 . 0 % Ne w E n g l a n d 4 9 4 6 9 , 5 5 1 8 . 0 % M i d d l e At l a n t i c 3 4 3 4 5 , 8 6 1 5 . 9 % W e s t No r t h Ce n t r a l 1 1 1 3 4 , 9 1 3 2 . 3 % To t a l 6 3 3 $ 5 , 8 6 1 , 6 7 9 1 0 0 . 0 % * Re g i o n d e f i n i t i o n s a r e d e r i v e d f r o m c e n s u s b u r e a u d e f i n i t i o n s
and ar e i t em i zed i n t he gl os s ar y. 14
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P O RTF O LI O 2 0 P o r t f o l i o P e r f o r m a n c e F a c i l i t y Re v e n u e M i x T T M T T M Ag e Oc c u p a n c y CBM F ( 1 ) CAM F ( 1 ) P r i v a t e P a y M e d i c a i d M e d i c a r e S t a b l e P o r t f o l i o * I n d e p e n d e n t l i v i n g / CCRC 1 1 9 0 . 6 % 1 . 3 1 x 1 . 1 1 x 9 2 . 5 % 2 . 0 % 5 . 5 % As s i s t e d l i v i n g 1 0 8 8 . 8 % 1 . 5 5 x 1 . 3 2 x 8 8 . 0 % 1 1 . 8 % 0 . 2 % S k i l l e d n u r s i n g 2 3 8 3 . 9 % 2 . 2 6 x 1 . 6 6 x 1 9 . 0 % 5 1 . 4 % 2 9 . 6 % S p e c i a l t y c a r e 1 1 4 9 . 5 % 2 . 2 6 x 1. 83x 31. 9% 9. 2% 58. 9% M edi cal of f i ce 12 90. 4% n/ a n/ a 100. 0% 0. 0% 0. 0% To t a l 14 1. 96x 1. 52x * Da t a as of De c e m b e r 31, 2008 f or m edi cal of f i ce and Se pt e m be r 30, 2008 f or r em ai ni ng asset t ypes . No t e s : ( 1) Re p r e s e n t s t r ai l i ng t we l v e m ont h cover age m et r i cs. Sam e St or e Re v e n u e G r o wt h ( d o l l a r s
i n t h o u s a n d s ) 4 Q0 7 S a m e S t o r e 4 Q0 8 S a m e S t o r e
P r o p e r t i e s ( 1 ) Re v e n u e * Re v e n u e * % Ch a n g e S a m e S t o r e P o r t f o l i o I n d e p e n d e n t l i v i n g / CCRC 5 0 $ 1 2 , 2 7 2 $ 1 2 , 7 0 3 3 . 5 % As s i s t e d l i v i n g 1 6 3 2 3 , 0 2 0 2 3 , 7 9 4 3 . 4 % S k i l l e d n u r s i n g 2 2 1 3 9 , 8 0 8 4 0 , 8 2 5 2 . 6 % S p e c i a l t y c a r e 1 6 6 , 3 2 0 6 , 4 5 9 2 . 2 % To t a l 4 5 0 $ 8 1 , 4 2 0 $ 8 3 , 7 8 1 2 . 9 % * S a m e s t o r e r e v e n u e r e p r e s e n t s c a s h - o n l y r e n t o r i n t e r e s t i n c o m e e x c l u d i n g t h e i m p a c t o f l e a s e o r l oan bas i s changes ( e. g. , r ent - pr oduci ng capi t al i m pr ovem ent addi t i ons f or l eases and pr i nci pal d r a ws or p a y d o wn s f or l oans ) . No t e s : ( 1) Re p r e s e n t s t hos e pr oper t i es i n t he por t f ol i o ( bot h s t abl e and uns t abl e) f or t he 15 m ont hs pr ecedi ng t he end of t he por t f ol i o per f or m ance per i od.
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Sa m e S t o r e ( 1 9 p r o p e r t i e s ) P O RTF O LI O P o r t f o l i o P e r f o r m a n c e — I n d e p e n d e n t Li v i n g / CCRC S t a b l e T r a i l i n g T we l v e M o n t h P a y m e n t Co v e r a g e Be f o r e M a n a g e m e n t F e e s 1 . 6 0 1 . 5 5 1 . 5 0 1 . 4 4 x 1 . 4 5 1 . 4 0 1 . 3 5 1. 31x 1 . 3 0 b a s i s 3 Q0 8 / 3 Q0 8 / p o i n t s 3 Q0 7 2 Q0 8 1 . 2 5 S a m e S t o r e ( 2) ( 4) 1. 20 St a bl e ( 15) ( 6) 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 Oc c u p a n c y 95% 93% 91. 8% 91% 90. 6% 89% bas i s 3 Q0 8 / 3 Q0 8 / poi nt s 3 Q0 7 2 Q0 8 87% Sa m e St or e ( 140) ( 90) St a bl e ( 260) ( 80) 85% 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 Re v e n u e per Oc c u p i e d Un i t $4, 000 $3, 750 $3, 439 $3, 500 3 Q0 8 / 3 Q0 8 / $3, 250 $3, 350 ( % chg) 3 Q0 7 2 Q0 8 Sa m e St or e 3. 4% -
1. 2% $3, 000 St a bl e 0. 4% - 1. 6% 4Q 2006 1 Q 2 0 0 7 2 Q 2 0 0 7 3 Q 2 0 0 7 4 Q 2 0 0 7 1 Q 2 0 0 8 2 Q 2 0 0 8 3 Q 2 0 0 8 Ex p e n s e p e r Oc c u p i e d Un i t $ 2 , 5 0 0 $ 2 , 3 4 2 $ 2 , 2 5 0 $ 2 , 2 8 1 3 Q0 8 / 3 Q0 8 / ( % c h g ) 3 Q0 7 2 Q0 8 S a m e S t o r e 7 . 0 % 0. 5% St a bl e 3. 6% - 0. 3% $2, 000 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 26
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S a m e S t o r e ( 1 4 6 p r o p e r t i e s ) P O RTF O LI O S t a b l e P o r t f o l i o P e r f o r m a n c e — As s i s t e d Li v i n g T r a i l i n g T we l v e M o n t h P a y m e n t Co v e r a g e Be f o r e M a n a g e m e n t F e e s 1 . 6 5 1 . 5 5 x 1 . 5 5 1 . 5 5 x 1 . 4 5 b a s i s 3 Q0 8 / 3 Q0 8 / p o i n t s 3 Q0 7 2 Q0 8 1 . 3 5 S a m e St or e ( 7) ( 2) St a bl e ( 6) ( 1) 1. 25 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 Oc c u p a n c y 92% 90% 88. 9% 88% 88. 8% 86% bas i s 3 Q0 8 / 3 Q0 8 / poi nt s 3 Q0 7 2 Q0 8 84% Sa m e St or e ( 20) 110 82% St a bl e ( 10) 130 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 Re v e n u e per Oc c u p i e d Un i t $4, 298 $4, 350 $4, 278 $4, 100 $3, 850 3 Q0 8 / 3 Q0 8 / $3, 600 ( % chg) 3 Q0 7 2 Q0 8 Sa m e St or e 3. 8% 1. 1% $3, 350 St a bl e 3. 5% 0. 8%
4 Q 2 0 0 6 1 Q 2 0 0 7 2 Q 2 0 0 7 3 Q 2 0 0 7 4 Q 2 0 0 7 1 Q 2 0 0 8 2 Q 2 0 0 8 3 Q 2 0 0 8 Ex p e n s e p e r Oc c u p i e d Un i t $ 3 , 0 0 0 $ 2 , 8 3 8 $ 2 , 7 5 0 $ 2 , 8 2 4 3 Q0 8 / 3 Q0 8 / $2, 500 ( % c h g ) 3 Q0 7 2 Q0 8 S a m e S t o r e 6 . 0 % 2 . 0 % $ 2 , 2 5 0 S t a b l e 4 . 7 % 1. 5% 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 23 27
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P O RTF O LI O S a m e S t o r e ( 1 9 9 p r o p e r t i e s ) P o r t f o l i o Pe r f o r m a n c e — S k i l l e d Nu r s i n g S t a b l e T r a i l i n g T we l v e M o n t h P a y m e n t Co v e r a g e Be f o r e M a n a g e m e n t F e e s 2 . 5 2 . 3 5 x 2 . 3 2 . 2 6 x 2 . 0 1 . 8 1 . 5 b a s i s 3 Q0 8 / 3 Q0 8 / p o i n t s 3 Q0 7 2 Q0 8 1. 3 Sa m e St or e 8 ( 2) 1. 0 St a bl e 3 ( 3) 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 Oc c u p a n c y 88% 83. 9% 85% 82% 83. 4% 79% bas i s 3 Q0 8 / 3 Q0 8 / poi nt s 3 Q0 7 2 Q0 8 76% Sa m e St or e ( 120) ( 30) 73% ( 90) ( 20) St a bl e 70% 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 Re v e n u e per Oc c u p i e d Be d $6, 700 $6, 539 $6, 500 $6, 535 $6, 300 $6, 100 3 Q0 8 / 3 Q0 8 / ( % chg) 3 Q0 7 2 Q0 8 $5, 900 Sa m e St or e 5. 1% 1. 0% $5, 700 St a bl e
5. 0% 1. 0% 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3 Q 2 0 0 8 Ex p e n s e p e r Oc c u p i e d Be d $ 5 , 5 0 0 $ 5 , 3 5 7 $ 5 , 2 5 0 $ 5 , 3 4 6 $ 5 , 0 0 0 3 Q0 8 / 3 Q0 8 / ( % c h g ) 3 Q0 7 2 Q0 8 $ 4 , 7 5 0 S a m e S t o r e 5 . 8 % 1 . 6 % St a bl e 6. 1% 1. 7% $4, 500 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008
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Sa m e St or e ( 10 pr oper t i es ) P O RTF O LI O St a bl e Po r t f o l i o Pe r f o r m a n c e — Spe c i al t y Ca r e * Tr a i l i n g T we l v e M ont h Pa ym e nt Co v e r a g e Be f o r e M anagem ent Fe e s 3. 0 2. 5 2. 38x 2. 26x 2. 0 bas i s 3 Q0 8 / 3 Q0 8 / poi nt s 3 Q0 7 2 Q0 8 Sa m e St or e ( 18) ( 7) 1. 5 St a bl e ( 30) ( 19) 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 Oc c u p a n c y 65% 60% 55% 49. 5% bas i s 3 Q0 8 / 3 Q0 8 / 50% poi nt s 3 Q0 7 2 Q0 8 48. 3% Sa m e St or e ( 690) ( 220) 45% St a bl e ( 570) ( 70) 40% 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 *Pe r occupi ed uni t m et r i cs not appl i cabl e f or s peci al t y car e.
