Health Care REIT, Inc. Reports Third Quarter 2007 Results

Health Care REIT, Inc. (NYSE:HCN) today announced operating results for its third quarter ended September 30, 2007. Recent Highlights. Completed net new investments year-to-date totaling $791 million Increased 2007 net investment guidance to a range of $950 million to $1.1 billion, from $800 million to $1.1 billion Reported 3Q07 normalized FFO growth of 8% per share Reported 3Q07 normalized FAD growth of 6% per share Issued $400 million of 4.75% convertible senior unsecured notes in July Expanded and extended unsecured line of credit to $1.15 billion in August Key Performance Indicators.     3Q07   3Q06   Change   2007   2006   Change Net income available to common stockholders (NICS) per diluted share   $0.30   $0.34   -12%   $0.94   $1.04   -10% Normalized FFO per diluted share   $0.79   $0.73   8%   $2.32   $2.18   6% Normalized FAD per diluted share   $0.75   $0.71   6%   $2.18   $2.11   3% Dividends per common share   $0.66   $0.64   3%   $1.96   $1.90   3% Normalized FFO Payout Ratio   84%   88%       84%   87%     Normalized FAD Payout Ratio   88%   90%       90%   90%     3Q07 Earnings. The following table summarizes certain items impacting NICS, FFO and FAD:   NICS   FFO   FAD     3Q07   3Q06   Change   3Q07   3Q06   Change   3Q07   3Q06   Change Per diluted share   $0.30   $0.34   -12%   $0.79   $0.73   8%   $0.82   $0.76   8% Includes impact of:                                     Gain (loss) on sales of real property(1)   $0.01   $0.00                             Cash receipts - prepaid/straight-line rent(2)                           $0.07   $0.05     Per diluted share - normalized(a)               $0.79   $0.73   8%   $0.75   $0.71   6% (a) Amounts may not sum due to rounding    (1) $766,000 and $108,000 of gains for 3Q07 and 3Q06, respectively.    (2) $5,881,000 and $3,256,000 of receipts for 3Q07 and 3Q06, respectively. 2007 Year-To-Date Earnings. The following table summarizes certain items impacting NICS, FFO and FAD: NICS FFO FAD   2007 2006 Change 2007 2006 Change 2007 2006 Change Per diluted share $0.94 $1.04 -10% $2.30 $2.18 6% $2.29 $2.37 -3% Includes impact of:                   Gain (loss) on sales of real property (1) $0.04 $0.04               One-time acquisition finders' fees (2) ($0.02)     ($0.02)     ($0.02)     Cash receipts - prepaid/straight-line rent (3)             $0.14 $0.27   Per diluted share - normalized (a)       $2.32 $2.18 6% $2.18 $2.11 3% (a) Amounts may not sum due to rounding    (1) $2,775,000 and $2,590,000 of gains for 2007 and 2006, respectively.    (2) $1,750,000 of one-time acquisition finders' fees for 2007.    (3) $10,791,000 and $16,276,000 of receipts for 2007 and 2006, respectively. Dividends for Third Quarter 2007. As previously announced, the Board of Directors declared a dividend for the quarter ended September 30, 2007 of $0.66 per share, as compared to $0.64 per share for the same period in 2006. The dividend will be payable November 20, 2007 to stockholders of record on November 2, 2007 and will be the company’s 146th consecutive dividend payment. Outlook for 2007. The company is increasing its investment guidance to a range of $1.1 billion to $1.2 billion from the prior range of $1.0 billion to $1.2 billion for 2007. Acquisition guidance has been increased to a range of $850 to $950 million from $750 to $950 million, while development funding remains unchanged at $250 million. In addition, the company expects $100 to $150 million of dispositions, resulting in net investments of $950 million to $1.1 billion. The company is refining its 2007 guidance for net income available to common stockholders to a range of $1.27 to $1.29 per diluted share, from $1.27 to $1.33 per diluted share. The company is refining its 2007 normalized FFO guidance to a range of $3.11 to $3.13 per diluted share, from $3.09 to $3.15 per diluted share. The company is increasing its 2007 FAD guidance to a range of $3.01 to $3.03 per diluted share, from $2.91 to $2.97 per diluted share primarily due to cash receipts of $5.9 million during the third quarter. 