Welltower 8K 2012 Q4 Other Events | WELL Filing

EXHIBIT 99.1

Item 6. Selected Financial Data

The following selected financial data for the five years ended December 31, 2012 are derived from our audited consolidated financial statements (in thousands, except per share data):

		Year Ended December 31,
		2008		2009		2010		2011		2012
Operating Data
Revenues⁽¹⁾		$	397,564	$	434,788	$	569,371	$	1,324,014	$	1,816,397
Expenses⁽¹⁾			306,968		331,310		535,249		1,210,509		1,629,341
Income from continuing operations before income taxes and income from unconsolidated entities			90,596		103,478		34,122		113,505		187,056
Income tax expense			(1,306)		(168)		(364)		(1,388)		(7,612)
Income from unconsolidated entities			-		-		6,673		5,772		2,482
Income from continuing operations			89,290		103,310		40,431		117,889		181,926
Income from discontinued operations, net⁽¹⁾			194,135		89,617		88,453		94,827		112,914
Net income			283,425		192,927		128,884		212,716		294,840
Preferred stock dividends			23,201		22,079		21,645		60,502		69,129
Preferred stock redemption charge			-		-		-		-		6,242
Net income (loss) attributable to noncontrolling interests			126		(342)		357		(4,894)		(2,415)
Net income attributable to common stockholders		$	260,098	$	171,190	$	106,882	$	157,108	$	221,884

Other Data
Average number of common shares outstanding:
	Basic		93,732		114,207		127,656		173,741		224,343
	Diluted		94,309		114,612		128,208		174,401		225,953

Per Share Data
Basic:
	Income from continuing operations attributable to common stockholders	$	0.70	$	0.71	$	0.14	$	0.36	$	0.49
	Discontinued operations, net		2.07		0.78		0.69		0.55		0.50
	Net income attributable to common stockholders *	$	2.77	$	1.50	$	0.84	$	0.90	$	0.99
Diluted:
	Income from continuing operations attributable to common stockholders	$	0.70	$	0.71	$	0.14	$	0.36	$	0.48
	Discontinued operations, net		2.06		0.78		0.69		0.54		0.50
	Net income attributable to common stockholders *	$	2.76	$	1.49	$	0.83	$	0.90	$	0.98

Cash distributions per common share		$	2.70	$	2.72	$	2.74	$	2.835	$	2.960


* Amounts may not sum due to rounding
(1) We have reclassified the income and expenses attributable to properties sold prior to or held for sale at September 30, 2013, to discontinued operations for all periods presented. See Note 5 to our audited consolidated financial statements.

			December 31,
Balance Sheet Data			2008		2009		2010		2011		2012
	Net real estate investments	$	5,854,179	$	6,080,620	$	8,590,833	$	13,942,350	$	17,423,009
	Total assets		6,215,031		6,367,186		9,451,734		14,924,606		19,549,109
	Total long-term obligations		2,847,676		2,414,022		4,469,736		7,240,752		8,531,899
	Total liabilities		2,976,746		2,559,735		4,714,081		7,612,309		8,993,998
	Total preferred stock		289,929		288,683		291,667		1,010,417		1,022,917
	Total equity		3,238,285		3,807,451		4,733,100		7,278,647		10,520,519

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is based primarily on the consolidated financial statements of Health Care REIT, Inc. for the periods presented and should be read together with the notes thereto contained in this Current Report on Form 8-K. Other important factors are identified in “Item 1 — Business” and “Item 1A — Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2012.

Executive Summary

Company Overview

Health Care REIT, Inc. is a real estate investment trust (“REIT”) that has been at the forefront of seniors housing and health care real estate since the company was founded in 1970. We are an S&P 500 company headquartered in Toledo, Ohio. Our portfolio spans the full spectrum of seniors housing and health care real estate, including seniors housing communities, skilled nursing/post-acute facilities, medical office buildings, inpatient and outpatient medical centers and life science facilities. Our capital programs, when combined with comprehensive planning, development and property management services, make us a single-source solution for acquiring, planning, developing, managing, repositioning and monetizing real estate assets.

The following table summarizes our consolidated portfolio as of December 31, 2012:

	Investments		Percentage of	Number of
Type of Property	(in thousands)		Investments	Properties
Seniors housing triple-net	$	8,154,650	46.8%	573
Seniors housing operating⁽¹⁾		4,948,536	28.4%	154
Medical facilities⁽²⁾		4,319,823	24.8%	246
Totals	$	17,423,009	100.0%	973


(1) Excludes 39 properties with an investment amount of $427,187,000 which relates to our share of investments in unconsolidated entities with Chartwell. Please see Note 7 to our consolidated financial statements for additional information.
(2) Excludes 13 properties with an investment amount of $375,780,000 which relates to our share of investments in unconsolidated entities with Forest City and a strategic medical partnership. Please see Note 7 to our consolidated financial statements for additional information.

Business Strategy

Our primary objectives are to protect stockholder capital and enhance stockholder value. We seek to pay consistent cash dividends to stockholders and create opportunities to increase dividend payments to stockholders as a result of annual increases in net operating income and portfolio growth. To meet these objectives, we invest across the full spectrum of seniors housing and health care real estate and diversify our investment portfolio by property type, customer and geographic location.

Substantially all of our revenues are derived from operating lease rentals, resident fees and services, and interest earned on outstanding loans receivable. These items represent our primary sources of liquidity to fund distributions and depend upon the continued ability of our obligors to make contractual rent and interest payments to us and the profitability of our operating properties. To the extent that our customers/partners experience operating difficulties and become unable to generate sufficient cash to make payments to us, there could be a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. To mitigate this risk, we monitor our investments through a variety of methods determined by the type of property. Our proactive and comprehensive asset management process for seniors housing properties generally includes review of monthly financial statements and other operating data for each property, review of obligor/partner creditworthiness, property inspections, and review of covenant compliance relating to licensure, real estate taxes, letters of credit and other collateral. Our internal property management division actively manages and monitors the medical office building portfolio with a comprehensive process including tenant relations, lease expirations, the mix of health service providers, hospital/health system relationships, property performance, capital improvement needs, and market conditions among other things. In monitoring our portfolio, our personnel use a proprietary database to collect and analyze property-specific data. Additionally, we conduct extensive research to ascertain industry trends. We evaluate the operating environment in each property’s market to determine the likely trend in operating performance of the facility. When we identify unacceptable trends, we seek to mitigate, eliminate or transfer the risk. Through these efforts, we are generally able to intervene at an early stage to address any negative trends, and in so doing, support both the collectability of revenue and the value of our investment.

In addition to our asset management and research efforts, we also structure our investments to help mitigate payment risk. Operating leases and loans are normally credit enhanced by guaranties and/or letters of credit. In addition, operating leases are typically structured as master leases and loans are generally cross-defaulted and cross-collateralized with other real estate loans, operating leases or agreements between us and the obligor and its affiliates.

For the year ended December 31, 2012, rental income, resident fees and services and interest and other income represented 61%, 37%, and 2% respectively, of total revenues (including discontinued operations). Substantially all of our operating leases are designed

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. Our yield on loans receivable depends upon a number of factors, including the stated interest rate, the average principal amount outstanding during the term of the loan and any interest rate adjustments.

Our primary sources of cash include rent and interest receipts, resident fees and services, borrowings under our primary unsecured line of credit arrangement, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances, property operating expenses and general and administrative expenses. Depending upon the availability and cost of external capital, we believe our liquidity is sufficient to fund these uses of cash.

We also continuously evaluate opportunities to finance future investments. New investments are generally funded from temporary borrowings under our primary unsecured line of credit arrangement, internally generated cash and the proceeds from investment dispositions. Our investments generate cash from net operating income and principal payments on loans receivable. Permanent financing for future investments, which replaces funds drawn under our primary unsecured line of credit arrangement, has historically been provided through a combination of the issuance of public debt and equity securities and the incurrence or assumption of secured debt.

Depending upon market conditions, we believe that new investments will be available in the future with spreads over our cost of capital that will generate appropriate returns to our stockholders. It is also possible that investment dispositions may occur in the future. To the extent that investment dispositions exceed new investments, our revenues and cash flows from operations could be adversely affected. We expect to reinvest the proceeds from any investment dispositions in new investments. To the extent that new investment requirements exceed our available cash on-hand, we expect to borrow under our primary unsecured line of credit arrangement. At December 31, 2012, we had $1.0 billion of cash and cash equivalents, $107.7 million of restricted cash and $2.0 billion of available borrowing capacity under our primary unsecured line of credit arrangement. Please see Note 21 of our consolidated financial statements for information regarding subsequent events that impact our liquidity.

Capital Market Outlook

The capital markets remain supportive of our investment strategy. For the year ended December 31, 2012, we raised over $6.0 billion in aggregate gross proceeds through issuance of common and preferred stock, unsecured debt and a Canadian denominated term loan. The capital raised, in combination with available cash and borrowing capacity under our primary unsecured line of credit arrangement, supported $4.9 billion in gross new investments for the year. We expect attractive investment opportunities to remain available in the future as we continue to leverage the benefits of our relationship investment strategy.

Key Transactions in 2012

We completed the following capital transactions during the year ended December 31, 2012:

· issued 64.4 million shares of common stock, generating $3.4 billion of proceeds in three public issuances;

· raised $120.4 million in proceeds from issuance of 2.1 million shares of common stock under our DRIP;

· issued 11.5 million shares of 6.5% preferred stock, generating $287.5 million of proceeds, and redeemed $275 million of 7.716% preferred stock;

· issued $1.8 billion of senior unsecured notes with average rates of 3.7% and average terms of 10.5 years;

· funded $250 million Canadian denominated unsecured term loan to help hedge our Chartwell investment;

· completed the redemption/conversion of $293.7 million of 4.75% convertible senior unsecured notes; and

· extinguished $360 million of secured debt bearing a weighted-average interest rate of 4.67%.

We completed $4.9 billion of gross investments during the year, including 76% from existing relationships. The following summarizes investments made during the year ended December 31, 2012 (dollars in thousands):

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Properties		Investment Amount⁽¹⁾	Capitalization Rates⁽²⁾		Book Amount⁽³⁾
Acquisitions/JVs:
Seniors housing triple-net	51	$	1,068,123	7.3%	$	1,071,438
Seniors housing operating	80		2,029,109	6.7%		1,840,524
Medical facilities	35		791,279	6.9%		837,705
Total acquisitions/JVs	166		3,888,511	7.0%		3,749,667
Construction in progress			314,514			314,514
Loan advances⁽⁴⁾			665,094			665,094
Total		$	4,868,119		$	4,729,275


(1) Represents stated purchase price including cash and any assumed debt but excludes fair value adjustments pursuant to U.S. GAAP.
(2) Represents annualized contractual or projected income to be received in cash divided by investment amounts.
(3) Represents amounts recorded on our books including fair value adjustments pursuant to U.S. GAAP. See Notes 3, 6 and 7 to our consolidated financial statements for additional information.
(4) Includes $580,834,000 in advances under the Sunrise loan which was acquired upon merger consummation on January 9, 2013. See Note 21 to our consolidated financial statements for additional information.

We completed $534 million of dispositions during the year, generating $635 million in proceeds and $101 million in net gains. The following summarizes dispositions made during the year ended December 31, 2012 (dollars in thousands):

	Properties		Proceeds⁽¹⁾	Capitalization Rates⁽²⁾		Book Amount⁽³⁾
Property sales:
Seniors housing triple-net	73	$	489,216	8.5%	$	372,378
Seniors housing operating	-		-	0.0%		-
Medical facilities	18		133,055	9.9%		149,344
Total property sales	91		622,271	8.8%		521,722
Loan payoffs	5		12,555			12,555
Total dispositions	96	$	634,826		$	534,277


(1) Represents proceeds received upon disposition including any seller financing. See Notes 5 and 6 to our consolidated financial statements for additional information.
(2) Represents annualized contractual income that was being received in cash at date of disposition divided by disposition proceeds.
(3) Represents carrying value of assets at time of disposition.

The following other events occurred during the year ended December 31, 2012:

· Our Board of Directors increased the annual cash dividend to $3.06 per common share ($0.765 per share quarterly), as compared to $2.96 per common share for 2012, beginning in February 2013. The dividend declared for the quarter ended December 31, 2012 represents the 167^th consecutive quarterly dividend payment.

· We declassified our Board of Directors in May.

Key Performance Indicators, Trends and Uncertainties

We utilize several key performance indicators to evaluate the various aspects of our business. These indicators are discussed below and relate to operating performance, credit strength and concentration risk. Management uses these key performance indicators to facilitate internal and external comparisons to our historical operating results, in making operating decisions and for budget planning purposes.

Operating Performance. We believe that net income attributable to common stockholders (“NICS”) is the most appropriate earnings measure. Other useful supplemental measures of our operating performance include funds from operations (“FFO”), net operating income from continuing operations (“NOI”) and same store cash NOI (“SSCNOI”); however, these supplemental measures are not defined by U.S. generally accepted accounting principles (“U.S. GAAP”). Please refer to the section entitled “Non-GAAP Financial Measures” for further discussion and reconciliations of FFO, NOI and SSCNOI. These earnings measures and their relative

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

per share amounts are widely used by investors and analysts in the valuation, comparison and investment recommendations of companies. The following table reflects the recent historical trends of our operating performance measures for the periods presented (in thousands):

	Year Ended December 31,
	2010		2011		2012

Net income attributable to common stockholders	$	106,882	$	157,108	$	221,884
Funds from operations		280,022		524,902		697,557
Net operating income from continuing operations		491,593		946,217		1,245,536
Same store cash net operating income		314,300		325,898		328,632

Credit Strength. We measure our credit strength both in terms of leverage ratios and coverage ratios. The leverage ratios indicate how much of our balance sheet capitalization is related to long-term debt. The coverage ratios indicate our ability to service interest and fixed charges (interest, secured debt principal amortization and preferred dividends). We expect to maintain capitalization ratios and coverage ratios sufficient to maintain compliance with our debt covenants. The coverage ratios are based on adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) which is discussed in further detail, and reconciled to net income, below in “Non-GAAP Financial Measures.” Leverage ratios and coverage ratios are widely used by investors, analysts and rating agencies in the valuation, comparison, investment recommendations and rating of companies. The following table reflects the recent historical trends for our credit strength measures for the periods presented:

	Year Ended December 31,
	2010	2011	2012

Debt to book capitalization ratio	49%	50%	45%
Debt to undepreciated book capitalization ratio	45%	46%	41%
Debt to market capitalization ratio	38%	38%	33%

Adjusted interest coverage ratio	3.39x	3.02x	3.31x
Adjusted fixed charge coverage ratio	2.76x	2.37x	2.58x

Concentration Risk. We evaluate our concentration risk in terms of asset mix, investment mix, customer mix and geographic mix. Concentration risk is a valuable measure in understanding what portion of our investments could be at risk if certain sectors were to experience downturns. Asset mix measures the portion of our investments that are real property. In order to qualify as an equity REIT, at least 75% of our real estate investments must be real property whereby each property, which includes the land, buildings, improvements, intangibles and related rights, is owned by us. Investment mix measures the portion of our investments that relate to our various property types. Customer mix measures the portion of our investments that relate to our top five customers. Geographic mix measures the portion of our investments that relate to our top five states (or international equivalents). The following table reflects our recent historical trends of concentration risk by investment balance for the periods presented:

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

		December 31,
		2010	2011	2012

Asset mix:
	Real property	91%	95%	91%
	Real estate loans receivable	5%	2%	5%
	Investments in unconsolidated entities	4%	3%	4%

Investment mix:⁽¹⁾
	Seniors housing triple-net	53%	54%	47%
	Seniors housing operating	13%	20%	28%
	Medical facilities	34%	26%	25%

Customer mix:⁽¹⁾
	Genesis HealthCare, LLC		18%	15%
	Sunrise Senior Living Inc.			6%
	Merrill Gardens L.L.C.	9%	8%	6%
	Belmont Village, LP			5%
	Benchmark Senior Living, LLC		6%	5%
	Brandywine Senior Living, LLC	7%	5%
	Senior Living Communities, LLC	7%	4%
	Senior Star Living	5%
	Brookdale Senior Living Inc.	4%
	Remaining customers	68%	59%	63%

Geographic mix:⁽¹⁾
	California	10%	10%	9%
	Texas	8%	7%	9%
	New Jersey		10%	9%
	Florida	11%	7%	7%
	Pennsylvania			5%
	Massachusetts		6%
	Washington	6%
	Ohio	6%
	Remaining	59%	60%	61%


(1) Excludes our share of investments in unconsolidated entities.

We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved and actual results may differ materially from our expectations. Factors that may cause actual results to differ from expected results are described in more detail in “Forward-Looking Statements and Risk Factors” and other sections of the Annual Report on Form 10-K for the year ended December 31, 2012. Management regularly monitors economic and other factors to develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic and company-specific trends. Please refer to “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report on Form 10-K for the year ended December 31, 2012 for further discussion of these risk factors.

Corporate Governance

Maintaining investor confidence and trust has become is important in today’s business environment. Our Board of Directors and management are strongly committed to policies and procedures that reflect the highest level of ethical business practices. Our corporate governance guidelines provide the framework for our business operations and emphasize our commitment to increase stockholder value while meeting all applicable legal requirements. These guidelines meet the listing standards adopted by the New York Stock Exchange and are available on the Internet at www.hcreit.com.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Liquidity and Capital Resources

Sources and Uses of Cash

Our primary sources of cash include rent and interest receipts, resident fees and services, borrowings under our primary unsecured line of credit arrangement, public issuances of debt and equity securities, proceeds from investment dispositions and principal payments on loans receivable. Our primary uses of cash include dividend distributions, debt service payments (including principal and interest), real property investments (including acquisitions, capital expenditures, construction advances and transaction costs), loan advances, property operating expenses, and general and administrative expenses. These sources and uses of cash are reflected in our Consolidated Statements of Cash Flows and are discussed in further detail below. The following is a summary of our sources and uses of cash flows (dollars in thousands):

	Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
	December, 31		December, 31					December, 31
	2010		2011		$		%	2012		$		%	$		%

Beginning cash and cash equivalents	$	35,476	$	131,570	$	96,094	271%	$	163,482	$	31,912	24%	$	128,006	361%
Cash provided from (used in):
Operating activities		364,741		588,224		223,483	61%		818,133		229,909	39%		453,392	124%
Investing activities		(2,312,039)		(4,520,129)		(2,208,090)	96%		(3,592,979)		927,150	-21%		(1,280,940)	55%
Financing activities		2,043,392		3,963,817		1,920,425	94%		3,645,128		(318,689)	-8%		1,601,736	78%
Ending cash and cash equivalents	$	131,570	$	163,482	$	31,912	24%	$	1,033,764	$	870,282	532%	$	902,194	686%

Operating Activities. The change in net cash provided from operating activities is primarily attributable to increases in NOI which is primarily due to acquisitions. Please see “Results of Operations” for further discussion.

Investing Activities. The changes in net cash used in investing activities are primarily attributable to net changes in real property investments, real estate loans receivable and investments in unconsolidated entities which are summarized above in “Key Transactions in 2012.” Please refer to Notes 3, 6 and 7 of our consolidated financial statements for additional information.

Financing Activities. The changes in net cash provided from financing activities are primarily attributable to changes related to our long-term debt arrangements, the issuance/redemptions of common and preferred stock, and dividend payments which are summarized above in “Key Transactions in 2012.” Please refer to Notes 9, 10 and 13 of our consolidated financial statements for additional information.

Subsequent Events. Subsequent to December 31, 2012, we closed on a new unsecured line of credit arrangement and completed our acquisition of Sunrise Senior Living, Inc. Please refer to Note 21 of our consolidated financial statements for additional information.

Off-Balance Sheet Arrangements

At December 31, 2012, we had investments in unconsolidated entities with our ownership ranging from 10% to 50%. Please see Note 7 to our consolidated financial statements for additional information. We use financial derivative instruments to hedge interest rate exposure. Please see Note 11 to our consolidated financial statements for additional information. At December 31, 2012, we had nine outstanding letter of credit obligations. Please see Note 12 to our consolidated financial statements for additional information.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Contractual Obligations

The following table summarizes our payment requirements under contractual obligations as of December 31, 2012 (in thousands):

	Payments Due by Period
Contractual Obligations	Total		2013		2014-2015		2016-2017		Thereafter

Unsecured line of credit arrangements	$	0	$	0	$	0	$	0	$	0
Senior unsecured notes⁽¹⁾		6,145,457		300,000		501,054		1,150,000		4,194,403
Secured debt⁽¹⁾		2,728,500		175,652		590,095		765,624		1,197,129
Contractual interest obligations		3,601,325		411,053		756,197		607,765		1,826,310
Capital lease obligations		85,853		73,562		10,203		1,118		970
Operating lease obligations		699,990		11,046		22,339		22,348		644,257
Purchase obligations		2,340,618		2,221,934		118,684		0		0
Other long-term liabilities		6,522		0		1,580		2,463		2,479
Total contractual obligations	$	15,608,265	$	3,193,247	$	2,000,152	$	2,549,318	$	7,865,548


(1) Amounts represent principal amounts due and do not reflect unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

At December 31, 2012, we had a $2,000,000,000 unsecured line of credit arrangement that is described in Note 9 to our consolidated financial statements. At December 31, 2012, we had no balance outstanding under the unsecured line of credit arrangement. Please see Note 21 to our consolidated financial statements for subsequent event information regarding our unsecured line of credit arrangement.

We have $6,145,457,000 of senior unsecured notes principal outstanding with fixed annual interest rates ranging from 2.25% to 6.50%, payable semi-annually. A total of $494,403,000 of our senior unsecured notes are convertible notes that also contain put features. Please see Note 10 to our consolidated financial statements for additional information. In addition, we have a $250,000,000 Canadian denominated unsecured term loan (approximately $251,054,000 USD at exchange rates on December 31, 2012.) The loan matures on July 27, 2015 and includes an option to extend for an additional year at our discretion. Total contractual interest obligations on senior unsecured notes and the Canadian term loan totaled $2,777,745,000 at December 31, 2012.

We have consolidated secured debt with total outstanding principal of $2,311,586,000, collateralized by owned properties, with annual interest rates ranging from 1.00% to 10.00%, payable monthly. The carrying values of the properties securing the debt totaled $3,953,516,000 at December 31, 2012. Total contractual interest obligations on consolidated secured debt totaled $757,025,000 at December 31, 2012. Our share of non-recourse secured debt associated with unconsolidated entities (as reflected in the contractual obligations table above) is $416,914,000 at December 31, 2012. Our share of contractual interest obligations on our unconsolidated entities’ secured debt is $66,555,000 at December 31, 2012.

At December 31, 2012, we had operating lease obligations of $699,990,000 relating primarily to ground leases at certain of our properties and office space leases and capital lease obligations of $85,853,000 relating to certain lease investment properties that contain bargain purchase options.

Purchase obligations include $2,047,400,000 representing the cash portion of the Sunrise merger and management business sale commitments discussed in Note 21 to our audited financial statements. Purchase obligations also include unfunded construction commitments and contingent purchase obligations. At December 31, 2012, we had outstanding construction financings of $162,984,000 for leased properties and were committed to providing additional financing of approximately $213,255,000 to complete construction. At December 31, 2012, we had contingent purchase obligations totaling $79,963,000. These contingent purchase obligations relate to unfunded capital improvement obligations and contingent obligations on acquisitions. Upon funding, amounts due from the tenant are increased to reflect the additional investment in the property.

Other long-term liabilities relate to our Supplemental Executive Retirement Plan, which is discussed in Note 19 to our consolidated financial statements.

Capital Structure

As of December 31, 2012, we had total equity of $10,520,519,000 and a total debt balance of $8,450,347,000, which represents a debt to total book capitalization ratio of 45%. Our ratio of debt to market capitalization was 33% at December 31, 2012. For the year ended December 31, 2012, our adjusted interest coverage ratio was 3.31x and our adjusted fixed charge coverage ratio was 2.58x. Also, at December 31, 2012, we had $1,033,764,000 of cash and cash equivalents, $107,657,000 of restricted cash and $2,000,000,000 of available borrowing capacity under our primary unsecured line of credit arrangement.

Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of December 31, 2012, we were in compliance with all of the covenants under our debt agreements. Please refer to the section entitled “Non-GAAP Financial Measures” for further discussion. None of our debt agreements contain provisions for acceleration which could be triggered by our debt ratings. However, under our primary unsecured line of credit arrangement, the ratings on our senior unsecured notes are used to determine the fees and interest charged. A summary of certain covenants and our results as of and for the year ended December 31, 2012 is as follows:

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Per Agreement
Covenant	Unsecured Line of Credit⁽¹⁾	Senior Unsecured Notes	Actual At December 31, 2012
Total Indebtedness to Book Capitalization Ratio maximum:	60%	n/a	45%
Secured Indebtedness to Total Assets Ratio maximum:	30%	40%	12%
Total Indebtedness to Total Assets maximum:	n/a	60%	44%
Unsecured Debt to Unencumbered Assets maximum:	60%	n/a	38%
Adjusted Interest Coverage Ratio minimum:	n/a	1.50x	3.31x
Adjusted Fixed Charge Coverage minimum:	1.50x	n/a	2.58x


(1) Canadian denominated term loan covenants are the same as those contained in our primary unsecured line of credit agreement.

We plan to manage the company to maintain compliance with our debt covenants and with a capital structure consistent with our current profile. Any downgrades in terms of ratings or outlook by any or all of the rating agencies could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition.

On May 4, 2012, we filed an open-ended automatic or “universal” shelf registration statement with the Securities and Exchange Commission covering an indeterminate amount of future offerings of debt securities, common stock, preferred stock, depositary shares, warrants and units. As of January 31, 2013, we had an effective registration statement on file in connection with our enhanced dividend reinvestment plan under which we may issue up to 10,000,000 shares of common stock. As of January 31, 2013, 3,752,914 shares of common stock remained available for issuance under this registration statement. We have entered into separate Equity Distribution Agreements with each of UBS Securities LLC, RBS Securities Inc., KeyBanc Capital Markets Inc. and Credit Agricole Securities (USA) Inc. relating to the offer and sale from time to time of up to $630,015,000 aggregate amount of our common stock (“Equity Shelf Program”). As of January 31, 2013, we had $457,112,000 of remaining capacity under the Equity Shelf Program. Depending upon market conditions, we anticipate issuing securities under our registration statements to invest in additional properties and to repay borrowings under our unsecured line of credit arrangements.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

Our primary sources of revenue include rent, resident fees and services, and interest income. Our primary expenses include interest expense, depreciation and amortization, property operating expenses, transaction costs and general and administrative expenses. These revenues and expenses are reflected in our Consolidated Statements of Comprehensive Income and are discussed in further detail below. The following is a summary of our results of operations (dollars in thousands, except per share amounts):

		Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
		December 31,		December 31,					December 31,
		2010		2011		Amount		%	2012		Amount		%	Amount		%

Net income attributable to common stockholders		$	106,882	$	157,108	$	50,226	47%	$	221,884	$	64,776	41%	$	115,002	108%
Funds from operations			280,022		524,902		244,880	87%		697,557		172,655	33%		417,535	149%
Adjusted EBITDA			568,429		971,525		403,096	71%		1,264,091		292,566	30%		695,662	122%
Net operating income from continuing operations			491,593		946,217		454,624	92%		1,245,536		299,319	32%		753,943	153%
Same store cash NOI			314,300		325,898		11,598	4%		328,632		2,734	1%		14,332	5%

Per share data (fully diluted):
	Net income attributable to common stockholders	$	0.83	$	0.90	$	0.07	8%	$	0.98	$	0.08	9%	$	0.15	18%
	Funds from operations		2.18		3.01		0.83	38%		3.09		0.08	3%		0.91	42%

Adjusted interest coverage ratio			3.39x		3.02x		-0.37x	-11%		3.31x		0.29x	10%		-0.08x	-2%
Adjusted fixed charge coverage ratio			2.76x		2.37x		-0.39x	-14%		2.58x		0.21x	9%		-0.18x	-7%

The following table represents the changes in outstanding common stock for the period from January 1, 2010 to December 31, 2012 (in thousands):

		Year Ended
		December 31, 2010	December 31, 2011	December 31, 2012	Totals
Beginning balance		123,385	147,097	192,275	123,385
Public offerings		20,700	41,400	64,400	126,500
DRIP issuances		1,957	2,534	2,136	6,627
ESP issuances		431	849	-	1,280
Senior note conversions		-	-	1,040	1,040
Preferred stock conversions		339	-	-	339
Option exercises		129	232	341	702
Other, net		156	163	182	501
Ending balance		147,097	192,275	260,374	260,374

Average number of shares outstanding:
	Basic	127,656	173,741	224,343
	Diluted	128,208	174,401	225,953

We evaluate our business and make resource allocations on our three business segments: seniors housing triple-net, seniors housing operating and medical facilities. The primary performance measures for our properties are NOI and SSCNOI, which are discussed below. Please see Note 17 to our consolidated financial statements for additional information.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Seniors Housing Triple-net

The following is a summary of our NOI for the seniors housing triple-net segment (dollars in thousands):

	Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
	December 31,		December 31,					December 31,
	2010		2011		$		%	2012		$		%	$		%
SSCNOI⁽¹⁾	$	214,361	$	220,110	$	5,749	3%	$	223,463	$	3,353	2%	$	9,102	4%
Non-cash NOI attributable to same store properties⁽¹⁾		7,591		6,254		(1,337)	-18%		4,688		(1,566)	-25%		(2,903)	-38%
NOI attributable to non same store properties⁽²⁾		98,244		356,885		258,641	263%		487,429		130,544	37%		389,185	396%
NOI	$	320,196	$	583,249	$	263,053	82%	$	715,580	$	132,331	23%	$	395,384	123%


(1) Due to increases in cash and non-cash revenues (described below) related to 233 same store properties.
(2) Primarily due to acquisitions of properties, which totaled 46, 184 and 51 for the years ended December 31, 2010, 2011 and 2012, respectively, and conversions of construction projects into revenue-generating properties, which totaled nine, seven and 11 for the years ended December 31, 2010, 2011 and 2012, respectively.

The following is a summary of our results of operations for the seniors housing triple-net segment (dollars in thousands):

			Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
			December 31,		December 31,					December 31,
			2010		2011		$		%	2012		$		%	$		%
Revenues:
	Rental income		$	280,634	$	542,561	$	261,927	93%	$	688,788	$	146,227	27%	$	408,154	145%
	Interest income			36,176		34,068		(2,108)	-6%		24,380		(9,688)	-28%		(11,796)	-33%
	Other income			3,386		6,620		3,234	96%		2,412		(4,208)	-64%		(974)	-29%
		Net operating income from continuing operations (NOI)		320,196		583,249		263,053	82%		715,580		132,331	23%		395,384	123%
Expenses:
	Interest expense			(6,094)		(1,338)		4,756	-78%		3,230		4,568	-341%		9,324	-153%
	Loss (gain) on derivatives, net			-		-		0	n/a		96		96	n/a		96	n/a
	Depreciation and amortization			80,109		157,267		77,158	96%		202,370		45,103	29%		122,261	153%
	Transaction costs			20,612		27,993		7,381	36%		35,705		7,712	28%		15,093	73%
	Loss (gain) on extinguishment of debt, net			7,791		-		(7,791)	-100%		2,405		2,405	n/a		(5,386)	-69%
	Provision for loan losses			29,684		-		(29,684)	-100%		27,008		27,008	n/a		(2,676)	-9%
				132,102		183,922		51,820	39%		270,814		86,892	47%		138,712	105%
Income from continuing operations before income taxes and income (loss) from unconsolidated entities				188,094		399,327		211,233	112%		444,766		45,439	11%		256,672	136%
Income tax expense				-		(143)		(143)	n/a		(2,852)		(2,709)	1894%		(2,852)	n/a
Income (loss) from unconsolidated entities				-		(9)		(9)	n/a		(33)		(24)	267%		(33)	n/a
Income from continuing operations				188,094		399,175		211,081	112%		441,881		42,706	11%		253,787	135%
Discontinued operations:
	Gain (loss) on sales of properties, net			36,274		59,108		22,834	63%		116,838		57,730	98%		80,564	222%
	Impairment of assets			-		(1,103)		(1,103)	n/a		(14,699)		(13,596)	1233%		(14,699)	n/a
	Income from discontinued operations, net			49,961		42,068		(7,893)	-16%		37,071		(4,997)	-12%		(12,890)	-26%
	Discontinued operations, net			86,235		100,073		13,838	16%		139,210		39,137	39%		52,975	61%
Net income				274,329		499,248		224,919	82%		581,091		81,843	16%		306,762	112%
Less: Net income attributable to noncontrolling interests				(18)		218		236	n/a		429		211	97%		447	-2483%
Net income attributable to common stockholders			$	274,347	$	499,030	$	224,683	82%	$	580,662	$	81,632	16%	$	306,315	112%

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The increase in rental income is primarily attributable to the acquisitions of new properties and the conversion of newly constructed seniors housing triple-net properties from which we receive rent. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index and/or changes in the gross operating revenues of the tenant’s properties. These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period. If gross operating revenues at our facilities and/or the Consumer Price Index do not increase, a portion of our revenues may not continue to increase. Sales of real property would offset revenue increases and, to the extent that they exceed new acquisitions, could result in decreased revenues. Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income. For the three months ended December 31, 2012, we had no lease renewals but we had 12 leases with rental rate increasers ranging from 0.16% to 0.30% in our seniors housing triple-net portfolio. The decrease in interest income is attributable to loan payoffs (see Note 6 to our consolidated financial statements for additional information).