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P O RTF O LI O P o r t f o l i o Co m p o s i t i o n — M e d i c a l O f f i c e Bu i l d i n g s ( d o l l a r s i n t h o u s a n d s ) I n v e s t m e n t T o t a l Op e r a t i n g P r o p e r t i e s S q u a r e F e e t Ba l a n c e Re v e n u e s E x p e n s e s NOI Ag e Oc c u p a n c y On Ca m p u s 4 5 2 , 4 7 1 , 9 6 4 $ 6 7 7 , 6 5 2 $ 1 8 , 1 5 2 $ 6 , 1 0 9 $ 1 2 , 0 4 3 1 1 9 3 . 1 % Of f Ca m p u s - Af f i l i a t e d 2 1 8 3 9 , 6 3 7 1 9 1 , 5 1 3 5 , 7 4 4 2 , 3 1 7 3 , 4 2 7 1 3 9 1 . 8 % Of f Ca m p u s 4 3 1 , 3 3 0 , 7 6 5 3 8 0 , 0 6 5 8 , 8 8 3 2 , 9 6 3 5 , 9 2 0 1 3 8 4 . 6 % S u b t o t a l 1 0 9 4 , 6 4 2 , 3 6 6 1 , 2 4 9 , 2 3 0 3 2 , 7 7 9 1 1 , 3 8 9 2 1 , 3 9 0 1 2 9 0 . 4 % He l d - f o r - s a l e 1 4 2 7 4 , 3 5 5 2 1 , 8 4 3 5 8 1 6 3 0 ( 4 9 ) De v e l o p m e n t 4 6 8 8 , 0 8 1 9 6 , 7 7 2 L a n d 1 1 1 , 8 7 2 To t a l 1 2 8 5 , 6 0 4 , 8 0 2 $ 1 , 3 7 9 , 7 1 7 $ 3 3 , 3 6 0 $ 1 2 , 0 1 9 $ 2 1 , 3 4 1 P o r t f o l i o P e r f o r m a n c e — M e d i c a l O f f i c e Bu i l d i n g s ( d o l l a r s i n t h o u s a n d s )
4 Q0 7 A 1 Q0 8 A 2 Q0 8 A 3 Q0 8 A 4 Q0 8 A T o t a l M OB P e r f o r m a n c e P r o p e r t i e s * 1 0 2 1 0 5 1 0 6 1 0 9 1 0 9 S q u a r e f e e t * 4 , 2 2 8 , 7 9 1 4 , 4 0 0 , 0 7 9 4 , 4 2 7 , 5 2 7 4 , 6 4 2 , 3 6 6 4 , 6 4 2 , 3 6 6 I n v e s t m e n t b a l a n c e * $ 1 , 1 7 8 , 0 3 2 $ 1 , 2 0 7 , 2 0 3 $ 1 , 1 9 5 , 3 7 5 $ 1 , 2 5 7 , 9 9 3 $ 1 , 2 4 9 , 2 3 0 Oc c u p a n c y * 9 1 . 3 % 9 0 . 9 % 9 1 . 9 % 9 1 . 5 % 9 0 . 4 % T o t a l r e v e n u e * $ 2 9 , 5 5 6 $ 3 1 , 9 0 6 $ 3 1 , 9 7 9 $ 3 3 , 2 2 6 $ 3 2 , 7 7 9 Op e r a t i n g e x p e n s e s * $ 1 0 , 2 7 4 $ 1 0 , 7 0 1 $ 1 0 , 6 9 1 $ 1 1 , 1 7 8 $ 1 1 , 3 8 9 NOI f r o m c o n t i n u i n g o p e r a t i o n s * $ 1 9 , 2 8 2 $ 2 1 , 2 0 5 $ 2 1 , 2 8 8 $ 2 2 , 0 4 8 $ 2 1 , 3 9 0 NOI f r o m d i s c o n t i n u e d o p e r a t i o n s $ 8 6 8 $ 8 7 1 $ 5 7 7 $ 3 0 4 $ ( 4 9 ) T o t a l c a p - e x / T I / L C $ 1 , 7 6 3 $ 7 6 5 $ 1 , 1 6 2 $ 1 , 5 5 5 $ 2 , 8 6 5 E x p i r e d ( s q u a r e f e e t ) * 1 1 3 , 6 8 3 2 2 2 , 8 2 0 1 7 2 , 6 1 8 1 2 1 , 3 5 4 1 8 8 , 3 6 7 Re t a i n e d
( s q u a r e f e e t ) * 9 8 , 2 3 6 1 9 7 , 0 5 5 1 4 3 , 8 1 4 8 3 , 1 1 1 1 4 5 , 3 4 9 Re t e n t i o n r a t e * 8 6 . 4 % 8 8 . 4 % 8 3 . 3 % 6 8 . 5 % 7 7 . 2 % 4 Q0 7 1 Q0 8 2 Q0 8 3 Q0 8 4 Q0 8 S a m e S t o r e P e r f o r m a n c e * P r o p e r t i e s 9 9 9 9 9 9 9 9 9 9 S q u a r e f e e t 4 , 1 0 4 , 5 5 8 4 , 1 0 4 , 5 5 8 4 , 1 0 4 , 5 5 8 4 , 1 0 4 , 5 5 8 4 , 1 0 4 , 5 5 8 I n v e s t m e n t b a l a n c e $ 1 , 1 4 7 , 2 0 5 $ 1 , 1 3 5 , 3 3 0 $ 1 , 1 1 8 , 1 2 0 $ 1 , 1 0 7 , 9 1 6 $ 1 , 1 0 0 , 4 7 1 Oc c u p a n c y 9 1 . 1 % 9 0 . 3 % 9 1 . 3 % 9 0 . 5 % 8 9 . 3 % T o t a l r e v e n u e $ 2 9 , 3 0 2 $ 3 0 , 1 6 7 $ 2 9 , 8 6 1 $ 3 0 , 1 9 0 $ 2 8 , 8 2 8 Op e r a t i n g e x p e n s e s $ 1 0 , 2 4 5 $ 1 0 , 1 9 3 $ 1 0 , 0 1 5 $ 1 0 , 3 5 2 $ 1 0 , 1 9 5 NOI $ 1 9 , 0 5 7 $ 1 9 , 9 7 4 $ 1 9 , 8 4 6 $ 1 9 , 8 3 8 $ 1 8 , 6 3 3 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 Re m a i n i n g L e a s e E x p i r a t i o n s * S q u a r e f e e t 4 2 6 , 7 8 5 4 2 8 , 8 4 7 4 7 4 , 2 4 0 5 3 7 , 6 9 5 3 7 1 , 1 1 1 % o f t o t a l p o r t f o l i o 8 . 7 %
8 . 7 % 9 . 6 % 1 0 . 9 % 7 . 5 % * Re s u l t s a n d f o r e c a s t s i n c l u d e m o n t h - t o - m o n t h a n d h o l d o v e r l e a s e s a n d e x c l u d e t e r m i n a t i o n s a n d d i s c o n t i n u e d o p e r a t i o n s .
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P o r t f o l i o Co n c e n t r a t i o n — M e d i c a l O f f i c e Bu i l d i n g s S q u a r e F e e t % o f To t a l By T e n a n t * T e n e t He a l t h S y s t e m s 3 0 6 , 8 3 4 6 . 6 % Ba p t i s t He a l t h S y s t e m I n c 1 6 1 , 9 3 3 3 . 5 % S o u t h we s t M e d i c a l As s o c i a t e s 1 6 0 , 8 5 5 3 . 5 % Co m m u n i t y He a l t h 1 5 5 , 3 6 5 3 . 3 % Or a n g e Re g i o n a l M e d i c a l Ce n t e r 1 0 0 , 4 9 6 2 . 2 % Re m a i n i n g P o r t f o l i o 3 , 7 5 6 , 8 8 3 8 0 . 9 % To t a l 4 , 6 4 2 , 3 6 6 1 0 0 . 0 % * E x c l u d e s d e v e l o p m e n t a n d h e l d - f o r - s a l e p r o p e r t i e s . I n v e s t m e n t Ba l a n c e p e r P r o p e r t i e s S q u a r e F e e t % of T o t a l Ba l a n c e ( $ 0 0 0 ) S q u a r e F o o t By Re g i o n * S o u t h At l a n t i c 5 4 1 , 5 5 4 , 6 4 9 2 7 . 7 % $ 3 8 9 , 2 6 0 $ 2 5 0 W e s t S o u t h Ce n t r a l 1 7 884, 514 1 5 . 8 % 2 1 6 , 0 4 3 2 4 4 M i d d l e At l a n t i c 1 3 7 8 0 , 6 9 0 1 3 . 9 % 161, 125 2 0 6 Ea s t S o u t h
Ce n t r a l 1 3 7 1 0 , 9 7 1 1 2 . 7 % 1 2 5 , 9 6 2 1 7 7 M o u n t a i n 1 6 7 0 0 , 4 3 6 1 2 . 5 % 2 2 0 , 3 2 8 3 1 5 Ea s t No r t h Ce n t r a l 6 4 7 5 , 4 8 3 8 . 5 % 9 9 , 5 5 3 2 0 9 P a c i f i c 8 4 4 7 , 9 0 3 8 . 0 % 1 5 1 , 0 4 0 3 3 7 W e s t No r t h Ce n t r a l 1 5 0 , 1 5 6 0 . 9 % 1 6 , 4 0 6 3 2 7 To t a l 1 2 8 5 , 6 0 4 , 8 0 2 1 0 0 . 0 % $ 1 , 3 7 9 , 7 1 7 $ 2 4 6 * Re g i o n d e f i n i t i o n s a r e d e r i v e d f r o m U. S . Ce n s u s Bu r e a u d e f i n i t i o n s a n d ar e i t em i zed i n t he gl os s ar y. I n v e s t m e n t Ba l a n c e p e r P r o p e r t i e s S q u a r e F e e t % o f T o t a l Ba l a n c e ( $ 0 0 0 ) S q u a r e F o o t By S t a t e Fl or i da 27 9 3 5 , 9 4 3 1 6 . 7 % $ 2 6 8 , 8 5 2 $ 2 8 7 T e x a s 1 6 8 3 9 , 7 1 1 1 5 . 0 % 2 0 3 , 6 7 0 2 4 3 Ne w J e r s e y 5 4 0 6 , 4 5 4 7 . 3 % 7 9 , 1 8 3 1 9 5 Ca l i f o r n i a 7 384, 520 6 . 9 % 1 2 2 , 3 6 6 3 1 8 Ge o r g i a 1 5 3 5 8 , 5 6 6 6 . 4 % 7 5 , 9 8 2 2 1 2 Ar i z o n a 6 339, 205 6. 1%
1 0 0 , 5 6 7 2 9 6 Ne v a d a 9 3 2 4 , 8 4 5 5 . 8 % 1 1 2 , 5 4 0 3 4 6 Al a b a m a 5 3 0 3 , 3 1 6 5. 4% 43, 715 144 T e n n e s s e e 7 2 9 5 , 0 1 7 5 . 3 % 6 7 , 1 7 1 2 2 8 W i s c o n s i n 1 2 9 3 , 6 2 9 5 . 2 % 5 3 , 2 6 6 1 8 1 Re m a i n i n g p o r t f o l i o 3 0 1 , 1 2 3 , 5 9 6 1 9 . 9 % 2 5 2 , 4 0 5 2 2 5 To t a l 1 2 8 5 , 6 0 4 , 8 0 2 1 0 0 . 0 % $ 1 , 3 7 9 , 7 1 7 $ 2 4 6