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 Exhibit 16 for a reconciliation of the outlook for net income available to common stockholders to FFO and FAD. Conference Call Information. The company has scheduled a conference call on Wednesday, November 7, 2007 at 9:00 a.m. Eastern Time to discuss its third quarter 2007 results, industry trends, portfolio performance and outlook for the remainder of 2007. Telephone access will be available by dialing 888-211-9994 or 913-312-0717 (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 November 22, 2007. To access the rebroadcast, dial 888-203-1112 or 719-457-0820 (international). The conference ID number is 6488985. 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 Web sites. This earnings release is posted on the company’s Web site 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 the 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. EBITDA stands for earnings before interest, taxes, depreciation and amortization. The company believes that EBITDA, along with net income and cash flow provided from operating activities, is an important supplemental measure because it provides additional information to assess and evaluate the performance of its operations. Additionally, restrictive covenants in the company’s long-term debt arrangements contain financial ratios based on EBITDA. Adjusted EBITDA represents EBITDA as adjusted for stock-based compensation expenses and the provision for loan losses pursuant to covenant provisions of our unsecured lines of credit arrangements. The company primarily utilizes EBITDA to measure its interest coverage ratio, which represents EBITDA divided by total interest, and its fixed charge coverage ratio, which represents EBITDA divided by fixed charges. Fixed charges include total interest, secured debt principal amortization and preferred stock dividends. Net operating income (NOI) is used to evaluate the operating performance of certain real estate properties such as medical office buildings. The company defines NOI as total revenues, including tenant reimbursements and discontinued operations, less property operating expenses, which exclude depreciation and amortization, general and administrative expenses, impairments and interest expense. The company believes NOI provides investors relevant and useful information because it measures the operating performance of our medical office buildings at the property level on an unleveraged basis. The company uses NOI to make decisions about resource allocations and to assess the property level performance of our medical office buildings. The company’s supplemental reporting measures are financial measures that are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating 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., with headquarters in Toledo, Ohio, is an equity real estate investment trust that invests across the full spectrum of senior housing and health care real estate, including independent living/continuing care retirement communities, assisted living facilities, skilled nursing facilities, hospitals, long-term acute care hospitals and medical office buildings. Founded in 1970, the company was the first REIT to invest exclusively in health care facilities. As of September 30, 2007, the company’s broadly diversified portfolio consisted of 631 properties in 38 states. The company also offers a full array of property management and development services. More information is available on the Internet at 