Interest expense for the years ended December 31, 2012, 2011 and 2010 represents $13,572,000, $15,306,000 and $15,111,000, respectively, of secured debt interest expense offset by interest allocated to discontinued operations. The change in secured debt interest expense is due to the net effect and timing of assumptions, extinguishments and principal amortizations. The following is a summary of our seniors housing triple-net property secured debt principal activity (dollars in thousands):

	Year Ended			Year Ended			Year Ended
	December 31, 2010			December 31, 2011			December 31, 2012
			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	298,492	5.998%	$	172,862	5.265%	$	259,000	5.105%
Debt transferred		(131,214)	6.100%		-	0.000%		-	0.000%
Debt issued		81,977	4.600%		-	0.000%		9,387	4.080%
Debt assumed		78,794	5.867%		90,120	4.819%		83,002	5.304%
Debt extinguished		(150,982)	5.924%		-	0.000%		(128,818)	4.743%
Principal payments		(4,205)	4.388%		(3,982)	5.556%		(3,830)	5.556%
Ending balance	$	172,862	5.265%	$	259,000	5.105%	$	218,741	5.393%

Monthly averages	$	242,123	5.663%	$	234,392	5.141%	$	216,314	5.254%

In connection with secured debt extinguishments, we recognized losses of $7,791,000 and $2,405,000 during the years ended December 31, 2010 and 2012, respectively.

Depreciation and amortization increased primarily as a result of new property acquisitions and the conversions of newly constructed investment properties. To the extent that we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.

Transaction costs represent costs incurred with property acquisitions (including due diligence costs, fees for legal and valuation services, and termination of pre-existing relationships computed based on the fair value of the assets acquired), lease termination fees and other similar costs.

Changes in gains on sales of properties are related to property sales which totaled 31, 39 and 73 for the years ended December 31, 2010, 2011 and 2012, respectively. We recognized impairment losses on certain held-for-sale facilities as the fair value less estimated costs to sell exceeded our carrying values. The following illustrates the reclassification impact as a result of classifying the properties sold prior to or held for sale at September 30, 2013 as discontinued operations for the periods presented. Please refer to Note 5 to our consolidated financial statements for further discussion.

		Year Ended December 31,
		2010		2011		2012

Rental income		$	102,269	$	79,756	$	59,293
Expenses:
	Interest expense		21,205		16,634		10,342
	Provision for depreciation		31,103		21,054		11,880
Income (loss) from discontinued operations, net		$	49,961	$	42,068	$	37,071

During the year ended December 31, 2010, we recorded $29,684,000 of provision for loan losses, which is primarily attributable to the write-off of loans related to certain early stage seniors housing and CCRC development projects. We did not record any provision for loan loss or have any loan write-offs for seniors housing triple-net investments during the year ended December 31, 2011. During the year

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

ended December 31, 2012, we wrote off loans totaling $27,008,000, which is attributable to the write-off of one loan at an entrance fee community. The provision for loan losses is related to our critical accounting estimate for the allowance for loan losses and is discussed in “Critical Accounting Policies” and Note 6 to our consolidated financial statements.

During the year ended December 31, 2012 a portion of our seniors housing triple-net properties were formed through partnership interests. Net income attributable to noncontrolling interests for the year ended December 31, 2012 represents our partners’ share of net income (loss) relating to those properties. In connection with a seniors housing triple-net partnership, we also acquired a minority interest in a separate unconsolidated entity. This investment is reflected as an investment in unconsolidated entities on our consolidated balance sheet. Accordingly, our proportionate share of net income (loss) is reflected as income (loss) from unconsolidated entities on our consolidated income statement.

Seniors Housing Operating

As discussed in Note 3 to our consolidated financial statements, we completed additional acquisitions within our seniors housing operating segment during the year ended December 31, 2012. The results of operations for these properties have been included in our consolidated results of operations from the dates of acquisition. The seniors housing operating acquisitions were structured under RIDEA, which is discussed in Note 18 to our consolidated financial statements. When considering new acquisitions utilizing the RIDEA structure, we look for opportunities with best-in-class operators with a strong seasoned leadership team, high-quality real estate in attractive markets, growth potential above the standard rent escalators in our triple-net lease seniors housing portfolio, and alignment of economic interests with our operating partner. Our seniors housing operating properties offer us the opportunity for external growth because we have the right to fund future seniors housing investment opportunities sourced by our operating partners. There were no seniors housing operating segment investments prior to September 1, 2010. As such, the increases in NOI are almost entirely attributable to property acquisitions which totaled 32, 58, and 80 for the years ended December 31, 2010, 2011 and 2012, respectively. The following is a summary of our seniors housing operating results of operations (dollars in thousands):

		Year Ended					One Year Change			Year Ended		One Year Change			Two Year Change
			December 31,		December 31,					December 31,
			2010		2011		$		%	2012		$		%	$		%
Revenues:
	Resident fees and services		$	51,006	$	456,085	$	405,079	794%	$	697,494	$	241,409	53%	$	646,488	1267%
	Interest income			-		-		-	n/a		6,208		6,208	n/a		6,208	n/a
				51,006		456,085		405,079	794%		703,702		247,617	54%		652,696	1280%
Property operating expenses				32,621		314,142		281,521	863%		471,678		157,536	50%		439,057	1346%
	Net operating income from continuing operations (NOI)			18,385		141,943		123,558	672%		232,024		90,081	63%		213,639	1162%
Other expenses:
	Interest expense			7,794		46,342		38,548	495%		67,524		21,182	46%		59,730	766%
	Loss (gain) on derivatives, net			-		-		-	n/a		(1,921)		(1,921)	n/a		(1,921)	n/a
	Depreciation and amortization			15,504		138,192		122,688	791%		165,798		27,606	20%		150,294	969%
	Transaction costs			20,936		36,328		15,392	74%		12,756		(23,572)	-65%		(8,180)	-39%
	Loss (gain) on extinguishment of debt, net			-		(979)		(979)	n/a		(2,697)		(1,718)	175%		(2,697)	n/a
				44,234		219,883		175,649	397%		241,460		21,577	10%		197,226	446%
Income from continuing operations before income from unconsolidated entities				(25,849)		(77,940)		(52,091)	202%		(9,436)		68,504	-88%		16,413	-63%
Income tax expense				(229)		-		229	n/a		(1,086)		(1,086)	n/a		(857)	374%
Income from unconsolidated entities				-		(1,531)		(1,531)	n/a		(6,364)		(4,833)	316%		(6,364)	n/a
Net income (loss)				(26,078)		(79,471)		(53,393)	205%		(16,886)		62,585	-79%		9,192	-35%
Less: Net income (loss) attributable to noncontrolling interests				(1,656)		(6,006)		(4,350)	263%		(3,015)		2,991	-50%		(1,359)	82%
Net income (loss) attributable to common stockholders			$	(24,422)	$	(73,465)	$	(49,043)	201%		(13,871)		59,594	-81%		10,551	-43%

Fluctuations in revenues and property operating expenses are primarily a result of acquisitions subsequent to September 30, 2010. Interest income relates to the Sunrise loan funded during the three months ended December 31, 2012 (please see Note 6 to our consolidated financial statements for additional information). The fluctuations in depreciation and amortization are due to acquisitions offset by variations in amortization of short-lived intangible assets. To the extent that we acquire or dispose of additional properties in

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

the future, these amounts will change accordingly. Loss from unconsolidated entities during the year ended December 31, 2012 is primarily attributable to depreciation and amortization of short-lived intangible assets related to our joint venture with Chartwell described in Note 7 to our consolidated financial statements.

Interest expense represents secured debt interest expense as well as interest expense related to our unsecured Canadian term loan discussed further in Note 10 of our audited consolidated financial statements. The following is a summary of our seniors housing operating property secured debt principal activity, which excludes the Canadian term loan (dollars in thousands):

	Year Ended			Year Ended			Year Ended
	December 31, 2010			December 31, 2011			December 31, 2012
			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	-	0.000%	$	487,706	5.939%	$	1,318,599	4.665%
Debt transferred		131,214	6.100%		-	0.000%		-	0.000%
Debt issued		75,179	6.386%		114,903	5.779%		148,031	4.220%
Debt assumed		318,125	5.855%		780,955	4.269%		115,371	5.512%
Debt extinguished		(35,017)	6.723%		(55,317)	5.949%		(193,962)	4.395%
Foreign currency		-	0.000%		-	0.000%		187	5.624%
Principal payments		(1,795)	6.165%		(9,648)	5.474%		(18,700)	4.850%
Ending balance	$	487,706	5.939%	$	1,318,599	4.665%	$	1,369,526	4.874%

Monthly averages	$	350,259	5.957%	$	969,265	5.679%	$	1,366,758	4.866%

In connection with secured debt extinguishments, we recognized gains of $979,000 and $2,697,000 during the years ended December 31, 2011 and 2012, respectively. In addition, during the year ended December 31, 2012, we recognized a net realized gain on derivatives of $1,921,000 associated with our Chartwell transaction discussed in Note 7 to our audited consolidated financial statements.

Transaction costs were incurred in connection with acquisitions that occurred during the relevant periods. Transaction costs generally include due diligence costs and fees for legal and valuation services, charges associated with the termination of pre-existing relationships computed based on the fair value of the assets acquired and lease termination fees. The decline in transaction costs from 2011 to 2012 is primarily attributable to termination of pre-existing relationships incurred during 2011. The majority of our seniors housing operating properties are formed through partnership interests. Net income attributable to noncontrolling interests for the year ended December 31, 2012 represents our partners’ share of net income (loss) related to those properties.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Medical Facilities

The following is a summary of our NOI for the medical facilities segment (dollars in thousands):

	Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
	December 31,		December 31,					December 31,
	2010		2011		$		%	2012		$		%	$		%
SSCNOI⁽¹⁾	$	99,939	$	105,788	$	5,849	6%	$	105,169	$	(619)	-1%	$	5,230	5%
Non-cash NOI attributable to same store properties⁽¹⁾		5,862		4,426		(1,436)	-24%		2,909		(1,517)	-34%		(2,953)	-50%
NOI attributable to non same store properties⁽²⁾		44,337		110,121		65,784	148%		188,942		78,821	72%		144,605	326%
NOI	$	150,138	$	220,335	$	70,197	47%	$	297,020	$	76,685	35%	$	146,882	98%


(1) Due to increases in cash and non-cash revenues (described below) related to 95 same store properties.
(2) Primarily due to acquisitions of properties, which totaled 36, 35 and 34 for the years ended December 31, 2010, 2011 and 2012, respectively, and conversions of construction projects into revenue-generating properties, which totaled four, seven and five for the years ended December 31, 2010, 2011 and 2012, respectively.

The following is a summary of our results of operations for the medical facilities segment (dollars in thousands):

		Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
		December 31,		December 31,					December 31,
		2010		2011		$		%	2012		$		%	$		%
Revenues:
	Rental income	$	189,631	$	273,003	$	83,372	44%	$	385,779	$	112,776	41%	$	196,148	103%
	Interest income		4,679		7,002		2,323	50%		8,477		1,475	21%		3,798	81%
	Other income		985		3,985		3,000	305%		1,947		(2,038)	-51%		962	98%
			195,295		283,990		88,695	45%		396,203		112,213	40%		200,908	103%
Property operating expenses			45,157		63,655		18,498	41%		99,183		35,528	56%		54,026	120%
	Net operating income from continuing operations (NOI)		150,138		220,335		70,197	47%		297,020		76,685	35%		146,882	98%
Other expenses:
	Interest expense		15,959		20,217		4,258	27%		30,565		10,348	51%		14,606	92%
	Depreciation and amortization		65,929		94,692		28,763	44%		142,217		47,525	50%		76,288	116%
	Transaction costs		5,112		5,903		791	15%		13,148		7,245	123%		8,036	157%
	Loss (gain) on extinguishment of debt, net		1,308		-		(1,308)	-100%		(483)		(483)	n/a		(1,791)	n/a
	Provision for loan losses		-		2,010		2,010	n/a		-		(2,010)	n/a		0	n/a
			88,308		122,822		34,514	39%		185,447		62,625	51%		97,139	110%
Income from continuing operations before income taxes and income from unconsolidated entities			61,830		97,513		35,683	58%		111,573		14,060	14%		49,743	80%
Income tax expense			(77)		(361)		(284)	369%		(2,381)		(2,020)	560%		(2,304)	2992%
Income from unconsolidated entities			6,673		7,312		639	10%		8,879		1,567	21%		2,206	33%
Income from continuing operations			68,426		104,464		36,038	53%		118,071		13,607	13%		49,645	73%
Discontinued operations:
	Gain (loss) on sales of properties, net		(159)		2,052		2,211	n/a		(16,289)		(18,341)	-894%		(16,130)	10145%
	Impairment of assets		(947)		(11,091)		(10,144)	1071%		(14,588)		(3,497)	32%		(13,641)	1440%
	Income (loss) from discontinued operations, net		3,324		3,793		469	14%		4,581		788	21%		1,257	38%
	Discontinued operations, net		2,218		(5,246)		(7,464)	n/a		(26,296)		(21,050)	401%		(28,514)	-1286%
Net income (loss)			70,644		99,218		28,574	40%		91,775		(7,443)	-8%		21,131	30%
Less: Net income (loss) attributable to noncontrolling interests			2,031		894		(1,137)	-56%		171		(723)	-81%		(1,860)	-92%
Net income (loss) attributable to common stockholders		$	68,613	$	98,324	$	29,711	43%	$	91,604	$	(6,720)	-7%	$	22,991	34%

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The increase in rental income is primarily attributable to the acquisitions of new properties and the construction conversions of medical facilities from which we receive rent. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index. These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period. If the Consumer Price Index does not increase, a portion of our revenues may not continue to increase. Sales of real property would offset revenue increases and, to the extent that they exceed new acquisitions, could result in decreased revenues. Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income. For the three months ended December 31, 2012, our consolidated medical office building portfolio signed 50,323 square feet of new leases and 172,647 square feet of renewals. The weighted-average term of these leases was five years, with a rate of $20.55 per square foot and tenant improvement and lease commission costs of $8.77 per square foot. Substantially all of these leases during the referenced quarter contain an annual fixed or contingent escalation rent structure ranging from the change in CPI to 3%. For the three months ended December 31, 2012, we had no lease renewals but we had one lease with a rental rate increaser of 2.0% in our hospital portfolio. Interest income increased from the prior period primarily due to an increase in outstanding balances for medical facility real estate loans.

Interest expense for the years ended December 31, 2012, 2011 and 2010 represents $38,786,000, $31,477,000, and $24,926,000, respectively, of secured debt interest expense offset by interest allocated to discontinued operations. The change in secured debt interest expense is primarily due to the net effect and timing of assumptions, extinguishments and principal amortizations. The following is a summary of our medical facilities secured debt principal activity (dollars in thousands):

	Year Ended			Year Ended			Year Ended
	December 31, 2010			December 31, 2011			December 31, 2012
			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate

Beginning balance	$	314,065	5.677%	$	463,477	5.286%	$	520,066	5.981%
Debt assumed		167,737	6.637%		69,779	5.921%		246,371	5.888%
Debt extinguished		(8,494)	6.045%		-	0.000%		(37,622)	5.858%
Principal payments		(9,831)	6.279%		(13,190)	6.208%		(15,095)	6.180%
Ending balance	$	463,477	5.286%	$	520,066	5.981%	$	713,720	5.950%

Monthly averages	$	458,196	5.961%	$	489,923	6.179%	$	669,753	5.952%

In connection with secured debt extinguishments, we recognized a loss of $1,308,000 and a gain of $483,000 during the years ended December 31, 2010 and 2012, respectively.

The increase in property operating expenses and depreciation and amortization is primarily attributable to acquisitions and construction conversions of new medical facilities for which we incur certain property operating expenses offset by property operating expenses associated with discontinued operations.

Transaction costs for the year ended December 31, 2012 represent costs incurred in connection with the acquisition of new properties.

During the year ended December 31, 2011, we recorded $2,010,000 of provision for loan losses, which is primarily attributable to the write-off of a hospital loan.

Income from unconsolidated entities includes our share of net income related to our joint venture investment with Forest City Enterprises and certain unconsolidated property investments related to our strategic joint venture relationship with a national medical office building company. See Note 7 to our consolidated financial statements for additional information.

Changes in gains/losses on sales of properties is related to property sales which totaled seven, three and 20 for the years ended December 31, 2010, 2011, and 2012, respectively. We recognized impairment losses on certain held for sale facilities as the fair value less estimated costs to sell exceeded our carrying values. The following illustrates the reclassification impact as a result of classifying the properties sold prior to or held for sale at September 30, 2013 as discontinued operations for the periods presented. Please refer to Note 5 to our consolidated financial statements for further discussion.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

		Year Ended December 31,
		2010		2011		2012

Rental income		$	30,876	$	33,526	$	25,732
Expenses:
	Interest expense		8,967		11,260		8,221
	Property operating expenses		8,687		6,073		1,610
	Provision for depreciation		9,898		12,400		11,320
Income (loss) from discontinued operations, net		$	3,324	$	3,793	$	4,581

Net income attributable to non-controlling interests primarily relates to certain properties that are consolidated in our operating results but where we have less than a 100% ownership interest.

Non-Segment/Corporate

The following is a summary of our results of operations for the non-segment/corporate activities (dollars in thousands):

		Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
		December 31,		December 31,					December 31,
		2010		2011		$		%	2012		$		%	$		%
Revenues:
	Other income	$	2,874	$	690	$	(2,184)	-76%	$	912	$	222	32%	$	(1,962)	-68%
Expenses:
	Interest expense		113,129		228,884		115,755	102%		263,418		34,534	15%		150,289	133%
	General and administrative		54,626		77,201		22,575	41%		97,341		20,140	26%		42,715	78%
	Loss (gain) on extinguishments of debt, net		25,072		0		(25,072)	-100%		0		0	n/a		(25,072)	-100%
			192,827		306,085		113,258	59%		360,759		54,674	18%		167,932	87%
Loss from continuing operations before income taxes			(189,953)		(305,395)		(115,442)	61%		(359,847)		(54,452)	18%		(169,894)	89%
Income tax expense (benefit)			(58)		(884)		(826)	1424%		(1,293)		(409)	46%		(1,235)	2129%
Net loss			(190,011)		(306,279)		(116,268)	61%		(361,140)		(54,861)	18%		(171,129)	90%
Preferred stock dividends			21,645		60,502		38,857	180%		69,129		8,627	14%		47,484	219%
Preferred stock redemption charge			-		-		-	n/a		6,242		6,242	n/a		6,242	n/a
Net loss attributable to common stockholders		$	(211,656)	$	(366,781)	$	(155,125)	73%	$	(436,511)	$	(69,730)	19%	$	(224,855)	106%

Other income primarily represents income from non-real estate activities such as interest earned on temporary investments of cash reserves.

The following is a summary of our non-segment/corporate interest expense (dollars in thousands):

	Year Ended				One Year Change			Year Ended		One Year Change			Two Year Change
	December 31,		December 31,					December 31,
	2010		2011		$		%	2012		$		%	$		%

Senior unsecured notes	$	122,492	$	222,559	$	100,067	82%	$	249,564	$	27,005	12%	$	127,072	104%
Secured debt		645		604		(41)	-6%		557		(47)	-8%		(88)	-14%
Unsecured lines of credit		3,974		7,917		3,943	99%		11,769		3,852	49%		7,795	196%
Capitalized interest		(20,792)		(13,164)		7,628	-37%		(9,777)		3,387	-26%		11,015	-53%
Interest SWAP savings		(161)		(161)		-	0%		(96)		65	-40%		65	-40%
Loan expense		6,971		11,129		4,158	60%		11,401		272	2%		4,430	64%
Totals	$	113,129	$	228,884	$	115,755	102%	$	263,418	$	34,534	15%	$	150,289	133%

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The change in interest expense on senior unsecured notes is due to the net effect of issuances and extinguishments. Please refer to Note 10 of our consolidated financial statements for additional information. We capitalize certain interest costs associated with funds used for the construction of properties owned directly by us. The amount capitalized is based upon the balances outstanding during the construction period using the rate of interest that approximates our cost of financing. Our interest expense is reduced by the amount capitalized. Please see Note 11 to our consolidated financial statements for a discussion of our interest rate swap agreements and their impact on interest expense. Loan expense represents the amortization of deferred loan costs incurred in connection with the issuance and amendments of debt. Loan expense changes are due to amortization of charges for costs incurred for senior unsecured note issuance. The change in interest expense on the unsecured line of credit arrangements is due primarily to the net effect and timing of draws, paydowns and variable interest rate changes. Please refer to Note 9 of our consolidated financial statements for additional information regarding our unsecured line of credit arrangements.

General and administrative expenses as a percentage of consolidated revenues (including revenues from discontinued operations) for the years ended December 31, 2012, 2011 and 2010 were 5.12%, 5.37% and 7.78%, respectively. The increase in general and administrative expenses is primarily related to costs associated with our initiatives to attract and retain appropriate personnel to achieve our business objectives. The decline in percent of revenue is primarily related to the increasing revenue base as a result of our acquisitions.

The changes in preferred stock dividends and redemption charge are primarily attributable to the net effect of issuances, redemptions and conversions. Please see Note 13 to our consolidated financial statements for additional information.

Non-GAAP Financial Measures

We believe that net income, as defined by U.S. GAAP, is the most appropriate earnings measurement. However, we consider FFO to be a useful supplemental measure of our 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 and impairment of depreciable assets, plus depreciation and amortization, and after adjustments for unconsolidated entities.

Net operating income from continuing operations (“NOI”) is used to evaluate the operating performance of our properties. We define NOI as total revenues, including tenant reimbursements, less property level operating expenses, which exclude depreciation and amortization, general and administrative expenses, impairments and interest expense. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our seniors housing operating and medical facility properties. These expenses include, but are not limited to, property-related payroll and benefits, property management fees, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance. General and administrative expenses represent costs unrelated to property operations or transaction costs. These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets. Same store cash NOI (“SSCNOI”) is used to evaluate the cash-based operating performance of our properties under a consistent population which eliminates changes in the composition of our portfolio. As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the full three year reporting period. Any properties acquired, developed, transitioned or classified in discontinued operations during that period are excluded from the same store amounts. We believe NOI and SSCNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI and SSCNOI to make decisions about resource allocations and to assess the property level performance of our properties.

EBITDA stands for earnings before interest, taxes, depreciation and amortization. We believe 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 our operations. We primarily utilize EBITDA to measure our interest coverage ratio, which represents EBITDA divided by total interest, and our fixed charge coverage ratio, which represents EBITDA divided by fixed charges. Fixed charges include total interest, secured debt principal amortization and preferred dividends.

A covenant in our primary unsecured line of credit arrangement and Canadian denominated term loan contains a financial ratio based on a definition of EBITDA that is specific to that agreement. Failure to satisfy these covenants could result in an event of default that could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. Due to the materiality of these debt agreements and the financial covenants, we have disclosed Adjusted EBITDA, which represents EBITDA as defined above and adjusted for stock-based compensation expense, provision for loan losses and gain/loss on extinguishment of debt. We use Adjusted EBITDA to measure

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

our adjusted fixed charge coverage ratio, which represents Adjusted EBITDA divided by fixed charges on a trailing twelve months basis. Fixed charges include total interest (excluding capitalized interest and non-cash interest expenses), secured debt principal amortization and preferred dividends. Our covenant requires an adjusted fixed charge ratio of at least 1.50 times.

Other than Adjusted EBITDA, our supplemental reporting measures and similarly entitled financial measures are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. Management uses these financial measures to facilitate internal and external comparisons to our historical operating results and in making operating decisions. Additionally, these measures are utilized by the Board of Directors to evaluate management. Adjusted EBITDA is used solely to determine our compliance with a financial covenant in our primary line of credit arrangement and Canadian denominated term loan and is not being presented for use by investors for any other purpose. None of our supplemental measures 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 measures, as defined by us, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies.

The table below reflects the reconciliation of FFO to net income attributable to common stockholders, the most directly comparable U.S. GAAP measure, for the periods presented. The provisions for depreciation and amortization include provisions for depreciation and amortization from discontinued operations. Noncontrolling interest amounts represent the noncontrolling interests’ share of transaction costs and depreciation and amortization. Unconsolidated entity amounts represent our share of unconsolidated entities’ depreciation and amortization. Amounts are in thousands except for per share data.

		Year Ended December 31,
FFO Reconciliation:		2010		2011		2012
Net income attributable to common stockholders		$	106,882	$	157,108	$	221,884
Depreciation and amortization			202,543		423,605		533,585
Impairment of assets			947		12,194		29,287
Loss (gain) on sales of properties			(36,115)		(61,160)		(100,549)
Noncontrolling interests			(2,749)		(18,557)		(21,058)
Unconsolidated entities			8,514		11,712		34,408
Funds from operations		$	280,022	$	524,902	$	697,557

Average common shares outstanding:
	Basic		127,656		173,741		224,343
	Diluted		128,208		174,401		225,953

Per share data:
Net income attributable to common stockholders
	Basic	$	0.84	$	0.90	$	0.99
	Diluted		0.83		0.90		0.98

Funds from operations
	Basic	$	2.19	$	3.02	$	3.11
	Diluted		2.18		3.01		3.09

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The table below reflects the reconciliation of Adjusted EBITDA to net income, the most directly comparable U.S. GAAP measure, for the periods presented. Interest expense and the provisions for depreciation and amortization include discontinued operations. Dollars are in thousands.

		Year Ended December 31,
Adjusted EBITDA Reconciliation:		2010		2011		2012
Net income		$	128,884	$	212,716	$	294,840
Interest expense			160,960		321,999		383,300
Income tax expense (benefit)			364		1,388		7,612
Depreciation and amortization			202,543		423,605		533,585
Stock-based compensation expense			11,823		10,786		18,521
Provision for loan losses			29,684		2,010		27,008
Loss (gain) on extinguishment of debt			34,171		(979)		(775)
Adjusted EBITDA		$	568,429	$	971,525	$	1,264,091

Adjusted Interest Coverage Ratio:
Interest expense		$	160,960	$	321,999	$	383,300
Capitalized interest			20,792		13,164		9,777
Non-cash interest expense			(13,945)		(13,905)		(11,395)
	Total interest		167,807		321,258		381,682
Adjusted EBITDA		$	568,429	$	971,525	$	1,264,091
	Adjusted interest coverage ratio		3.39x		3.02x		3.31x

Adjusted Fixed Charge Coverage Ratio:
Interest expense		$	160,960	$	321,999	$	383,300
Capitalized interest			20,792		13,164		9,777
Non-cash interest expense			(13,945)		(13,905)		(11,395)
Secured debt principal payments			16,652		27,804		38,554
Preferred dividends			21,645		60,502		69,129
	Total fixed charges		206,104		409,564		489,365
Adjusted EBITDA		$	568,429	$	971,525	$	1,264,091
	Adjusted fixed charge coverage ratio		2.76x		2.37x		2.58x

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following tables reflect the reconciliation of NOI and SSCNOI to net income attributable to common stockholders, the most directly comparable U.S. GAAP measure, for the periods presented. Amounts are in thousands.

				Year Ended December 31,
NOI Reconciliation:				2010		2011		2012
Total revenues:
	Seniors housing triple-net			$	320,196	$	583,249	$	715,580
	Seniors housing operating				51,006		456,085		703,702
	Medical facilities				195,295		283,990		396,203
	Non-segment/corporate				2,874		690		912
			Total revenues		569,371		1,324,014		1,816,397
Property operating expenses:
	Seniors housing operating				32,621		314,142		471,678
	Medical facilities				45,157		63,655		99,183
			Total property operating expenses		77,778		377,797		570,861
Net operating income:
	Seniors housing triple-net				320,196		583,249		715,580
	Seniors housing operating				18,385		141,943		232,024
	Medical facilities				150,138		220,335		297,020
	Non-segment/corporate				2,874		690		912
			Net operating income from continuing operations	$	491,593	$	946,217	$	1,245,536
Reconciling items:
	Interest expense				(130,788)		(294,105)		(364,737)
	Loss (gain) on derivatives, net				-		-		1,825
	Depreciation and amortization				(161,542)		(390,151)		(510,385)
	General and administrative				(54,626)		(77,201)		(97,341)
	Transaction costs				(46,660)		(70,224)		(61,609)
	Loss (gain) on extinguishment of debt				(34,171)		979		775
	Provision for loan losses				(29,684)		(2,010)		(27,008)
	Income tax benefit (expense)				(364)		(1,388)		(7,612)
	Income from unconsolidated entities				6,673		5,772		2,482
	Income (loss) from discontinued operations, net				88,453		94,827		112,914
	Preferred dividends				(21,645)		(60,502)		(69,129)
	Preferred stock redemption charge				-		-		(6,242)
	Loss (income) attributable to noncontrolling interests				(357)		4,894		2,415
					(384,711)		(789,109)		(1,023,652)
Net income (loss) attributable to common stockholders				$	106,882	$	157,108	$	221,884
				Year Ended December 31,
Same Store Cash NOI Reconciliation:				2010		2011		2012
Net operating income from continuing operations:
	Seniors housing triple-net			$	320,196	$	583,249	$	715,580
	Seniors housing operating				18,385		141,943		232,024
	Medical facilities				150,138		220,335		297,020
			Total		488,719		945,527		1,244,624
Adjustments:
	Seniors housing triple-net:
		Non-cash NOI on same store properties			(7,591)		(6,254)		(4,688)
		NOI attributable to non same store properties			(98,244)		(356,885)		(487,429)
			Subtotal		(105,835)		(363,139)		(492,117)
	Seniors housing operating:
		Non-cash NOI on same store properties			-		-		-
		NOI attributable to non same store properties			(18,385)		(141,943)		(232,024)
			Subtotal		(18,385)		(141,943)		(232,024)
	Medical facilities:
		Non-cash NOI on same store properties			(5,862)		(4,426)		(2,909)
		NOI attributable to non same store properties			(44,337)		(110,121)		(188,942)
			Subtotal		(50,199)		(114,547)		(191,851)
			Total		(243,003)		(876,119)		(1,339,867)
Same store cash net operating income:
	Seniors housing triple-net				214,361		220,110		223,463
	Seniors housing operating				-		-		-
	Medical facilities				99,939		105,788		105,169
			Total	$	314,300	$	325,898	$	328,632

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Health Care Industry

The demand for health care services, and consequently health care properties, is projected to reach unprecedented levels in the near future. The Centers for Medicare and Medicaid Services (“CMS”) projects that national health expenditures will rise to $3.3 trillion in 2015 or 18.2% of gross domestic product (“GDP”). The average annual growth in national health expenditures for 2011 through 2021 is expected to be 5.9%.

While demographics are the primary driver of demand, economic conditions and availability of services contribute to health care service utilization rates. We believe the health care property market may be less susceptible to fluctuations and economic downturns relative to other property sectors. Investor interest in the market remains strong, especially in specific sectors such as private-pay senior living and medical office buildings. As a REIT, we believe we are situated to benefit from any turbulence in the capital markets due to our access to capital.

The total U.S. population is projected to increase by 18.6% through 2030. The elderly population aged 65 and over is projected to increase by 78.3% through 2030. The elderly are an important component of health care utilization, especially independent living services, assisted living services, skilled nursing services, inpatient and outpatient hospital services and physician ambulatory care. Most health care services are provided within a health care facility such as a hospital, a physician’s office or a seniors housing community. Therefore, we believe there will be continued demand for companies, such as ours, with expertise in health care real estate.