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De v e l o p m e n t Ac t i v i t y ( d o l l a r s i n t h o u s a n d s ) P ORT F OL I O Be d s / Un i t s / CI P Ba l a n c e 2 0 0 8 YT D 2 0 0 8 YT D CI P Ba l a n c e P r o j e c t s S q u a r e F e e t a t 1 2 / 3 1 / 0 7 F u n d i n g Co n v e r s i o n s ( 1 ) a t 1 2 / 3 1 / 0 8 De v e l o p m e n t P r o p e r t i e s CCRC — e n t r a n c e f e e 3 7 5 7 $ 4 4 , 4 7 7 $ 1 2 3 , 4 4 8 $ — $ 1 6 7 , 9 2 5 CCRC — r e n t a l 3 2 7 5 3 7 , 0 1 4 4 , 5 7 3 ( 4 1 , 3 5 6 ) 2 3 1 Co m b i n a t i o n — ent r ance f e e 5 8 3 2 6 4 , 9 5 6 1 0 1 , 2 0 8 ( 5 9 , 2 0 6 ) 1 0 6 , 9 5 8 Co m b i n a t i o n — r e n t a l 2 1 2 , 2 0 1 7 8 , 5 8 9 1 6 5 , 2 5 4 ( 8 1 , 6 2 9 ) 1 6 2 , 2 1 4 F r e e s t a n d i n g d e m e n t i a c a r e 4 2 0 3 7 , 4 2 5 1 4 , 4 2 2 ( 7 , 8 5 3 ) 1 3 , 9 9 4 F r e e s t a n d i n g s k i l l e d n u r s i n g 2 2 4 0 9 , 5 9 3 1 6 , 3 2 7 ( 1 6 , 9 1 8 ) 9 , 0 0 2 S p e c i a l t y c a r e 5 3 1 2 3 3 , 0 1 9 7 7 , 6 4 2 ( 3 5 , 1 5 1 ) 7 5 , 5 1 0 M e d i c a l o f f i c e 5 6 8 8 , 0 8 1 1 4 , 6 8 8 9 3 , 9 0 7 ( 1 1 , 8 2 3 ) 9 6 , 7 7 2
T o t a l 4 8 $ 2 8 9 , 7 6 1 $ 5 9 6 , 7 8 1 $ ( 2 5 3 , 9 3 6 ) $ 6 3 2 , 6 0 6 E x p a n s i o n P r o j e c t s CCRC — e n t r a n c e f e e 3 9 1 $ 5 , 3 1 5 $ 6 , 4 9 8 $ ( 7 , 9 9 9 ) $ 3 , 8 1 4 Co m b i n a t i o n — e n t r a n c e f e e 5 1 2 9 1 8 , 6 3 3 1 7 , 3 2 1 ( 3 2 , 9 5 5 ) 2 , 9 9 9 T o t a l 8 2 3 , 9 4 8 2 3 , 8 1 9 ( 4 0 , 9 5 4 ) 6 , 8 1 3 De v e l o p m e n t T o t a l 5 6 $ 3 1 3 , 7 0 9 $ 6 2 0 , 6 0 0 $ ( 2 9 4 , 8 9 0 ) $ 6 3 9 , 4 1 9 No t e s : ( 1 ) I n c l u d e s o n e p a r c e l o f l a n d r el at i ng t o a p o t e n t i a l f u t u r e M OB d e v e l o p m e n t t h a t wa s r e c l a s s i f i e d t o l a n d a n d l a n d i m p r o v e m e n t s . De v e l o p m e n t F u n d i n g P r o j e c t i o n s ( d o l l a r s i n t h o u s a n d s ) P r o j e c t e d F u t u r e F u n d i n g Be d s / Un i t s / S q u a r e I n i t i a l 2 0 0 9 2 0 1 0 F u n d i n g Un f u n d e d Co m m i t t e d P r o j e c t s F e e t Yi e l d F u n d i n g F u n d i n g T h e r e a f t e r Co m m i t m e n t s Ba l a n c e s De v e l o p m e n t
P r o p e r t i e s CCRC — e n t r a n c e f e e 3 7 5 7 9 . 7 % $ 7 5 , 4 1 3 $ 1 5 , 6 8 8 $ — $ 9 1 , 1 0 1 $ 2 5 9 , 0 2 6 CCRC — r e n t a l 1 2 4 1 0 . 5 % 3 , 3 6 9 — - 3 , 3 6 9 3 , 6 0 0 Co m b i n a t i o n — e n t r a n c e f e e 4 6 1 8 8 . 7 % 7 4 , 0 1 3 7 , 5 0 4 — 8 1 , 5 1 7 1 8 8 , 4 7 5 Co m b i n a t i o n — r e n t a l 1 4 1 , 6 9 3 8 . 4 % 1 4 3 , 4 4 4 6 , 1 6 5 — 1 4 9 , 6 0 9 3 1 1 , 8 2 3 F r e e s t a n d i n g d e m e n t i a c a r e 3 1 6 1 9 . 1 % 1 2 , 9 5 6 — - 12, 956 2 6 , 9 5 0 F r e e s t a n d i n g s k i l l e d n u r s i n g 1 1 2 0 9 . 2 % 5 , 7 9 4 — - 5 , 7 9 4 1 4 , 7 9 6 S p e c i a l t y c a r e 3 2 1 2 9 . 4 % 1 3 9 , 2 1 9 8 8 , 0 2 8 3 7 , 9 5 0 2 6 5 , 1 9 7 3 4 0 , 7 0 7 M e d i c a l o f f i c e 4 6 8 8 , 0 8 1 7 . 5 % 1 0 9 , 0 2 4 3 , 1 8 4 — 1 1 2 , 2 0 8 2 0 8 , 9 8 0 T o t a l 3 3 8 . 8 % $ 5 6 3 , 2 3 2 $ 1 2 0 , 5 6 9 $ 3 7 , 9 5 0 $ 7 2 1 , 7 5 1 $ 1 , 3 5 4 , 3 5 7 E x p a n s i o n P r o j e c t s CCRC — e n t r a n c e f e e 3 4 1 9 . 1 % $ 3 , 7 5 5 $ 4 5 6 $ 1 1 1 $
4 , 3 2 2 $ 8 , 1 3 6 Co m b i n a t i o n — e n t r a n c e f e e 4 3 1 8 . 7 % 3 , 2 0 5 — - 3 , 2 0 5 6 , 2 0 4 T o t a l 7 8 . 9 % 6 , 9 6 0 4 5 6 1 1 1 7 , 5 2 7 1 4 , 3 4 0 De v e l o p m e n t T o t a l 4 0 8 . 8 % $ 5 7 0 , 1 9 2 $ 1 2 1 , 0 2 5 $ 3 8 , 0 6 1 $ 7 2 9 , 2 7 8 $ 1 , 3 6 8 , 6 9 7 3 2
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De v e l o p m e n t P r o j e c t Co n v e r s i o n E s t i m a t e s * ( d o l l a r s i n t h o u s a n d s ) Qu a r t e r l y Co n v e r s i o n s An n u a l Co n v e r s i o n s P ORT F OL I O P r o j e c t e d I ni t i al Pr oj e c t e d I ni t i al Am o u n t Ca s h Yi e l d s ( 1) Am o u n t Ca s h Yi e l d s ( 1) 1 Q0 9 est i m at e $ 19, 757 9. 1% 2009 est i m at e $ 536, 964 8. 6% 2 Q0 9 est i m at e 86, 062 8. 8% 2010 est i m at e 606, 893 8. 9% 3 Q0 9 est i m at e 162, 745 7. 7% 2011 est i m at e 210, 500 9. 3% 4 Q0 9 est i m at e 268, 400 9. 0% 2012 est i m at e — 0. 0% 1 Q1 0 est i m at e 263, 410 8. 3% 2013+ es t i m at e - 0. 0% 2 Q1 0 est i m at e 235, 027 9. 3% To t a l $ 1, 354, 357 8. 8% 3 Q1 0 est i m at e 108, 456 9. 2% 4 Q1 0 est i m at e - 0. 0% To t a l $1, 143, 857 8. 7% * Ex c l u d e s expans i on pr oj ect s No t e s : ( 1) Ac t u a l i ni t i al yi el ds
m ay be hi gher i f t he under l yi ng m ar ket r at es i ncr eas e. 33
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P O RTF O LI O Un s t a b i l i z e d P r o p e r t i e s ( d o l l a r s i n t h o u s a n d s ) 9 / 3 0 / 2 0 0 8 Co n s t r u c t i o n Ac q u i s i t i o n s / 1 2 / 3 1 / 0 8 P r o p e r t i e s S t a b i l i z e d Co n v e r s i o n s E x p a n s i o n s P r o p e r t i e s P r o p e r t y T y p e CCRC — e n t r a n c e f e e 3 0 0 0 3 CCRC — r e n t a l 5 0 0 0 5 Co m b i n a t i o n — ent r ance f e e 4 0 0 0 4 Co m b i n a t i o n — r e n t a l 1 3 0 1 0 1 4 F r e e s t a n d i n g a s s i s t e d l i v i n g 4 ( 1 ) 0 0 3 F r e e s t a n d i n g d e m e n t i a c a r e 7 ( 2 ) 0 0 5 F r e e s t a n d i n g s k i l l e d n u r s i n g 2 0 1 0 3 S p e c i a l t y c a r e 5 0 0 1 6 To t a l 43 ( 3) 2 1 43 12/ 31/ 08 I nves t m ent % o f To t a l P r o p e r t i e s Be d s / Un i t s Ba l a n c e I n v e s t m e n t P r o p e r t y T y p e CCRC — e n t r a n c e f e e 3 5 7 9 $ 1 1 5 , 0 0 4 2 . 0 % CCRC — r e n t a l 5 9 0 8 1 0 0 , 0 2 2 1 . 7 % Co m b i n a t i o n — e n t r a n c e f e e 4
8 6 2 1 7 6 , 0 4 8 3 . 0 % Co m b i n a t i o n — r e n t a l 1 4 1 , 3 8 4 2 4 6 , 2 2 6 4 . 2 % F r e e s t a n d i n g a s s i s t e d l i v i n g 3 1 4 1 1 7 , 2 3 2 0 . 3 % F r e e s t a n d i n g d e m e n t i a c a r e 5 215 48, 771 0. 8% Fr e e s t a ndi ng s ki l l e d nur s i ng 3 482 40, 983 0. 7% Spe c i a l t y c a r e 6 3 1 4 1 0 0 , 7 2 9 1 . 7 % To t a l 43 4, 885 $ 8 4 5 , 0 1 5 1 4 . 4 % 9 / 3 0 / 2 0 0 8 Co n s t r u c t i o n Ac q u i s i t i o n s / 1 2 / 3 1 / 0 8 P r o p e r t i e s S t a b i l i z e d Co n v e r s i o n s E x p a n s i o n s P r o g r e s s i o n s P r o p e r t i e s Oc c u p a n c y 0 — 5 0 % 1 6 0 2 0 ( 2 ) 1 6 5 0 % — 7 0 % 9 0 0 1 ( 1 ) 9 7 0 % + 18 ( 3) 0 0 3 1 8 To t a l 4 3 ( 3 ) 2 1 0 43 12/ 31/ 08 M ont hs I n % o f To t a l I n v e s t m e n t % o f T o t a l P r o p e r t i e s Op e r a t i o n Re v e n u e s Re v e n u e s ( 1 ) Ba l a n c e I n v e s t m e n t Oc c u p a n c y 0 — 5 0 % 1 6 1 0 $ 8 , 4 5 0 1 . 5 % $ 3 6 9 , 2 9 5
6 . 3 % 5 0 % — 7 0 % 9 1 5 3 , 0 1 3 0 . 6 % 1 4 1 , 9 1 2 2 . 4 % 7 0 % + 1 8 2 1 7 , 8 0 6 1 . 4 % 3 3 3 , 8 0 8 5 . 7 % To t a l 4 3 1 5 $ 1 9 , 2 6 9 3 . 5 % $ 8 4 5 , 0 1 5 1 4 . 4 % No t e s : ( 1) I ncl udes annual i zed r evenues as pr es ent ed on page 13.