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 and properties; its occupancy rates; its ability to acquire or develop properties; its ability to manage properties; its ability to enter into agreements with new viable tenants for vacant space or for properties that the company takes back from financially troubled tenants, if any; its ability to make distributions; 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 prevailing interest rates; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies; operators’ and 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 or tenants, including, but not limited to, their ability to pay rent and repay loans; the company’s ability to transition or sell facilities with a profitable result; the failure of closings to occur as and when anticipated; acts of God affecting the company’s properties; the company’s ability to timely reinvest sale proceeds at similar rates to assets sold; the company’s ability to re-lease space at similar rates as vacancies occur; operator or tenant bankruptcies or insolvencies; government regulations affecting Medicare and Medicaid reimbursement rates; liability or contract claims by or against operators and tenants; unanticipated difficulties and/or expenditures relating to future acquisitions and the integration of multi-property 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. FINANCIAL SCHEDULES FOLLOW     HEALTH CARE REIT, INC. Financial Supplement   CONSOLIDATED BALANCE SHEETS (unaudited) (In thousands) September 30,   2007       2006   Assets   Real estate investments:   Real property owned   Land and land improvements $ 440,365 $ 276,480 Buildings and improvements 4,165,573 2,815,206 Acquired lease intangibles 129,533 0 Real property held for sale, net of accumulated depreciation 6,908 27,678 Construction in progress   229,134     98,675   4,971,513 3,218,039 Less accumulated depreciation and intangible amortization   (449,831 )   (332,925 ) Total real property owned 4,521,682 2,885,114 Loans receivable 271,985 216,870 Less allowance for losses on loans receivable   (7,406 )   (7,156 )   264,579     209,714   Net real estate investments 4,786,261 3,094,828   Other assets: Equity investments 4,617 5,070 Deferred loan expenses 32,082 12,309 Cash and cash equivalents 31,440 15,490 Receivables and other assets   117,427     73,132     185,566     106,001     Total assets $ 4,971,827   $ 3,200,829     Liabilities and stockholders’ equity Liabilities: Borrowings under unsecured lines of credit arrangements $ 145,000 $ 276,000 Senior unsecured notes 1,890,344 1,196,897 Secured debt 513,058 130,405 Liability to subsidiary trust issuing preferred securities 52,184 0 Accrued expenses and other liabilities   105,629     50,558   Total liabilities 2,706,215 1,653,860   Minority interests 4,928 0   Stockholders’ equity: Preferred stock 338,993 276,875 Common stock 81,253 63,005 Capital in excess of par value 2,200,030 1,469,491 Treasury stock (3,952 ) (2,714 ) Cumulative net income 1,025,309 909,894 Cumulative dividends (1,386,899 ) (1,171,302 ) Accumulated other comprehensive income 3,302 0 Other equity   2,648     1,720   Total stockholders’ equity   2,260,684     1,546,969     Total liabilities and stockholders’ equity $ 4,971,827   $ 3,200,829   CONSOLIDATED STATEMENTS OF INCOME (unaudited)   (In thousands, except per share data)   Three Months Ended   Nine Months Ended September 30,   September 30,   2007       2006   2007       2006 Revenues:         Rental income $ 117,930 $ 73,328 $ 332,907 $ 214,032 Interest income 5,947 4,436 17,673 13,178 Other income   1,199     1,019   3,935     3,049 Gross revenues 125,076 78,783 354,515 230,259   Expenses: Interest expense 34,869 23,290 99,570 68,482 Property operating expenses 10,426 0 26,251 0 Depreciation and amortization 39,933 22,947 108,434 66,839 General