Health care real estate investment opportunities tend to increase as demand for health care services increases. We recognize the need for health care real estate as it correlates to health care service demand. Health care providers require real estate to house their businesses and expand their services. We believe that investment opportunities in health care real estate will continue to be present due to:

· The specialized nature of the industry, which enhances the credibility and experience of our company;

· The projected population growth combined with stable or increasing health care utilization rates, which ensures demand; and

· The on-going merger and acquisition activity.

Health Reform Laws

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act of 2010 (the “PPACA”) and the Health Care and Education Reconciliation Act of 2010, which amends the PPACA (collectively, the “Health Reform Laws”). The Health Reform Laws contain various provisions that may directly impact us or the operators and tenants of our properties. Some provisions of the Health Reform Laws may have a positive impact on our operators’ or tenants’ revenues, by, for example, increasing coverage of uninsured individuals, while others may have a negative impact on the reimbursement of our operators or tenants by, for example, altering the market basket adjustments for certain types of health care facilities. The Health Reform Laws also enhance certain fraud and abuse penalty provisions that could apply to our operators and tenants, in the event of one or more violations of the federal health care regulatory laws. In addition, there are provisions that impact the health coverage that we and our operators and tenants provide to our respective employees. We cannot predict whether the existing Health Reform Laws, or future health care reform legislation or regulatory changes, will have a material impact on our operators’ or tenants’ property or business. If the operations, cash flows or financial condition of our operators and tenants are materially adversely impacted by the Health Reform Laws or future legislation, our revenue and operations may be adversely affected as well. On June 28, 2012, The United States Supreme Court upheld the individual mandate of the Health Reform Laws but partially invalidated the expansion of Medicaid. The ruling on Medicaid expansion will allow States not to participate in the expansion – and to forego funding for the Medicaid expansion – without losing their existing Medicaid funding. Given that the federal government substantially funds the Medicaid expansion, it is unclear whether any state will pursue this option, although at least some appear to be considering this option at this time.

Impact to Reimbursement of the Operators and Tenants of Our Properties. The Health Reform Laws provide for various changes to the reimbursement that our operators and tenants may receive. One such change is a reduction to the market basket adjustments for inpatient acute hospitals, long−term care hospitals, inpatient rehabilitation facilities, home health agencies, psychiatric hospitals, hospice care and outpatient hospitals. Since 2010, the otherwise applicable percentage increase to the market basket for inpatient acute hospitals has decreased. Since 2012, inpatient acute hospitals have also faced a downward adjustment of the annual percentage increase to the market basket rate by a “productivity adjustment.” The productivity adjustment may cause the annual percentage increase to be less than zero, which would mean that inpatient acute hospitals could face payment rates for a fiscal year that are less than the payment rates for the preceding year.

A similar productivity adjustment has applied to skilled nursing facilities since 2012, which means that the payment rates for skilled nursing facilities may decrease from one year to the next. Long−term care hospitals have faced a specified percentage decrease in their annual update for discharges since 2010. Additionally, since 2012, long−term care hospitals have been subject to the

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

productivity adjustments, which may decrease the federal payment rates for long−term care hospitals. Similar productivity adjustments and other adjustments to payment rates have applied to inpatient rehabilitation facilities, psychiatric hospitals and outpatient hospitals since 2010.

The Health Reform Laws revise other reimbursement provisions that may affect our business. For example, the Health Reform Laws reduce states’ Medicaid disproportionate share hospital (“DSH”) allotments, starting in 2014 through 2020. These allotments would have provided additional funding for DSH hospitals that are operators or tenants of our properties, and thus, any reduction might negatively impact these operators or tenants.

Additionally, under the Health Reform Laws, beginning in fiscal year 2015, Medicare payments will decrease to hospitals for treatment associated with hospital acquired conditions. This decreased payment rate may negatively impact our operators or tenants. To account for excess readmissions, the Health Reform Laws also call for a reduction of 1% in payments for those hospitals with higher−than−average risk−adjusted readmission rates beginning October 1, 2012, 2% beginning in fiscal year 2014, and 3% from fiscal year 2015 onward. These reductions in payments to our operators or tenants may affect their ability to make payments to us.

The Health Reform Laws additionally call for the creation of the Independent Payment Advisory Board (the “Board”), which will be responsible for establishing payment policies, including recommendations in the event that Medicare costs exceed a certain threshold. Proposals for recommendations submitted by the Board prior to December 31, 2018 may not include recommendations that would reduce payments for hospitals, skilled nursing facilities, and physicians, among other providers, prior to December 31, 2019. On March 22, 2012, the House of Representatives approved legislation that would repeal the Board. While this legislation was not passed by the Senate, if such a repeal were signed into law in the future, reimbursement to our tenants and operators may be impacted.

The Health Reform Laws also create other mechanisms that could permit significant changes to payment. For example, the Health Reform Laws establish the Center for Medicare and Medicaid Innovation to test innovative payment and service delivery models to reduce program expenditures through the use of demonstration programs that can waive existing reimbursement methodologies. As another example, on November 2, 2011, CMS published the final rule implementing section 3022 of the Health Reform Laws, which contains provisions relating to Medicare payment to providers and suppliers participating in Accountable Care Organizations (“ACOs”) under the Medicare Shared Servings Program. Under the program, Medicare will share a percentage of savings with ACOs that meet certain quality and saving requirements, thereby allowing providers to receive incentive payments in addition to their traditional fee−for−service payments. Under the program, more experienced providers may assume the risk of losses in exchange for greater potential rewards: ACOs may share up to 50% of the savings under the one−sided model and up to 60% of the savings under the two−sided model, depending on their quality and performance. The amount of shared losses for which an ACO is liable in the two−sided model may not exceed the following percentages of its updated benchmark: 5% in the first performance year, 7.5% in the second year, and 10% in the third year. These shared losses could affect the ability of ACO operators or tenants to meet their financial obligations to us. The Health Reform Laws also provide additional Medicaid funding to allow states to carry out the expansion of Medicaid coverage to certain financially−eligible individuals beginning in 2014, and also permit states to expand their Medicaid coverage to these individuals since April 1, 2010, if certain conditions are met. The Health Reform Laws also extend certain payment rules related to long−term acute care hospitals found in the Medicare, Medicaid, and SCHIP Extension Act of 2007 (“MMSEA”).

Additionally, although the Health Reform Laws delayed implementation of the Resource Utilization Group, Version Four (“RUG−IV”), which revises the payment classification system for skilled nursing facilities, the Medicare and Medicaid Extenders Act of 2010 repealed this delay retroactively to October 1, 2010. The implementation of the RUG-IV classification may impact our tenants and operators by revising the classifications of certain patients. The federal reimbursement for certain facilities, such as skilled nursing facilities, incorporates adjustments to account for facility case-mix. The Health Reform Laws also extend certain payment rules related to long−term acute care hospitals found in the MMSEA. The MMSEA delayed the implementation of a policy referred to as the “25% threshold rule” that would limit the proportion of patients who can be admitted from a co-located or host hospital during a cost reporting period and be paid under the long-term care hospital prospective payment system. The Health Reform Laws further extended the delay, which expired at various points in calendar year 2012, depending on the start of the provider’s cost reporting period.

Finally, many other changes resulting from the Health Reform Laws, or implementing regulations or guidance may negatively impact our operators and tenants. We will continue to monitor and evaluate the Health Reform Laws and implementing regulations and guidance to determine other potential effects of the reform.

Impact of Fraud and Abuse Provisions. The Health Reform Laws revise health care fraud and abuse provisions that will affect our operators and tenants. Specifically, the Health Reform Laws allow for up to treble damages under the Federal False Claims Act for violations related to state−based health insurance exchanges authorized by the Health Reform Laws, which will be implemented beginning in 2014. The Health Reform Laws also impose new civil monetary penalties for false statements or actions that lead to delayed inspections, with penalties of up to $15,000 per day for failure to grant timely access and up to $50,000 for a knowing

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

violation. Additionally, the Health Reform Laws require certain entities – including providers, suppliers, Medicaid managed care organizations, Medicare Advantage organizations, and prescription drug program sponsors – to report and return overpayments to the appropriate payer by the later of (a) sixty (60) days after the date the overpayment was “identified,” or (b) the date that the “corresponding cost report” is due. The entity also must notify the payer in writing of the reason for the overpayment. A violation of these requirements may result in criminal liability, civil liability under the FCA, and/or exclusion from the federal health care programs. On February 14, 2012, CMS published a proposed rule implementing the Health Reform Laws requirement that health care providers and suppliers report and return self−identified overpayments by the later of 60 days after the date the overpayment was identified, or the date any corresponding cost report is due, if applicable. The Health Reform Laws also amend the Federal Anti−Kickback Statute (“AKS”) to state that any items or services “resulting from” a violation of the AKS constitutes a “false or fraudulent claim” under the Federal False Claims Act. The Health Reform Laws also provide for additional funding to investigate and prosecute health care fraud and abuse. Accordingly, the increased penalties under the Health Reform Laws for fraud and abuse violations may have a negative impact on our operators and tenants in the event that the government brings an enforcement action or subjects them to penalties.

Further, CMS published final rulemaking to implement the enhanced provider and supplier screening provisions called for in the Health Reform Laws. Under the final rule, beginning March 25, 2011, all enrolling and participating providers and suppliers are assessed an annual administrative fee and are placed in one of three risk levels (limited, moderate, and high) based on an assessment of the individual’s or entity’s overall risk of fraud, waste and abuse. This rule also allows for the temporary suspension of Medicare payments to providers or suppliers in the event CMS receives credible information that an overpayment, fraud, or willful misrepresentation has occurred. The Health Reform Laws granted the Secretary of the Department of Health and Human Services significant discretionary authority to suspend, exclude, or impose fines on providers and suppliers based on the agency’s determination that such a provider or supplier is “high−risk,” and, as a result, this final rulemaking has the potential to materially adversely affect our operators and tenants who may be evaluated under the enhanced screening process.

On November 2, 2011, CMS and OIG jointly published the final rule establishing waivers of certain fraud and abuse laws to ACOs. These waivers include automatic AKS, Stark, and Civil Monetary Penalty Law waivers that may be applied in certain situations and that will apply uniformly to each ACO, ACO participant, and ACO provider/supplier. Notably, the final rule states that CMS and OIG intend to closely monitor ACOs through June 2013 to ensure that these waivers are not causing “undesirable effects” and need to be narrowed to prevent fraud and abuse.

Additionally, provisions of Title VI of the Health Care Reform Laws are designed to increase transparency and program integrity by skilled nursing facilities, other nursing facilities and similar providers. Specifically, skilled nursing facilities and other providers and suppliers will be required to institute compliance and ethics programs. Additionally, the Health Reform Laws make it easier for consumers to file complaints against nursing homes by mandating that states establish complaint websites. The provisions calling for enhanced transparency will increase the administrative burden and costs on these providers.

Impact to the Health Care Plans Offered to Our Employees. The Health Reform Laws affect employers that provide health plans to their employees. The new laws change the tax treatment of the Medicare Part D retiree drug subsidy and extend dependent coverage for dependents up to age 26, among other changes. We continue to evaluate our health care plans for these changes as new reform laws are enacted. These changes may affect our operators and tenants as well.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions. Management considers accounting estimates or assumptions critical if:

· the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and

· the impact of the estimates and assumptions on financial condition or operating performance is material.

Management has discussed the development and selection of its critical accounting policies with the Audit Committee of the Board of Directors and the Audit Committee has reviewed the disclosure presented below relating to them. Management believes the current assumptions and other considerations used to estimate amounts reflected in our consolidated financial statements are appropriate and are not reasonably likely to change in the future. However, since these estimates require assumptions to be made that were uncertain at the time the estimate was made, they bear the risk of change. If actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations, liquidity and/or financial condition. Please refer to Note 1 of our audited consolidated financial statements for further information on significant accounting policies that impact us. There were no material changes to these policies in 2012.

The following table presents information about our critical accounting policies, as well as the material assumptions used to develop each estimate:

Nature of Critical

Accounting Estimate

Assumptions/Approach

Used

Principles of Consolidation

The consolidated financial statements include our accounts, the accounts of our wholly-owned subsidiaries and the accounts of joint venture entities in which we own a majority voting interest with the ability to control operations and where no substantive participating rights or substantive kick out rights have been granted to the noncontrolling interests. In addition, we consolidate those entities deemed to be variable interest entities in which we are determined to be the primary beneficiary. All material intercompany transactions and balances have been eliminated in consolidation.

We make judgments about which entities are VIEs based on an assessment of whether (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We make judgments with respect to our level of influence or control of an entity and whether we are (or are not) the primary beneficiary of a VIE. Consideration of various factors includes, but is not limited to, our ability to direct the activities that most significantly impact the entity's economic performance, our form of ownership interest, our representation on the entity's governing body, the size and seniority of our investment, our ability and the rights of other investors to participate in policy making decisions, replace the manager and/or liquidate the entity, if applicable. Our ability to correctly assess our influence or control over an entity at inception of our involvement or on a continuous basis when determining the primary beneficiary of a VIE affects the presentation of these entities in our consolidated financial statements. If we perform a primary beneficiary analysis at a date other than at inception of the variable interest entity, our assumptions may be different and may result in the identification of a different primary beneficiary.

Income Taxes

As part of the process of preparing our consolidated financial statements, significant management judgment is required to evaluate our compliance with REIT requirements.

Our determinations are based on interpretation of tax laws, and our conclusions may have an impact on the income tax expense recognized. Adjustments to income tax expense may be required as a result of: (i) audits conducted by federal and state tax authorities, (ii) our ability to qualify as a REIT, (iii) the potential for built-in-gain recognized related to prior-tax-free acquisitions of C corporations, and (iv) changes in tax laws. Adjustments required in any given period are included in income.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Nature of Critical Accounting Estimate	Assumptions/Approach Used
Business Combinations Real property developed by us is recorded at cost, including the capitalization of construction period interest. The cost of real property acquired is allocated to net tangible and identifiable intangible assets based on their respective fair values. Tangible assets primarily consist of land, buildings and improvements. The remaining purchase price is allocated among identifiable intangible assets primarily consisting of the above or below market component of in-place leases and the value of in-place leases. The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship values based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with that respective tenant.	We make estimates as part of our allocation of the purchase price of acquisitions to the various components of the acquisition based upon the relative fair value of each component. The most significant components of our allocations are typically the allocation of fair value to the buildings as-if-vacant, land and in-place leases. In the case of the fair value of buildings and the allocation of value to land and other intangibles, our estimates of the values of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the value of in-place leases, we make our best estimates based on our evaluation of the specific characteristics of each tenant's lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. Our assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases. We compute depreciation and amortization on our properties using the straight-line method based on their estimated useful lives which range from 15 to 40 years for buildings and five to 15 years for improvements. Amortization periods for intangibles are based on the estimated remaining useful lives of the underlying agreements.
Allowance for Loan Losses We maintain an allowance for loan losses in accordance with U.S. GAAP. The allowance for loan losses is maintained at a level believed adequate to absorb potential losses in our loans receivable. The determination of the allowance is based on a quarterly evaluation of all outstanding loans. If this evaluation indicates that there is a greater risk of loan charge-offs, additional allowances or placement on non-accrual status may be required. A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the original loan agreement. Consistent with this definition, all loans on non-accrual are deemed impaired. To the extent circumstances improve and the risk of collectability is diminished, we will return these loans to full accrual status.		The determination of the allowance is based on a quarterly evaluation of all outstanding loans, including general economic conditions and estimated collectability of loan payments and principal. We evaluate the collectability of our loans receivable based on a combination of factors, including, but not limited to, delinquency status, historical loan charge-offs, financial strength of the borrower and guarantors and value of the underlying property.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Nature of Critical

Accounting Estimate

Assumptions/Approach

Used

Revenue Recognition

Revenue is recorded in accordance with U.S. GAAP, which requires that revenue be recognized after four basic criteria are met. These four criteria include persuasive evidence of an arrangement, the rendering of service, fixed and determinable income and reasonably assured collectability. If the collectability of revenue is determined incorrectly, the amount and timing of our reported revenue could be significantly affected. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risk. Substantially all of our operating leases contain fixed and/or contingent escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. We recognize resident fees and services, other than move-in fees, monthly as services are provided. Lease agreements with residents generally have a term of one year and are cancelable by the resident with 30 days’ notice.

We evaluate the collectability of our revenues and related receivables on an on-going basis. We evaluate collectability based on assumptions and other considerations including, but not limited to, the certainty of payment, payment history, the financial strength of the investment’s underlying operations as measured by cash flows and payment coverages, the value of the underlying collateral and guaranties and current economic conditions.

If our evaluation indicates that collectability is not reasonably assured, we may place an investment on non-accrual or reserve against all or a portion of current income as an offset to revenue.

Impairment of Long-Lived Assets

We review our long-lived assets for potential impairment in accordance with U.S. GAAP. An impairment charge must be recognized when the carrying value of a long-lived asset is not recoverable. The carrying value is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that a permanent impairment of a long-lived asset has occurred, the carrying value of the asset is reduced to its fair value and an impairment charge is recognized for the difference between the carrying value and the fair value.

The net book value of long-lived assets is reviewed quarterly on a property by property basis to determine if there are indicators of impairment. These indicators may include anticipated operating losses at the property level, the tenant’s inability to make rent payments, a decision to dispose of an asset before the end of its estimated useful life and changes in the market that may permanently reduce the value of the property. If indicators of impairment exist, then the undiscounted future cash flows from the most likely use of the property are compared to the current net book value. This analysis requires us to determine if indicators of impairment exist and to estimate the most likely stream of cash flows to be generated from the property during the period the property is expected to be held.

Fair Value of Derivative Instruments

The valuation of derivative instruments is accounted for in accordance with U.S. GAAP, which requires companies to record derivatives at fair market value on the balance sheet as assets or liabilities.

The valuation of derivative instruments requires us to make estimates and judgments that affect the fair value of the instruments. Fair values for our derivatives are estimated by utilizing pricing models that consider forward yield curves and discount rates. Such amounts and their recognition are subject to significant estimates which may change in the future.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Impact of Inflation

During the past three years, inflation has not significantly affected our earnings because of the moderate inflation rate. Additionally, our earnings are primarily long-term investments with predictable rates of return. These investments are mainly financed with a combination of equity, senior unsecured notes and borrowings under our primary unsecured line of credit arrangement. During inflationary periods, which generally are accompanied by rising interest rates, our ability to grow may be adversely affected because the yield on new investments may increase at a slower rate than new borrowing costs. Presuming the current inflation rate remains moderate and long-term interest rates do not increase significantly, we believe that inflation will not impact the availability of equity and debt financing for us.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of Health Care REIT, Inc.

We have audited the accompanying consolidated balance sheets of Health Care REIT, Inc. as of December 31, 2012 and 2011, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2012. Our audits also included the financial statement schedules listed in Item 9.01 of this Form 8-K. These financial statements and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Health Care REIT, Inc. at December 31, 2012 and 2011, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedules, when considered in relation to the basic financial statements taken as a whole, present fairly in all material respects the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Health Care REIT, Inc.’s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated February 26, 2013 (not included herein) expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Toledo, Ohio

February 26, 2013,

except for Notes 5 and 17

as to which the date is November 5, 2013

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

					December 31,		December 31,
					2012		2011
Assets				��	(In thousands)
Real estate investments:
	Real property owned:
		Land and land improvements			$	1,365,391	$	1,116,756
		Buildings and improvements				15,635,127		13,073,747
		Acquired lease intangibles				673,684		428,199
		Real property held for sale, net of accumulated depreciation				245,213		36,115
		Construction in progress				162,984		189,502
			Gross real property owned			18,082,399		14,844,319
		Less accumulated depreciation and amortization				(1,555,055)		(1,194,476)
			Net real property owned			16,527,344		13,649,843
	Real estate loans receivable:
		Real estate loans receivable				895,665		292,507
	Net real estate investments					17,423,009		13,942,350
Other assets:
		Investments in unconsolidated entities				438,936		241,722
		Goodwill				68,321		68,321
		Deferred loan expenses				66,327		58,584
		Cash and cash equivalents				1,033,764		163,482
		Restricted cash				107,657		69,620
		Receivables and other assets				411,095		380,527
			Total other assets			2,126,100		982,256
Total assets					$	19,549,109	$	14,924,606

Liabilities and equity
Liabilities:
		Borrowings under unsecured line of credit arrangements			$	-	$	610,000
		Senior unsecured notes				6,114,151		4,434,107
		Secured debt				2,336,196		2,112,649
		Capital lease obligations				81,552		83,996
		Accrued expenses and other liabilities				462,099		371,557
Total liabilities						8,993,998		7,612,309

Redeemable noncontrolling interests						34,592		33,650

Equity:
		Preferred stock				1,022,917		1,010,417
		Common stock				260,396		192,299
		Capital in excess of par value				10,543,690		7,019,714
		Treasury stock				(17,875)		(13,535)
		Cumulative net income				2,184,819		1,893,806
		Cumulative dividends				(3,694,579)		(2,972,129)
		Accumulated other comprehensive income (loss)				(11,028)		(11,928)
		Other equity				6,461		6,120
			Total Health Care REIT, Inc. stockholders’ equity			10,294,801		7,124,764
		Noncontrolling interests				225,718		153,883
Total equity						10,520,519		7,278,647
Total liabilities and equity					$	19,549,109	$	14,924,606

See accompanying notes

CONSOLIDATED BALANCE SHEETS

HEALTH CARE REIT, INC. AND SUBSIDIARIES

			Year Ended December 31,
			2012		2011		2010

Revenues:
	Rental income		$	1,074,567	$	815,564	$	470,265
	Resident fees and services			697,494		456,085		51,006
	Interest income			39,065		41,070		40,855
	Other income			5,271		11,295		7,245
		Total revenues		1,816,397		1,324,014		569,371
Expenses:
	Interest expense			364,737		294,105		130,788
	Property operating expenses			570,861		377,797		77,778
	Depreciation and amortization			510,385		390,151		161,542
	General and administrative			97,341		77,201		54,626
	Transaction costs			61,609		70,224		46,660
	Loss (gain) on derivatives, net			(1,825)		0		0
	Loss (gain) on extinguishment of debt, net			(775)		(979)		34,171
	Provision for loan losses			27,008		2,010		29,684
		Total expenses		1,629,341		1,210,509		535,249
Income from continuing operations before income taxes
	and income from unconsolidated entities			187,056		113,505		34,122
Income tax (expense) benefit				(7,612)		(1,388)		(364)
Income from unconsolidated entities				2,482		5,772		6,673
Income from continuing operations				181,926		117,889		40,431
Discontinued operations:
	Gain (loss) on sales of properties, net			100,549		61,160		36,115
	Impairment of assets			(29,287)		(12,194)		(947)
	Income (loss) from discontinued operations, net			41,652		45,861		53,285
		Discontinued operations, net		112,914		94,827		88,453
Net income				294,840		212,716		128,884
Less: Preferred stock dividends				69,129		60,502		21,645
Less: Preferred stock redemption charge				6,242		0		0
Less: Net income (loss) attributable to noncontrolling interests⁽¹⁾				(2,415)		(4,894)		357
Net income attributable to common stockholders			$	221,884	$	157,108	$	106,882

Average number of common shares outstanding:
	Basic			224,343		173,741		127,656
	Diluted			225,953		174,401		128,208

Earnings per share:
	Basic:
	Income from continuing operations
		attributable to common stockholders	$	0.49	$	0.36	$	0.14
	Discontinued operations, net			0.50		0.55		0.69
	Net income attributable to common stockholders*		$	0.99	$	0.90	$	0.84

	Diluted:
	Income from continuing operations
		attributable to common stockholders	$	0.48	$	0.36	$	0.14
	Discontinued operations, net			0.50		0.54		0.69
	Net income attributable to common stockholders*		$	0.98	$	0.90	$	0.83

* Amounts may not sum due to rounding

(1) Includes amounts attributable to redeemable noncontrolling interests

See accompanying notes

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

HEALTH CARE REIT, INC. AND SUBSIDIARIES

			Year Ended December 31,
			2012		2011		2010

Net income			$	294,840	$	212,716	$	128,884

Other comprehensive income (loss):
	Unrecognized gain/(loss) on equity investments			403		(122)		54
	Change in net unrealized gains (losses) on cash flow hedges:
		Unrealized gain/(loss)		3,200		3,189		(10,307)
		Reclassification adjustment realized in net income		(1,596)		(1,781)		2,244
	Unrecognized actuarial gain/(loss)			(226)		(2,115)		(199)
	Foreign currency translation gain/(loss)			(881)		0		0
Total other comprehensive income (loss)				900		(829)		(8,208)

Total comprehensive income				295,740		211,887		120,676
Total comprehensive income attributable to noncontrolling interests⁽¹⁾				(2,415)		(4,894)		357
Total comprehensive income attributable to stockholders			$	293,325	$	206,993	$	121,033

(1) Includes amounts attributable to redeemable noncontrolling interests.

See accompanying notes

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)

HEALTH CARE REIT, INC. AND SUBSIDIARIES

(in thousands)														Accumulated
						Capital in								Other
		Preferred		Common		Excess of		Treasury		Cumulative		Cumulative		Comprehensive		Other		Noncontrolling
		Stock		Stock		Par Value		Stock		Net Income		Dividends		Income		Equity		Interests		Total
Balances at December 31, 2009		$	288,683		123,385		3,900,666		(7,619)		1,547,669		(2,057,658)		(2,891)		4,804		10,412	$	3,807,451
Comprehensive income:
	Net income										128,527								357		128,884
	Other comprehensive income:														(8,208)						(8,208)
Total comprehensive income																					120,676
Contributions by noncontrolling interests							43,640												122,781		166,421
Distributions to noncontrolling interests																			(3,301)		(3,301)
Amounts related to issuance of common stock
	from dividend reinvestment and stock
	incentive plans, net of forfeitures				2,300		97,696		(3,733)								(741)				95,522
Net proceeds from sale of common stock					21,131		884,255														905,386
Equity component of convertible debt							(9,689)														(9,689)
Equity consideration in business combinations			16,667				2,721														19,388
Redemption of preferred stock			(165)																		(165)
Conversion of preferred stock			(13,518)		339		13,179														0
Option compensation expense																	1,634				1,634
Cash dividends paid:
	Common stock cash dividends												(348,578)								(348,578)
	Preferred stock cash dividends												(21,645)								(21,645)
Balances at December 31, 2010			291,667		147,155		4,932,468		(11,352)		1,676,196		(2,427,881)		(11,099)		5,697		130,249		4,733,100
Comprehensive income:
	Net income										217,610								(3,591)		214,019
	Other comprehensive income:														(829)						(829)
Total comprehensive income																					213,190
Contributions by noncontrolling interests							6,468												65,361		71,829
Distributions to noncontrolling interests																			(38,136)		(38,136)
Amounts related to issuance of common stock
	from dividend reinvestment and stock
	incentive plans, net of forfeitures				2,895		138,989		(2,183)								(1,494)				138,207
Net proceeds from sale of common stock					42,249		1,964,102														2,006,351
Proceeds from issuance of preferred shares			718,750				(22,313)														696,437
Option compensation expense																	1,917				1,917
Cash dividends paid:
	Common stock cash dividends												(483,746)								(483,746)
	Preferred stock cash dividends												(60,502)								(60,502)
Balances at December 31, 2011			1,010,417		192,299		7,019,714		(13,535)		1,893,806		(2,972,129)		(11,928)		6,120		153,883		7,278,647
Comprehensive income:
	Net income										297,255								(1,480)		295,775
	Other comprehensive income:														900						900
Total comprehensive income																					296,675
Contributions by noncontrolling interests							222												89,934		90,156
Distributions to noncontrolling interests							(7,358)												(16,619)		(23,977)
Amounts related to issuance of common stock
	from dividend reinvestment and stock
	incentive plans, net of forfeitures				2,658		149,955		(4,340)								(2,534)				145,739
Net proceeds from sale of common stock					64,400		3,382,532														3,446,932
Net proceeds from sale of preferred stock			287,500				(9,813)														277,687
Equity component of convertible debt					1,039		2,236														3,275
Redemption of preferred stock			(275,000)				6,202				(6,242)										(275,040)
Option compensation expense																	2,875				2,875
Cash dividends paid:
	Common stock cash dividends												(653,321)								(653,321)
	Preferred stock cash dividends												(69,129)								(69,129)
Balances at December 31, 2012		$	1,022,917	$	260,396	$	10,543,690	$	(17,875)	$	2,184,819	$	(3,694,579)	$	(11,028)	$	6,461	$	225,718	$	10,520,519

See accompanying notes

CONSOLIDATED STATEMENTS OF EQUITY

HEALTH CARE REIT, INC. AND SUBSIDIARIES

			Year Ended December 31,
(In thousands)			2012		2011		2010
Operating activities
Net income			$	294,840	$	212,716	$	128,884
Adjustments to reconcile net income to
	net cash provided from (used in) operating activities:
		Depreciation and amortization		533,585		423,605		202,543
		Other amortization expenses		15,185		16,851		17,169
		Provision for loan losses		27,008		2,010		29,684
		Impairment of assets		29,287		12,194		947
		Stock-based compensation expense		18,521		10,786		11,823
		Loss (gain) on derivatives, net		(1,825)		0		0
		Loss (gain) on extinguishment of debt, net		(775)		(979)		34,171
		Income from unconsolidated entities		(2,482)		(5,772)		(6,673)
		Rental income in excess of cash received		(32,362)		(31,578)		(6,594)
		Amortization related to above (below) market leases, net		165		(2,507)		(2,856)
		Loss (gain) on sales of properties, net		(100,549)		(61,160)		(36,115)
		Distributions by unconsolidated entities		17,607		6,149		0
		Increase (decrease) in accrued expenses and other liabilities		38,213		10,653		12,293
		Decrease (increase) in receivables and other assets		(18,285)		(4,744)		(20,535)
Net cash provided from (used in) operating activities				818,133		588,224		364,741

Investing activities
	Investment in real property, net of cash acquired			(3,345,111)		(4,905,122)		(2,074,176)
	Capitalized interest			(9,777)		(13,164)		(20,792)
	Investment in real estate loans receivable			(665,094)		(51,477)		(97,265)
	Other investments, net of payments			25,425		(22,986)		(133,894)
	Principal collected on real estate loans receivable			35,020		188,811		43,495
	Contributions to unconsolidated entities			(227,735)		(2,784)		(196,413)
	Distributions by unconsolidated entities			13,136		9,135		103
	Proceeds from (payments on) derivatives			6,652		0		0
	Decrease (increase) in restricted cash			(35,766)		30,248		(52,124)
	Proceeds from sales of real property			610,271		247,210		219,027
Net cash provided from (used in) investing activities				(3,592,979)		(4,520,129)		(2,312,039)

Financing activities
	Net increase (decrease) under unsecured lines of credit arrangements			(610,000)		310,000		160,000
	Proceeds from issuance of senior unsecured notes			2,025,708		1,381,086		1,821,683
	Payments to extinguish senior unsecured notes			(370,524)		(3)		(495,542)
	Net proceeds from the issuance of secured debt			157,418		119,030		154,306
	Payments on secured debt			(406,210)		(83,998)		(217,711)
	Net proceeds from the issuance of common stock			3,581,292		2,137,594		995,438
	Net proceeds from the issuance of preferred stock			277,687		696,437		0
	Redemption of preferred stock			(275,000)		0		0
	Decrease (increase) in deferred loan expenses			(7,152)		(28,867)		(3,869)
	Contributions by noncontrolling interests⁽¹⁾			24,115		8,604		2,611
	Distributions to noncontrolling interests⁽¹⁾			(29,353)		(30,705)		(3,301)
	Cash distributions to stockholders			(722,450)		(544,248)		(370,223)
	Other financing activities			(403)		(1,113)		0
Net cash provided from (used in) financing activities				3,645,128		3,963,817		2,043,392


Increase (decrease) in cash and cash equivalents				870,282		31,912		96,094
Cash and cash equivalents at beginning of period				163,482		131,570		35,476
Cash and cash equivalents at end of period			$	1,033,764	$	163,482	$	131,570

Supplemental cash flow information:
	Interest paid		$	369,511	$	285,884	$	156,207
	Income taxes paid			3,071		389		319

(1) Includes amounts attributable to redeemable noncontrolling interests.

See accompanying notes.