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P O RTF O LI O P o r t f o l i o Tr e n d s Op e r a t o r Co n c e n t r a t i o n Tr e n d ( 1) 70% 60% 50% To p 1 0 38. 2% To p 5 40% 30% 25. 1% 20% 12/ 31/ 2005 12/ 31/ 2006 12/ 31/ 2007 12/ 31/ 2008 Pr ope r t y Ty p e Tr e n d ( 2) 50% 40% S NF 3 0 % M O B 24. 4% 22. 6% ALF 2 0 % 20. 0% I LF / CCRC 1 9 . 5 % 13. 5% S CF 1 0 % 0% 12/ 31/ 2005 12/ 31/ 2006 12/ 31/ 2007 12/ 31/ 2008 Pa yor M i x Tr e n d ( 3) 70% 64. 9% 60% 50% % 18. 7% 16. 4% 10% 12/ 31/ 2005 12/ 31/ 2006 12/ 31/ 2007 9/ 30/ 2008 No t e s : ( 1) Op e r a t o r concent r at i on t r end bas ed on i nves t m ent bal ances f or t he dat es pr es ent ed ( 2) Pr ope r t y t ype t r end bas ed on com m i t t ed i nves t m ent bal ances f or t he dat es pr es ent ed. ( 3) Pa yor m i x i s we i g h t e d by i nves t m ent bal ance i ncl udi ng
s t abl e and uns t abi l i zed pr oper t i es . 35
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G LO S S ARY Ag e : Cu r r e n t y e a r , l e s s t h e y e a r b u i l t , a d j u s t e d f or m a j o r r e n o v a t i o n s . As s i s t e d Li v i n g : As s i s t ed l i vi ng f aci l i t i es ar e s t a t e r e g u l a t e d r e n t a l p r o p e r t i e s t h a t p r o v i d e t h e s a m e s e r v i c e s a s i n d e p e n d e n t l i v i n g f a c i l i t i e s , b u t a l s o p r o v i d e s u p p o r t i v e c a r e f r o m t r a i n e d e m p l o y e e s t o r e s i d e n t s wh o r e q u i r e a s s i s t a n c e wi t h a c t i v i t i e s o f d a i l y l i v i n g , i n c l u d i n g m a n a g e m e n t o f m e d i c a t i o n s , b a t h i n g , d r e s s i n g , t o i l e t i n g , a m b u l a t i n g a n d e a t i n g . CAM F : Co v e r a g e a f t e r m a n a g e m e n t f e e s r e p r e s e n t s t h e r a t i o o f E BI T DAR t o c o n t r a c t u a l r e n t f o r l e a s e s o r i n t e r e s t a n d p r i n c i p a l p a y m e n t s f o r l o a n s . CAM F i s a m e a s u r e o f a p r o p e r t y ’ s a b i l i t y t o g e n e r a t e s u f f i c i e n t c a s h
f l o ws f o r t h e o p e r a t o r / b o r r o we r t o p a y r e n t a n d m e e t o t h e r obl i gat i o n s . T h e c o v e r a g e s h o wn e x c l u d e s p r o p e r t i es t hat ar e uns t abi l i zed, c l o s e d o r f o r wh i c h d a t a i s n o t a v a i l a b l e o r m e a n i n g f u l . Ca p - e x , Te n a n t I m p r o v e m e n t s , Le a s i n g Co m m i s s i o n s : Re p r e s e n t s a m o u n t s p a i d i n c a s h f o r : 1 ) r e c u r r i n g a n d n o n - r e c u r r i n g c a p i t a l e x p e n d i t u r e s r e q u i r e d t o m a i n t a i n a n d r e - t e n a n t o u r p r o p e r t i e s , 2 ) s e c o n d g e n e r a t i o n t e n a n t i m p r o v e m e n t s a n d 3 ) l e a s i n g c o m m i s s i o n s p a i d t o t h i r d p a r t y l e a s i n g a g e n t s t o s e c u r e n e w t e n a n t s . CBM F : Co v e r a g e b e f o r e m a n a g e m e n t f e e s r e p r e s e n t s t h e r a t i o o f E BI T DARM t o c o n t r a c t u a l r e n t f o r l e a s e s o r i n t e r e s t a n d p r i n c i p a l p a y m e n t s f o r l o a n s .
CBM F i s a m e a s u r e o f a p r o p e r t y ’ s a b i l i t y t o g e n e r a t e s u f f i ci ent c a s h f l o ws f o r t h e o p e r a t o r / b o r r o we r t o pay r ent and m eet ot her obl i g a t i o n s , a s s u m i n g t h a t m a n a g e m e n t f e e s a r e n o t p a i d . T h e c o v e r a g e s h o wn e x c l u d e s p r o p e r t i e s t h a t a r e u n s t a b i l i z e d , c l o s e d o r f o r wh i c h d a t a i s n o t a v a i l a b l e o r m e a n i n g f u l . CCRC: Co n t i n u i n g c a r e r e t i r e m e n t c o m m u n i t i e s i n c l u d e a c o m b i n a t i o n o f d e t a c h e d h o m e s , a n i n d e p e n d e n t l i v i n g f a c i l i t y , a n a s s i s t e d l i v i n g f a c i l i t y a n d / o r a s k i l l e d n u r s i n g f a c i l i t y o n o n e c a m p u s . Re s i d e n t p a y m e n t p l a n s v a r y , b u t c a n i n c l u d e e n t r a n c e f e e s , c o n d o m i n i u m f e e s a n d r e n t a l f e e s . M a n y o f t h e s e c o m m u n i t i e s a l s o c h a r g e m o n t h l y m a i n t e n a n c e
f ees i n exchange f or a l i vi ng uni t , m eal s and s om e heal t h s er vi ce s . Co m b i n a t i o n : A p r o p e r t y t h a t o f f e r s t wo o r m o r e l e v e l s o f c a r e ( i . e . i n d e p e n d e n t l i v i n g , a s s i s t e d l i v i n g , d e m e n t i a a n d s k i l l e d n u r s i n g ) , b u t d o e s n o t m e e t t h e d e f i n i t i o n o f a CCRC. Co m m i t t e d Ba l a n c e : Re p r e s e n t s i n v e s t m e n t b a l a n c e p l u s u n f u n d e d c o n s t r u c t i o n c o m m i t m e n t s f o r wh i c h i n i t i a l f u n d i n g h a s c o m m e n c e d . Co n s t r u c t i o n Co n v e r s i o n : Re p r e s e n t s c o m p l e t e d c o n s t r u c t i o n p r o j e c t s t h a t we r e p l a c e d i n t o s e r v i c e a n d b e g a n e a r n i n g r e n t . De m e n t i a Ca r e : Ce r t a i n a s s i s t e d l i v i n g f a c i l i t i e s m a y i n c l u d e s t a t e l i c e n s e d s e t t i n g s t h a t s p e c i a l i z e i n c a r i n g f o r t h o s e a f f l i c t e d wi t h Al z h e i m e r ’ s d i s e a s e
a n d / o r s i m i l a r f o r m s o f d e m e n t i a . EBI TDAR: E a r n i n g s b e f o r e i nt er es t , t axes , depr eci at i on, am or t i zat i on and r ent . M anagem ent f ees a r e i m p u t e d a t 5 % o f r e v e n u e s f o r i n d e p e n d e n t l i v i n g , a s s i s t e d l i v i n g , s k i l l e d n u r s i n g a n d CCRCs a n d a t 3 % f o r s p e c i a l t y c a r e wh i c h t h e c o m p a n y b e l i e v e s r e p r e s e n t t y p i c a l m a n a g e m e n t f e e s . T h e c o m p a n y u s e s u n a u d i t e d , p e r i o d i c f i n a n c i a l i n f o r m a t i o n p r o v i d e d s o l e l y b y t e n a n t s / b o r r o we r s t o c a l c u l a t e E BI T DAR a n d h a s n o t i n d e p e n d e n t l y v e r i f i e d t h e i n f o r m a t i o n . E BI T DAR i s u s e d t o c a l c u l a t e CAM F . EBI TDARM : E a r n i n g s b e f o r e i n t e r e s t , t a x e s , d e p r e c i a t i o n , a m o r t i z a t i o n , r e n t a n d m a n a g e m e n t f e e s . T h e c o m p a n y u s e s u n a u d i t e d , p e r i o d i c
f i n a n c i a l i n f o r m a t i o n p r o v i d e d s o l e l y b y t e n a n t s / b o r r o we r s t o cal c u l a t e E BI T DARM a n d h a s n o t i n d e p e n d e n t l y ver i f i ed t he i nf or m at i on. E BI T DARM i s u s e d t o c a l c u l a t e CBM F . En t r a n c e F e e : A p r o p e r t y wh e r e t h e r e s i d e n t p a y s a s u b s t a n t i a l u p f r o n t f e e a n d a n o n g o i n g m o n t h l y s e r v i c e f e e f o r t h e r i g h t t o o c c u p y a u n i t . T y p i c a l l y , a p o r t i o n o f t h e u p f r o n t f e e i s r e f u n d a b l e . Ex p e n s e p e r O c c u p i e d Un i t : Re p r e s e n t s t h e r a t i o o f r e v e n u e l e s s E BI T DARM t o o c c u p i e d u n i t s b a s e d o n t h e m o s t r e c e n t q u a r t e r o f a v a i l a b l e d a t a a n d e x c l u d e s p r o p e r t i e s t h a t a r e u n s t a b i l i z e d , c l o s e d , o r f o r wh i c h d a t a i s n o t a v a i l a b l e o r m e a n i n g f u l . T h e c o m p a n y u s e s u n a u d i t e d , p e r i o d i c f i n a n c i a l