and administrative expenses 8,626 5,010 28,304 15,788 Loan expense 1,504 782 4,006 2,199 Provision for loan losses   0     250   0     750 Total expenses   95,358     52,279   266,565     154,058   Income from continuing operations before minority interests 29,718 26,504 87,950 76,201   Minority interests   (121 )   0   (407 )   0   Income from continuing operations 29,597 26,504 87,543 76,201   Discontinued operations: Gain (loss) on sales of properties 766 108 2,775 2,590 Income (loss) from discontinued operations, net   483     201   2,138     1,000   1,249     309   4,913     3,590   Net income 30,846 26,813 92,456 79,791   Preferred dividends   6,317     5,333   18,952     15,998   Net income available to common stockholders $ 24,529   $ 21,480 $ 73,504   $ 63,793   Average number of common shares outstanding: Basic 80,710 62,524 77,686 60,766 Diluted 81,163 62,866 78,234 61,102   Net income available to common stockholders per share: Basic $ 0.30 $ 0.34 $ 0.95 $ 1.05 Diluted 0.30 0.34 0.94 1.04   Common dividends per share $ 0.66 $ 0.64 $ 1.6191 $ 1.90   HEALTH CARE REIT, INC. Financial Supplement - September 30, 2007   Portfolio Composition Exhibit 1 ($000’s except Investment per Bed/Unit/Sq. Ft.)       Balance Sheet Data   #Properties     Balance   % Balance Real Property 594   $ 4,521,682 94% Loans Receivable (1)   37         271,985     6%   Totals 631   $ 4,793,667 100%   Investment Balances   #Properties     Investment (2)   % Investment Independent/ CCRCs 57   $ 678,145 14% Assisted Living Facilities 201   1,002,599 21% Skilled Nursing Facilities 234   1,544,271 32% Medical Office Buildings 117   1,233,327 26% Specialty Care Facilities   22         337,775     7%   Totals 631   $ 4,796,117 100%   Committed Investments   #Properties #Beds/Unitsor Sq. Ft. Committed Balance (3)   Investmentper metric Independent/ CCRCs 57 6,615 units $ 1,021,974 $ 154,493  unit Assisted Living Facilities 201 12,052 units 1,125,080 93,352  unit Skilled Nursing Facilities 234 31,680 beds 1,557,942 49,177  bed Medical Office Buildings 117 4,837,991 sq. ft. 1,306,558 270 sq. ft.  Specialty Care Facilities   22   1,541 beds   377,991     245,289  bed Totals 631 -na- $ 5,389,545 -na- Notes:  (1)  Includes $799,000 of loans on non-accrual. (2)  Real Estate Investments include gross real estate investments and credit enhancements which amounted to $4,793,667,000 and $2,450,000, respectively. (3)  Committed Balance includes gross real estate investments, credit enhancements and unfunded construction commitments for which initial funding had commenced. Selected Facility Data   Exhibit 2   Coverage Data % Payor Mix - Revenues BeforeMgt. Fees AfterMgt. Fees Census Private Medicare Medicaid   Independent/CCRCs 92% 96% 3% 1% 1.46x 1.26x Assisted Living Facilities 88% 85% 0% 15% 1.59x 1.37x Skilled Nursing Facilities 84% 19% 30% 51% 2.21x 1.60x Medical Office Buildings 90% 100% 0% 0% -na- -na- Specialty Care Facilities 58% 25% 58% 17% 2.57x   2.01x Weighted Averages 1.96x 1.52x   Notes: Data as of June 30, 2007. Payor mix represents percentage of facility/operator revenues. Investment Concentrations ($000’s)           Exhibit 3             Concentration by Customer   # Properties   Investment     % Investment Emeritus Corporation 50 $ 356,553 7% Brookdale Senior Living Inc. 84 260,544 5% Life Care Centers of America, Inc. 26 255,774 5% Home Quality Management, Inc. 35 219,043 5% Merrill Gardens L.L.C. 13 178,881 4% Remaining portfolio   423     3,525,322     74%   Totals 631 $ 4,796,117 100%   Concentration by Region   # Properties   Investment     % Investment South 379 $ 2,524,301 53% West 88 899,708 19% Midwest 81 732,505 15% Northeast   83     639,603     13%   Totals 631 $ 4,796,117 100%   Concentration by State   # Properties   Investment     % Investment Florida 88 $ 768,265 