CONSOLIDATED STATEMENTS OF CASH FLOWS

HEALTH CARE REIT, INC. AND SUBSIDIARIES

1. Business

Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is an equity real estate investment trust (“REIT”) that invests in seniors housing and health care real estate. Our full service platform offers property management and development services to our customers. As of December 31, 2012, our diversified portfolio consisted of 1,025 properties in 46 states, the United Kingdom, and Canada. Founded in 1970, we were the first real estate investment trust to invest exclusively in health care facilities.

2. Accounting Policies and Related Matters

Principles of Consolidation

The consolidated financial statements include the accounts of our wholly-owned subsidiaries and joint venture entities that we control, through voting rights or other means. All material intercompany transactions and balances have been eliminated in consolidation.

At inception of joint venture transactions, we identify entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and determine which business enterprise is the primary beneficiary of its operations. A VIE is broadly defined as an entity where either (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We consolidate investments in VIEs when we are determined to be the primary beneficiary. Accounting Standards Codification Topic 810, Consolidations (“ASC 810”), requires enterprises to perform a qualitative approach to determining whether or not a VIE will need to be consolidated on a continuous basis. This evaluation is based on an enterprise’s ability to direct and influence the activities of a VIE that most significantly impact that entity’s economic performance.

For investments in joint ventures, we evaluate the type of rights held by the limited partner(s), which may preclude consolidation in circumstances in which the sole general partner would otherwise consolidate the limited partnership. The assessment of limited partners’ rights and their impact on the presumption of control over a limited partnership by the sole general partner should be made when an investor becomes the sole general partner and should be reassessed if (i) there is a change to the terms or in the exercisability of the rights of the limited partners, (ii) the sole general partner increases or decreases its ownership in the limited partnership, or (iii) there is an increase or decrease in the number of outstanding limited partnership interests. We similarly evaluate the rights of managing members of limited liability companies.

Use of Estimates

The preparation of the financial statements in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Revenue Recognition

Revenue is recorded in accordance with U.S. GAAP, which requires that revenue be recognized after four basic criteria are met. These four criteria include persuasive evidence of an arrangement, the rendering of service, fixed and determinable income and reasonably assured collectability. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risk. Substantially all of our operating leases contain escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. Leases in our medical office building portfolio typically include some form of operating expense reimbursement by the tenant. Certain payments made to operators are treated as lease incentives and amortized as a reduction of revenue over the lease term. We recognize resident fees and services, other than move-in fees, monthly as services are provided. Lease agreements with residents generally have a term of one year and are cancelable by the resident with 30 days’ notice.

Cash and Cash Equivalents

Cash and cash equivalents consist of all highly liquid investments with an original maturity of three months or less.

Restricted Cash

Restricted cash primarily consists of amounts held by lenders to provide future payments for real estate taxes, insurance, tenant and capital improvements and amounts held in escrow relating to acquisitions we are entitled to receive over a period of time as outlined in the escrow agreement.

Deferred Loan Expenses

CONSOLIDATED STATEMENTS OF CASH FLOWS

HEALTH CARE REIT, INC. AND SUBSIDIARIES

Deferred loan expenses are costs incurred by us in connection with the issuance, assumption and amendments of debt arrangements. We amortize these costs over the term of the debt using the straight-line method, which approximates the effective interest method.

Investments in Unconsolidated Entities

Investments in less than majority owned entities where our interests represent a general partnership interest but substantive participating or kick-out rights have been granted to the limited partners, or where our interests do not represent the general partnership interest and we do not control the major operating and financial policies of the entity, are reported under the equity method of accounting. Under the equity method of accounting, our share of the investee’s earnings or losses is included in our consolidated results of operations. To the extent that our cost basis is different from the basis reflected at the entity level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in our share of equity in earnings of the entity. The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the entity interest or the estimated fair value of the assets prior to the sale of interests in the entity. Other equity investments include an investment in available-for-sale securities. These equity investments represented a minimal ownership interest in these companies. We evaluate our equity method investments for impairment based upon a comparison of the estimated fair value of the equity method investment to its carrying value. When we determine a decline in the estimated fair value of such an investment below its carrying value is other-than-temporary, an impairment is recorded.

Redeemable Noncontrolling Interests

Certain noncontrolling interests are redeemable at fair value. Accordingly, we record the carrying amount of the noncontrolling interests at the greater of (i) the initial carrying amount, increased or decreased for the noncontrolling interest’s share of net income or loss and its share of other comprehensive income or loss and dividends or (ii) the redemption value. In accordance with ASC 810, the redeemable noncontrolling interests were classified outside of permanent equity, as a mezzanine item, in the balance sheet.

Real Property Owned

Real property developed by us is recorded at cost, including the capitalization of construction period interest. Expenditures for repairs and maintenance are expensed as incurred. Property acquisitions are accounted for as business combinations where we measure the assets acquired, liabilities (including assumed debt and contingencies) and any noncontrolling interests at their fair values on the acquisition date. The cost of real property acquired, which represents substantially all of the purchase price, is allocated to net tangible and identifiable intangible assets based on their respective fair values. These properties are depreciated on a straight-line basis over their estimated useful lives which range from 15 to 40 years for buildings and 5 to 15 years for improvements. Tangible assets primarily consist of land, buildings and improvements, including those related to capital leases. We consider costs incurred in conjunction with re-leasing properties, including tenant improvements and lease commissions, to represent the acquisition of productive assets and, accordingly, such costs are reflected as investment activities in our statement of cash flows.

The remaining purchase price is allocated among identifiable intangible assets primarily consisting of the above or below market component of in-place leases and the value associated with the presence of in-place tenants or residents. The value allocable to the above or below market component of the acquired in-place lease is determined based upon the present value (using a discount rate which reflects the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term, and (ii) management’s estimate of the amounts that would be paid using fair market rates over the remaining term of the lease. The amounts allocated to above market leases are included in acquired lease intangibles and below market leases are included in other liabilities in the balance sheet and are amortized to rental income over the remaining terms of the respective leases.

The total amount of other intangible assets acquired is further allocated to in-place lease values and customer relationship values for in-place tenants based on management’s evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respective tenant. Characteristics considered by management in allocating these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors . The total amount of other intangible assets acquired is further allocated to in-place lease values for in-place residents with such value representing (i) value associated with lost revenue related to tenant reimbursable operating costs that would be incurred in an assumed re-leasing period, and (ii) value associated with lost rental revenue from existing leases during an assumed re-leasing period. This intangible asset will be amortized over the assumed re-leasing period.

The net book value of long-lived assets is reviewed quarterly on a property by property basis to determine if facts and circumstances suggest that the assets may be impaired or that the depreciable life may need to be changed. We consider external factors relating to each asset and the existence of a master lease which may link the cash flows of an individual asset to a larger portfolio of assets leased to the same tenant. If these factors and the projected undiscounted cash flows of the asset over the remaining depreciation period indicate that the asset will not be recoverable, the carrying value is reduced to the estimated fair market value. In

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

addition, we are exposed to the risks inherent in concentrating investments in real estate, and in particular, the seniors housing and health care industries. A downturn in the real estate industry could adversely affect the value of our properties and our ability to sell properties for a price or on terms acceptable to us.

Capitalization of Construction Period Interest

We capitalize interest costs associated with funds used for the construction of properties owned directly by us. The amount capitalized is based upon the balance outstanding during the construction period using the rate of interest which approximates our cost of financing. We capitalize interest costs related to construction of real property owned by us. Our interest expense reflected in the consolidated statements of comprehensive income has been reduced by the amounts capitalized.

Gain on Sale of Assets

We recognize sales of assets only upon the closing of the transaction with the purchaser. Payments received from purchasers prior to closing are recorded as deposits and classified as other assets on our consolidated balance sheets. Gains on assets sold are recognized using the full accrual method upon closing when (i) the collectability of the sales price is reasonably assured, (ii) we are not obligated to perform significant activities after the sale to earn the profit, (iii) we have received adequate initial investment from the purchaser and (iv) other profit recognition criteria have been satisfied. Gains may be deferred in whole or in part until the sales satisfy the requirements of gain recognition on sales of real estate.

Real Estate Loans Receivable

Real estate loans receivable consist of mortgage loans and other real estate loans. Interest income on loans is recognized as earned based upon the principal amount outstanding subject to an evaluation of collectability risks. The loans are primarily collateralized by a first, second or third mortgage lien, a leasehold mortgage on, or an assignment of the partnership interest in, the related properties, corporate guaranties and/or personal guaranties.

Allowance for Losses on Loans Receivable

The allowance for losses on loans receivable is maintained at a level believed adequate to absorb potential losses in our loans receivable. The determination of the allowance is based on a quarterly evaluation of these loans, including general economic conditions and estimated collectability of loan payments. We evaluate the collectability of our loans receivable based on a combination of factors, including, but not limited to, delinquency status, historical loan charge-offs, financial strength of the borrower and guarantors and value of the underlying collateral. If such factors indicate that there is greater risk of loan charge-offs, additional allowances or placement on non-accrual status may be required. A loan is impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due as scheduled according to the contractual terms of the original loan agreement. Consistent with this definition, all loans on non-accrual are deemed impaired. To the extent circumstances improve and the risk of collectability is diminished, we will return these loans to full accrual status. While a loan is on non-accrual status, any cash receipts are applied against the outstanding principal balance.

Goodwill

We account for goodwill in accordance with U.S. GAAP. Goodwill is tested annually for impairment and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value and the implied fair value of goodwill is less than the carrying amount of that goodwill. We have not had any goodwill impairments.

Fair Value of Derivative Instruments

Derivatives are recorded at fair value on the balance sheet as assets or liabilities. The valuation of derivative instruments requires us to make estimates and judgments that affect the fair value of the instruments. Fair values of our derivatives are estimated by pricing models that consider the forward yield curves and discount rates. The fair value of our forward exchange contracts are estimated by pricing models that consider foreign currency spot rates, forward trade rates and discount rates. Such amounts and the recognition of such amounts are subject to significant estimates that may change in the future. See Note 11 for additional information.

Federal Income Tax

We have elected to be treated as a REIT under the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our first taxable year, and made no provision for federal income tax purposes prior to our acquisition of our “taxable REIT subsidiaries.” As a result of these as well as subsequent acquisitions, we now record income tax expense or benefit with respect to certain of our entities that are taxed as taxable REIT subsidiaries under provisions similar to those applicable to regular corporations and not under the REIT provisions.

We account for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

expected future tax consequences of events that have been included in our financial statements or tax returns. Under this method, we determine deferred tax assets and liabilities based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes a change in our judgment about expected future tax consequences of events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes a change in our judgment about the realizability of the related deferred tax asset, is included in the tax provision when such changes occur. See Note 18 for additional information.

Foreign Currency

Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. We translate the results of operations of our foreign subsidiaries into U.S. dollars using average rates of exchange in effect during the period, and we translate balance sheet accounts using exchange rates in effect at the end of the period. We record resulting currency translation adjustments in accumulated other comprehensive income, a component of stockholders’ equity, on our consolidated balance sheets. We record transaction gains and losses in our consolidated statements of comprehensive income.

Earnings Per Share

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares outstanding for the period adjusted for non-vested shares of restricted stock. The computation of diluted earnings per share is similar to basic earnings per share, except that the number of shares is increased to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued.

New Accounting Standards

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS” (“ASU 2011-04”), which requires incremental fair value disclosures in the notes to the financial statements. We have adopted ASU 2011-04 effective January 1, 2012. The adoption of this guidance did not have a material impact on our consolidated financial position or results of operations.

In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”), which requires entities to present net income and other comprehensive income in either a single continuous statement or in two separate, but consecutive, statements of net income and other comprehensive income. We have adopted ASU 2011-05 effective January 1, 2012 and presented total comprehensive income on the consolidated statements of comprehensive income. Further disclosures including reconciliation from net income to total comprehensive income will be required on an annual basis. The provisions of ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in ASU 2011-05” delayed the requirement to present certain reclassifications on the face of the financial statements.

Reclassifications

Certain amounts in prior years have been reclassified to conform to current year presentation.

3. Real Property Acquisitions and Development

The total purchase price for all properties acquired has been allocated to the tangible and identifiable intangible assets, liabilities and noncontrolling interests based upon their respective fair values in accordance with our accounting policies. The results of operations for these acquisitions have been included in our consolidated results of operations since the date of acquisition and are a component of the appropriate segments. Transaction costs primarily represent costs incurred with property acquisitions, including due diligence costs, fees for legal and valuation services and termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees and other acquisition-related costs. During the year ended December 31, 2012, we finalized our purchase price allocation of certain previously reported acquisitions and there were no material changes from those previously disclosed.

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Seniors Housing Triple-net Activity

The following is our purchase price allocations and other seniors housing triple-net real property investment activity for the periods presented (in thousands):


		Year Ended December 31,
			2012⁽¹⁾		2011		2010
Land and land improvements		$	87,242	$	212,156	$	61,290
Buildings and improvements			984,077		3,108,508		967,239
Receivables and other assets			119		9,101		0
	Total assets acquired⁽²⁾		1,071,438		3,329,765		1,028,529
Secured debt			(89,881)		(93,431)		(84,086)
Accrued expenses and other liabilities			(3,542)		(91,290)		(26,345)
	Total liabilities assumed		(93,423)		(184,721)		(110,431)
Capital in excess of par			921		0		0
Noncontrolling interests			(17,215)		0		0
Non-cash acquisition related activity			(616)		(2,532)		(9,922)
	Cash disbursed for acquisitions		961,105		3,142,512		908,176
Construction in progress additions			179,684		182,626		85,993
Less: Capitalized interest			(6,041)		(5,752)		(6,396)
Cash disbursed for construction in progress			173,643		176,874		79,597
Capital improvements to existing properties			67,026		0		21,833
	Total cash invested in real property, net of cash acquired	$	1,201,774	$	3,319,386	$	1,009,606


(1) Includes acquisitions with an aggregate purchase price of $37,772,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $2,031,000 of cash acquired during the year ended December 31, 2012.

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Seniors Housing Operating Activity

Acquisitions of seniors housing operating properties are structured under RIDEA, which is described in Note 18. This structure results in the inclusion of all resident revenues and related property operating expenses from the operation of these qualified health care properties in our consolidated statements of comprehensive income. Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. See Note 2 for information regarding our foreign currency policies.

The following is a summary of our seniors housing operating real property investment activity for the periods presented (in thousands):


		Year Ended December 31,
			2012⁽¹⁾		2011		2010
Land and land improvements		$	146,332	$	112,350	$	75,620
Buildings and improvements			1,341,560		1,512,764		676,623
Acquired lease intangibles			118,077		122,371		63,757
Restricted cash			1,296		20,699		-
Receivables and other assets			10,125		901		16,459
	Total assets acquired⁽²⁾		1,617,390		1,769,085		832,459
Secured debt			(124,190)		(796,272)		(305,167)
Accrued expenses and other liabilities			(17,347)		(44,483)		(6,849)
	Total liabilities assumed		(141,537)		(840,755)		(312,016)
Capital in excess of par			-		(6,017)		(43,641)
Noncontrolling interests			(56,884)		(69,984)		(101,091)
Cash disbursed for acquisitions			1,418,969		852,329		375,711
Capital improvements to existing properties			21,751		15,880		1,735
	Total cash invested in real property, net of cash acquired	$	1,440,720	$	868,209	$	377,446


(1) Includes acquisitions with an aggregate purchase price of $1,370,128,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $20,691,000, $38,952,000 and $8,532,000 of cash acquired during the years ended December 31, 2012, 2011 and 2010, respectively.

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Medical Facilities Activity

Accrued contingent consideration related to certain medical facility acquisitions was $34,692,000 and $39,827,000 as of December 31, 2012 and 2011, respectively. Of the amount recognized, $12,500,000 is required to be settled in the Company’s common stock upon the achievement of certain performance thresholds. The following is a summary of our medical facilities real property investment activity for the periods presented (in thousands):


		Year Ended December 31,
			2012⁽¹⁾		2011		2010
Land and land improvements		$	68,619	$	48,342	$	49,632
Buildings and improvements			648,409		520,976		513,152
Acquired lease intangibles			115,233		60,609		67,929
Restricted cash			975		100		0
Goodwill⁽²⁾			0		0		68,321
Receivables and other assets			4,469		3,053		0
	Total assets acquired⁽³⁾		837,705		633,080		699,034
Secured debt			(267,527)		(72,225)		(170,255)
Accrued expenses and other liabilities			(25,928)		(34,214)		(75,010)
	Total liabilities assumed		(293,455)		(106,439)		(245,265)
Capital in excess of par			0		0		(2,721)
Noncontrolling interests			(193)		(7,211)		(10,848)
Preferred stock			0		0		(16,667)
Non-cash acquisition related activity			(880)		0		0
Cash disbursed for acquisitions			543,177		519,430		423,533
Construction in progress additions			134,830		165,593		252,595
Less: Capitalized interest			(3,736)		(7,412)		(13,924)
Accruals			(18,327)		(33,451)		(11,435)
Cash disbursed for construction in progress			112,767		124,730		227,236
Capital improvements to existing properties			46,673		24,031		36,354
	Total cash invested in real property, net of cash acquired	$	702,617	$	668,191	$	687,123


(1) Includes acquisitions with an aggregate purchase price of $190,799,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Goodwill represents the estimated fair value of the future development pipeline expected to be generated. Cash flows from this future pipeline are expected to come from development activities and the ability to perform the management functions at the assets after the properties are developed.
(3) Excludes $2,154,000 of cash acquired during the year ended December 31, 2011.

Construction Activity

The following is a summary of the construction projects that were placed into service and began generating revenues during the periods presented:


			Year Ended
			December 31, 2012		December 31, 2011		December 31, 2010
	Development projects:
		Seniors housing triple-net	$	146,913	$	114,161	$	273,034
		Medical facilities		189,135		355,935		162,376
		Total development projects		336,048		470,096		435,410
	Expansion projects			4,983		45,414		3,216
Total construction in progress conversions			$	341,031	$	515,510	$	438,626

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At December 31, 2012, future minimum lease payments receivable under operating leases (excluding properties in our seniors housing operating partnerships and excluding any operating expense reimbursements) are as follows (in thousands):


2013	$	1,039,427
2014		980,258
2015		952,029
2016		950,079
2017		929,224
Thereafter		7,579,800
Totals	$	12,430,817

4. Real Estate Intangibles

The following is a summary of our real estate intangibles, excluding those classified as held for sale, as of the dates indicated (dollars in thousands):


		December 31, 2012		December 31, 2011
Assets:
	In place lease intangibles	$	541,729	$	332,645
	Above market tenant leases		56,086		35,973
	Below market ground leases		61,450		51,316
	Lease commissions		14,419		8,265
	Gross historical cost		673,684		428,199
	Accumulated amortization		(257,242)		(148,380)
	Net book value	$	416,442	$	279,819

	Weighted-average amortization period in years		16.4		17.0

Liabilities:
	Below market tenant leases	$	77,036	$	67,284
	Above market ground leases		9,490		5,020
	Gross historical cost		86,526		72,304
	Accumulated amortization		(27,753)		(21,387)
	Net book value	$	58,773	$	50,917

	Weighted-average amortization period in years		14.3		12.3

The following is a summary of real estate intangible amortization for the periods presented (in thousands):


	Year Ended December 31,
	2012		2011		2010
Rental income related to above/below market tenant leases, net	$	1,120	$	3,340	$	3,829
Property operating expenses related to above/below market ground leases, net		(1,285)		(1,161)		(1,049)
Depreciation and amortization related to in place lease intangibles and lease commissions		(103,044)		(98,856)		(18,298)

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The future estimated aggregate amortization of intangible assets and liabilities is as follows for the periods presented (in thousands):


		Assets		Liabilities
2013	$	112,730	$	7,200
2014		62,787		6,616
2015		29,220		5,645
2016		23,201		5,233
2017		23,453		4,920
Thereafter		165,051		29,159
Totals	$	416,442	$	58,773

5. Dispositions, Assets Held for Sale and Discontinued Operations

Impairment of assets as reflected in our consolidated statements of comprehensive income relate to properties designated as held for sale and represent the charges necessary to adjust the carrying values to estimated fair values less costs to sell based on current sales price expectations. The following is a summary of our real property disposition activity for the periods presented (in thousands):


		Year Ended
		December 31, 2012		December 31, 2011		December 31, 2010
Real property dispositions:
	Seniors housing triple-net	$	372,378	$	150,755	$	170,290
	Medical facilities		149,344		35,295		14,092
	Total dispositions		521,722		186,050		184,382
Add: Gain (loss) on sales of real property, net			100,549		61,160		36,115
	Seller financing on sales of real property		(12,000)		0		(1,470)
Proceeds from real property sales		$	610,271	$	247,210	$	219,027

At December 31, 2012, $46,201,000 of sales proceeds is on deposit in an Internal Revenue Code Section 1031 exchange account escrow account with a qualified intermediary. We have reclassified the income and expenses attributable to all properties sold prior to or held for sale at September 30, 2013 to discontinued operations. Expenses include an allocation of interest expense based on property carrying values and our weighted-average cost of debt. The following illustrates the reclassification impact as a result of classifying properties as discontinued operations for the periods presented (in thousands):


			Year Ended December 31,
		2012		2011		2010
Revenues:
	Rental income	$	85,025	$	113,282	$	133,145
Expenses:
	Interest expense		18,563		27,894		30,172
	Property operating expenses		1,610		6,073		8,687
	Provision for depreciation		23,200		33,454		41,001
Income (loss) from discontinued operations, net		$	41,652	$	45,861	$	53,285

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6. Real Estate Loans Receivable

The following is a summary of our real estate loans receivable (in thousands):


		December 31,
	2012		2011
Mortgage loans	$	87,955	$	63,934
Other real estate loans		807,710		228,573
Totals	$	895,665	$	292,507

The following is a summary of our real estate loan activity for the periods presented (in thousands):


		Year Ended
		December 31, 2012								December 31, 2011						December 31, 2010
		Seniors		Seniors						Seniors						Seniors
		Housing		Housing		Medical				Housing		Medical				Housing		Medical
		Triple-net		Operating⁽¹⁾		Facilities		Totals		Triple-net		Facilities		Totals		Triple-net		Facilities		Totals
Advances:
	Investments in new loans	$	2,220	$	580,834	$	38,336	$	621,390	$	18,541	$	0	$	18,541	$	9,742	$	41,644	$	51,386
	Draws on existing loans		41,754		0		1,950		43,704		29,752		3,184		32,936		46,113		1,236		47,349
	Sub-total		43,974		580,834		40,286		665,094		48,293		3,184		51,477		55,855		42,880		98,735
	Less: Seller financing on property sales		0		0		0		0		0		0		0		0		(1,470)		(1,470)
	Net cash advances on real estate loans		43,974		580,834		40,286		665,094		48,293		3,184		51,477		55,855		41,410		97,265
Receipts:
	Loan payoffs		10,387		0		2,168		12,555		162,705		2,943		165,648		5,619		6,233		11,852
	Principal payments on loans		19,786		0		2,679		22,465		17,856		5,307		23,163		24,203		7,440		31,643
	Total receipts on real estate loans		30,173		0		4,847		35,020		180,561		8,250		188,811		29,822		13,673		43,495
Net advances (receipts) on real estate loans		$	13,801	$	580,834	$	35,439	$	630,074	$	(132,268)	$	(5,066)	$	(137,334)	$	26,033	$	27,737	$	53,770


(1) Represents loan to Sunrise Senior Living, Inc. that was acquired upon merger consummation on January 9, 2013 as discussed in Note 21.

The following is a summary of the allowance for losses on loans receivable for the periods presented (in thousands):


		Year Ended December 31,
	2012⁽¹⁾		2011⁽²⁾		2010⁽³⁾
Balance at beginning of year	$	-	$	1,276	$	5,183
Provision for loan losses		27,008		2,010		29,684
Charge-offs		(27,008)		(3,286)		(33,591)
Balance at end of year	$	-	$	-	$	1,276


(1) Provision and charge-off amounts relate to one entrance fee community in our seniors housing triple-net segment.
(2) Provision and charge-off amounts relate to one hospital in our medical facilities segment.
(3) Provision and charge-off amounts relate to certain early stage seniors housing and CCRC development projects in our seniors housing triple-net segment.

The following is a summary of our loan impairments (in thousands):

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


		Year Ended December 31,
	2012		2011		2010
Balance of impaired loans at end of year	$	4,230	$	6,244	$	9,691
Allowance for loan losses		-		-		1,276
Balance of impaired loans not reserved	$	4,230	$	6,244	$	8,415
Average impaired loans for the year	$	5,237	$	7,968	$	38,409
Interest recognized on impaired loans⁽¹⁾		44		-		103


(1) Represents interest recognized prior to placement on non-accrual status.

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. Investments in Unconsolidated Entities

During the year ended December 31, 2010, we entered into a joint venture investment with Forest City Enterprises (NYSE:FCE.A and FCE.B). We acquired a 49% interest in a seven-building life science campus located at University Park in Cambridge, Massachusetts, which is immediately adjacent to the campus of the Massachusetts Institute of Technology. At December 31, 2012, our investment of $174,692,000 is recorded as an investment in unconsolidated entities on the balance sheet. The aggregate remaining unamortized basis difference of our investment in this joint venture of $448,000 at December 31, 2012 is primarily attributable to real estate and related intangible assets and will be amortized over the life of the related properties and included in the reported amount of income from unconsolidated entities.

On December 31, 2010, we formed a strategic partnership with a national medical office building company whereby the partnership invested in 17 medical office properties. We own a controlling interest in 11 properties and consolidate them. Consolidation is based on a combination of ownership interest and control of operational decision-making authority. We do not own a controlling interest in six properties and account for them under the equity method. Our investment in the strategic partnership provides us access to health systems and includes development and property management resources.

During the three months ended June 30, 2012, we entered into a joint venture with Chartwell Retirement Residences (TSX:CSH.UN). The portfolio contains 42 properties in Canada, 39 of which are owned 50% by us and Chartwell, and three of which we wholly own. All properties are managed by Chartwell. In connection with the 39 properties, we invested $223,134,000 of cash which was recorded as an investment in unconsolidated entities on the balance sheet. The 39 properties are accounted for under the equity method of accounting and do not qualify as VIEs (variable interest entities). The joint venture is structured under RIDEA. The aggregate remaining unamortized basis difference of our investment in this joint venture of $8,656,000 at December 31, 2012 is primarily attributable to transaction costs that will be amortized over the weighted-average useful life of the related properties and included in the reported amount of income from unconsolidated entities.

The results of operations for these properties have been included in our consolidated results of operations from the date of acquisition by the joint ventures and are reflected in our statements of comprehensive income as income or loss from unconsolidated entities. The following is a summary of our income from and investments in unconsolidated entities (dollars in thousands):


			Year Ended December 31,						December 31,
	Percentage Ownership	Properties	2012 Income (loss)		2011 Income (loss)		2010 Income (loss)		2012 Assets		2011 Assets
Seniors housing triple-net⁽¹⁾	10% to 49%	21	$	(33)	$	(9)	$	-	$	34,618	$	30,975
Seniors housing operating	33% to 50%	39		(6,364)		(1,531)		-		217,701		15,429
Medical facilities	36% to 49%	13		8,879		7,312		6,673		186,617		195,318
Total			$	2,482	$	5,772	$	6,673	$	438,936	$	241,722


(1) Asset amounts include an available-for-sale equity investment. See Note 16 for additional information.

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8. Customer Concentration

The following table summarizes certain information about our customer concentration as of December 31, 2012 (dollars in thousands):


		Number of	Total		Percent of
Concentration by investment:⁽¹⁾		Properties	Investment⁽²⁾		Investment⁽³⁾
	Genesis HealthCare	177	$	2,682,822	15%
	Sunrise Senior Living	10		1,087,357	6%
	Merrill Gardens	48		1,084,536	6%
	Belmont Village	19		896,692	5%
	Benchmark Senior Living	35		842,760	5%
	Remaining portfolio	684		10,828,842	63%
	Totals	973	$	17,423,009	100%

_____________________

(1) Genesis is in our seniors housing triple-net segment whereas the other top five customers are in our seniors housing operating segment.

(2) Excludes our share of investments in unconsolidated entities. Please see Note 7 for additional information.

(3) Investments with our top five customers comprised 41% of total investments at December 31, 2011.

9. Borrowings Under Line of Credit Arrangement and Related Items

Please see Note 21 regarding line of credit activity that occurred subsequent to December 31, 2012. At December 31, 2012, we had a $2,000,000,000 unsecured line of credit arrangement with a consortium of 31 banks with an option to upsize the facility by up to an additional $500,000,000 through an accordion feature, allowing for an aggregate commitment of up to $2,500,000,000. The revolving credit facility was scheduled to expire July 27, 2015. Borrowings under the agreement are subject to interest payable in periods no longer than three months at either the agent bank’s prime rate of interest or the applicable margin over LIBOR interest rate, at our option (1.56% at December 31, 2012). The applicable margin is based on certain of our debt ratings and was 1.35% at December 31, 2012. In addition, we pay a facility fee annually to each bank based on the bank’s commitment amount. The facility fee depends on certain of our debt ratings and was 0.25% at December 31, 2012. Principal is due upon expiration of the agreement. In addition, at December 31, 2012, we had a $5,000,000 unsecured revolving demand note undrawn and bearing interest at 1-month LIBOR plus 110 basis points.

The following information relates to aggregate borrowings under our unsecured lines of credit arrangements for the periods presented (dollars in thousands):


		Year Ended December 31,
		2012		2011		2010
Balance outstanding at year end		$	0	$	610,000	$	300,000
Maximum amount outstanding at any month end		$	897,000	$	710,000	$	560,000
Average amount outstanding (total of daily
	principal balances divided by days in period)	$	191,378	$	240,104	$	268,762
Weighted-average interest rate (actual interest
	expense divided by average borrowings outstanding)		1.80%		1.51%		1.48%

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10. Senior Unsecured Notes and Secured Debt

We may repurchase, redeem or refinance convertible and non-convertible senior unsecured notes from time to time, taking advantage of favorable market conditions when available. We may purchase senior notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to their terms. The non-convertible senior unsecured notes are redeemable at our option, at any time in whole or from time to time in part, at a redemption price equal to the sum of (1) the principal amount of the notes (or portion of such notes) being redeemed plus accrued and unpaid interest thereon up to the redemption date and (2) any “make-whole” amount due under the terms of the notes in connection with early redemptions. Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. At December 31, 2012, the annual principal payments due on these debt obligations were as follows (in thousands):


	Senior		Secured
	Unsecured Notes^(1,2)		Debt ^(1,3)		Totals
2013	$	300,000	$	110,034	$	410,034
2014		0		204,783		204,783
2015⁽⁴⁾		501,054		224,486		725,540
2016		700,000		328,730		1,028,730
2017		450,000		320,943		770,943
Thereafter		4,194,403		1,122,610		5,317,013
Totals	$	6,145,457	$	2,311,586	$	8,457,043


(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts or other fair value adjustments as reflected on the consolidated balance sheet.
(2) Annual interest rates range from 2.25% to 6.5%, excluding the Canadian denominated unsecured term loan.
(3) Annual interest rates range from 1.0% to 10.0%. Carrying value of the properties securing the debt totaled $3,953,516,000 at December 31, 2012.
(4) On July 30, 2012, we completed funding on a $250,000,000 Canadian denominated unsecured term loan (approximately $251,054,000 USD at exchange rates on December 31, 2012). The loan matures on July 27, 2015 (with an option to extend for an additional year at our discretion) and bears interest at the Canadian Dealer Offered Rate plus 145 basis points (2.67% at December 31, 2012).

During the twelve months ended December 31, 2010, we issued $494,403,000 of 3.00% senior unsecured convertible notes due December 2029, generating net proceeds of $486,084,000. The notes are convertible, in certain circumstances, into cash and, if applicable, shares of common stock at an initial conversion rate of 19.5064 shares per $1,000 principal amount of notes, which represents an initial conversion price of $51.27 per share. In general, upon conversion, the holder of each note would receive, in respect of the conversion value of such note, cash up to the principal amount of such note and common stock for the note’s conversion value in excess of such principal amount. In addition, on each of December 1, 2014, December 1, 2019 and December 1, 2024, holders may require us to purchase all or a portion of their notes at a purchase price in cash equal to 100% of the principal amount of the notes to be purchased, plus any accrued and unpaid interest. The notes are bifurcated into a debt component and an equity component since they may be settled in cash upon conversion. The value of the debt component is based upon the estimated fair value of a similar debt instrument without the conversion feature at the time of issuance. The difference between the contractual principal on the debt and the value allocated to the debt of $29,925,000 was recorded as an equity component and represents the conversion feature of the instrument. The excess of the contractual principal amount of the debt over its estimated fair value is amortized to interest expense using the effective interest method over the period used to estimate the fair value.