i n f o r m a t i o n p r o v i d e d s o l e l y b y t e n a n t s / b o r r o we r s t o c a l c u l a t e expe ns e per occupi ed uni t and has not i ndepe ndent l y ver i f i ed t he i nf or m at i on.
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F r e e s t a n d i n g : A p r o p e r t y t h a t o f f e r s o n e l e v e l o f s e r v i c e . G LO S S ARY I n d e p e n d e n t Li v i n g : I n d e p e n d e n t l i v i n g f a c i l i t i e s a r e a g e - r e s t r i c t e d m u l t i - f a m i l y p r o p e r t i e s wi t h c e n t r a l d i n i n g f a c i l i t i e s t h a t p r o v i d e r e s i d e n t s a c c e s s t o 2 8 m e a l s a n d o t h e r s e r v i c e s s u c h a s h o u s e k e e p i n g , l i n e n s e r v i c e , t r a n s p o r t a t i o n a n d s o c i a l a n d r e c r e a t i o n a l a c t i v i t i e s . I n i t i a l Ca s h Yi e l d : Re p r e s e n t s a n n u a l i z e d c o n t r a c t u a l i n c o m e t o b e r e c e i v e d i n c a s h a t d a t e o f i n v e s t m e n t d i v i d e d b y i n v e s t m e n t a m o u n t . I n v e s t m e n t Am o u n t : Ac q u i s i t i o n s — Re p r e s e n t s p u r c h a s e p r i c e . Ne w l o a n s — Re p r e s e n t s f a c e a m o u n t o f n e w l o a n . Co n s t r u c t i o n c o n v e r s i o n — Re p r e s e n t s b o o k b a l a n c e c o n v e r t e d f r o m CI P t o
r e a l p r o p e r t y u p o n c o m p l e t i o n . Ca p i t a l i m p r o v e m e n t s t o e x i s t i n g p r o p e r t i e s — Re p r e s e n t s c a s h f u n d e d t o t e n a n t s u n d e r a n e x i s t i n g l e a s e a g r e e m e n t . L o a n a d v a n c e s — Re p r e s e n t s c a s h f u n d e d t o o p e r a t o r s u n d e r a n e x i s t i n g l o a n a g r e e m e n t . I n v e s t m e n t Ba l a n c e : Re p r e s e n t s n e t b o o k v a l u e o f r e a l e s t a t e i n v e s t m e n t s a s r e f l e c t e d o n t h e c o m p a n y ’ s b a l a n c e s h e e t . M e d i c a l O f f i c e : M e d i c a l o f f i c e b u i l d i n g s a r e o f f i c e a n d c l i n i c f a c i l i t i e s , o f t e n l o c a t e d n e a r h o s p i t a l s o r o n h o s p i t a l c a m p u s e s , s p e c i f i c a l l y c o n s t r u c t e d a n d d e s i g n e d f o r u s e b y p h y s i c i a n s a n d o t h e r h e a l t h c a r e p e r s o n n e l t o p r o v i d e s e r v i c e s t o t h e i r p a t i e n t s . T h e y m a y a l s o i n c l u d e a m b u l a t o r y s u r g e r y c e n t e r s
t h a t a r e u s e d f o r g e n e r a l o r s p e c i a l t y s u r g i c a l p r o c e d u r e s n o t r e q u i r i n g a n o v e r n i g h t s t a y i n a h o s p i t a l . M e d i c a l o f f i c e b u i l d i n g s t y p i c a l l y c o n t a i n s o l e a n d g r o u p p h y s i c i a n p r a c t i c e s a n d m a y p r o v i d e l a b o r a t o r y a n d o t h e r p a t i e n t s e r v i c e s . M e t r o p o l i t a n S t a t i s t i c a l Ar e a : M e t r o p o l i t a n s t a t i s t i c a l a r e a s a r e g e o g r a p h i c e n t i t i e s d e f i n e d b y t h e U. S . Of f i c e o f M a n a g e m e n t a n d Bu d g e t ( OM B) f o r u s e b y F e d e r a l s t a t i s t i c a l a g e n c i e s i n c o l l e c t i n g , t a b u l a t i n g a n d p u b l i s h i n g F e d e r a l s t a t i s t i c s . T h e NI C M AP ™ Da t a a n d An a l y s i s S e r v i c e p r o v i d e s r e v e n u e , s u p p l y a n d d e m o g r a p h i c i n f o r m a t i o n f o r t h e I L / CCRC, a s s i s t e d l i v i n g , a n d s k i l l e d n u r s i n g s e r v i c e t y p e s a n d c o m m o n l y
a g g r e g a t e s t h e i n f o r m a t i o n f o r t h e t o p 3 1 , t o p 7 5 a n d t o p 1 0 0 M S As . T h e c o m p a n y p r o v i d e s i n v e s t m e n t b a l a n c e i n f o r m a t i o n i n t h e s a m e c a t e g o r i e s a s a n o t h e r m e a s u r e o f g e o g r a p h i c c o n c e n t r a t i o n . O c c u p a n c y : M e d i c a l o f f i c e o c c u p a n c y r e p r e s e n t s t h e p e r c e n t a g e o f t o t a l r e n t a b l e s q u a r e f e e t l e a s e d a n d o c c u p i e d , i n c l u d i n g m o n t h - t o - m o n t h l e a s e s , a s o f t h e d a t e r e p o r t e d . Oc c u p a n c y f o r a l l o t h e r p r o p e r t y t y p e s r e p r e s e n t s a v e r a g e q u a r t e r l y o p e r a t i n g o c c u p a n c y b a s e d o n t h e m o s t r e c e n t q u a r t e r o f a v a i l a b l e d a t a a n d e x c l u d e s p r o p e r t i e s t h a t a r e u n s t a b i l i z e d , c l o s e d o r f o r wh i c h d a t a i s n o t a v a i l a b l e o r m e a n i n g f u l . T h e c o m p a n y u s e s u n a u d i t e d , p e r i o d i c f i n a n c i a l
i n f o r m a t i o n p r o v i d e d s o l e l y b y t e n a n t s / b o r r o we r s t o c a l c u l a t e o c c u p a n c y a n d h a s n o t i n d e p e n d e n t l y v e r i f i e d t h e i n f o r m a t i o n . O f f Ca m p u s : P r o p e r t i e s t h a t a r e n e i t h e r o n c a m p u s n o r o f f c a m p u s a f f i l i a t e d . O f f Ca m p u s - Af f i l i a t e d : P r o p e r t i e s n o t o n c a m p u s a r e c o n s i d e r e d a f f i l i a t e d wi t h a h o s p i t a l o r h e a l t h s y s t e m i f o n e o r m o r e o f t h e f o l l o wi n g c o n d i t i o n s a r e m e t : 1 ) a g r o u n d l e a s e i s m a i n t a i n e d wi t h a h o s p i t a l o r s y s t e m e n t i t y ; 2 ) a m a s t e r l e a s e i s m a i n t a i n e d wi t h a h o s p i t a l o r s y s t e m e n t i t y ; 3 ) s i g n i f i c a n t s q u a r e f o o t a g e i s l e a s e d t o a h o s p i t a l o r s y s t e m e n t i t y ; o r 4 ) t h e p r o p e r t y i n c l u d e s a n a m b u l a t o r y s u r g e r y c e n t e r wi t h a h o s p i t a l p a r t n e r s h i p
i n t e r e s t . O n Ca m p u s : P r o p e r t i e s a r e c o n s i d e r e d o n c a m p u s i f o n e o r m o r e o f t h e f o l l o wi n g c r i t e r i a a r e m e t : 1 ) t h e l a n d p a r c e l i s c o n t a i n e d wi t h i n t h e p h y s i c a l b o u n d a r i e s o f a h o s p i t a l c a m p u s ; 2 ) t h e l a n d p a r c e l i s l o c a t e d a d j a c e n t t o t h e c a m p u s ; o r 3 ) t h e b u i l d i n g i s p h y s i c a l l y c o n n e c t e d t o t h e h o s p i t a l r e g a r d l e s s o f t h e l a n d o wn e r s h i p s t r u c t u r e .