16% Texas 84 625,828 13% Massachusetts 41 349,033 7% California 24 343,247 7% Ohio 31 278,448 6% Remaining portfolio   363     2,431,296     51%   Totals 631 $ 4,796,117 100%   NOI Reconciliation ($000’s)     Exhibit 4   GrossRevenues (1) PropertyOperatingExpenses Net OperatingIncome Current Quarter Independent/ CCRCs $ 11,765 9 % $ 11,765 10 % Assisted Living Facilities 28,734 23 % 28,734 25 % Skilled Nursing Facilities 40,970 33 % 40,970 35 % Medical Office Buildings 30,984 25 % $ 10,296 99 % 20,688 18 % Specialty Care Facilities 6,377 5 % 130 1 % 6,247 5 % Interest income 5,947 5 % 5,947 5 % Other income   1,199   0 %         1,199   2 % Totals $ 125,976 100 % $ 10,426 100 % $ 115,550 100 %   Year-To-Date Independent/ CCRCs $ 33,060 9 % $ 33,060 10 % Assisted Living Facilities 86,314 24 % 86,314 26 % Skilled Nursing Facilities 118,007 33 % 118,007 35 % Medical Office Buildings 81,332 23 % $ 26,044 99 % 55,288 17 % Specialty Care Facilities 18,581 5 % 207 1 % 18,374 6 % Interest income 17,673 5 % 17,673 5 % Other income   3,935   1 %         3,935   1 % Totals $ 358,902 100 % $ 26,251 100 % $ 332,651 100 %   Notes: (1)  Revenues include gross revenues and revenues from discontinued operations. Revenue Maturities ($000’s) Exhibit 5     Year     Investment Properties Rental Income (1)   Operating PropertiesRental Income (1)   InterestIncome (1)   TotalRevenues   % of Total 2007 $ 967 $ 3,119 $ 1,777 $ 5,863 1% 2008 423 12,541 3,532 16,496 4% 2009 930 7,439 3,227 11,596 2% 2010 578 9,886 2,500 12,964 3% 2011 6,921 8,061 1,478 16,460 4% Thereafter     336,756     53,164     13,793     403,713   86%   Totals $ 346,575 $ 94,210 $ 26,307 $ 467,092 100%   Notes:  (1)  Annualized revenue impact by year. Reflects contract rate of interest for loans, annual straight-line rent for leases with fixed escalators or annual cash rent for leases with contingent escalators, net of collectibility reserves if applicable. Debt Maturities and Principal Payments ($000’s)   Exhibit 6         Year   Line of Credit   Senior Notes (1)   Secured Debt (1)   TrustPreferredLiability (1)   Total   2007 $ 0 $ 0 $ 2,133 $ 51,000 (2) $ 53,133 2008 0 42,330 27,719 0 70,049 2009 0 0 53,541 0 53,541 2010 0 0 15,230 0 15,230 2011 145,000 0 52,371 0 197,371 2012 0 250,000 23,809 0 273,809 2013 0 300,000 52,237 0 352,237 Thereafter   0       1,295,000       284,996       0       1,579,996   Totals $ 145,000 $ 1,887,330 $ 512,036 $ 51,000 $ 2,595,366   Notes:   (1) Amounts above represent principal amounts due and do not reflect unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet. (2)  Trust preferred securities were repurchased on November 6, 2007. Fill-Up Concentrations ($000’s)     Exhibit 7               Facility Type # Properties   # Beds/Units   InvestmentBalance   % Investment Independent/ CCRCs 9 1,615 $ 230,121 5% Assisted Living Facilities 19 1,093 152,958 3% Skilled Nursing Facilities 9 1,067 81,439 2% Specialty Care Facilities 1     62       15,235     0%   Totals 38 3,837 $ 479,753 10%     Occupancy # Properties   Average Monthsin Operation   Revenues (1)   % Revenues 0% - 50% 7 4 $ 1,012 1% 50% - 70% 11 7 2,178 2% 70% + 20     14       6,910     6%   Totals 38 10 $ 10,100 8% Notes:  (1)  Revenues include gross revenues and revenues from discontinued operations for the three months ended September 30, 2007. Investment Activity ($000’s)             Exhibit 8                 Three Months Ended Nine Months Ended September 30, 2007 September 30, 2007 Funding by Investment Type Real Property $ 198,811 86 % $ 769,210 86 % Loans Receivable     31,205     14 %       122,596     14 %   Totals $ 230,016 100 % $ 891,806 100 %   Funding by Facility Type Independent/CCRCs $ 95,609 42 % $ 168,450 19 % Assisted Living Facilities 15,503 7 % 72,896 8 % Skilled Nursing Facilities 33,451 15 % 193,914 22 % Medical Office Buildings 55,549 24 % 375,852 42 % Specialty Care Facilities     29,904     12 %       80,694     9 %   Totals $ 230,016 100 % $ 891,806 100 %   Development Activity ($000’s)   Exhibit 9                   Facility Type Balance atDec. 