The following is a summary of our senior unsecured note principal activity, excluding the Canadian denominated unsecured term loan, during the periods presented (dollars in thousands):


	Year Ended
	December 31, 2012			December 31, 2011			December 31, 2010
			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate

Beginning balance	$	4,464,927	5.133%	$	3,064,930	5.129%	$	1,661,853	5.557%
Debt issued		1,800,000	3.691%		1,400,000	5.143%		1,844,403	4.653%
Debt extinguished		(76,853)	8.000%		(3)	4.750%		(441,326)	4.750%
Debt redeemed		(293,671)	4.750%		-	0.000%		-	0.000%
Ending balance	$	5,894,403	4.675%	$	4,464,927	5.133%	$	3,064,930	5.129%

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of our secured debt principal activity for the periods presented (dollars in thousands):


	Year Ended
		December 31, 2012		December 31, 2011			December 31, 2010
			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	2,108,384	5.285%	$	1,133,715	5.972%	$	623,045	5.842%
Debt issued		157,418	4.212%		116,903	5.697%		157,156	5.454%
Debt assumed		444,744	5.681%		940,854	4.444%		564,656	6.089%
Debt extinguished		(360,403)	4.672%		(55,317)	5.949%		(194,493)	6.073%
Foreign currency		187	5.637%		-	0.000%		-	0.000%
Principal payments		(38,744)	5.456%		(27,771)	5.845%		(16,649)	5.792%
Ending balance	$	2,311,586	5.140%	$	2,108,384	5.285%	$	1,133,715	5.972%

11. Derivative Instruments

We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates. We may elect to use financial derivative instruments to hedge interest rate exposure. These decisions are principally based on our policy to manage the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. In addition, non-U.S. investments expose us to the potential losses associated with adverse changes in foreign currency to U.S. Dollar exchange rates. We elected to manage this risk through the use of a forward exchange contract and issuing debt in the foreign currency.

Interest Rate Swap Contracts Designated as Cash Flow Hedges

For instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”), and reclassified into earnings in the same period, or periods, during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in earnings. As of December 31, 2012, we had one interest rate swap for a total aggregate notional amount of $11,905,000. The swap hedges interest payments associated with long-term LIBOR based borrowings and matures on December 31, 2013. Approximately $1,973,000 of losses, which are included in accumulated other comprehensive income (“AOCI”), are expected to be reclassified into earnings in the next 12 months.

Foreign Currency Hedges

For instruments that are designated and qualify as net investment hedges, the variability in the foreign currency to U.S. dollar of the instrument is recorded as a cumulative translation adjustment component of OCI. The balance of the cumulative translation adjustment will be reclassified to earnings when the hedged investment is sold or substantially liquidated. On February 15, 2012, we entered into a forward exchange contract to purchase $250,000,000 Canadian Dollars at a fixed rate in the future. The forward contract was used to limit exposure to fluctuations in the Canadian Dollar to U.S. Dollar exchange rate associated with our initial cash investment funded for the Chartwell transaction. On May 3, 2012, this forward exchange contract was settled for a gain of $2,772,000, which was reflected on the consolidated statement of comprehensive income, and the proceeds were used to fund our investment. On May 3, 2012, we also entered into a forward contract to sell $250,000,000 Canadian dollars at a fixed rate on July 31, 2012 to hedge our net investment. We settled the forward contract on July 31, 2012 with the net loss reflected in OCI. Upon settlement of the forward contract we entered into a $250,000,000 Canadian Dollar term loan which has been designated as a net investment hedge of our Chartwell investment and changes in fair value are reported in OCI as no ineffectiveness is anticipated.

On August 30, 2012, we entered into two cross currency swaps to purchase £125,000,000. The swaps were used to limit exposure to fluctuations in the Pound Sterling to U.S. Dollar exchange rate associated with our initial cash investment funded for the Sunrise transaction discussed in Note 21. The cross currency swaps have been designated as a net investment hedge, and changes in fair value are reported in OCI as no ineffectiveness is anticipated.

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On September 17, 2012, we entered into two forward exchange contracts to purchase $14,000,000 Canadian Dollars and £23,000,000 at a fixed rate in the future. The forward contracts were used to limit exposure to fluctuations in foreign currency associated with future international transactions.

The following presents the impact of derivative instruments on the statement of comprehensive income and OCI for the periods presented (dollars in thousands):


		Year Ended
	Location	December 31, 2012		December 31, 2011		December 31, 2010
Gain (loss) on interest rate swap recognized in OCI (effective portion)	OCI	$	3,200	$	3,189	$	(10,307)
Gain (loss) on interest rate swaps reclassified from AOCI into income (effective portion)	Interest expense		(1,596)		1,781		(2,244)
Gain (loss) on forward exchange contracts recognized in income	Realized gain		1,921		0		0
Gain (loss) on interest rate swaps recognized in income	Realized loss		(96)		0		0
Gain (loss) on forward exchange contracts designated as net investment hedge recognized in OCI	OCI		(5,134)		0		0

12. Commitments and Contingencies

At December 31, 2012, we had nine outstanding letter of credit obligations totaling $7,172,000 and expiring between 2013 and 2014. At December 31, 2012, we had outstanding construction in process of $162,984,000 for leased properties and were committed to providing additional funds of approximately $213,255,000 to complete construction. At December 31, 2012, we had contingent purchase obligations totaling $79,963,000, excluding our Sunrise-related commitment described in Note 21. These contingent purchase obligations relate to unfunded capital improvement obligations and contingent obligations on acquisitions. Rents due from the tenant are increased to reflect the additional investment in the property.

We evaluate our leases for operating versus capital lease treatment in accordance with ASC Topic 840 “Leases.” A lease is classified as a capital lease if it provides for transfer of ownership of the leased asset at the end of the lease term, contains a bargain purchase option, has a lease term greater than 75% of the economic life of the leased asset, or if the net present value of the future minimum lease payments are in excess of 90% of the fair value of the leased asset. Certain leases contain bargain purchase options and have been classified as capital leases. At December 31, 2012, we had operating lease obligations of $699,990,000 relating to certain ground leases and Company office space. We incurred rental expense relating to company office space of $1,534,000, $1,901,000 and $1,280,000 for the years ended December 31, 2012, 2011 and 2010, respectively. Regarding the ground leases, we have sublease agreements with certain of our operators that require the operators to reimburse us for our monthly operating lease obligations. At December 31, 2012, aggregate future minimum rentals to be received under these noncancelable subleases totaled $47,632,000.

At December 31, 2012, future minimum lease payments due under operating and capital leases are as follows (in thousands):


	Operating Leases		Capital Leases⁽¹⁾
2013	$	11,046	$	73,562
2014		11,267		1,219
2015		11,072		8,984
2016		11,168		559
2017		11,180		559
Thereafter		644,257		970
Totals	$	699,990	$	85,853


(1) Amounts above represent principal and interest obligations under capital lease arrangements. Related assets with a gross value of $186,343,000 and accumulated depreciation of $8,639,000 are recorded in real property.

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. Stockholders’ Equity

The following is a summary of our stockholder’s equity capital accounts as of the dates indicated:


		December 31, 2012	December 31, 2011
Preferred Stock, $1.00 par value:
	Authorized shares	50,000,000	50,000,000
	Issued shares	26,224,854	25,724,854
	Outstanding shares	26,224,854	25,724,854

Common Stock, $1.00 par value:
	Authorized shares	400,000,000	400,000,000
	Issued shares	260,780,109	192,604,918
	Outstanding shares	260,373,754	192,275,248

Preferred Stock. The following is a summary of our preferred stock activity during the periods presented (dollars in thousands, except per share amounts):


	Year Ended
	December 31, 2012		December 31, 2011		December 31, 2010
		Weighted Avg.		Weighted Avg.		Weighted Avg.
	Shares	Dividend Rate	Shares	Dividend Rate	Shares	Dividend Rate

Beginning balance	25,724,854	7.013%	11,349,854	7.663%	11,474,093	7.697%
Shares issued	11,500,000	6.500%	14,375,000	6.500%	349,854	6.000%
Shares redeemed	(11,000,000)	7.716%	-	0.000%	(5,513)	7.500%
Shares converted	-	0.000%	-	0.000%	(468,580)	7.262%
Ending balance	26,224,854	6.493%	25,724,854	7.013%	11,349,854	7.663%

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended December 31, 2010, we issued 349,854 shares of 6.00% Series H Cumulative Convertible and Redeemable Preferred Stock in connection with a business combination. These shares have a liquidation value of $25.00 per share. Dividends are payable quarterly in arrears. The preferred stock, which has no stated maturity, may be redeemed by us at a redemption price of $25.00 per share, plus accrued and unpaid dividends on such shares to the redemption date, on or after December 31, 2015.

During the three months ended March 31, 2011, we issued 14,375,000 of 6.50% Series I Cumulative Convertible Perpetual Preferred Stock. These shares have a liquidation value of $50.00 per share. Dividends are payable quarterly in arrears. The preferred stock is not redeemable by us. The preferred shares are convertible, at the holder’s option, into 0.8460 shares of common stock (equal to an initial conversion price of approximately $59.10).

During the three months ended March 31, 2012, we issued 11,500,000 of 6.50% Series J Cumulative Redeemable Preferred Stock. Dividends are payable quarterly in arrears. The preferred stock, which has no stated maturity, may be redeemed by us at a redemption price of $25.00 per share, plus accrued and unpaid dividends on such shares to the redemption date, on or after March 7, 2017.

Common Stock. The following is a summary of our common stock issuances during the periods indicated (dollars in thousands, except per share amounts):


	Shares Issued		Average Price		Gross Proceeds		Net Proceeds

September 2010 public issuance	9,200,000	$	45.75	$	420,900	$	403,921
December 2010 public issuance	11,500,000		43.75		503,125		482,448
2010 Dividend reinvestment plan issuances	1,957,364		43.95		86,034		86,034
2010 Equity shelf program issuances	431,082		44.94		19,371		19,013
2010 Option exercises	129,054		31.17		4,022		4,022
2010 Totals	23,217,500			$	1,033,452	$	995,438

March 2011 public issuance	28,750,000	$	49.25	$	1,415,938	$	1,358,543
November 2011 public issuance	12,650,000		50.00		632,500		606,595
2011 Dividend reinvestment plan issuances	2,534,707		48.44		122,794		121,846
2011 Equity shelf program issuances	848,620		50.53		42,888		41,982
2011 Option exercises	232,081		37.17		8,628		8,628
2011 Totals	45,015,408			$	2,222,748	$	2,137,594

February 2012 public issuance	20,700,000	$	53.50	$	1,107,450	$	1,062,256
August 2012 public issuance	13,800,000		58.75		810,750		778,011
September 2012 public issuance	29,900,000		56.00		1,674,400		1,606,665
2012 Dividend reinvestment plan issuances	2,136,140		56.37		120,411		120,411
2012 Option exercises	341,371		40.86		13,949		13,949
2012 Senior note conversions	1,039,721				0		0
2012 Totals	67,917,232			$	3,726,960	$	3,581,292

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Dividends. The increase in dividends is primarily attributable to increases in our common and preferred shares outstanding as described above. Please refer to Notes 2 and 18 for information related to federal income tax of dividends. The following is a summary of our dividend payments (in thousands, except per share amounts):


	Year Ended
	December 31, 2012				December 31, 2011				December 31, 2010
	Per Share		Amount		Per Share		Amount		Per Share		Amount

Common Stock	$	2.96000	$	653,321	$	2.83500	$	483,746	$	2.74000	$	348,578
Series D Preferred Stock		0.50301		2,012		1.96875		7,875		1.96875		7,875
Series E Preferred Stock		-		0		-		0		1.12500		94
Series F Preferred Stock		0.48715		3,410		1.90625		13,344		1.90625		13,344
Series G Preferred Stock		-		0		-		0		1.40640		332
Series H Preferred Stock		2.85840		1,000		2.85840		1,000		-		0
Series I Preferred Stock		3.25000		46,719		1.33159		38,283		-		0
Series J Preferred Stock		1.39038		15,988		-		0		-		0
Totals			$	722,450			$	544,248			$	370,223

Accumulated Other Comprehensive Income. The following is a summary of accumulated other comprehensive income/(loss) as of the dates indicated (in thousands):



		December 31, 2012		December 31, 2011
Unrecognized gains (losses) on cash flow hedges	$	(6,957)	$	(8,561)
Unrecognized gains (losses) on equity investments		(216)		(619)
Unrecognized gains (losses) on foreign currency translation		(881)		0
Unrecognized actuarial gains (losses)		(2,974)		(2,748)
Totals	$	(11,028)	$	(11,928)

Other Equity. Other equity consists of accumulated option compensation expense, which represents the amount of amortized compensation costs related to stock options awarded to employees and directors. Expense, which is recognized as the options vest based on the market value at the date of the award, totaled $2,875,000, $1,917,000 and $1,634,000 for the years ended December 31, 2012, 2011 and 2010, respectively.

14. Stock Incentive Plans

Our Amended and Restated 2005 Long-Term Incentive Plan authorizes up to 6,200,000 shares of common stock to be issued at the discretion of the Compensation Committee of the Board of Directors. The 2005 Plan replaced the 1995 Stock Incentive Plan and the Stock Plan for Non-Employee Directors. The options granted to officers and key employees under the 1995 Plan vested through 2010 and expire ten years from the date of grant. Our non-employee directors, officers and key employees are eligible to participate in the 2005 Plan. The 2005 Plan allows for the issuance of, among other things, stock options, restricted stock, deferred stock units and dividend equivalent rights. Vesting periods for options, deferred stock units and restricted shares generally range from three years for non-employee directors to five years for officers and key employees. Options expire ten years from the date of grant.

Valuation Assumptions

The fair value of each option grant is estimated on the date of grant using the Black-Scholes-Merton option pricing model with the following weighted-average assumptions:

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


	Year Ended
	December 31, 2012	December 31, 2011	December 31, 2010
Dividend yield	5.16%	5.74%	6.28%
Expected volatility	35.15%	34.80%	34.08%
Risk-free interest rate	1.48%	2.87%	3.23%
Expected life (in years)	7.0	7.0	7.0
Weighted-average fair value	$11.11	$9.60	$7.82

The dividend yield represented the dividend yield of our common stock on the dates of grant. Our computation of expected volatility was based on historical volatility. The risk-free interest rates used were the 7-year U.S. Treasury Notes yield on the date of grant. The expected life was based on historical experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations regarding future employee behavior.

Option Award Activity

The following table summarizes information about stock option activity for the periods presented:


	Year Ended
	December 31, 2012			December 31, 2011			December 31, 2010
	Number of	Weighted		Number of	Weighted		Number of	Weighted
	Shares	Average		Shares	Average		Shares	Average
Stock Options	(000's)	Exercise Price		(000's)	Exercise Price		(000's)	Exercise Price
Options at beginning of year	1,252	$	42.12	1,207	$	39.45	1,062	$	37.71
Options granted	332		57.33	289		49.17	280		43.29
Options exercised	(341)		40.11	(232)		36.92	(129)		33.58
Options terminated	(81)		51.81	(12)		43.09	(6)		37.82
Options at end of period	1,162	$	46.40	1,252	$	42.12	1,207	$	39.45

Options exercisable at end of period	313	$	40.82	427	$	39.45	440	$	37.76
Weighted average fair value of
options granted during the period		$	11.11		$	9.60		$	7.82

The following table summarizes information about stock options outstanding at December 31, 2012:


		Options Outstanding					Options Exercisable
		Number	Weighted		Weighted Average		Number	Weighted		Weighted Average
		Outstanding	Average		Remaining		Exercisable	Average		Remaining
Range of Per Share Exercise Prices		(thousands)	Exercise Price		Contract Life		(thousands)	Exercise Price		Contract Life
$30-$40		271	$	36.80	6.3		132	$	36.58	5.5
$40-$50		593		45.31	7.7		181		43.90	6.3
$50+		298		57.33	10.0		-		-	-
Totals		1,162	$	$46.40	6.9		313	$	40.82	6.0

Aggregate intrinsic value	$	17,095,000				$	6,341,000

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the quoted price

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of our common stock for the options that were in-the-money at December 31, 2012. During the years ended December 31, 2012, 2011 and 2010, the aggregate intrinsic value of options exercised under our stock incentive plans was $6,186,000, $3,390,000 and $1,798,000, respectively (determined as of the date of option exercise). Cash received from option exercises under our stock incentive plans was $13,949,000, $8,628,000 and $4,022,000 for the years ended December 31, 2012, 2011 and 2010, respectively.

As of December 31, 2012, there was approximately $5,104,000 of total unrecognized compensation cost related to unvested stock options granted under our stock incentive plans. That cost is expected to be recognized over a weighted-average period of 4 years. As of December 31, 2012, there was approximately $24,796,000 of total unrecognized compensation cost related to unvested restricted stock granted under our stock incentive plans. That cost is expected to be recognized over a weighted-average period of 3 years.

The following table summarizes information about non-vested stock incentive awards as of December 31, 2012 and changes for the year ended December 31, 2012:


	Stock Options			Restricted Stock
	Number of		Weighted-Average	Number of	Weighted-Average
	Shares		Grant Date	Shares	Grant Date
	(000's)		Fair Value	(000's)	Fair Value
Non-vested at December 31, 2011	825	$	7.40	508	$	44.91
Vested	(211)		6.96	(228)		47.38
Granted	332		11.11	404		57.31
Terminated	(97)		7.29	(83)		42.75
Non-vested at December 31, 2012	849	$	8.97	601	$	52.60

We use the Black-Scholes-Merton option pricing model to estimate the value of stock option grants and expect to continue to use this acceptable option valuation model. We recognize compensation cost for share-based grants on a straight-line basis through the date the awards become fully vested or to the retirement eligible date, if sooner. Compensation cost totaled $18,521,000, $10,786,000 and $11,823,000 for the years ended December 31, 2012, 2011 and 2010, respectively.

15. Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):


		Year Ended December 31,
		2012		2011		2010
Numerator for basic and diluted earnings
	per share - net income attributable to
	common stockholders	$	221,884	$	157,108	$	106,882

Denominator for basic earnings per
	share: weighted-average shares		224,343		173,741		127,656
Effect of dilutive securities:
	Employee stock options		231		176		125
	Non-vested restricted shares		312		246		420
	Convertible senior unsecured notes		1,067		238		7
Dilutive potential common shares			1,610		660		552
Denominator for diluted earnings per
	share: adjusted-weighted average shares		225,953		174,401		128,208

Basic earnings per share		$	0.99	$	0.90	$	0.84
Diluted earnings per share		$	0.98	$	0.90	$	0.83

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The diluted earnings per share calculations exclude the dilutive effect of 182,000, 0 and 280,000 stock options for the years ended December 31, 2012, 2011 and 2010, respectively, because the exercise prices were more than the average market price. The Series H Cumulative Convertible and Redeemable Preferred Stock issued in 2010 was excluded from the calculations for 2010 and 2011 as the effect of the conversions was anti-dilutive. The Series I Cumulative Convertible Perpetual Preferred Stock issued in 2011 was excluded from the calculations for 2011 and 2012 as the effect of the conversions was anti-dilutive.

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

16. Disclosure about Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value.

Mortgage Loans and Other Real Estate Loans Receivable — The fair value of mortgage loans and other real estate loans receivable is generally estimated by using level two and level three inputs such as discounting the estimated future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Cash and Cash Equivalents — The carrying amount approximates fair value.

Available-for-sale Equity Investments — Available-for-sale equity investments are recorded at their fair value based on level one publicly available trading prices.

Borrowings Under Unsecured Line of Credit Arrangements — The carrying amount of the unsecured line of credit arrangements approximates fair value because the borrowings are interest rate adjustable.

Senior Unsecured Notes — The fair value of the senior unsecured notes payable was estimated based on level one publicly available trading prices.

Secured Debt — The fair value of fixed rate secured debt is estimated using level two inputs by discounting the estimated future cash flows using the current rates at which similar loans would be made with similar credit ratings and for the same remaining maturities. The carrying amount of variable rate secured debt approximates fair value because the borrowings are interest rate adjustable.

Interest Rate Swap Agreements — Interest rate swap agreements are recorded as assets or liabilities on the balance sheet at fair market value. Fair market value is estimated using level two inputs by utilizing pricing models that consider forward yield curves and discount rates.

Foreign Currency Forward Contracts — Foreign currency forward contracts are recorded as assets or liabilities on the balance sheet at fair market value. Fair market value is determined using level two inputs by estimating the future value of the currency pair based on existing exchange rates, comprised of current spot and traded forward points, and calculating a present value of the net amount using a discount factor based on observable traded interest rates.

The carrying amounts and estimated fair values of our financial instruments are as follows (in thousands):


		December 31, 2012				December 31, 2011
		Carrying		Fair		Carrying		Fair
		Amount		Value		Amount		Value
Financial Assets:
	Mortgage loans receivable	$	87,955	$	88,975	$	63,934	$	64,194
	Other real estate loans receivable		807,710		820,195		228,573		231,308
	Available-for-sale equity investments		1,384		1,384		980		980
	Cash and cash equivalents		1,033,764		1,033,764		163,482		163,482

Financial Liabilities:
	Borrowings under unsecured lines of credit arrangements	$	0	$	0	$	610,000	$	610,000
	Senior unsecured notes		6,114,151		6,793,424		4,434,107		4,709,736
	Secured debt		2,336,196		2,515,145		2,112,649		2,297,278
	Interest rate swap agreements		264		264		2,854		2,854
	Foreign currency forward contracts		7,247		7,247		0		0

U.S. GAAP provides authoritative guidance for measuring and disclosing fair value measurements of assets and liabilities. The guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Please see Note 2 for additional information.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Items Measured at Fair Value on a Recurring Basis

The market approach is utilized to measure fair value for our financial assets and liabilities reported at fair value on a recurring basis. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.


	Fair Value Measurements as of December 31, 2012
	Total		Level 1		Level 2		Level 3
Available-for-sale equity investments⁽¹⁾	$	1,384	$	1,384	$	0	$	0
Interest rate swap agreements⁽²⁾		(264)		0		(264)		0
Foreign currency forward contract⁽²⁾		(7,247)		0		(7,247)		0
Totals	$	(6,127)	$	1,384	$	(7,511)	$	0


(1) Unrealized gains or losses on equity investments are recorded in accumulated other comprehensive income (loss) at each measurement date.
(2) Please see Note 11 for additional information.

Items Measured at Fair Value on a Nonrecurring Basis

In addition to items that are measured at fair value on a recurring basis, we also have assets and liabilities in our balance sheet that are measured at fair value on a nonrecurring basis. As these assets and liabilities are not measured at fair value on a recurring basis, they are not included in the tables above. Assets, liabilities and noncontrolling interests that are measured at fair value on a nonrecurring basis include those acquired/assumed in business combinations (see Note 3) and asset impairments (see Note 5 for impairments of real property and Note 6 for impairments of loans receivable). We have determined that the fair value measurements included in each of these assets and liabilities rely primarily on Company-specific inputs and our assumptions about the use of the assets and settlement of liabilities, as observable inputs are not available. As such, we have determined that each of these fair value measurements generally reside within Level 3 of the fair value hierarchy. We estimate the fair value of real estate and related intangibles using the income approach and unobservable data such as net operating income and estimated capitalization and discount rates. We also consider local and national industry market data including comparable sales, and commonly engage an external real estate appraiser to assist us in our estimation of fair value. We estimate the fair value of assets held for sale based on current sales price expectations or, in the absence of such price expectations, Level 3 inputs described above. We estimate the fair value of secured debt assumed in business combinations using current interest rates at which similar borrowings could be obtained on the transaction date.

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17. Segment Reporting

We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our five operating segments: seniors housing triple-net, seniors housing operating, medical office buildings, hospitals and life science. Our seniors housing triple-net properties include skilled nursing/post-acute facilities, assisted living facilities, independent living/continuing care retirement communities and combinations thereof. Under the seniors housing triple-net segment, we invest in seniors housing and health care real estate through acquisition and financing of primarily single tenant properties. Properties acquired are primarily leased under triple-net leases and we are not involved in the management of the property. Our seniors housing operating properties include seniors housing communities that are owned and/or operated through RIDEA structures (see Note 3).

Our medical facility properties include medical office buildings, hospitals and life science buildings which are aggregated into our medical facilities reportable segment. Our medical office buildings are typically leased to multiple tenants and generally require a certain level of property management. Our hospital investments are leased and we are not involved in the management of the property. Our life science investment represents an investment in an unconsolidated entity (see Note 7).

The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2). The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments. There are no intersegment sales or transfers.

We evaluate performance based upon net operating income from continuing operations (“NOI”) of each segment. We define NOI as total revenues, including tenant reimbursements, less property level operating expenses, which exclude depreciation and amortization, general and administrative expenses, transaction costs, provision for loan losses and interest expense. We believe NOI provides investors relevant and useful information because it measures the operating performance of our properties at the property level on an unleveraged basis. We use NOI to make decisions about resource allocations and to assess the property level performance of our properties.

Non-segment revenue consists mainly of interest income on non-real estate investments and other income. Non-segment assets consist of corporate assets including cash, deferred loan expenses and corporate offices and equipment among others. Non-property specific revenues and expenses are not allocated to individual segments in determining NOI.

Summary information for the reportable segments (which excludes unconsolidated entities) during the years ended December 31, 2012, 2011 and 2010 is as follows (in thousands):


Year Ended December 31, 2012:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	688,788	$	-	$	385,779	$	-	$	1,074,567
Resident fees and services		-		697,494		-		-		697,494
Interest income		24,380		6,208		8,477		-		39,065
Other income		2,412		-		1,947		912		5,271
Total revenues		715,580		703,702		396,203		912		1,816,397

Property operating expenses		-		(471,678)		(99,183)		-		(570,861)
Net operating income from continuing operations		715,580		232,024		297,020		912		1,245,536

Reconciling items:
Interest expense		(3,230)		(67,524)		(30,565)		(263,418)		(364,737)
(Loss) gain on derivatives, net		(96)		1,921		-		-		1,825
Depreciation and amortization		(202,370)		(165,798)		(142,217)		-		(510,385)
General and administrative		-		-		-		(97,341)		(97,341)
Transaction costs		(35,705)		(12,756)		(13,148)		-		(61,609)
(Loss) gain on extinguishment of debt, net		(2,405)		2,697		483		-		775
Provision for loan losses		(27,008)		-		-		-		(27,008)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	444,766	$	(9,436)	$	111,573	$	(359,847)	$	187,056

Total assets	$	8,447,698	$	5,323,777	$	4,706,159	$	1,071,475	$	19,549,109


Year Ended December 31, 2011:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	542,561	$	-	$	273,003	$	-	$	815,564
Resident fees and services		-		456,085		-		-		456,085
Interest income		34,068		-		7,002		-		41,070
Other income		6,620		-		3,985		690		11,295
Total revenues		583,249		456,085		283,990		690		1,324,014

Property operating expenses		-		(314,142)		(63,655)		-		(377,797)
Net operating income from continuing operations		583,249		141,943		220,335		690		946,217

Reconciling items:
Interest expense		1,338		(46,342)		(20,217)		(228,884)		(294,105)
Depreciation and amortization		(157,267)		(138,192)		(94,692)		-		(390,151)
General and administrative		-		-		-		(77,201)		(77,201)
Transaction costs		(27,993)		(36,328)		(5,903)		-		(70,224)
(Loss) gain on extinguishment of debt, net		-		979		-		-		979
Provision for loan losses		-		-		(2,010)		-		(2,010)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	399,327	$	(77,940)	$	97,513	$	(305,395)	$	113,505

Total assets	$	7,823,953	$	3,041,238	$	3,795,940	$	263,475	$	14,924,606

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Year Ended December 31, 2010:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	280,634	$	-	$	189,631	$	-	$	470,265
Resident fees and services		-		51,006		-		-		51,006
Interest income		36,176		-		4,679		-		40,855
Other income		3,386		-		985		2,874		7,245
Total revenues		320,196		51,006		195,295		2,874		569,371

Property operating expenses		-		(32,621)		(45,157)		-		(77,778)
Net operating income from continuing operations		320,196		18,385		150,138		2,874		491,593

Reconciling items:
Interest expense		6,094		(7,794)		(15,959)		(113,129)		(130,788)
Depreciation and amortization		(80,109)		(15,504)		(65,929)		-		(161,542)
General and administrative		-		-		-		(54,626)		(54,626)
Transaction costs		(20,612)		(20,936)		(5,112)		-		(46,660)
Loss (gain) on extinguishment of debt, net		(7,791)		-		(1,308)		(25,072)		(34,171)
Provision for loan losses		(29,684)		-		-		-		(29,684)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	188,094	$	(25,849)	$	61,830	$	(189,953)	$	34,122

Our portfolio of properties and other investments are located in the United States, the United Kingdom and Canada. Revenues and assets are attributed to the country in which the property is physically located. For the year ended December 31, 2012, $25,321,000 (or 1.4% of our revenues) and $856,895,000 (or 4.4% of our assets) were located outside the United States. There were no revenues or assets located outside the United States for the years ended December 31, 2011 and 2010.

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

18. Income Taxes and Distributions

We elected to be taxed as a REIT commencing with our first taxable year. To qualify as a REIT for federal income tax purposes, at least 90% of taxable income (excluding 100% of net capital gains) must be distributed to stockholders. REITs that do not distribute a certain amount of current year taxable income in the current year are also subject to a 4% federal excise tax. The main differences between undistributed net income for federal income tax purposes and financial statement purposes are the recognition of straight-line rent for reporting purposes, basis differences in acquisitions, recording of impairments, differing useful lives and depreciation and amortization methods for real property and the provision for loan losses for reporting purposes versus bad debt expense for tax purposes.

Cash distributions paid to common stockholders, for federal income tax purposes, are as follows for the periods presented:


			Year Ended December 31,
			2012		2011		2010
Per Share:
	Ordinary income	$	1.5000	$	1.1472	$	0.7774
	Return of capital		1.3376		1.4227		1.7408
	Long-term capital gains		0.1176		0.1059		0.0190
	Unrecaptured section 1250 gains		0.0048		0.1592		0.2028
	Totals	$	2.9600	$	2.8350	$	2.7400

Our consolidated provision for income taxes is as follows for the periods presented (dollars in thousands):


		Year Ended December 31,
		2012		2011		2010
Current	$	4,785	$	389	$	319
Deferred		2,827		999		45
Totals	$	7,612	$	1,388	$	364

REITs generally are not subject to U.S. federal income taxes on that portion of REIT taxable income or capital gain that is distributed to stockholders. For the tax year ended December 31, 2012, as a result of acquisitions located in Canada and the United Kingdom, we were subject to foreign income taxes under the respective tax laws of these jurisdictions. The provision for income taxes for the year ended December 31, 2012 primarily relates to state taxes, foreign taxes, requirements of ASC 740-10, and taxes on TRS income.

For the tax year ended December 31, 2012, the Canadian and United Kingdom tax expense amount included in the consolidated provision for income taxes was $596,000. We did not hold an interest in any entity located in a foreign jurisdiction for the years ended December 31, 2011 and 2010.