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G LO S S ARY Re g i o n De f i n i t i o n s : E i g h t d i v i s i o n s a s e s t a b l i s h e d b y t h e Ce n s u s Bu r e a u . Ne w E n g l a n d — Co n n e c t i c u t , M a i n e , M a s s a c h u s e t t s , Ne w Ha m p s h i r e , Rh o d e I s l a n d , Ve r m o n t . M i d d l e At l a n t i c — Ne w J e r s e y , Ne w Yo r k , P e n n s y l v a n i a . E a s t No r t h Ce n t r a l — I n d i a n a , I l l i n o i s , M i c h i g a n , Oh i o , W i s c o n s i n . W e s t No r t h Ce n t r a l — I o wa , Ka n s a s , M i n n e s o t a , M i s s o u r i , Ne b r a s k a , No r t h Da k o t a , S o u t h Da k o t a . S o u t h At l a n t i c — De l a wa r e , Di s t r i c t o f Co l u m b i a , F l o r i d a , Ge o r g i a , M a r y l a n d , No r t h Ca r o l i n a , S o u t h Ca r o l i n a , Vi r g i n i a , W e s t Vi r g i n i a . E a s t S o u t h Ce n t r a l — Al a b a m a , Ke n t u c k y , M i s s i s s i p p i , T e n n e s s e e . W e s t S o u t h Ce n t r a l — Ar k a n s a s , L o u i s i a n a , Ok l a h o m a , T e x a s .
M o u n t a i n — Ar i z o n a , Co l o r a d o , I d a h o , Ne w M e x i c o , M o n t a n a , Ut a h , Ne v a d a , W y o m i n g . P a c i f i c — Al a s k a , Ca l i f o r n i a , Ha wa i i , Or e g o n , W a s h i n g t o n . Re n e wa l Ra t e : T h e r a t i o o f t o t a l s q u a r e f e e t e x p i r i n g a n d a v a i l a b l e f o r l e a s e t o t o t a l r e n e we d s q u a r e f e e t . Re n e we d S q u a r e F e e t : S q u a r e f e e t e x p i r i n g d u r i n g t h e r e p o r t i n g p e r i o d u p o n wh i c h a l e a s e i s e x e c u t e d b y t h e c u r r e n t o c c u p a n t . Re n t a l : A p r o p e r t y wh e r e t h e r e s i d e n t p a y s a m o n t h l y m a r k e t r a t e f o r t h e l e v e l o f c a r e p r o v i d e d , b u t i s n o t r e q u i r e d t o p a y a s u b s t a n t i a l u p f r o n t f e e . Re v e n u e p e r O c c u p i e d Un i t : Re p r e s e n t s t h e r a t i o o f t o t a l r e v e n u e t o o c c u p i e d u n i t s b a s e d o n t h e m o s t r e c e n t q u a r t e r o f a v a i l a b l e d a t a a n d
e x c l u d e s p r o p e r t i e s t h a t a r e u n s t a b i l i z e d , c l o s e d , o r f o r wh i c h d a t a i s n o t a v a i l a b l e o r m e a n i n g f u l . T h e c o m p a n y u s e s u n a u d i t e d , p e r i o d i c f i n a n c i a l i n f o r m a t i o n p r o v i d e d s o l e l y b y t e n a n t s / b o r r o we r s t o c a l c u l a t e r e v e n u e p e r o c c u p i e d u n i t a n d h a s n o t i n d e p e n d e n t l y v e r i f i e d t h e i n f o r m a t i o n . S a m e S t o r e : F o r t h e m e d i c a l o f f i c e b u i l d i n g p o r t f o l i o , s a m e s t o r e i s d e f i n e d a s t h o s e p r o p e r t i e s i n t h e p o r t f o l i o a s o f Oc t o b e r 1 , 2 0 0 7 . F o r a l l o t h e r p r o p e r t y t y p e s , s a m e s t o r e i s d e f i n e d a s t h o s e p r o p e r t i e s i n t h e s t a b l e p o r t f o l i o f o r t h e 2 4 m o n t h s p r e c e d i n g t h e e n d o f t h e p o r t f o l i o p e r f o r m a n c e r e p o r t i n g p e r i o d , u n l e s s o t h e r wi s e n o t e d . S k i l l e d Nu r s i n g : S k i l l e d n u r s i n g
f a c i l i t i e s a r e l i c e n s e d d a i l y r a t e o r r e n t a l p r o p e r t i e s wh e r e t h e m a j o r i t y o f i n d i v i d u a l s r e q u i r e 2 4 - h o u r n u r s i n g a n d / o r m e d i c a l c a r e . Ge n e r a l l y , t h e s e p r o p e r t i e s a r e l i c e n s e d f o r M e d i c a i d a n d / o r M e d i c a r e r e i m b u r s e m e n t . S p e c i a l t y Ca r e : S p e c i a l t y c a r e f a c i l i t i e s g e n e r a l l y i n c l u d e a c u t e c a r e h o s p i t a l s , l o n g - t e r m a c u t e c a r e h o s p i t a l s a n d o t h e r s p e c i a l t y c a r e f a c i l i t i e s . Ac u t e c a r e h o s p i t a l s p r o v i d e a wi d e r a n g e o f i n p a t i e n t a n d o u t p a t i e n t s e r v i c e s , i n c l u d i n g , b u t n o t l i m i t e d t o , s u r g e r y , r e h a b i l i t a t i o n , t h e r a p y a n d c l i n i c a l l a b o r a t o r i e s . L o n g - t e r m a c u t e c a r e h o s p i t a l s p r o v i d e i n p a t i e n t s e r v i c e s f o r p a t i e n t s wi t h c o m p l e x m e d i c a l c o n d i t i o n s wh o r e q u i r e m o r e
i n t e n s i v e c a r e , m o n i t o r i n g o r e m e r g e n c y s u p p o r t t h a n t h a t a v a i l a b l e i n m o s t s k i l l e d n u r s i n g f a c i l i t i e s . Ot h e r s p e c i a l t y c a r e f a c i l i t i e s t y p i c a l l y p r o v i d e s p e c i a l i z e d i n p a t i e n t a n d o u t p a t i e n t c a r e f o r s p e c i f i c i l l n e s s e s o r d i s e a s e s , i n c l u d i n g , a m o n g o t h e r s , o r t h o p e d i c a n d n e u r o l o g i c c a r e . S q u a r e F e e t : Ne t r e n t a b l e s q u a r e f e e t c a l c u l a t e d u t i l i z i n g Bu i l d i n g Own e r s a n d M a n a g e r s As s o c i a t i o n m e a s u r e m e n t s t a n d a r d s . S t a b l e : A f a c i l i t y wi l l e n t e r t h e s t a b l e p o r t f o l i o a f t e r i t h a s g e n e r a t e d CAM F o f 1 . 1 0 x o r g r e a t e r f o r t h r e e c o n s e c u t i v e m o n t h s . Ad d i t i o n a l l y , a f a c i l i t y wi l l e n t e r t h e s t a b l e p o r t f o l i o i f a f a c i l i t y f a i l s t o m e e t t h e a b o v e c r i t e r i a i n t h e 1 2 m o n t h s
f o l l o wi n g t h e b u d g e t e d s t a b i l i z a t i o n d a t e . Un s t a b i l i z e d : An a c q u i s i t i o n t h a t d o e s n o t m e e t t h e s t a b l e c r i t e r i a u p o n c l o s i n g o r a c o n s t r u c t i o n p r o p e r t y t h a t h a s o p e n e d b u t n o t y e t r e a c h e d s t a b i l i z a t i o n . Yi e l d o n S a l e : Re p r e s e n t s a n n u a l i z e d c o n t r a c t u a l i n c o m e t h a t wa s b e i n g r e c e i v e d i n c a s h a t d a t e o f d i s p o s i t i o n d i v i d e d b y d i s p o s i t i o n c a s h p r o c e e d s . 3 8
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Th e c o m p a ny bel i e ves t hat net i ncom e avai l abl e t o c o m m o n s t o c k h o l d e r s ( NI CS ) , a s d e f i n e d b y U. S . g e n e r a l l y S UP P LEM ENTAL a c c e p t e d a c c o u n t i n g p r i n c i p l e s ( U. S . GAAP ) , i s t h e m o s t a p p r o p r i a t e e a r n i n g s m e a s u r e m e n t . Ho we v e r , t h e c o m p a n y c o n s i d e r s f u n d s f r om ope r a t i o n s ( F F O) a n d f u n d s a v a i l abl e f o r d i s t r i b u t i o n ( F AD) t o b e u s e f u l s uppl em ent al m eas ur es of i t s oper at i ng per f or m a n c e . Hi s t o r i c a l c os t account i ng f or r eal es t at e as s et s i n a c c o r d a n c e wi t h U. S . GAAP i m pl i ci t l y as s um es t hat t he val ue of r eal es t at e as s et s di m i ni s hes pr edi ct a bl y over t i m e as e vi denced b y t h e p r o v i s i o n f o r d e p r e c i a t i o n . Ho we v e r , s i nce r e a l est at e val ues have hi s t or i cal l y r i s en or