31, 2006 2007 YTDFundings 2007 YTDConversions Balance atSept. 30, 2007 CommittedBalances Independent/ CCRCs $ 61,709 $ 83,414 $ (24,496 ) $ 120,627 $ 464,456 Assisted Living Facilities 55,197 35,132 (56,556 ) 33,773 156,255 Skilled Nursing Facilities 14,852 15,427 (16,557 ) 13,722 27,393 Medical Office Buildings 0 10,405 0 10,405 83,638 Specialty Care Facilities   6,464   44,143     0     50,607   90,820   Totals $ 138,222 $ 188,521 $ (97,609 ) $ 229,134 $ 822,562   Development Funding Projections for Existing Projects ($000's) Projected Future Fundings Facility Type Projects # Beds/Unitsor Sq. Ft. 2007Fundings FundingsThereafter UnfundedCommitments Independent/ CCRCs 12    1,746 $ 35,531 $ 308,298 $ 343,829 Assisted Living Facilities 7    772 7,398 115,084 122,482 Skilled Nursing Facilities 2    193 1,650 12,021 13,671 Medical Office Buildings 1    234,221 0 73,233 73,233 Specialty Care Facilities   5    258   10,376     29,837   40,213   Totals 27    $ 54,955 $ 538,473 $ 593,428   Project Conversion Projections ($000's)   2007 Quarterly Conversions Annual Projections Quarter Amount Projected AverageInitial Yields (1) Year Amount Projected AverageInitial Yields (1) 1Q07 actual $ 6,921 9.06 % 2007 projected $ 170,394 9.33 % 2Q07 actual 67,300 9.35 % 2008 projected 270,443 9.22 % 3Q07 actual 23,388 9.36 % 2009 projected 128,725 9.91 % 4Q07 projected   72,785   9.33 % 2010+ projected   350,609   9.37 % Totals $ 170,394 9.33 % Totals $ 920,171 9.43 % Notes:  All amounts include both cash advances and non-cash additions such as capitalized interest. (1) Actual initial yields may be higher if the underlying market rates increase. Disposition Activity ($000's)     Exhibit 10                         Three Months Ended Nine Months Ended September 30, 2007 September 30, 2007 Dispositions by Investment  Type Real Property $ 40,992 83 % $ 63,165 62 % Loans Receivable     8,229     17 %       38,095     38 % Totals $ 49,221 100 % $ 101,260 100 %   Dispositions by Facility Type Assisted Living Facilities $ 40,992 83 % $ 68,467 68 % Skilled Nursing Facilities 8,229 17 % 15,607 15 % Independent/CCRCs                 17,186     17 % Totals $ 49,221 100 % $ 101,260 100 % Discontinued Operations ($000’s)     Exhibit 11     Three Months Ended Nine Months Ended September 30, September 30, 2007 2006 2007 2006 Revenues Rental income   $ 900 $ 2,976 $ 4,387 $ 9,924   Expenses Interest expense 213 984 1,138 3,117 Depreciation and amortization 204 1,579 1,111 5,078 General and administrative     0   212   0   729   Income (loss) from discontinued operations, net   $ 483 $ 201 $ 2,138 $ 1,000       Exhibit 12     Current Capitalization ($000’s except share price) Leverage & Performance Ratios Balance   % Balance Borrowings Under Bank Lines $ 145,000 3% Debt/Total Book Cap 53% Long-Term Debt Obligations 2,403,402 49% Trust Preferred Liability 52,184 1% Debt/Undepreciated Book Cap 49% Stockholders’ Equity   2,260,684   47%   Total Book Capitalization $ 4,861,270 100% Debt/Total Market Cap 40%   Common Shares Outstanding (000's) 81,384 Interest Coverage 2.81x 3rd Qtr. Period-End Share Price $ 44.24 2.82x YTD Common Stock Market Value $ 3,600,428 55% Interest Coverage 2.85x 3rd Qtr. Preferred Stock 338,993 5% - adjusted 2.87x YTD Borrowings Under Bank Lines 145,000 2% Fixed Charge Coverage 2.31x 3rd Qtr. Trust Preferred Liability 52,184 1% 2.30x YTD Long-Term Debt Obligations   2,403,402   37%   Fixed Charge Coverage 2.34x 3rd Qtr. Total Market Capitalization $ 6,540,007 100% - adjusted 2.34x YTD EBITDA Reconciliation ($000's)   Exhibit 13     