A reconciliation of income tax expense, which is computed by applying the federal corporate tax rate for the years ended December 31, 2012, 2011 and 2010, to the income tax provision/(benefit) is as follows for the periods presented (dollars in thousands):

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


		Year Ended December 31,
		2012		2011		2010
Tax at statutory rate on earnings from continuing operations before unconsolidated entities, noncontrolling interests and income taxes	$	64,979	$	54,750	$	26,111
Increase in valuation allowance		9,234		(4,732)		317
Tax at statutory rate on earnings not subject to federal income taxes		(72,640)		(48,630)		(26,064)
Other differences		6,039		-		-
Totals	$	7,612	$	1,388	$	364

Each TRS and foreign entity subject to income taxes is a tax paying component for purposes of classifying deferred tax assets and liabilities. The tax effects of taxable and deductible temporary differences, as well as tax attributes, are summarized as follows for the periods presented (dollars in thousands):


		Year Ended December 31,
		2012		2011		2010
Property, primarily differences in depreciation and amortization, the tax basis of land assets and the treatment of interests and certain costs	$	(2,144)	$	(1,577)	$	(29)
Operating loss and interest deduction carryforwards		8,552		1,488		7,080
Expense accruals and other		4,372		5,749		1,980
Valuation allowance		(12,199)		(2,965)		(7,697)
Totals	$	(1,419)	$	2,695	$	1,334

At December 31, 2012, we recorded a valuation allowance related to the deferred tax assets of our U.S. taxable REIT subsidiaries and Canadian entities. These tax attributes are carried forward in order to offset taxable income in future years. The valuation allowances have been established for these assets based upon our assessment of whether it is more likely than not that such assets may not be realized. During the year ended December 31, 2012, the valuation allowance increased primarily due to additional deferred tax assets recorded for Canadian net operating losses. At December 31, 2012, we had a net operating loss (“NOL”) carryforward related to Canadian entities of $32,061,000. These Canadian losses have a 20-year carryforward period. The valuation allowance rollforward is summarized as follows for the periods presented (dollars in thousands):


		Year Ended December 31,
		2012	��		2011		2010
Beginning balance	$	2,965		$	7,697	$	7,380
Additions		9,234			-		317
Deductions		-			(4,732)		-
Ending balance	$	12,199		$	2,965	$	7,697

As a result of certain acquisitions, we are subject to corporate level taxes for any related asset dispositions that may occur during the ten-year period immediately after such assets were owned by a C corporation (“built-in gains tax”). The amount of income potentially subject to this special corporate level tax is generally equal to the lesser of (a) the excess of the fair value of the asset over its adjusted tax basis as of the date it became a REIT asset, or (b) the actual amount of gain. Some but not all gains recognized during this period of time could be offset by available net operating losses and capital loss carryforwards. As of December 31, 2012, we have acquired an additional 40 assets with built-in gains as of the date of acquisition that could be subject to the built-in gains tax if

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

disposed of prior to the expiration of the applicable ten-year period. We have not recorded a deferred tax liability as a result of the potential built-in gains tax based on our intentions with respect to such properties and available tax planning strategies.

Under the provisions of the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”), for taxable years beginning after July 30, 2008, the REIT may lease “qualified health care properties” on an arm’s-length basis to a TRS if the property is operated on behalf of such subsidiary by a person who qualifies as an “eligible independent contractor.” Generally, the rent received from the TRS will meet the related party rent exception and will be treated as “rents from real property.” A “qualified health care property” includes real property and any personal property that is, or is necessary or incidental to the use of, a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility, or other licensed facility which extends medical or nursing or ancillary services to patients. We have entered into various joint ventures that were structured under RIDEA. Resident level rents and related operating expenses for these facilities are reported in the consolidated financial statements and are subject to federal taxes as the operations of such facilities are included in a TRS. Certain net operating loss carryforwards could be utilized to offset taxable income in future years.

Generally, we are subject to audit under the statute of limitations by the Internal Revenue Service (“IRS”) for the year ended December 31, 2008 and subsequent years and are subject to audit by state taxing authorities for the year ended December 31, 2007 and subsequent years. In the future, we will be subject to audit by the Canada Revenue Agency (“CRA”) and provincial authorities generally for periods subsequent to our REIT acquisition in May 2012 related to entities acquired or formed in connection with the acquisition, and by HM Revenue & Customs for periods subsequent to our REIT acquisition in August 2012 related to entities acquired or formed in connection with the acquisition.

At December 31, 2012, we had a net operating loss (“NOL”) carryforward related to the REIT of $96,253,000. Due to our uncertainty regarding the realization of certain deferred tax assets, we have not recorded a deferred tax asset related to NOLs generated by the REIT. These amounts can be used to offset future taxable income (and/or taxable income for prior years if an audit determines that tax is owed), if any. The REIT will be entitled to utilize NOLs and tax credit carryforwards only to the extent that REIT taxable income exceeds our deduction for dividends paid. The NOL carryforwards will expire through 2032.

We apply the rules under ASC 740-10 “Accounting for Uncertainty in Income Taxes” for uncertain tax positions using a “more likely than not” recognition threshold for tax positions. Pursuant to these rules, we will initially recognize the financial statement effects of a tax position when it is more likely than not, based on the technical merits of the tax position, that such a position will be sustained upon examination by the relevant tax authorities. If the tax benefit meets the “more likely than not” threshold, the measurement of the tax benefit will be based on our estimate of the ultimate tax benefit to be sustained if audited by the taxing authority. The following table summarizes the activity related to our unrecognized tax benefits for the periods presented (dollars in thousands):


		Year Ended December 31,
		2012		2011
Gross unrecognized tax benefits at beginning of year	$	6,098	$	-
Increases (decreases) in unrecognized tax benefits related to a prior year		(248)		-
Increases (decreases) in unrecognized tax benefits related to the current year		394		6,098
Lapse in statute of limitations for assessment		(146)		-
Gross unrecognized tax benefits at end of year	$	6,098	$	6,098

Of the total $6,098,000 of total liability for gross unrecognized tax benefits at December 31, 2012, $5,916,000 (exclusive of accrued interest and penalties) relates to the April 1, 2011 Genesis HealthCare Corporation transaction (“Genesis Acquisition”) and is included in accrued expenses and other liabilities on the consolidated balance sheet. As a part of the Genesis Acquisition, we received a full indemnification from FC-GEN Operations Investment, LLC covering income taxes or other taxes as well as interest and penalties relating to tax positions taken by FC-GEN Operations Investment, LLC prior to the acquisition. Accordingly, an offsetting indemnification asset is recorded in receivables and other assets on the consolidated balance sheet. Such indemnification asset is reviewed for collectability periodically.

There is no amount of unrecognized tax benefits, currently accrued for, that would have a material impact on the effective tax rate to the extent that would be recognized. There were insignificant uncertain tax positions as of December 31, 2012 for which it is

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

reasonably possible that the amount of unrecognized tax benefits would decrease during 2013. Interest and penalties totaled $299,000 and $815,000, respectively, for the year ended December 31, 2012 and are included in income tax expense. Of these amounts, $221,000 and $638,000 of interest and penalties, respectively, relate to the Genesis Acquisition and are offset by the indemnification asset.

19. Retirement Arrangements

Under the retirement plan and trust (the “401(k) Plan”), eligible employees may make contributions, and we may make matching contributions and a profit sharing contribution. Our contributions to the 401(k) Plan totaled $2,140,000, $1,558,000 and $1,341,000 in 2012, 2011 and 2010, respectively.

We have a Supplemental Executive Retirement Plan (“SERP”), a non-qualified defined benefit pension plan, which provides one executive officer with supplemental deferred retirement benefits. The SERP provides an opportunity for the participant to receive retirement benefits that cannot be paid under our tax-qualified plans because of the restrictions imposed by ERISA and the Internal Revenue Code of 1986, as amended. Benefits are based on compensation and length of service and the SERP is unfunded. Benefit payments are expected to total $4,043,000 during the next five fiscal years and $2,479,000 thereafter. We use a December 31 measurement date for the SERP. The accrued liability on our balance sheet for the SERP was $6,665,000 at December 31, 2012 ($5,623,000 at December 31, 2011).

20. Quarterly Results of Operations (Unaudited)

The following is a summary of our unaudited quarterly results of operations for the years ended December 31, 2012 and 2011 (in thousands, except per share data). The sum of individual quarterly amounts may not agree to the annual amounts included in the consolidated statements of income due to rounding.


		Year Ended December 31, 2012
		1st Quarter		2nd Quarter		3rd Quarter⁽²⁾		4th Quarter
Revenues - as reported		$	435,359	$	453,082	$	474,139	$	500,663
Discontinued operations			(18,817)		(14,778)		(12,306)		(945)
Revenues - as adjusted⁽¹⁾		$	416,542	$	438,304	$	461,833	$	499,718
Net income (loss) attributable to common stockholders		$	39,307	$	54,735	$	37,269	$	90,576
Net income (loss) attributable to common stockholders per share:
	Basic	$	0.20	$	0.26	$	0.17	$	0.35
	Diluted		0.19		0.25		0.16		0.35

		Year Ended December 31, 2011
		1st Quarter		2nd Quarter		3rd Quarter⁽³⁾		4th Quarter⁽⁴⁾
Revenues - as reported		$	255,477	$	381,059	$	384,786	$	407,391
Discontinued operations			(28,362)		(25,863)		(26,114)		(24,360)
Revenues - as adjusted⁽¹⁾		$	227,115	$	355,196	$	358,672	$	383,031
Net income attributable to common stockholders		$	23,372	$	69,847	$	36,607	$	27,282
Net income attributable to common stockholders per share:
	Basic	$	0.15	$	0.40	$	0.21	$	0.15
	Diluted		0.15		0.39		0.21		0.15


(1) We have reclassified the income attributable to the properties sold prior to or held for sale at September 30, 2013 to discontinued operations. See Note 5.
(2) The decreases in net income and amounts per share are primarily attributable to gains on sales of real estate totaling $32,450,000 for the second quarter as compared to $12,827,000 for the third quarter.
(3) The decreases in net income and amounts per share are primarily attributable to gains on sales of real estate totaling $30,224,000 for the second quarter as compared to $185,000 for the third quarter.
(4) The decreases in net income and amounts per share are primarily attributable to impairment charges of $11,992,000.

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

21. Subsequent Events

Line of Credit Modification

On January 8, 2013, we closed a $2,750,000,000 unsecured line of credit arrangement consisting of a $2,250,000,000 revolver and a $500,000,000 term loan. The facility replaced our existing $2,000,000,000 unsecured line of credit arrangement described in Note 9. The revolver matures on March 31, 2017, but can be extended for an additional year at our option. The term loan matures on March 31, 2016, but can be extended up to two years at our option. The revolver bears interest at LIBOR plus 117.5 basis points and has an annual facility fee of 22.5 basis points. The term loan bears interest at LIBOR plus 135 basis points. We have an option to upsize the facility by up to an additional $1,000,000,000 through an accordion feature, allowing for aggregate commitments of up to $3,750,000,000. The facility also allows us to borrow up to $500,000,000 in alternate currencies.

Sunrise Merger

In August 2012, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Sunrise Senior Living, Inc. (“Sunrise”), pursuant to which we agreed to acquire Sunrise in an all-cash merger (the “Merger”) in which Sunrise stockholders would receive $14.50 in cash for each share of Sunrise common stock. Subsequent to December 31, 2012, we completed our acquisition of the Sunrise property portfolio. The total estimated purchase price of approximately $3,281,300,000 (which includes certain seniors housing operating investments that occurred during the year ended December 31, 2012 and are included in Notes 3 and 6) is comprised of approximately $3,084,400,000 cash consideration and $133,900,000 of assumed debt (excluding our pro rata share of debt at unconsolidated entities) and excludes fair value and other purchase price accounting adjustments. As of December 31, 2012, we were committed to fund an additional $2,021,400,000 in cash which was sourced from cash on-hand and our new unsecured line of credit arrangement described above.

In connection with the Merger Agreement, Sunrise agreed to sell its management business and certain additional assets and liabilities to Red Fox Management, LP (the “Management Business Buyer”). Immediately prior to our acquisition of the Sunrise property portfolio on January 9, 2013, the Management Business Buyer acquired the Sunrise management company for $130,000,000, with the Company investing $26,000,000 for a 20% ownership interest. The Management Business Buyer will provide management services to the communities under an incentive-based management contract.

Initial accounting for the entire acquisition is incomplete as of February 26, 2013 due to the complexity of the transaction. No measurement period adjustments were recognized for the year ending December 31, 2012 as the transaction closed after year-end. Pro forma financial information has not been provided herein due to a lack of sufficient information at the time of the filing.