f a l l e n wi t h m ar ke t condi t i ons , m any i ndus t r y i nves t or s and anal ys t s have cons i der ed pr es ent at i ons of ope r at i ng r es ul t s f or r eal es t at e com pani es t hat us e hi s t or i cal cos t account i ng t o be i n s u f f i c i e n t . I n r e s p o n s e , t h e Na t i o n a l As s o c i a t i o n o f Re a l E s t a t e I nves t m e n t T r u s t s ( NARE I T ) c r e a t e d FFO as a s uppl em ent al m eas ur e of oper at i n g REP O RTI NG p e r f o r m a n c e f o r RE I T s t h a t e x c l u d e s hi s t or i cal cos t d e p r e c i a t i o n f r o m n e t i n c o m e . F F O, a s d e f i n e d b y NARE I T , m e a n s n e t i ncom e, c o m p u t e d i n a c c o r d a n c e wi t h U. S . GAAP , e x c l udi ng gai ns ( or l os s e s ) f r om sa l e s of r eal est at e, pl us r eal es t at e depr eci at i on and am or t i z at i on, a nd af t e r adj us t m ent s f or uncons ol i dat ed
par t ner s hi ps and j o i n t v e n t u r e s . No r m a l i z e d F F O r e p r e s e nt s FFO a dj us t e d f or unus ua l a nd non- r e c ur r i ng i t e m s . F AD 3 5 r e p r e s e n t s FFO e xc l udi ng ne t s t r a i ght - l i ne r e nt a l a dj us t m e nt s , r e nt a l i n c o m e r e l a t e d t o a b o v e / b e l o w m a r k e t M EAS URES l e a s e s a n d a m o r t i zat i on of def er r ed l oan expens es and l ess cas h us ed t o f und capi t al expendi t ur e s , t enant i m pr ovem ent s and l eas e com m i s s i ons . No r m a l i z e d F AD r e p r e s e n t s F AD e x c l u d i n g p r e p a i d / s t r a i g h t - l i ne r ent cas h r ecei pt s and a dj us t ed f o r u n u s u a l a n d n o n - r e c u r r i n g i t e m s . E BI T DA s t ands f or ear ni ngs be f or e i nt e r e st , t axe s , depr ec i at i on and am or t i zat i on. A covenant i n our l i ne of c r edi t a r r angem ent cont ai ns a f i nanci al r at i o
bas ed on a def i ni t i o n o f E BI T DA t h a t i s s p e c i f i c t o t ha t a gr e e m e nt . Fa i l ur e t o s a t i s f y t hi s c ove na nt c oul d r es ul t i n an event of def aul t t hat coul d have a m at er i al adver s e i m pact on our c o s t a n d a v a i l a b i l i t y o f c a p i t a l , wh i c h c o u l d i n t u r n h a v e a m a t e r i al adver s e i m pact on our cons ol i dat ed r es ul t s of oper at i ons , l i qui di t y and/ or f i n a n c i a l c o n d i t i o n . Du e t o t h e m a t e r i a l i t y o f t hi s debt agr eem e n t a n d t h e f i n a n c i a l c o v e n a n t , we h a v e d i s c l o s e d Ad j u s t e d E BI T DA, wh i c h r epr es e n t s E BI T DA a s d e f i n e d a b o v e a n d a d j u s t e d f o r s t ock- bas ed com pens a t i on expe ns e, pr ovi s i on f or l oan l os s es and gai n/ l os s on ext i ngui s hm ent of debt . W e us e Ad j u s t e d E BI T DA t o m e a s u r e o u r
adj us t ed f i xed cha r g e c o v e r a g e r a t i o , wh i c h r e p r e s e n t s Ad j u s t e d E BI T DA d i v i d e d b y f i x e d c h a r g e s o n a t r a i l i n g t we l v e m o n t h s b a s i s . Fi xe d c ha r ge s i nc l ude t ot a l i nt e r e s t ( e xc l udi ng c a pi t a l i z ed i nt er es t ) , s ecur ed debt pr i nci pal am or t i zat i on and pr ef er r ed di vi dends . Ou r c o v e n a n t r e q u i r e s a n a d j us t e d f i xed char ge r at i o of at l eas t 1. 75 t i m e s . Ne t o p e r a t i n g i n c o m e ( NOI ) i s u s e d t o e v a l uat e t he oper at i ng per f or m ance of t he com pany’ s pr oper t i e s . T h e c o m p a n y d e f i n e s NOI a s t ot al r evenues , i ncl udi ng t enant r ei m bur s em ent s and di s cont i nued oper at i ons , l es s pr oper t y oper at i n g e x p e n s e s , wh i c h e x c l u d e d e p r e c i a t i o n a n d am or t i z at i on, gener al and adm i ni s t r at i ve expens es ,
i m pai r m e nt s and i n t e r e s t e x p e n s e . Th e c o m p a n y b e l i e v e s NOI p r o v i d e s i n v e s t o r s r e l e v a n t a n d u s e f u l i n f o r m at i on becaus e i t m ea s ur es t he oper at i ng per f or m ance of t he com pany’ s pr oper t i e s a t t h e p r o p e r t y l e v e l o n a n u n l e v e r a g e d b a s i s . Th e c o m p a n y u s e s NOI t o m ake deci s i ons about r es our ce al l ocat i ons and t o as s es s t he pr oper t y l e v e l p e r f o r m a n c e o f o u r p r o p e r t i e s . Ot h e r t h a n Ad j u s t e d E BI T DA, t h e com pany’ s s uppl em ent al r epor t i ng m eas ur es and s i m i l ar l y ent i t l ed f i nanci al m e a s u r e s t h a t a r e wi d e l y u s e d b y i n v e s t o r s , equi t y and debt anal ys t s and r a t i ng age nci es i n t he val uat i on, com par i s on, r at i ng and i nves t m ent r e com m e n d a t i o n s o f c o m p a n i e s . Th e c o m p a n y ’ s
m anagem e nt us es t hes e f i nanci al m eas ur es t o f aci l i t at e i nt er nal and ext er nal com par i s ons t o hi s t or i cal oper at i ng r es ul t s and i n m a k i n g o p e r a t i n g d e c i s i o n s . Ad d i t i o n a l l y , t h e s e m e a s u r e s a r e u t i l i z e d b y t h e Bo a r d o f Di r e c t o r s t o e v a l u a t e m a n a g e m e n t . Ad j u s t e d E BI T DA i s u s e d s o l e l y t o d e t er m i n e o u r c o m p l i a n c e wi t h a f i n a n c i a l c ovenant of our l i ne of cr edi t ar r angem ent and i s not bei ng pr es ent ed f or us e by i nves t or s f or any ot her pur p o s e . Th e s u p p l e m e n t a l r e p o r t i ng m ea s ur es do not r epr es ent net i ncom e or cas h f l ow pr ovi ded f r om ope r at i ng ac t i vi t i es a s det er m i n e d i n a c c o r d a n c e wi t h U. S . GAAP a n d s h o u l d not be c ons i der ed as al t er nat i ve m eas ur es of
pr of i t abi l i t y or l i qui di t y. Fi na l l y, t he s uppl e m e nt a l r epor t i ng m eas ur es , as def i ned by t he com pany, m ay not be com par abl e t o s i m i l ar l y ent i t l ed i t em s r epor t ed by ot her r eal es t at e i nves t m ent t r us t s or ot her com pani es . M ul t i - per i od am ount s m ay not equal t he s um of t he i ndi vi dual quar t er l y am ount s due t o r oundi ng.
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HE AL T H CARE RE I T , I NC. On e S e a Ga t e , Sui t e 1500 P. O. Bo x 1475 To l e d o , OH 4 3 6 0 3 - 1 4 7 5 419. 247. 2800 m ai n 419. 247. 2826 f ax www. h c r e i t . c o m