Three Months Ended Nine Months Ended September 30,   September 30,   2007 2006 2007 2006   Net income $ 30,846 $ 26,813 $ 92,456 $ 79,791 Interest expense (1) 35,082 24,274 100,708 71,599 Tax expense (benefit) (23 ) 70 (81 ) 82 Depreciation and amortization (1) 40,137 24,526 109,545 71,917 Amortization of deferred loan expenses   1,504     782     4,006     2,199   EBITDA 107,546 76,465 306,634 225,588 Stock-based compensation expense 1,301 839 5,753 4,191 Provision for loan losses   0     250     0     750   EBITDA - adjusted $ 108,847 $ 77,554 $ 312,387 $ 230,529   Interest Coverage Ratio Interest expense (1) $ 35,082 $ 24,274 $ 100,708 $ 71,599 Capitalized interest   3,162     1,384     8,058     2,494   Total interest 38,244 25,658 108,766 74,093 EBITDA $ 107,546   $ 76,465   $ 306,634   $ 225,588   Interest coverage ratio 2.81 x 2.98 x 2.82 x 3.04 x   EBITDA - adjusted $ 108,847   $ 77,554   $ 312,387   $ 230,529   Interest coverage ratio - adjusted 2.85 x 3.02 x 2.87 x 3.11 x   Fixed Charge Coverage Ratio Total interest (1) $ 38,244 $ 25,658 $ 108,766 $ 74,093 Secured debt principal amortization 2,022 773 5,816 2,184 Preferred dividends   6,317     5,333     18,952     15,998   Total fixed charges 46,583 31,764 133,534 92,275 EBITDA   $ 107,546   $ 76,465   $ 306,634   $ 225,588   Fixed charge coverage ratio 2.31 x 2.41 x 2.30 x 2.44 x   EBITDA - adjusted $ 108,847   $ 77,554   $ 312,387   $ 230,529   Fixed charge coverage ratio - adjusted 2.34 x 2.44 x 2.34 x 2.50 x   Notes:   (1)  Depreciation and amortization and interest expense include depreciation and amortization and interest expense from discontinued operations. Exhibit 14 Funds Available For Distribution Reconciliation (Amounts in 000's except per share data)   Three Months Ended   Nine Months Ended September 30, September 30,   2007       2006     2007       2006     Net income available to common stockholders $ 24,529 $ 21,480 $ 73,504 $ 63,793 Depreciation and amortization (1) 40,137 24,526 109,545 71,917 Loss (gain) on sales of properties (766 ) (108 ) (2,775 ) (2,590 ) Minority interests 85 0 (2 ) 0 Gross straight-line rental income (4,555 ) (1,904 ) (12,664 ) (6,520 ) Prepaid/straight-line rent receipts 5,881 3,256 10,791 16,276 Amortization related to above/(below) market leases, net 268 0 (656 ) 0 Amortization of deferred loan expenses 1,504 782 4,006 2,199 Cap Ex, tenant improvements, lease commissions   (704 )   0     (2,529 )   0   Funds available for distribution 66,379 48,032 179,220 145,075 One-time acquisition finder's fees 0 0 1,750 0 Prepaid/straight-line rent receipts   (5,881 )   (3,256 )   (10,791 )   (16,276 ) Funds available for distribution - normalized $ 60,498 $ 44,776 $ 170,179 $ 128,799   Average common shares outstanding: Basic 80,710 62,524 77,686 60,766 Diluted 81,163 62,866 78,234 61,102   Per share data: Net income available to common stockholders Basic $ 0.30 $ 0.34 $ 0.95 $ 1.05 Diluted 0.30 0.34 0.94 1.04   Funds available for distribution Basic $ 0.82 $ 0.77 $ 2.31 $ 2.39 Diluted 0.82 0.76 2.29 2.37   Funds available for distribution - normalized Basic $ 0.75 $ 0.72 $ 2.19 $ 2.12 Diluted 0.75 0.71 2.18 2.11   FAD Payout Ratio Dividends per common share (2) $ 0.66 $ 0.64 $ 1.96 $ 1.90 FAD per diluted share $ 0.82   $ 0.76   $ 2.29   $ 2.37   FAD payout ratio 80%   84%   86%   80%     FAD Payout Ratio - Normalized Dividends per common share (2) $ 0.66 $ 0.64 $ 1.96 $ 1.90 FAD per diluted share - normalized $ 0.75   $ 0.71   $ 2.18   $ 2.11   FAD payout ratio - normalized 88%   90%   90%   90%   Notes: (1)  Depreciation and amortization includes depreciation and amortization from discontinued operations. (2)  Includes $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger. Funds From Operations Reconciliation     Exhibit 15 (Amounts in 000's except per share