Health Care REIT, Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2012
(Dollars in thousands)
										Initial Cost to Company													Gross Amount at Which Carried at Close of Period
Description				Encumbrances						Land					Building & Improvements				Cost Capitalized Subsequent to Acquisition				Land			Building & Improvements					Accumulated Depreciation⁽¹⁾					Year Acquired				Year Built
Seniors housing triple-net:
Aboite Twp, IN			$	-					$	1,770			$		19,930		$		1,601			$	1,770		$	21,531				$	1,222					2010				2008
Agawam, MA				-						880					16,112				2,134				880			18,246					5,213					2002				1993
Agawam, MA				-						1,230					13,618				289				1,230			13,906					709					2011				1975
Agawam, MA				-						930					15,304				229				930			15,533					762					2011				1970
Agawam, MA				-						920					10,661				36				920			10,697					556					2011				1985
Agawam, MA				-						920					10,562				45				920			10,607					551					2011				1967
Akron, OH				-						290					8,219				491				290			8,710					1,821					2005				1961
Akron, OH				-						630					7,535				229				630			7,764					1,414					2006				1915
Alliance, OH				-						270					7,723				107				270			7,830					1,539					2006				1982
Amelia Island, FL				-						3,290					24,310				20,122				3,288			44,434					6,432					2005				1998
Ames, IA				-						330					8,870				-				330			8,870					639					2010				1999
Anderson, SC				-						710					6,290				419				710			6,709					1,955					2003				1986
Andover, MA				-						1,310					12,647				27				1,310			12,674					679					2011				1985
Annapolis, MD				-						1,010					24,825				50				1,010			24,876					1,185					2011				1993
Ansted, WV				-						240					14,113				43				240			14,156					662					2011				1982
Asheboro, NC				-						290					5,032				165				290			5,197					1,340					2003				1998
Asheville, NC				-						204					3,489				-				204			3,489					1,375					1999				1999
Asheville, NC				-						280					1,955				351				280			2,306					669					2003				1992
Aspen Hill, MD				-						-					9,008				457				-			9,465					482					2011				1988
Aurora, OH				-						1,760					14,148				41				1,760			14,189					811					2011				2002
Aurora, CO				-						2,600					5,906				7,915				2,600			13,821					2,915					2006				1988
Aurora, CO				-						2,440					28,172				-				2,440			28,172					4,425					2006				2007
Austin, TX				9,934						730					18,970				-				730			18,970					2,931					2007				2006
Aventura, FL				-						4,540					33,986				-				4,540			33,986					305					2012				2001
Avon, IN				-						1,830					14,470				-				1,830			14,470					1,089					2010				2004
Avon Lake, OH				-						790					10,421				32				790			10,452					622					2011				2001
Ayer, MA				-						-					22,074				3				-			22,077					1,056					2011				1988
Baltic, OH				-						50					8,709				189				50			8,898					1,716					2006				1983
Baltimore, MD				-						1,350					14,884				321				1,350			15,204					754					2011				1905
Baltimore, MD				-						900					5,039				90				900			5,129					302					2011				1969
Bartlesville, OK				-						100					1,380				-				100			1,380					634					1996				1995
Baytown, TX				9,317						450					6,150				-				450			6,150					1,883					2002				2000
Baytown, TX				-						540					11,110				-				540			11,110					1,009					2009				2008
Beachwood, OH				-						1,260					23,478				-				1,260			23,478					7,182					2001				1990
Beattyville, KY				-						100					6,900				660				100			7,560					1,489					2005				1972
Bedford, NH				-						2,250					28,831				5				��2,250			28,836					1,371					2011				1978
Bellevue, WI				-						1,740					18,260				571				1,740			18,831					3,207					2006				2004
Benbrook, TX				-						1,550					13,553				-				1,550			13,553					589					2011				1984
Bethel Park, PA				-						1,700					16,007				-				1,700			16,007					1,650					2007				2009
Bluefield, VA				-						900					12,463				32				900			12,495					611					2011				1990
Boca Raton, FL				-						1,440					31,048				-				1,440			31,048					275					2012				1989
Boonville, IN				-						190					5,510				-				190			5,510					1,654					2002				2000
Bradenton, FL				-						252					3,298				-				252			3,298					1,531					1996				1995
Bradenton, FL				3,031						480					9,953				-				480			9,953					132					2012				2000
Braintree, MA				-						170					7,157				1,290				170			8,447					7,669					1997				1968
Brandon, MS				-						1,220					10,241				-				1,220			10,241					608					2010				1999
Bremerton, WA				-						390					2,210				144				390			2,354					364					2006				1999
Bremerton, WA				-						830					10,420				150				830			10,570					649					2010				1984
Brick, NJ				-						1,290					25,247				102				1,290			25,349					904					2011				2000
Brick, NJ				-						1,170					17,372				223				1,179			17,586					910					2010				1998
Brick, NJ				-						690					17,125				51				690			17,176					880					2010				1999
Bridgewater, NJ				-						1,850					3,050				-				1,850			3,050					997					2004				1970
Bridgewater, NJ				-						1,730					48,201				260				1,739			48,452					2,479					2010				1999
Bridgewater, NJ				-						1,800					31,810				40				1,800			31,850					1,124					2011				2001
Broadview Heights, OH				-						920					12,400				2,393				920			14,793					3,945					2001				1984
Brookline, MA				-						2,760					9,217				2,540				2,760			11,757					554					2011				1984
Brooklyn Park, MD				-						1,290					16,329				29				1,290			16,358					808					2011				1973
Burleson, TX				-						670					13,985				-				670			13,985					630					2011				1988
Burlington, NC				-						280					4,297				707				280			5,004					1,270					2003				2000
Burlington, NC				-						460					5,467				-				460			5,467					1,428					2003				1997
Burlington, NJ				-						1,700					12,554				382				1,700			12,936					716					2011				1965
Burlington, NJ				-						1,170					19,205				167				1,170			19,372					820					2011				1994
Byrdstown, TN				-						-					2,414				269				-			2,683					1,414					2004				1982
Cambridge, MD				-						490					15,843				207				490			16,050					767					2011				1990
Canton, MA				-						820					8,201				263				820			8,464					3,125					2002				1993
Canton, OH				-						300					2,098				-				300			2,098					819					1998				1998
Cape Coral, FL				-						530					3,281				-				530			3,281					989					2002				2000
Cape Coral, FL				9,387						760					18,868				-				760			18,868					254					2012				2009
Carmel, IN				-						2,370					57,175				421				2,370			57,596					6,749					2006				2007
Cary, NC				-						1,500					4,350				986				1,500			5,336					1,926					1998				1996
Catonsville, MD				-						1,330					15,003				549				1,330			15,552					759					2011				1973
Cedar Grove, NJ				-						1,830					10,939				10				1,830			10,949					567					2011				1964
Cedar Grove, NJ				-						2,850					27,737				21				2,850			27,757					1,352					2011				1970
Centreville, MD⁽²⁾				-						600					14,602				-				600			14,602					726					2011				1978
Chapel Hill, NC				-						354					2,646				783				354			3,429					993					2002				1997
Charles Town, WV				-						230					22,834				29				230			22,863					1,057					2011				1997
Charleston, WV				-						440					17,575				47				440			17,622					823					2011				1998
Charleston, WV				-						410					5,430				13				410			5,444					287					2011				1979
Chelmsford, MA				-						1,040					10,951				1,499				1,040			12,450					2,734					2003				1997
Chicago, IL				-						1,800					19,256				-				1,800			19,256					313					2012				2005
Chicago, IL				-						2,900					17,016				-				2,900			17,016					280					2012				2007
Chickasha, OK				-						85					1,395				-				85			1,395					635					1996				1996
Cinnaminson, NJ				-						860					6,663				149				860			6,812					375					2011				1965
Claremore, OK				-						155					1,427				1				155			1,428					630					1996				1996
Clark Summit, PA				-						600					11,179				15				600			11,194					576					2011				1985
Clark Summit, PA				-						400					6,529				54				400			6,583					344					2011				1997
Clarksville, TN				-						330					2,292				-				330			2,292					887					1998				1998
Cleburne, TX				-						520					5,369				-				520			5,369					799					2006				2007
Cleveland, TN				-						350					5,000				122				350			5,122					1,684					2001				1987
Clinton, MD				-						2,330					20,876				-				2,330			20,876					345					2012				1988
Cloquet, MN				-						340					4,660				-				340			4,660					165					2011				2006
Colchester, CT				-						980					4,860				495				980			5,355					313					2011				1986
Colts Neck, NJ				-						780					14,733				347				920			14,940					795					2010				2002
Columbia, TN				-						341					2,295				-				341			2,295					899					1999				1999
Columbia, TN				-						590					3,787				-				590			3,787					1,303					2003				1974
Columbia, SC				-						2,120					4,860				5,709				2,120			10,569					2,527					2003				2000
Columbia Heights, MN				-						825					14,175				-				825			14,175					469					2011				2009
Columbus, IN				-						610					3,190				-				610			3,190					235					2010				1998
Columbus, IN				-						530					6,710				-				530			6,710					1,863					2002				2001
Columbus, OH				-						530					5,170				8,255				1,070			12,885					2,533					2005				1968
Columbus, OH				-						1,010					5,022				-				1,010			5,022					1,084					2006				1983
Columbus, OH				-						1,010					4,931				13,620				1,860			17,701					3,412					2006				1978
Concord, NC				-						550					3,921				55				550			3,976					1,151					2003				1997
Concord, NH				-						780					18,423				378				780			18,801					867					2011				1972
Concord, NH				-						1,760					43,179				545				1,760			43,724					2,021					2011				1994
Concord, NH				-						720					3,041				203				720			3,245					188					2011				1905
Conroe, TX				-						980					7,771				-				980			7,771					592					2009				2010
Conyers, GA				-						2,740					19,302				-				2,740			19,302��					171					2012				1998
Corpus Christi, TX				-						400					1,916				-				400			1,916					604					2005				1985
Cortland, NY				-						700					18,041				-				700			18,041					117					2012				2001
Daniels, WV				-						200					17,320				49				200			17,370					808					2011				1986
Danville, VA				-						410					3,954				722				410			4,676					1,238					2003				1998
Daphne, AL				-						2,880					8,670				-				2,880			8,670					155					2012				2001
Dedham, MA				-						1,360					9,830				-				1,360			9,830					3,168					2002				1996
DeForest, WI				-						250					5,350				354				250			5,704					840					2007				2006
Defuniak Springs, FL				-						1,350					10,250				-				1,350			10,250					1,867					2006				1980
Denton, TX				-						1,760					8,305				-				1,760			8,305					272					2010				2011
Denver, CO				-						2,530					9,514				-				2,530			9,514					1,965					2005				1986
Denver, CO				-						3,650					14,906				1,605				3,650			16,511					2,565					2006				1987
Denver, CO				-						2,076					13,594				-				2,076			13,594					1,146					2007				2009
Dover, DE				-						400					7,717				38				400			7,755					396					2011				1997
Dover, DE				-						600					22,266				90				600			22,356					1,063					2011				1984
Drescher, PA				-						2,060					40,236				159				2,067			40,388					2,063					2010				2001
Dundalk, MD⁽²⁾				-						1,770					32,047				-				1,770			32,047					1,532					2011				1978
Durham, NC				-						1,476					10,659				2,196				1,476			12,855					8,207					1997				1999
East Brunswick, NJ				-						1,380					34,229				87				1,380			34,315					1,198					2011				1998
East Norriston, PA				-						1,200					28,129				285				1,210			28,404					1,474					2010				1988
Easton, MD				-						900					24,539				-				900			24,539					1,205					2011				1962
Easton, PA				-						285					6,315				-				285			6,315					3,579					1993				1959
Eatontown, NJ				-						1,190					23,358				67				1,190			23,426					1,138					2011				1996
Eden, NC				-						390					4,877				-				390			4,877					1,294					2003				1998
Edmond, OK				-						410					8,388				-				410			8,388					210					2012				2001
Elizabeth City, NC				-						200					2,760				2,011				200			4,771					1,592					1998				1999
Elizabethton, TN				-						310					4,604				336				310			4,940					1,658					2001				1980
Englewood, NJ				-						930					4,514				17				930			4,531					242					2011				1966
Englishtown, NJ				-						690					12,520				401				722			12,890					683					2010				1997
Erin, TN				-						440					8,060				134				440			8,194					2,581					2001				1981
Everett, WA				-						1,400					5,476				-				1,400			5,476					2,037					1999				1999
Fair Lawn, NJ				-						2,420					24,504				159				2,420			24,663					1,190					2011				1962
Fairfield, CA				-						1,460					14,040				1,548				1,460			15,588					4,337					2002				1998
Fairhope, AL				-						570					9,119				-				570			9,119					162					2012				1987
Fall River, MA				-						620					5,829				4,856				620			10,685					3,953					1996				1973
Fall River, MA				-						920					34,715				208				920			34,923					1,655					2011				1993
Fanwood, NJ				-						2,850					55,175				121				2,850			55,296					1,904					2011				1982
Fayetteville, GA				-						560					12,665				-				560			12,665					110					2012				1994
Fayetteville, NY				-						410					3,962				500				410			4,462					1,316					2001				1997
Findlay, OH				-						200					1,800				-				200			1,800					762					1997				1997
Fishers, IN				-						1,500					14,500				-				1,500			14,500					1,090					2010				2000
Florence, NJ				-						300					2,978				-				300			2,978					893					2002				1999
Flourtown, PA				-						1,800					14,830				108				1,800			14,938					737					2011				1908
Flower Mound, TX				-						1,800					8,414				-				1,800			8,414					-					2011				0
Follansbee, WV				-						640					27,670				44				640			27,714					1,305					2011				1982
Forest City, NC				-						320					4,497				-				320			4,497					1,205					2003				1999
Fort Ashby, WV				-						330					19,566				123				330			19,689					906					2011				1980
Franconia, NH				-						360					11,320				69				360			11,390					549					2011				1971
Franklin, NH				-						430					15,210				46				430			15,255					729					2011				1990
Fredericksburg, VA				-						1,000					20,000				1,200				1,000			21,200					4,133					2005				1999
Fredericksburg, VA				-						590					28,611				35				590			28,646					1,339					2011				1977
Fredericksburg, VA				-						3,700					22,016				-				3,700			22,016					143					2012				1992
Gardner, MA				-						480					10,210				27				480			10,237					517					2011				1902
Gastonia, NC				-						470					6,129				-				470			6,129					1,591					2003				1998
Gastonia, NC				-						310					3,096				22				310			3,118					866					2003				1994
Gastonia, NC				-						400					5,029				120				400			5,149					1,346					2003				1996
Georgetown, TX				-						200					2,100				-				200			2,100					876					1997				1997
Gettysburg, PA				-						590					8,913				26				590			8,938					475					2011				1987
Glastonbury, CT				-						1,950					9,532				595				2,360			9,717					513					2011				1966
Glen Mills, PA				-						690					9,110				165				690			9,275					467					2011				1993
Glenside, PA				-						1,940					16,867				24				1,940			16,891					832					2011				1905
Goshen, IN				-						210					6,120				-				210			6,120					1,255					2005				2006
Graceville, FL				-						150					13,000				-				150			13,000					2,302					2006				1980
Grafton, WV				-						280					18,824				37				280			18,861					875					2011				1986
Granbury, TX				-						2,040					30,670				-				2,040			30,670					1,365					2011				2009
Granbury, TX				-						2,550					2,940				-				2,550			2,940					26					2012				1996
Grand Blanc, MI				-						700					7,843				-				700			7,843					-					2011				0
Grand Ledge, MI				8,178						1,150					16,286				-				1,150			16,286					908					2010				1999
Granger, IN				-						1,670					21,280				1,751				1,670			23,031					1,313					2010				2009
Greendale, WI				-						2,060					35,383				-				2,060			35,383					707					2012				1988
Greeneville, TN				-						400					8,290				507				400			8,797					2,122					2004				1979
Greenfield, WI				-						600					6,626				328				600			6,954					994					2006				2006
Greensboro, NC				-						330					2,970				554				330			3,524					956					2003				1996
Greensboro, NC				-						560					5,507				1,013				560			6,520					1,755					2003				1997
Greenville, SC				-						310					4,750				-				310			4,750					1,153					2004				1997
Greenville, SC				-						5,400					100,523				1,997				5,400			102,520					8,077					2006				2009
Greenville, NC				-						290					4,393				168				290			4,561					1,177					2003				1998
Greenwood, IN				-						1,550					22,770				81				1,550			22,851					1,344					2010				2007
Groton, CT				-						2,430					19,941				739				2,430			20,680					1,053					2011				1975
Haddonfield, NJ				-						520					2,320				160				520			2,480					1,668					2011				1953
Hamburg, PA				-						840					10,543				142				840			10,685					584					2011				1966
Hamilton, NJ				-						440					4,469				-				440			4,469					1,330					2001				1998
Hanover, IN				-						210					4,430				-				210			4,430					1,108					2004				2000
Harleysville, PA				-						960					11,355				-				960			11,355					1,089					2008				2009
Harriman, TN				-						590					8,060				158				590			8,218					2,757					2001				1972
Hatboro, PA				-						-					28,112				890				-			29,002					1,329					2011				1996
Hattiesburg, MS				-						450					15,518				35				450			15,553					818					2010				2009
Haverford, PA				-						1,880					33,993				387				1,882			34,378					1,750					2010				2000
Hemet, CA				-						870					3,405				-				870			3,405					499					2007				1996
Hermitage, TN				-						1,500					9,856				8				1,500			9,863					409					2011				2006
Hickory, NC				-						290					987				232				290			1,219					443					2003				1994
High Point, NC				-						560					4,443				793				560			5,236					1,393					2003				2000
High Point, NC				-						370					2,185				410				370			2,595					739					2003				1999
High Point, NC				-						330					3,395				28				330			3,423					918					2003				1994
High Point, NC				-						430					4,143				-				430			4,143					1,101					2003				1998
Highland Park, IL				-						2,820					15,832				-				2,820			15,832					35					2011				2012
Highlands Ranch, CO				-						940					3,721				-				940			3,721					1,132					2002				1999
Hilltop, WV				-						480					25,355				15				480			25,370					1,198					2011				1977
Hollywood, FL				-						1,240					13,806				-				1,240			13,806					124					2012				2001
Homestead, FL				-						2,750					11,750				-				2,750			11,750					2,129					2006				1994
Houston, TX				9,931						860					18,715				-				860			18,715					2,642					2007				2006
Houston, TX				-						5,090					9,471				-				5,090			9,471					1,014					2007				2009
Houston, TX				10,288						630					5,970				750				630			6,720					1,989					2002				1995
Howell, NJ				10,299						1,050					21,703				150				1,064			21,839					1,140					2010				2007
Huntington, WV				-						800					32,261				126				800			32,387					1,530					2011				1976
Huron, OH				-						160					6,088				1,452				160			7,540					1,389					2005				1983
Hurricane, WV				-						620					21,454				805				620			22,258					1,041					2011				1986
Hutchinson, KS				-						600					10,590				194				600			10,784					2,317					2004				1997
Indianapolis, IN				-						495					6,287				22,565				495			28,852					5,663					2006				1981
Indianapolis, IN				-						255					2,473				12,123				255			14,596					2,697					2006				1981
Jackson, NJ				-						6,500					26,405				-				6,500			26,405					171					2012				2001
Jacksonville Beach, FL				-						1,210					26,207				-				1,210			26,207					226					2012				1999
Jamestown, TN				-						-					6,707				45				-			6,752					3,912					2004				1966
Jefferson, OH				-						80					9,120				-				80			9,120					1,858					2006				1984
Jupiter, FL				-						3,100					47,453				-				3,100			47,453					303					2012				2002
Kalida, OH				-						480					8,173				-				480			8,173					1,285					2006				2007
Keene, NH				-						530					9,639				284				530			9,923					385					2011				1980
Kenner, LA				-						1,100					10,036				328				1,100			10,364					6,550					1998				2000
Kennesaw, GA				-						940					10,848				-				940			10,848					99					2012				1998
Kennett Square, PA				-						1,050					22,946				49				1,060			22,985					1,186					2010				2008
Kenosha, WI				-						1,500					9,139				-				1,500			9,139					971					2007				2009
Kent, WA				-						940					20,318				10,470				940			30,788					3,651					2007				2000
Kirkland, WA				-						1,880					4,315				683				1,880			4,998					1,143					2003				1996
Laconia, NH				-						810					14,434				483				810			14,916					711					2011				1968
Lake Barrington, IL				-						3,400					66,179				-				3,400			66,179					421					2012				2000
Lake Zurich, IL				-						1,470					9,830				-				1,470			9,830					459					2011				2007
Lakewood Ranch, FL				-						650					6,714				-				650			6,714					117					2011				2012
Lakewood Ranch, FL				7,569						1,000					22,388				-				1,000			22,388					295					2012				2005
Lancaster, PA				-						890					7,623				80				890			7,702					419					2011				1928
Lancaster, NH				-						430					15,804				161				430			15,964					757					2011				1981
Lancaster, NH				-						160					434				28				160			462					42					2011				1905
Langhorne, PA				-						1,350					24,881				117				1,350			24,998					1,221					2011				1979
Lapeer, MI				-						220					7,625				-				220			7,625					82					2011				2012
LaPlata, MD⁽²⁾				-						700					19,068				-				700			19,068					935					2011				1984
Lawrence, KS				3,797						250					8,716				-				250			8,716					114					2012				1996
Lebanon, NH				-						550					20,138				64				550			20,202					962					2011				1985
Lecanto, FL				-						200					6,900				-				200			6,900					1,607					2004				1986
Lee, MA				-						290					18,135				926				290			19,061					5,582					2002				1998
Leicester, England				-						6,897					30,240				-				6,897			30,240					-					2012				0
Lenoir, NC				-						190					3,748				641				190			4,389					1,161					2003				1998
Leominster, MA				-						530					6,201				25				530			6,226					348					2011				1966
Lewisburg, WV				-						260					3,699				70				260			3,769					210					2011				1995
Lexington, NC				-						200					3,900				1,015				200			4,915					1,389					2002				1997
Lexington, KY				-						1,850					11,977				-				1,850			11,977					-					2011				0
Libertyville, IL				-						6,500					40,024				-				6,500			40,024					1,848					2011				2001
Lincoln, NE				5,131						390					13,807				-				390			13,807					964					2010				2000
Linwood, NJ				-						800					21,984				429				800			22,413					1,178					2010				1997
Litchfield, CT				-						1,240					17,908				102				1,250			18,000					933					2010				1998
Little Neck, NY				-						3,350					38,461				426				3,355			38,882					2,008					2010				2000
Loganville, GA				-						1,430					22,912				-				1,430			22,912					215					2012				1997
Longview, TX				-						610					5,520				-				610			5,520					831					2006				2007
Longwood, FL				-						1,260					6,445				-				1,260			6,445					222					2011				2011
Louisville, KY				-						490					10,010				-				490			10,010					2,650					2005				1978
Louisville, KY				-						430					7,135				163				430			7,298					2,443					2002				1974
Louisville, KY				-						350					4,675				109				350			4,784					1,637					2002				1975
Lowell, MA				-						1,070					13,481				92				1,070			13,573					694					2011				1975
Lowell, MA				-						680					3,378				30				680			3,408					213					2011				1969
Lutherville, MD				-						1,100					19,786				1,579				1,100			21,365					969					2011				1988
Macungie, PA				-						960					29,033				17				960			29,049					1,364					2011				1994
Mahwah, NJ				-						785					-				-				785			-					-					2012
Manahawkin, NJ				-						1,020					20,361				122				1,020			20,483					991					2011				1994
Manalapan, NJ				-						900					22,624				56				900			22,680					795					2011				2001
Manassas, VA				-						750					7,446				530				750			7,976					1,875					2003				1996
Mansfield, TX				-						660					5,251				-				660			5,251					800					2006				2007
Marianna, FL				-						340					8,910				-				340			8,910					1,573					2006				1997
Marietta, GA				-						1,270					10,519				-				1,270			10,519					94					2012				1997
Marlinton, WV				-						270					8,430				-				270			8,430					418					2011				1987
Marmet, WV				-						540					26,483				-				540			26,483					1,225					2011				1986
Martinsburg, WV				-						340					17,180				31				340			17,211					802					2011				1987
Martinsville, VA				-						349					-				-				349			-					-					2003
Matawan, NJ				-						1,830					20,618				-				1,830			20,618					589					2011				1965
Matthews, NC				-						560					4,738				-				560			4,738					1,295					2003				1998
McConnelsville, OH				-						190					7,060				-				190			7,060					514					2010				1946
McHenry, IL				-						1,576					-				-				1,576			-					-					2006
McHenry, IL				-						3,550					15,300				6,718				3,550			22,018					3,105					2006				2004
McKinney, TX				-						1,570					7,389				-				1,570			7,389					592					2009				2010
McMurray, PA				-						1,440					15,805				1,894				1,440			17,699					489					2010				2011
Melbourne, FL				-						7,070					48,257				12,990				7,070			61,247					4,901					2007				2009
Melbourne, FL				-						2,540					21,319				-				2,540			21,319					503					2010				2012
Melville, NY				-						4,280					73,283				722				4,282			74,003					3,762					2010				2001
Memphis, TN				-						940					5,963				-				940			5,963					1,733					2004				1951
Memphis, TN				-						390					9,660				1,600				390			11,260					652					2010				1981
Mendham, NJ				-						1,240					27,169				375				1,240			27,544					1,281					2011				1968
Menomonee Falls, WI				-						1,020					6,984				-				1,020			6,984					980					2006				2007
Mercerville, NJ				-						860					9,929				109				860			10,039					518					2011				1967
Meriden, CT				-						1,300					1,472				5				1,300			1,477					158					2011				1968
Merrillville, IN				-						643					7,084				3,526				643			10,610					6,112					1997				1999
Merrillville, IN				-						1,080					3,413				-				1,080			3,413					195					2010				2011
Middleburg Heights, OH				��-						960					7,780				-				960			7,780					1,735					2004				1998
Middleton, WI				-						420					4,006				600				420			4,606					1,229					2001				1991
Middletown, RI				-						1,480					19,703				-				1,480			19,703					970					2011				1975
Midland, MI				-						200					11,025				39				200			11,064					598					2010				1994
Milford, DE				-						400					7,816				40				400			7,855					400					2011				1997
Milford, DE				-						680					19,216				56				680			19,273					940					2011				1905
Millersville, MD				-						680					1,020				25				680			1,045					411					2011				1962
Millville, NJ				-						840					29,944				85				840			30,030					1,433					2011				1986
Missoula, MT				-						550					7,490				377				550			7,867					1,503					2005				1998
Monmouth Junction, NJ				-						720					6,209				57				720			6,266					341					2011				1996
Monroe, NC				-						470					3,681				648				470			4,329					1,175					2003				2001
Monroe, NC				-						310					4,799				857				310			5,656					1,446					2003				2000
Monroe, NC				-						450					4,021				114				450			4,135					1,119					2003				1997
Monroe Twp, NJ				-						1,160					13,193				75				1,160			13,268					690					2011				1996
Monteagle, TN				-						310					3,318				-				310			3,318					1,061					2003				1980
Monterey, TN				-						-					4,195				410				-			4,605					2,454					2004				1977
Montville, NJ				-						3,500					31,002				135				3,500			31,137					1,112					2011				1988
Moorestown, NJ				-						2,060					51,628				267				2,063			51,892					2,668					2010				2000
Morehead City, NC				-						200					3,104				1,648				200			4,752					1,593					1999				1999
Morgantown, KY				-						380					3,705				615				380			4,320					1,128					2003				1965
Morgantown, WV				-						190					15,633				-				190			15,633					414					2011				1997
Morton Grove, IL				-						1,900					19,374				-				1,900			19,374					568					2010				2011
Mount Airy, NC				-						270					6,430				290				270			6,720					1,199					2005				1998
Mountain City, TN				-						220					5,896				660				220			6,556					3,568					2001				1976
Mt. Vernon, WA				-						400					2,200				156				400			2,356					375					2006				2001
Myrtle Beach, SC				-						6,890					41,526				11,498				6,890			53,024					4,281					2007				2009
Nacogdoches, TX				-						390					5,754				-				390			5,754					857					2006				2007
Naperville, IL				-						3,470					29,547				-				3,470			29,547					1,390					2011				2001
Naples, FL				-						550					5,450				-				550			5,450					1,361					2004				1968
Nashville, TN				-						4,910					29,590				-				4,910			29,590					3,567					2008				2007
Naugatuck, CT				-						1,200					15,826				99				1,200			15,924					781					2011				1980
Needham, MA				-						1,610					13,715				366				1,610			14,081					4,576					2002				1994
Neenah, WI				-						630					15,120				-				630			15,120					1,032					2010				1991
New Braunfels, TX				-						1,200					19,800				-				1,200			19,800					933					2011				2009
New Haven, IN				-						176					3,524				-				176			3,524					1,046					2004				1981
Newark, DE				-						560					21,220				1,488				560			22,708					4,595					2004				1998
Newport, VT				-						290					3,867				-				290			3,867					211					2011				1967
Norman, OK				-						55					1,484				-				55			1,484					751					1995				1995
Norman, OK				11,524						1,480					33,330				-				1,480			33,330					431					2012				1985
Norristown, PA				-						1,200					19,488				1,135				1,200			20,623					948					2011				1995
North Andover, MA				-						950					21,817				54				950			21,870					1,047					2011				1977
North Andover, MA				-						1,070					17,341				1,293				1,070			18,634					879					2011				1990
North Augusta, SC				-						332					2,558				-				332			2,558					990					1999				1998
North Cape May, NJ				-						600					22,266				36				600			22,302					1,062					2011				1995
Oak Hill, WV				-						240					24,506				-				240			24,506					1,132					2011				1988
Oak Hill, WV				-						170					721				-				170			721					73					2011				1999
Ocala, FL				-						1,340					10,564				-				1,340			10,564					973					2008				2009
Ogden, UT				-						360					6,700				699				360			7,399					1,534					2004				1998
Oklahoma City, OK				-						590					7,513				-				590			7,513					932					2007				2008
Oklahoma City, OK				-						760					7,017				-				760			7,017					767					2007				2009
Omaha, NE				-						370					10,230				-				370			10,230					730					2010				1998
Omaha, NE				4,419						380					8,864				-				380			8,864					654					2010				1999
Oneonta, NY				-						80					5,020				-				80			5,020					679					2007				1996
Ormond Beach, FL				-						-					2,739				73				-			2,812					1,495					2002				1983
Orwigsburg, PA				-						650					20,632				134				650			20,766					999					2011				1992
Oshkosh, WI				-						900					3,800				3,687				900			7,487					1,272					2006				2005
Oshkosh, WI				-						400					23,237				-				400			23,237					2,424					2007				2008
Overland Park, KS				-						1,120					8,360				-				1,120			8,360					1,763					2005				1970
Overland Park, KS				-						3,730					27,076				340				3,730			27,416					2,317					2008				2009
Overland Park, KS				-						4,500					29,105				7,295				4,500			36,400					2,007					2010				1988
Owasso, OK				-						215					1,380				-				215			1,380					608					1996				1996
Owensboro, KY				-						240					6,760				37				240			6,797					1,528					1993				1966
Owensboro, KY				-						225					13,275				-				225			13,275					2,912					2005				1964
Owenton, KY				-						100					2,400				-				100			2,400					647					2005				1979
Oxford, MI				11,710						1,430					15,791				-				1,430			15,791					906					2010				2001
Palestine, TX				-						180					4,320				1,300				180			5,620					890					2006				2005
Palm Coast, FL				-						870					10,957				-				870			10,957					877					2008				2010
Panama City Beach, FL				-						900					7,717				9				900			7,726					322					2011				2005
Paris, TX				-						490					5,452				-				490			5,452					2,240					2005				2006
Parkersburg, WV				-						390					21,288				643				390			21,931					1,012					2011				1979
Parkville, MD				-						1,350					16,071				212				1,350			16,284					801					2011				1980
Parkville, MD				-						791					11,186				-				791			11,186					571					2011				1972
Parkville, MD				-						1,100			��		11,768				-				1,100			11,768					595					2011				1972
Pasadena, TX				9,955						720					24,080				-				720			24,080					3,664					2007				2005
Paso Robles, CA				-						1,770					8,630				693				1,770			9,323					2,656					2002				1998
Pawleys Island, SC				-						2,020					32,590				6,022				2,020			38,612					6,600					2005				1997
Pella, IA				-						870					6,716				-				870			6,716					59					2012				2002
Pennington, NJ				-						1,380					27,620				426				1,420			28,006					860					2011				2000
Pennsauken, NJ				-						900					10,780				179				900			10,959					602					2011				1985
Petoskey, MI				6,293						860					14,452				-				860			14,452					739					2011				1997
Philadelphia, PA				-						2,700					25,709				333				2,700			26,041					1,259					2011				1976
Philadelphia, PA				-						2,930					10,433				2,642				2,930			13,075					632					2011				1952
Philadelphia, PA				-						540					11,239				62				540			11,302					532					2011				1965
Philadelphia, PA				-						1,810					16,898				32				1,810			16,931					902					2011				1972
Phillipsburg, NJ				-						800					21,175				193				800			21,368					1,044					2011				1992
Phillipsburg, NJ				-						300					8,114				38				300			8,151					399					2011				1905
Pigeon Forge, TN				-						320					4,180				117				320			4,297					1,510					2001				1986
Pinehurst, NC				-						290					2,690				484				290			3,174					892					2003				1998
Piqua, OH				-						204					1,885				-				204			1,885					755					1997				1997
Pittsburgh, PA				-						1,750					8,572				115				1,750			8,687					1,899					2005				1998
Plainview, NY				-						3,990					11,969				94				3,990			12,064					480					2011				1963
Plattsmouth, NE				-						250					5,650				-				250			5,650					424					2010				1999
Plymouth, MI				-						1,490					19,990				114				1,490			20,104					1,093					2010				1972
Port St. Joe, FL				-						370					2,055				-				370			2,055					863					2004				1982
Port St. Lucie, FL				-						8,700					47,230				4,761				8,700			51,991					3,550					2008				2010
Post Falls, ID				-						2,700					14,217				2,181				2,700			16,398					1,845					2007				2008
Pottsville, PA				-						950					26,964				202				950			27,166					1,319					2011				1990
Princeton, NJ				-						1,730					30,888				817				1,772			31,663					977					2011				2001
Quakertown, PA				-						1,040					25,389				72				1,040			25,461					1,213					2011				1977
Raleigh, NC				-						10,000					-				-				10,000			-					-					2008
Raleigh, NC				26,506						3,530					59,589				-				3,530			59,589					395					2012				2002
Raleigh, NC				-						2,580					16,837				-				2,580			16,837					156					2012				1988
Reading, PA				-						980					19,906				102				980			20,008					967					2011				1994
Red Bank, NJ				-						1,050					21,275				97				1,050			21,372					748					2011				1997
Rehoboth Beach, DE				-						960					24,248				196				961			24,443					1,269					2010				1999
Reidsville, NC				-						170					3,830				857				170			4,687					1,341					2002				1998
Reno, NV				-						1,060					11,440				605				1,060			12,045					2,569					2004				1998
Ridgeland, MS				-						520					7,675				427				520			8,102					1,926					2003				1997
Ridgely, TN				-						300					5,700				97				300			5,797					1,872					2001				1990
Ridgewood, NJ				-						1,350					16,170				478				1,350			16,649					780					2011				1971
Rockledge, FL				-						360					4,117				-				360			4,117					1,677					2001				1970
Rockville, MD				-						-					16,398				-				-			16,398					279					2012				1986
Rockville, CT				-						1,500					4,835				76				1,500			4,911					320					2011				1960
Rockville Centre, NY				-						4,290					20,310				142				4,290			20,452					756					2011				2002
Rockwood, TN				-						500					7,116				741				500			7,857					2,521					2001				1979
Rocky Hill, CT				-						1,090					6,710				1,500				1,090			8,210					1,842					2003				1996
Rogersville, TN				-						350					3,278				-				350			3,278					1,052					2003				1980
Romeoville, IL				-						1,895					-				-				1,895			-					-					2006
Rutland, VT				-						1,190					23,655				87				1,190			23,743					1,151					2011				1968
Saint Simons Island, GA				-						6,440					50,060				1,270				6,440			51,330					5,809					2008				2007
Salem, OR				-						449					5,171				-				449			5,172					1,977					1999				1998
Salisbury, NC				-						370					5,697				168				370			5,865					1,517					2003				1997
San Angelo, TX				-						260					8,800				425				260			9,225					1,927					2004				1997
San Antonio, TX				-						6,120					28,169				1,587				6,120			29,756					999					2010				2011
San Antonio, TX				10,754						560					7,315				-				560			7,315					2,258					2002				2000
San Antonio, TX				9,912						640					13,360				-				640			13,360					2,124					2007				2004
Sanatoga, PA				-						980					30,695				37				980			30,733					1,439					2011				1993
Sand Springs, OK				6,792						910					19,654				-				910			19,654					259					2012				2002	��
Sarasota, FL				-						475					3,175				-				475			3,175					1,474					1996				1995
Sarasota, FL				-						600					3,400				-				600			3,400					947					2004				1982
Sarasota, FL				-						1,120					12,489				-				1,120			12,489					114					2012				1999
Sarasota, FL				-						950					8,825				-				950			8,825					80					2012				1998
Sarasota, FL				-						880					9,854				-				880			9,854					94					2012				1990
Scituate, MA				-						1,740					10,640				-				1,740			10,640					2,077					2005				1976
Scott Depot, WV				-						350					6,876				58				350			6,934					351					2011				1995
Seaford, DE				-						720					14,029				53				720			14,082					718					2011				1977
Seaford, DE				-						830					7,995				-				830			7,995					112					2012				1992
Selbyville, DE				-						750					25,912				160				764			26,058					1,361					2010				2008
Seven Fields, PA				-						484					4,663				60				484			4,722					1,813					1999				1999
Severna Park, MD⁽²⁾				-						2,120					31,273				-				2,120			31,273					1,472					2011				1981
Shawnee, OK				-						80					1,400				-				80			1,400					640					1996				1995
Sheboygan, WI				-						80					5,320				3,774				80			9,094					1,143					2006				2006
Shelbyville, KY				-						630					3,870				-				630			3,870					859					2005				1965
Shelton, WA				-						530					17,049				-				530			17,049					237					2012				1989
Shepherdstown, WV				-						250					13,806				14				250			13,819					650					2011				1990
Sherman, TX				-						700					5,221				-				700			5,221					848					2005				2006
Shillington, PA				-						1,020					19,569				118				1,020			19,687					956					2011				1964
Shrewsbury, NJ				-						2,120					38,116				270				2,120			38,386					1,984					2010				2000
Silver Spring, MD				-						1,250					7,278				-				1,250			7,278					125					2012				1952
Silver Spring, MD				-						1,150					9,252				-				1,150			9,252					152					2012				1968
Silvis, IL				-						880					16,420				-				880			16,420					1,029					2010				2005
Sissonville, WV				-						600					23,948				54				600			24,003					1,136					2011				1981
Sisterville, WV				-						200					5,400				242				200			5,642					287					2011				1986
Smithfield, NC				-						290					5,680				-				290			5,680					1,487					2003				1998
Somerset, MA				-						1,010					29,577				95				1,010			29,671					1,394					2011				1998
South Boston, MA				-						385					2,002				5,218				385			7,220					2,823					1995				1961
South Pittsburg, TN				-						430					5,628				-				430			5,628					1,547					2004				1979
Southbury, CT				-						1,860					23,613				958				1,860			24,571					1,102					2011				2001
Sparks, NV				-						3,700					46,526				-				3,700			46,526					4,326					2007				2009
Spartanburg, SC				-						3,350					15,750				12,669				3,350			28,419					3,816					2005				1997
Spencer, WV				-						190					8,810				28				190			8,838					431					2011				1988
Spring City, TN				-						420					6,085				3,210				420			9,295					2,663					2001				1987
Spring House, PA				-						900					10,780				156				900			10,936					561					2011				1900
St. Charles, MD				-						580					15,555				82				580			15,636					765					2011				1996
St. Louis, MO				-						1,890					12,165				-				1,890			12,165					707					2010				1963
Statesville, NC				-						150					1,447				266				150			1,713					480					2003				1990
Statesville, NC				-						310					6,183				8				310			6,191					1,566					2003				1996
Statesville, NC				-						140					3,627				-				140			3,627					946					2003				1999
Stillwater, OK				-						80					1,400				-				80			1,400					643					1995				1995
Summit, NJ				-						3,080					14,152				-				3,080			14,152					660					2011				2001
Superior, WI				-						1,020					13,735				-				1,020			13,735					-					2009				0
Swanton, OH				-						330					6,370				-				330			6,370					1,504					2004				1950
Takoma Park, MD				-						1,300					10,136				-				1,300			10,136					172					2012				1962
Texarkana, TX				-						192					1,403				-				192			1,403					617					1996				1996
Thomasville, GA				-						530					13,899				409				530			14,308					569					2011				2006
Tomball, TX				-						1,050					13,300				-				1,050			13,300					655					2011				2001
Toms River, NJ				-						1,610					34,627				346				1,650			34,933					1,819					2010				2005
Topeka, KS				-						260					12,712				-				260			12,712					173					2012				2011
Towson, MD⁽²⁾				-						1,180					13,280				-				1,180			13,280					667					2011				1973
Troy, OH				-						200					2,000				4,254				200			6,254					1,168					1997				1997
Troy, OH				-						470					16,730				-				470			16,730					3,803					2004				1971
Trumbull, CT				-						4,440					43,384				-				4,440			43,384					1,930					2011				2001
Tucson, AZ				-						930					13,399				-				930			13,399					2,692					2005				1985
Tulsa, OK				-						1,390					7,110				219				1,390			7,329					561					2010				1998
Tulsa, OK				-						1,320					10,087				-				1,320			10,087					49					2011				2012
Tyler, TX				-						650					5,268				-				650			5,268					796					2006				2007
Uhrichsville, OH				-						24					6,716				-				24			6,716					1,308					2006				1977
Uniontown, PA				-						310					6,817				84				310			6,901					343					2011				1964
Valley Falls, RI				-						1,080					7,433				10				1,080			7,443					378					2011				1975
Valparaiso, IN				-						112					2,558				-				112			2,558					835					2001				1998
Valparaiso, IN				-						108					2,962				-				108			2,962					946					2001				1999
Venice, FL				-						500					6,000				-				500			6,000					1,472					2004				1987
Venice, FL				-						1,150					10,674				-				1,150			10,674					906					2008				2009
Vero Beach, FL				-						263					3,187				-				263			3,187					1,007					2001				1999
Vero Beach, FL				-						297					3,263				-				297			3,263					1,041					2001				1996
Vero Beach, FL				-						2,930					40,070				14,729				2,930			54,799					6,268					2007				2003
Voorhees, NJ				-						1,800					37,299				559				1,800			37,858					1,809					2011				1965
Voorhees, NJ⁽²⁾				-						1,900					26,040				-				1,900			26,040					1,278					2011				1985
Waconia, MN				-						890					14,726				4,334				890			19,060					547					2011				2005
Wake Forest, NC				-						200					3,003				1,742				200			4,745					1,640					1998				1999
Walkersville, MD				-						1,650					15,103				-				1,650			15,103					250					2012				1997
Wall, NJ				-						1,650					25,350				355				1,690			25,665					792					2011				2003		��
Wallingford, CT				-						490					1,210				46				490			1,256					103					2011				1962
Wareham, MA				-						875					10,313				1,701				875			12,014					3,650					2002				1989
Warren, NJ				-						2,000					30,810				86				2,000			30,896					1,072					2011				1999
Warwick, RI				-						1,530					18,564				48				1,530			18,612					924					2011				1963
Watchung, NJ				-						1,920					24,880				346				1,960			25,186					778					2011				2000
Waukee, IA				-						1,870					31,878				-				1,870			31,878					277					2012				2007
Waukesha, WI				-						1,100					14,910				-				1,100			14,910					1,206					2008				2009
Waxahachie, TX				-						650					5,763				-				650			5,763					728					2007				2008
Weatherford, TX				-						660					5,261				-				660			5,261					801					2006				2007
Webster, TX				9,473						360					5,940				-				360			5,940					1,826					2002				2000
Webster, NY				-						800					8,968				-				800			8,968					60					2012				2001
Webster, NY				-						1,300					21,127				-				1,300			21,127					136					2012				2001
Webster Groves, MO				-						1,790					15,469				-				1,790			15,469					137					2011				2012
West Bend, WI				-						620					17,790				-				620			17,790					472					2010				2011
West Chester, PA				-						1,350					29,237				95				1,350			29,332					1,411					2011				1974
West Chester, PA				-						3,290					42,258				-				3,290			42,258					844					2012				2000
West Chester, PA				-						600					11,894				-				600			11,894					242					2012				2002
West Orange, NJ				-						2,280					10,687				168				2,280			10,855					580					2011				1963
West Worthington, OH				-						510					5,090				-				510			5,090					1,031					2006				1980
Westerville, OH				-						740					8,287				3,105				740			11,392					6,416					1998				2001
Westfield, NJ⁽²⁾				-						2,270					16,589				-				2,270			16,589					890					2011				1970
Westford, MA				-						920					13,829				203				920			14,032					695					2011				1993
Westlake, OH				-						1,330					17,926				-				1,330			17,926					5,570					2001				1985
Westmoreland, TN				-						330					1,822				2,635				330			4,457					1,492					2001				1994
White Lake, MI				10,713						2,920					20,179				55				2,920			20,234					1,126					2010				2000
Wichita, KS				-						1,400					11,000				-				1,400			11,000					2,178					2006				1997
Wichita, KS				-						1,760					19,007				-				1,760			19,007					414					2011				2012
Wichita, KS				13,828						630					19,747				-				630			19,747					257					2012				2009
Wilkes-Barre, PA				-						610					13,842				95				610			13,937					695				��	2011				1986
Wilkes-Barre, PA				-						570					2,301				44				570			2,345					183					2011				1992
Willard, OH				-						730					6,447				-				730			6,447					96					2011				2012
Williamsport, PA				-						300					4,946				280				300			5,226					263					2011				1991
Williamsport, PA				-						620					8,487				428				620			8,914					464					2011				1988
Williamstown, KY				-						70					6,430				-				70			6,430					1,424					2005				1987
Willow Grove, PA				-						1,300					14,736				109				1,300			14,845					771					2011				1905
Wilmington, DE				-						800					9,494				57				800			9,551					493					2011				1970
Wilmington, NC				-						210					2,991				-				210			2,991					1,137					1999				1999
Windsor, CT				-						2,250					8,539				1,700				2,250			10,239					502					2011				1969
Windsor, CT				-						1,800					600				944				1,800			1,544					100					2011				1974
Winston-Salem, NC				-						360					2,514				459				360			2,973					805					2003				1996
Winston-Salem, NC				-						5,700					13,550				12,239				5,700			25,789					4,108					2005				1997
Worcester, MA				-						3,500					54,099				-				3,500			54,099					4,345					2007				2009
Worcester, MA				-						2,300					9,060				-				2,300			9,060					1,087					2008				1993
Wyncote, PA				-						2,700					22,244				145				2,700			22,389					1,106					2011				1960
Wyncote, PA				-						1,610					21,256				182				1,610			21,438					1,009					2011				1962
Wyncote, PA				-						900					7,811				18				900			7,829					386					2011				1889
Zionsville, IN				-						1,610					22,400				1,691				1,610			24,091					1,378					2010				2009
Seniors housing triple-net total			$	218,741					$	623,120			$		7,462,660		$		341,850			$	625,388		$	7,802,238				$	707,213