HEALTH CARE REIT INC /DE/ 8-K (Events or Changes Between Quarterly Reports) 2009-02-24

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HEALTH CARE REIT INC /DE/ 8-K (Events or Changes Between Quarterly Reports) 2009-02-24

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Date of Report (Date of earliest event reported) February 24, 2009

Health Care REIT, Inc.

Delaware 1-8923 34-1096634

One SeaGate, Suite 1500, Toledo, Ohio 43604

Registrant’s telephone number, including area code (419) 247-2800

(Former name or former address, if changed since last report.)

Item 2.02 Results of Operations and Financial Condition.

Item 9.01 Financial Statements and Exhibits.

HEALTH CARE REIT, INC.

By: /s/ GEORGE L. CHAPMAN

Dated: February 24, 2009

(HEALTHCARE REIT LOGO)

February 24, 2009

Health Care REIT, Inc.

Key Performance Indicators.

4Q08 Earnings Release February 24, 2009

NIC S FFO FAD

(a) Amounts may not sum due to rounding

NIC S FFO FAD

(a) Amounts may not sum due to rounding

Significant 2008 Items. The following items impacted 2008 earnings:

4Q08 Earnings Release February 24, 2009

Summary of per share impacts:

Funds from operations-normalized:

4Q08 Earnings Release February 24, 2009

4Q08 Earnings Release February 24, 2009

4Q08 Earnings Release February 24, 2009

HEALTH CARE REIT, INC.

CONSOLIDATED BALANCE SHEETS (unaudited)

Liabilities and stockholders’ equity

Minority interests 10,603 9,687

4Q08 Earnings Release February 24, 2009

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

Th re e Mon ths En de d Twe lve Mon ths En de d

Income from continuing operations before income taxes and minority

Income tax expense (136) (269) (1,306) (188)

Minority interests 2 169 (126) (238)

Average number of common shares outstanding:

Net income available to common stockholders per share:

Common dividends per share $ 0.68 $ 0.66 $ 2.70 $ 2.2791

4Q08 Earnings Release February 24, 2009

T hree Months Ended T welve Months Ended

Average common shares outstanding:

Per share data:

Funds from operations

Funds from operations — normalized

FFO Payout Ratio

FFO Payout Ratio — Normalized

4Q08 Earnings Release February 24, 2009

T hree Months Ended T welve Months Ended

Average common shares outstanding:

Per share data:

Funds available for distribution

Funds available for distribution — normalized

FAD Payout Ratio

FAD Payout Ratio — Normalized

4Q08 Earnings Release February 24, 2009

Per share data (diluted):

Per share data (diluted):

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