data)     Three Months Ended Nine Months Ended September 30, September 30,   2007     2006     2007     2006     Net income available to common stockholders $ 24,529 $ 21,480 $ 73,504 $ 63,793 Depreciation and amortization (1) 40,137 24,526 109,545 71,917 Loss (gain) on sales of properties (766 ) (108 ) (2,775 ) (2,590 ) Minority interests   (70 )   0     (256 )   0   Funds from operations $ 63,830 $ 45,898 $ 180,018 $ 133,120 One-time acquisition finder's fees   0     0     1,750     0   Funds from operations - normalized $ 63,830 $ 45,898 $ 181,768 $ 133,120   Average common shares outstanding: Basic 80,710 62,524 77,686 60,766 Diluted 81,163 62,866 78,234 61,102   Per share data: Net income available to common stockholders Basic $ 0.30 $ 0.34 $ 0.95 $ 1.05 Diluted 0.30 0.34 0.94 1.04   Funds from operations Basic $ 0.79 $ 0.73 $ 2.32 $ 2.19 Diluted 0.79 0.73 2.30 2.18   Funds from operations - normalized Basic $ 0.79 $ 0.73 $ 2.34 $ 2.19 Diluted 0.79 0.73 2.32 2.18   FFO Payout Ratio Dividends per common share (2) $ 0.66 $ 0.64 $ 1.96 $ 1.90 FFO per diluted share $ 0.79   $ 0.73   $ 2.30   $ 2.18   FFO payout ratio 84%   88%   85%   87%     FFO Payout Ratio - Normalized Dividends per share (2) $ 0.66 $ 0.64 $ 1.96 $ 1.90 FFO per diluted share - normalized $ 0.79   $ 0.73   $ 2.32   $ 2.18   FFO payout ratio - normalized 84%   88%   84%   87%   Notes: (1)  Depreciation and amortization includes depreciation and amortization from discontinued operations. (2)  Includes $0.3409 prorated dividend paid on December 28, 2006 in connection with the Windrose merger. Outlook Reconciliations     Exhibit 16 (Amounts in 000's except per share data)       Previous Outlook Current Outlook Year Ended Year Ended December 31, 2007   December 31, 2007 Low High Low High   FFO Reconciliation: Net income available to common stockholders $ 101,610 $ 106,410 $ 101,825 $ 103,425 Loss (gain) on sales of properties (2,010 ) (2,010 ) (2,775 ) (2,775 ) Depreciation and amortization (1)   146,000     146,000     148,000     148,000   Funds from operations 245,600 250,400 247,050 248,650 One-time acquisition finders' fees   1,750     1,750     1,750     1,750   Funds from operations - normalized $ 247,350 $ 252,150 $ 248,800 $ 250,400   Average common shares outstanding (diluted) 80,000 80,000 80,000 80,000   Per share data (diluted): Net income available to common stockholders $ 1.27 $ 1.33 $ 1.27 $ 1.29 Funds from operations 3.07 3.13 3.09 3.11 Funds from operations - normalized 3.09 3.15 3.11 3.13     FAD Reconciliation: Net income available to common stockholders $ 101,610 $ 106,410 $ 101,825 $ 103,425 Loss (gain) on sales of properties (2,010 ) (2,010 ) (2,775 ) (2,775 ) Depreciation and amortization (1) 146,000 146,000 148,000 148,000 Gross straight-line rental income (16,000 ) (16,000 ) (17,000 ) (17,000 ) Prepaid/straight-line rent receipts 4,910 4,910 10,791 10,791 Amortization related to above/below market leases (2,000 ) (2,000 ) (1,000 ) (1,000 ) Amortization of deferred loan expenses 6,000 6,000 6,000 6,000 Cap Ex, tenant improvements, lease commissions   (6,000 )   (6,000 )   (5,000 )   (5,000 ) Funds available for distribution 232,510 237,310 240,841 242,441 One-time acquisition finders' fees 1,750 1,750 1,750 1,750 Prepaid/straight-line rent receipts   (4,910 )   (4,910 )   (10,791 )   (10,791 ) Funds available for distribution - normalized $ 229,350 $ 234,150 $ 231,800 $ 233,400   Average common shares outstanding (diluted) 80,000 80,000 80,000 80,000   Per share data (diluted): Net income available to common stockholders $ 1.27 $ 1.33 $ 1.27 $ 1.29 Funds available for distribution 2.91 2.97 3.01 3.03 Funds available for distribution - normalized 2.87 2.93 2.90 2.92 Notes: (1)  Depreciation and amortization includes depreciation and amortization from discontinued operations.