Health Care REIT, Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2012
(Dollars in thousands)
										Initial Cost to Company													Gross Amount at Which Carried at Close of Period
Description				Encumbrances						Land					Building & Improvements				Cost Capitalized Subsequent to Acquisition				Land			Building & Improvements					Accumulated Depreciation⁽¹⁾					Year Acquired				Year Built
Seniors housing operating:
Agawam, MA			$	6,805					$	880			$		10,044		$		83			$	880		$	10,127				$	1,119					2011				1996
Albertville, AL				2,066						170					6,203				158				170			6,361					672					2010				1999
Albuquerque, NM				5,657						1,270					20,837				564				1,272			21,399					2,569					2010				1984
Alhambra, CA				3,012						600					6,305				52				600			6,357					554					2011				1923
Altrincham, England				-						5,578					32,373				-				5,578			32,373					625					2012				2009
Apple Valley, CA				10,979						480					16,639				107				480			16,746					2,083					2010				1999
Arlington, TX				22,542						1,660					37,395				-				1,660			37,395					214					2012				2000
Atlanta, GA				7,791						2,058					14,914				759				2,059			15,672					9,456					1997				1999
Austin, TX				19,309						880					9,520				546				880			10,066					3,817					1999				1998
Avon, CT				20,033						1,550					30,571				159				1,550			30,731					4,460					2011				1998
Azusa, CA				-						570					3,141				6,049				570			9,190					1,549					1998				1953
Bagshot, England				-						6,537					38,668				-				6,537			38,668					784					2012				2009
Banstead, England				-						8,781					54,836				-				8,781			54,836					-					2012				2005
Bellingham, WA				8,860						1,500					19,861				110				1,500			19,971					2,350					2010				1996
Belmont, CA				-						3,000					23,526				246				3,000			23,771					2,651					2011				1971
Borehamwood, England				-						7,074					41,060				-				7,074			41,060					-					2012				2003
Brighton, MA				10,899						2,100					14,616				95				2,100			14,711					1,736					2011				1995
Brookfield, CT				20,414						2,250					30,180				172				2,250			30,352					3,650					2011				1999
Buffalo Grove, IL				-						2,850					49,129				-				2,850			49,129					261					2012				2003
Burbank, CA				-						4,940					43,466				-				4,940			43,466					263					2012				2002
Cardiff by the Sea, CA				41,836						5,880					64,711				66				5,880			64,777					4,842					2011				2009
Carol Stream, IL				-						1,730					55,048				-				1,730			55,048					276					2012				2001
Centerville, MA				-						1,300					27,357				189				1,300			27,546					2,403					2011				1998
Cincinnati, OH				-						2,060					109,388				2,602				2,060			111,990					7,006					2007				2010
Citrus Heights, CA				15,189						2,300					31,876				428				2,300			32,304					3,897					2010				1997
Concord, NH				14,055						720					21,164				138				720			21,302					1,732					2011				2001
Costa Mesa, CA				-						2,050					19,969				45				2,050			20,014					2,257					2011				1965
Dallas, TX				-						1,080					9,655				116				1,080			9,771					891					2011				1997
Danvers, MA				9,857						1,120					14,557				121				1,120			14,677					1,410					2011				2000
Davenport, IA				-						1,403					35,893				2,063				1,403			37,956					3,250					2006				2009
Denver, CO				-						2,910					35,838				-				2,910			35,838					196					2012				2007
Denver, CO				13,161						1,450					19,389				-				1,450			19,389					110					2012				1997
Dublin, OH				18,884						1,680					43,423				941				1,680			44,364					4,501					2010				1990
East Haven, CT				23,721						2,660					35,533				426				2,660			35,959					5,310					2011				2000
Encinitas, CA				-						1,460					7,721				353				1,460			8,074					2,882					2000				1988
Encino, CA				-						5,040					46,255				-				5,040			46,255					285					2012				2003
Escondido, CA				13,182						1,520					24,024				106				1,520			24,131					2,677					2011				1987
Florence, AL				7,267						353					13,049				165				350			13,217					1,512					2010				1999
Fort Worth, TX				-						2,080					27,888				-				2,080			27,888					180					2012				2001
Fremont, CA				19,780						3,400					25,300				1,649				3,400			26,949					5,010					2005				1987
Gardnerville, NV				12,783						1,143					10,831				694				1,144			11,524					7,408					1998				1999
Gig Harbor, WA				5,789						1,560					15,947				71				1,560			16,018					1,843					2010				1994
Gilroy, CA				-						760					13,880				23,935				1,520			37,055					5,004					2006				2007
Glenview, IL				-						2,090					69,288				-				2,090			69,288					362					2012				2001
Hamden, CT				15,963						1,460					24,093				203				1,460			24,296					3,001					2011				1999
Hemet, CA				13,550						1,890					28,606				449				1,890			29,055					4,961					2010				1989
Hemet, CA				-						430					9,630				716				430			10,346					871					2010				1988
Henderson, NV				-						880					29,809				6				880			29,816					1,722					2011				2009
Houston, TX				-						3,830					55,674				-				3,830			55,674					3,560					2012				1998
Houston, TX				8,149						960					27,598				143				960			27,742					2,609					2011				1995
Houston, TX				18,509						1,040					31,965				-				1,040			31,965					225					2012				1999
Irving, TX				-						1,030					6,823				638				1,030			7,461					919					2007				1999
Kanata, ON				-						2,278					41,881				-				2,278			41,881					1,369					2012				2005
Kansas City, MO				5,745						1,820					34,898				1,473				1,836			36,355					4,077					2010				1980
Kansas City, MO				7,030						1,930					39,997				509				1,943			40,493					5,402					2010				1986
Kennewick, WA				14,866						1,820					27,991				235				1,820			28,226					4,318					2010				1994
Kingwood, TX				3,258						480					9,777				79				480			9,856					914					2011				1999
Kirkland, WA				24,600						3,450					38,709				15				3,450			38,723					2,570					2011				2009
Lancaster, CA				10,240						700					15,295				106				700			15,401					2,075					2010				1999
Leawood, KS				16,383						2,490					32,493				-				2,490			32,493					198					2012				1999
Los Angeles, CA				-						-					11,430				494				-			11,924					962					2008				1971
Los Angeles, CA				67,816						-					114,438				153				-			114,591					8,162					2011				2009
Los Angeles, CA				-						3,540					19,007				-				3,540			19,007					132					2012				2001
Louisville, KY				-						2,420					20,816				-				2,420			20,816					138					2012				1999
Mansfield, MA				29,381						3,320					57,011				479				3,320			57,490					6,447					2011				1998
Manteca, CA				6,279						1,300					12,125				1,423				1,300			13,548					2,608					2005				1986
Marysville, WA				4,652						620					4,780				302				620			5,082					1,242					2003				1998
Memphis, TN				-						1,800					17,744				-				1,800			17,744					1,544					2012				1999
Meriden, CT				9,730						1,500					14,874				236				1,500			15,110					2,667					2011				2001
Mesa, AZ				6,201						950					9,087				576				950			9,663					3,228					1999				2000
Middletown, CT				16,026						1,430					24,242				190				1,430			24,432					3,227					2011				1999
Middletown, RI				17,044						2,480					24,628				325				2,480			24,953					3,143					2011				1998
Milford, CT				11,956						3,210					17,364				253				3,210			17,617					2,361					2011				1999
Mill Creek, WA				29,622						10,150					60,274				419				10,150			60,693					9,422					2010				1998
Minnetonka, MN				14,935						2,080					24,360				-				2,080			24,360					144					2012				1999
Monroe, WA				13,791						2,560					34,460				243				2,560			34,703					4,098					2010				1994
Mystic, CT				11,956						1,400					18,274				213				1,400			18,487					1,928					2011				2001
Naples, FL				-						1,716					17,306				1,647				1,716			18,953					14,963					1997				1999
Nashville, TN				-						3,900					35,788				-				3,900			35,788					2,595					2012				1999
Newton, MA				29,000						2,250					43,614				116				2,250			43,730					4,354					2011				1996
Newton, MA				16,745						2,500					30,681				1,058				2,500			31,739					3,633					2011				1996
Newton, MA				-						3,360					25,099				195				3,360			25,294					3,272					2011				1994
Niantic, CT				-						1,320					25,986				241				1,320			26,227					2,319					2011				2001
North Andover, MA				23,530						1,960					34,976				209				1,960			35,185					3,882					2011				1995
North Chelmsford, MA				12,401						880					18,478				199				880			18,677					1,617					2011				1998
Oak Park, IL				-						1,250					40,383				-				1,250			40,383					212					2012				2004
Oceanside, CA				13,173						2,160					18,352				106				2,160			18,458					1,777					2011				2005
Olympia, WA				7,026						550					16,689				195				550			16,884					1,976					2010				1995
Overland Park, KS				3,648						1,540					16,269				-				1,540			16,269					103					2012				1998
Pembroke, ON				-						2,603					13,630				-				2,603			13,630					429					2012				1999
Plano, TX				4,286						840					8,538				154				840			8,691					989					2011				1996
Providence, RI				-						2,600					27,546				485				2,600			28,031					4,658					2011				1998
Purley, England				-						9,676					35,251				-				9,676			35,251					-					2012				2005
Puyallup, WA				11,586						1,150					20,776				241				1,150			21,017					2,616					2010				1985
Quincy, MA				8,585						1,350					12,584				162				1,350			12,746					1,480					2011				1998
Rancho Palos Verdes, CA				-						5,450					60,034				-				5,450			60,034					347					2012				2004
Redondo Beach, CA				7,873						-					9,557				1				-			9,558					1,531					2011				1957
Renton, WA				22,620						3,080					51,824				34				3,080			51,858					3,327					2011				2007
Rocky Hill, CT				10,811						810					16,351				147				810			16,498					1,638					2011				2000
Rohnert Park, CA				13,912						6,500					18,700				1,519				6,500			20,219					3,798					2005				1986
Romeoville, IL				-						854					12,646				58,559				6,114			65,945					5,084					2006				2010
Roswell, GA				8,000						1,107					9,627				498				1,107			10,125					6,606					1997				1999
Roswell, GA				-						2,080					6,486				-				2,080			6,486					50					2012				1997
Sacramento, CA				10,456						940					14,781				112				940			14,893					1,842					2010				1978
Salem, NH				21,686						980					32,721				159				980			32,880					2,942					2011				2000
Salt Lake City, UT				-						1,360					19,691				115				1,360			19,805					3,288					2011				1986
San Diego, CA				-						4,200					30,707				4				4,200			30,711					865					2011				2011
San Diego, CA				-						5,810					63,078				-				5,810			63,078					4,168					2012				2001
San Jose, CA				-						2,850					35,098				21				2,850			35,119					2,598					2011				2009
San Jose, CA				-						3,280					46,823				-				3,280			46,823					290					2012				2002
San Juan Capistrano, CA				-						1,390					6,942				136				1,390			7,078					2,276					2000				2001
San Ramon, CA				9,371						2,430					17,488				68				2,430			17,556					2,060					2010				1989
Sandy Springs, GA				-						2,214					8,360				-				2,214			8,360					987					2012				1997
Santa Maria, CA				-						6,050					50,658				217				6,050			50,875					3,681					2011				2001
Scottsdale, AZ				-						2,500					3,890				853				2,500			4,743					572					2008				1998
Seatlle, WA				48,543						6,790					85,369				261				6,790			85,631					5,152					2011				2009
Seattle, WA				7,758						5,190					9,350				374				5,190			9,724					2,134					2010				1962
Seattle, WA				7,575						3,420					15,555				64				3,420			15,619					2,161					2010				2000
Seattle, WA				9,263						2,630					10,257				41				2,630			10,298					1,515					2010				2003
Seattle, WA				28,965						10,670					37,291				143				10,670			37,434					6,455					2010				2005
Sevenoaks, England				-						8,131					51,963				-				8,131			51,963					1,104					2012				2009
Shelburne, VT				20,605						720					31,041				145				720			31,187					2,534					2011				1988
Sidcup, England				-						9,773					56,163				-				9,773			56,163					-					2012				2000
Solihull, England				-						6,667					55,336				-				6,667			55,336					893					2012				2009
Sonoma, CA				15,082						1,100					18,400				1,318				1,100			19,718					3,657					2005				1988
South Windsor, CT				-						3,000					29,295				395				3,000			29,690					4,022					2011				1999
Stanwood, WA				9,922						2,260					28,474				264				2,260			28,738					3,681					2010				1998
Stockton, CA				3,009						2,280					5,983				149				2,280			6,132					930					2010				1988
Sugar Land, TX				5,775						960					31,423				1,002				960			32,425					3,340					2011				1996
Sun City West, AZ				12,886						1,250					21,778				-				1,250			21,778					127					2012				1998
Sunnyvale, CA				-						5,420					41,682				-				5,420			41,682					262					2012				2002
Suwanee, GA				-						1,560					11,538				-				1,560			11,538					1,106					2012				2000
Tacoma, WA				19,180						2,400					35,053				59				2,400			35,111					2,251					2011				2008
The Woodlands, TX				2,619						480					12,379				93				480			12,472					1,170					2011				1999
Toledo, OH				16,352						2,040					47,129				428				2,040			47,557					6,818					2010				1985
Trumbull, CT				25,566						2,850					37,685				129				2,850			37,814					4,901					2011				1998
Tucson, AZ				4,852						830					6,179				-				830			6,179					36					2012				1997
Tulsa, OK				6,367						1,330					21,285				293				1,330			21,578					2,709					2010				1986
Tulsa, OK				8,321						1,500					20,861				255				1,500			21,116					2,959					2010				1984
Tustin, CA				7,014						840					15,299				22				840			15,321					1,289					2011				1965
Vacaville, CA				14,306						900					17,100				1,335				900			18,435					3,481					2005				1987
Vallejo, CA				14,322						4,000					18,000				1,786				4,000			19,786					3,674					2005				1989
Vallejo, CA				7,550						2,330					15,407				95				2,330			15,502					2,153					2010				1990
Vancouver, WA				12,011						1,820					19,042				107				1,820			19,149					2,425					2010				2006
Victoria, BC				8,168						3,716					18,977				-				3,716			18,977					650					2012				2002
Virginia Water, England				-						7,106					29,937				-				7,106			29,937					-					2012				2002
Warwick, RI				16,535						2,400					24,635				343				2,400			24,978					4,046					2011				1998
Waterbury, CT				25,629						2,460					39,547				368				2,460			39,915					6,036					2011				1998
Whittier, CA				11,605						4,470					22,151				277				4,470			22,428					4,200					2010				1988
Wilbraham, MA				11,574						660					17,639				146				660			17,784					1,769					2011				2000
Winchester, England				-						7,887					37,873				-				7,887			37,873					744					2012				2010
Woodbridge, CT				9,349						1,370					14,219				166				1,370			14,385					2,775					2011				1998
Worcester, MA				14,500						1,140					21,664				235				1,140			21,899					2,145					2011				1999
Yarmouth, ME				18,061						450					27,711				200				450			27,911					2,477					2011				1999
Seniors housing operating total			$	1,369,526					$	388,015			$		4,239,499		$		131,030			$	394,065		$	4,364,478				$	390,907

Health Care REIT, Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2012
(Dollars in thousands)
										Initial Cost to Company													Gross Amount at Which Carried at Close of Period
Description				Encumbrances						Land					Building & Improvements				Cost Capitalized Subsequent to Acquisition				Land			Building & Improvements					Accumulated Depreciation⁽¹⁾					Year Acquired				Year Built
Medical facilities:
Akron, OH			$	-					$	821			$		12,079		$		-			$	821		$	12,079				$	77					2012				2010
Akron, OH				-						300					20,200				-				300			20,200					1,585					2009				2008
Allen, TX				12,080						726					14,520				-				726			14,520					1,275					2012				2006
Alpharetta, GA				-						233					18,205				763				773			18,428					1,037					2011				1993
Alpharetta, GA				-						498					32,729				2,654				1,769			34,111					3,088					2011				1999
Alpharetta, GA				-						417					14,406				27				476			14,375					1,208					2011				2003
Alpharetta, GA				-						1,700					162				-				1,862			-					-					2011
Alpharetta, GA				-						628					16,063				1,114				555			17,250					1,157					2011				2007
Arcadia, CA				9,750						5,408					23,219				1,933				5,618			24,942					5,175					2006				1984
Atlanta, GA				-						4,931					18,720				2,937				5,301			21,287					5,415					2006				1991
Atlanta, GA				17,993						1,945					23,437				-				1,945			23,437					699					2012				1984
Atlanta, GA				26,745						-					42,468				-				-			42,468					1,799					2012				2006
Bartlett, TN				8,215						187					15,015				1,252				187			16,267					3,417					2007				2004
Bellaire, TX				-						4,551					46,105				-				4,551			46,105					7,883					2006				2005
Bellaire, TX				-						2,972					33,445				1,966				2,972			35,412					6,876					2006				2005
Bellevue, NE				-						-					15,833				868				-			16,701					1,525					2010				2010
Bellevue, NE				-						4,500					109,719				-				4,500			109,719					7,106					2008				2010
Bellingham, MA				-						9,270					-				-				9,270			-					-					2007
Birmingham, AL				-						52					9,950				201				52			10,151					2,196					2006				1971
Birmingham, AL				-						124					12,238				141				124			12,379					2,593					2006				1985
Birmingham, AL				-						476					18,994				196				476			19,190					3,744					2006				1989
Boardman, OH				-						80					11,787				342				80			12,130					1,214					2010				2007
Boardman, OH				-						1,200					12,800				-				1,200			12,800					1,723					2008				2008
Boca Raton, FL				13,259						109					34,002				2,096				214			35,993					7,475					2006				1995
Boca Raton, FL				-						31					11,659				-				31			11,659					-					2012				1993
Boerne, TX				-						50					13,317				-				50			13,317					870					2011				2007
Bowling Green, KY				-						3,800					26,700				149				3,800			26,849					3,066					2008				1992
Boynton Beach, FL				4,420						2,048					7,692				375				2,048			8,067					2,140					2006				1995
Boynton Beach, FL				3,965						2,048					7,403				964				2,048			8,367					1,855					2006				1997
Boynton Beach, FL				5,921						214					5,611				7,218				117			12,927					2,524					2007				1996
Bridgeton, MO				-						-					30,221				278				-			30,499					762					2011				2011
Bridgeton, MO				11,359						450					21,221				21				450			21,242					2,190					2010				2006
Burleson, TX				-						10					11,619				220				10			11,838					871					2011				2007
Carmel, IN				-						2,280					18,820				132				2,280			18,952					1,810					2011				2005
Carmel, IN				-						2,152					18,591				2,837				2,026			21,554					2,171					2011				2007
Cedar Grove, WI				-						113					618				-				113			618					64					2010				1986
Claremore, OK				8,131						132					12,829				302				132			13,131					2,881					2007				2005
Clarkson Valley, MO				-						-					35,592				-				-			35,592					3,782					2009				2010
Columbia, MD				-						2,258					18,861				-				2,258			18,861					-					2012				2002
Columbus, OH				-						415					6,764				-				415			6,764					12					2012				1994
Coral Springs, FL				-						1,598					10,627				1,080				1,636			11,668					3,068					2006				1992
Dade City, FL				-						1,211					5,511				-				1,211			5,511					282					2011				1998
Dallas, TX				14,926						137					28,690				1,067				137			29,757					6,340					2006				1995
Dallas, TX				28,450						462					53,963				-				462			53,963					1,883					2012				2004
Dayton, OH				-						730					6,515				145				730			6,660					548					2011				1988
Deerfield Beach, FL				-						2,408					7,482				187				2,408			7,668					727					2011				2001
Delray Beach, FL				-						1,882					34,767				4,857				1,943			39,563					9,440					2006				1985
Denton, TX				11,994						-					19,407				628				-			20,035					3,560					2007				2005
Edina, MN				-						310					15,132				-				310			15,132					1,321					2010				2003
El Paso, TX				10,005						677					17,075				1,471				677			18,546					4,344					2006				1997
El Paso, TX				-						600					6,700				-				600			6,700					823					2008				2003
El Paso, TX				-						2,400					32,800				424				2,400			33,224					7,570					2008				2003
Everett, WA				-						4,842					26,010				-				4,842			26,010					1,828					2010				2011
Fayetteville, GA				3,202						959					7,540				721				986			8,234					1,873					2006				1999
Fort Wayne, IN				16,822						1,105					22,836				-				1,105			22,836					473					2012				2004
Fort Wayne, IN				-						170					8,232				-				170			8,232					1,204					2006				2006
Fort Worth, TX				-						450					13,615				-				450			13,615					748					2010				2011
Franklin, TN				-						2,338					12,138				1,468				2,338			13,606					2,740					2007				1988
Franklin, WI				5,383						6,872					7,550				-				6,872			7,550					820					2010				1984
Fresno, CA				-						2,500					35,800				118				2,500			35,918					4,109					2008				1991
Frisco, TX				8,881						-					18,635				246				-			18,881					3,859					2007				2004
Frisco, TX				-						-					15,309				1,566				-			16,875					3,692					2007				2004
Frisco, TX				-						130					16,445				-				130			16,445					319					2012				2010
Gallatin, TN				-						20					19,432				478				20			19,910					2,761					2010				1997
Germantown, TN				-						3,049					12,456				597				3,049			13,053					2,721					2006				2002
Glendale, CA				7,960						37					18,398				198				37			18,596					3,743					2007				2002
Grand Prairie, TX				-						981					6,086				-				981			6,086					277					2012				2009
Greeley, CO				-						877					6,706				125				877			6,831					1,700					2007				1997
Green Bay, WI				9,017						-					14,891				-				-			14,891					1,429					2010				2002
Green Bay, WI				-						-					20,098				-				-			20,098					1,892					2010				2002
Green Bay, WI				-						-					11,696				-				-			11,696					1,529					2010				2002
Greeneville, TN				-						970					10,032				8				970			10,040					957					2010				2005
Greenwood, IN				-						8,316					26,384				-				8,316			26,384					532					2012				2010
Harker Heights, TX				-						1,907					3,754				-				1,907			3,754					31					2011				2012
High Point, NC				-						2,595					29,013				-				2,595			29,013					260					2012				2010
Houston, TX				-						10,395					-				2				10,388			9					-					2011
Houston, TX				-						5,837					32,986				-				5,837			32,986					1,284					2012				2005
Houston, TX				-						3,688					13,302				-				3,688			13,302					264					2012				2007
Houston, TX				-						12,815					44,717				-				12,815			44,717					827					2012				1998
Houston, TX				14,000						378					31,020				-				378			31,020					1,310					2012				1981
Houston, TX				-						91					11,136				-				91			11,136					612					2012				1986
Hudson, OH				-						2,473					13,622				-				2,473			13,622					-					2012				2006
Jupiter, FL				6,972						2,252					11,415				129				2,252			11,544					2,537					2006				2001
Jupiter, FL				4,336						2,825					5,858				43				2,825			5,901					1,492					2007				2004
Katy, TX				-						1,099					1,604				-				1,099			1,604					57					2012				1986
Kenosha, WI				9,934						-					18,058				-				-			18,058					1,696					2010				1993
Killeen, TX				-						760					22,667				-				760			22,667					1,973					2010				2010
Lafayette, LA				-						1,928					10,483				25				1,928			10,509					2,438					2006				1993
Lake St Louis, MO				-						240					11,937				1,947				240			13,884					1,352					2010				2008
Lakeway, TX				-						2,801					-				-				2,801			-					-					2007
Lakewood, CA				-						146					14,885				1,146				146			16,031					3,110					2006				1993
Lakewood, WA				7,609						72					15,958				-				72			15,958					-					2012				2005
Las Vegas, NV				-						2,319					4,612				916				2,319			5,527					1,207					2006				1991
Las Vegas, NV				2,961						433					6,921				202				433			7,123					1,570					2007				1997
Las Vegas, NV				-						6,127					-				-				6,127			-					-					2007
Las Vegas, NV				-						580					23,420				-				580			23,420					836					2011				2002
Las Vegas , NV				5,803						74					15,287				419				74			15,706					3,637					2006				2000
Lenexa, KS				11,905						540					16,013				2,347				540			18,360					1,459					2010				2008
Lincoln, NE				-						1,420					29,692				9				1,420			29,701					3,671					2010				2003
Los Alamitos, CA				8,085						39					18,635				412				39			19,047					3,858					2007				2003
Los Gatos, CA				-						488					22,386				1,289				488			23,675					5,499					2006				1993
Loxahatchee, FL				-						1,637					5,048				842				1,652			5,875					1,269					2006				1997
Loxahatchee, FL				-						1,340					6,509				57				1,345			6,561					1,511					2006				1993
Loxahatchee, FL				2,600						1,553					4,694				584				1,567			5,264					1,129					2006				1994
Marinette, WI				7,548						-					13,538				-				-			13,538					1,529					2010				2002
Marlton, NJ				-						-					38,300				410				-			38,710					4,400					2008				1994
Mechanicsburg, PA				-						1,350					16,650				-				1,350			16,650					608					2011				1971
Merced, CA				-						-					13,772				927				-			14,699					1,525					2009				2010
Meridian, ID				-						3,600					20,802				251				3,600			21,053					5,365					2006				2008
Merriam, KS				-						176					7,189				220				176			7,409					1,290					2011				1972
Merriam, KS				-						81					3,122				430				81			3,553					259					2011				1980
Merriam, KS				-						336					12,972				-				336			12,972					1,658					2011				1977
Merriam, KS				15,356						182					7,393				93				182			7,486					978					2011				1985
Merrillville, IN				-						-					22,134				210				-			22,344					2,979					2008				2006
Merrillville, IN				-						700					11,699				154				700			11,853					1,484					2007				2008
Mesa, AZ				-						1,558					9,561				378				1,558			9,939					2,503					2008				1989
Mesquite, TX				-						496					3,834				-				496			3,834					18					2012				2012
Middletown, NY				-						1,756					20,364				1,188				1,756			21,552					6,070					2006				1998
Milwaukee, WI				4,429						540					8,457				-				540			8,457					859					2010				1930
Milwaukee, WI				9,762						1,425					11,519				-				1,425			11,520					1,526					2010				1962
Milwaukee, WI				2,442						922					2,185				-				922			2,185					362					2010				1958
Milwaukee, WI				22,383						-					44,535				-				-			44,535					4,091					2010				1983
Monticello, MN				9,522						61					18,489				-				61			18,489					-					2012				2008
Moorestown, NJ				-						-					52,645				-				-			52,645					176					2011				2012
Morrow, GA				-						818					8,064				223				843			8,261					2,025					2007				1990
Mount Juliet, TN				4,456						1,566					11,697				1,038				1,566			12,735					2,741					2007				2005
Mount Vernon, IL				-						-					25,163				-				-			25,163					52					2011				2012
Murrieta, CA				-						-					46,520				484				-			47,004					4,058					2010				2011
Murrieta, CA				-						8,800					202,412				-				8,800			202,412					8,393					2008				2010
Muskego, WI				1,174						964					2,158				-				964			2,159					203					2010				1993
Nashville, TN				-						4,300					-				7,172				11,472			-					-					2010
Nashville , TN				-						1,806					7,165				1,322				1,806			8,487					2,234					2006				1986
New Berlin, WI				4,527						3,739					8,290				-				3,739			8,290					845					2010				1993
Niagara Falls, NY				-						1,145					10,574				228				1,153			10,794					2,797					2007				1995
Niagara Falls, NY				-						388					7,870				47				396			7,909					1,517					2007				2004
Orange Village, OH				-						610					7,419				296				610			7,715					1,898					2007				1985
Oro Valley, AZ				10,011						89					18,339				564				89			18,902					3,770					2007				2004
Oshkosh, WI				-						-					18,339				-				-			18,339					1,709					2010				2000
Oshkosh, WI				9,338						-					15,881				-				-			15,881					1,464					2010				2000
Palm Springs, FL				2,666						739					4,066				72				739			4,137					1,047					2006				1993
Palm Springs, FL				-						1,182					7,765				196				1,182			7,961					1,951					2006				1997
Palm Springs , CA				-						365					12,396				1,366				365			13,762					2,988					2006				1998
Palmer, AK				19,237						217					29,705				745				217			30,450					5,671					2007				2006
Pearland, TX				-						781					5,517				132				781			5,648					1,322					2006				2000
Pearland, TX				1,005						948					4,556				115				948			4,671					1,084					2006				2002
Pewaukee, WI				-						4,700					20,669				-				4,700			20,669					3,825					2007				2007
Phoenix, AZ				27,902						1,149					48,018				10,952				1,149			58,971					11,468					2006				1998
Pineville, NC				-						961					6,974				2,107				1,077			8,965					1,928					2006				1988
Plano, TX				-						5,423					20,752				56				5,423			20,807					5,855					2008				2007
Plano, TX				54,620						793					82,722				-				793			82,722					3,573					2012				2005
Plantation, FL				9,428						8,563					10,666				2,378				8,575			13,033					3,839					2006				1997
Plantation, FL				8,765						8,848					9,262				249				8,896			9,462					4,775					2006				1996
Plymouth, WI				1,370						1,250					1,870				-				1,250			1,870					214					2010				1991
Portland, ME				15,697						655					25,500				412				655			25,912					1,395					2011				2008
Raleigh, NC				-						1,486					11,200				1,762				1,486			12,962					1,064					2011				2007
Redmond, WA				-						5,015					26,697				-				5,015			26,697					2,049					2010				2011
Reno, NV				-						1,117					21,972				676				1,117			22,648					4,960					2006				1991
Richmond, VA				-						2,838					26,305				-				2,838			26,305					-					2012				2008
Rockwall, TX				-						132					17,056				-				132			17,056					735					2012				2008
Rogers, AR				-						1,062					28,680				-				1,062			28,680					1,504					2011				2008
Rolla, MO				-						1,931					47,640				-				1,931			47,639					1,984					2011				2009
Roswell, NM				1,806						183					5,851				-				183			5,851					301					2011				2004
Roswell, NM				5,078						883					15,984				-				883			15,984					680					2011				2006
Roswell, NM				-						762					17,171				-				762			17,171					583					2011				2009
Ruston, LA				-						710					9,790				-				710			9,790					388					2011				1988
Sacramento, CA				-						866					12,756				913				866			13,668					2,764					2006				1990
San Antonio, TX				-						2,050					16,251				2,307				2,050			18,559					5,471					2006				1999
San Antonio, TX				18,400						4,518					29,905				-				4,518			29,905					1,754					2012				1986
San Antonio, TX				-						-					17,303				-				-			17,303					3,735					2007				2007
San Bernardino, CA				-						3,700					14,300				687				3,700			14,987					1,617					2008				1993
San Diego, CA				-						-					22,003				1,845				-			23,848					2,491					2008				1992
Sarasota, FL				-						3,360					19,140				-				3,360			19,140					670					2011				2006
Sarasota, FL				-						62					46,348				-				62			46,348					81					2012				1990
Seattle, WA				-						4,410					35,787				2,055				4,410			37,843					3,140					2010				2010
Sewell, NJ				-						-					53,360				4,355				-			57,715					8,221					2007				2009
Shakopee, MN				6,932						420					11,360				8				420			11,368					1,112					2010				1996
Shakopee, MN				11,743						640					18,089				-				640			18,089					1,252					2010				2007
Sheboygan, WI				1,892						1,012					2,216				-				1,012			2,216					256					2010				1958
Somerville, NJ				-						3,400					22,244				2				3,400			22,246					2,457					2008				2007
Southlake, TX				11,680						592					17,905				-				592			17,905					752					2012				2004
Southlake, TX				18,518						698					30,524				-				698			30,524					998					2012				2004
St. Louis, MO				7,281						336					17,247				939				336			18,186					3,851					2007				2001
St. Paul, MN				26,105						2,681					39,507				-				2,681			39,507					2,594					2011				2007
Stafford, VA				-						-					11,260				313				-			11,573					1,323					2008				2009
Suffern, NY				-						622					35,220				1,985				622			37,204					1,558					2011				2007
Suffolk, VA				-						1,530					10,979				540				1,538			11,511					1,748					2010				2007
Sugar Land, TX				8,905						3,513					15,527				-				3,513			15,527					-					2012				2005
Summit, WI				-						2,899					87,666				-				2,899			87,666					11,954					2008				2009
Tallahassee, FL				-						-					14,719				2,730				-			17,449					1,295					2010				2011
Tampa, FL				-						1,210					19,572				-				1,210			19,572					700					2012				2006
Tampa, FL				-						2,208					6,464				-				2,208			6,464					321					2012				1985
Tampa, FL				-						4,319					12,234				-				4,319			12,234					536					2011				2003
Temple, TX				-						2,900					9,851				-				2,900			9,851					121					2011				2012
Tomball, TX				-						1,404					5,071				880				1,404			5,951					1,721					2006				1982
Tucson, AZ				-						1,302					4,925				662				1,302			5,587					1,377					2008				1995
Tulsa, OK				-						3,003					6,025				20				3,003			6,045					1,955					2006				1992
Van Nuys, CA				-						-					36,187				-				-			36,187					3,281					2009				1991
Virginia Beach, VA				-						827					18,289				237				895			18,458					1,647					2011				2007
Voorhees, NJ				-						6,404					24,251				1,313				6,422			25,546					4,899					2006				1997
Voorhees, NJ				-						-					96,006				-				-			96,006					2,689					2010				2012
Webster, TX				-						360					5,940				8,178				2,418			12,060					3,056					2006				1991
Wellington, FL				6,768						107					16,933				381				107			17,314					3,181					2006				2000
Wellington , FL				6,071						388					13,697				144				388			13,841					2,668					2007				2003
West Allis, WI				3,475						1,106					3,309				-				1,106			3,309					456					2010				1961
West Palm Beach, FL				6,602						628					14,740				121				628			14,861					3,332					2006				1993
West Palm Beach, FL				6,092						610					14,618				116				610			14,734					3,908					2006				1991
West Seneca, NY				12,051						917					22,435				1,759				1,628			23,482					4,871					2007				1990
Westerville, OH				-						2,122					5,403				-				2,122			5,403					14					2012				2001
Zephyrhills, FL				-						3,875					23,907				3,331				3,875			27,237					1,273					2011				1974
Medical facilities total:			$	713,720					$	333,112			$		4,027,512		$		127,413			$	345,938		$	4,142,095				$	456,935

Health Care REIT, Inc.
Schedule III
Real Estate and Accumulated Depreciation
December 31, 2012
(Dollars in thousands)

								Initial Cost to Company														Gross Amount at Which Carried at Close of Period
Description		Encumbrances						Land					Buildings & Improvements				Cost Capitalized Subsequent to Acquisition					Land			Buildings & Improvements					Accumulated Depreciation				Year Acquired					Year Built

Assets held for sale:
Brighton, MA	$	-					$	240			$		3,859			$	-				$	-		$	2,449				$	-				2005					1982
Durham, NC		-						5,350					9,320				-					-			2,539					-				2006					1980
Fairhaven, MA		-						770					6,230				-					-			5,552					-				2004					1999
Hamden, CT		-						1,470					4,530				-					-			4,370					-				2002					1998
Hopedale, MA		-						130					8,170				-					-			6,581					-				2005					1999
Lakeway, TX		-						5,484					24,886				-					-			23,716					-				2007					2011
Malabar, FL		-						5,000					12,000				-					-			16,425					-				2010					2008
Melbourne, FL		-						7,000					69,000				-					-			72,694					-				2010					2009
Melbourne, FL		-						1,400					24,400				-					-			24,631					-				2010					2003
Melbourne, FL		-						600					9,400				-					-			9,550					-				2010					1986
Melbourne, FL		-						367					458				-					-			793					-				2011					1979
Midwest City, OK		-						470					5,673				-					-			2,625					-				1998					1958
New Haven, CT		-						160					4,778				-					-			2,520					-				2006					1958
Newburyport, MA		-						960					8,290				-					-			6,784					-				2002					1999
Norwalk, CT		-						410					2,640				-					-			1,764					-				2004					1971
Oklahoma City, OK		-						510					10,694				-					-			9,079					-				1998					1979
Prospect, CT		-						820					1,441				-					-			1,022					-				2004					1970
Quincy, MA		-						2,690					15,410				-					-			14,852					-				2004					1999
Rocky Hill, CT		-						1,460					7,040				-					-			6,205					-				2002					1998
Torrington, CT		-						360					1,261				-					-			1,091					-				2004					1966
Viera, FL		-						1,600					10,600				-					-			11,692					-				2010					1998
Waterbury, CT		-						370					2,166				-					-			518					-				2006					1972
Waterford, CT		-						1,360					12,540				-					-			10,141					-				2002					2000
West Hartford, CT		-						2,650					5,980				-					-			7,144					-				2004					1905
West Haven, CT		-						580					1,620				-					-			476					-				2004					1971
Assets held for sale total	$	-					$	42,211			$		262,386			$	-				$	-		$	245,213					-


(1) Please see Note 2 to our consolidated financial statements for information regarding lives used for depreciation and amortization.
(2) Represents real property asset associated with a capital lease.
														Initial Cost to Company														Gross Amount at Which Carried at Close of Period
Segment						Encumbrances								Land						Buildings & Improvements			Cost Capitalized Subsequent to Acquisition					Land					Buildings & Improvements					Accumulated Depreciation

Seniors housing triple-net					$	218,741						$		623,120				$		7,462,660		$	341,850				$	625,388				$	7,802,238				$	707,213
Seniors housing operating						1,369,526								388,015						4,239,499			131,030					394,065					4,364,478					390,907
Medical facilities						713,720								333,112						4,027,512			127,413					345,938					4,142,095					456,935
Construction in progress						-								-						162,984			-					-					162,984					-
Total continuing operating properties						2,301,987								1,344,247						15,892,655			600,293					1,365,391					16,471,795					1,555,055

Assets held for sale						-								42,210						262,386			-					-					245,213					-
Total investments in real property owned					$	2,301,987						$		1,386,457				$		16,155,041		$	600,293				$	1,365,391				$	16,717,008				$	1,555,055

HEALTH CARE REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

								Year Ended December 31,
								2012					2011					2010

Reconciliation of real property:								(in thousands)
	Investment in real estate:
		Balance at beginning of year					$	14,844,319			$		8,992,495			$		6,336,291
		Additions:
			Acquisitions					2,923,251					4,525,737					1,707,421
			Improvements					449,964					426,000					398,510
			Conversions from loans receivable					-					-					10,070
			Assumed other items, net					108,404					210,411					208,314
			Assumed debt					481,598					961,928					559,508
			Foreign currency translation					6,082					-					-
		Total additions						3,969,299					6,124,076					2,883,823
		Deductions:
			Cost of real estate sold					(581,696)					(250,047)					(216,300)
			Reclassification of accumulated depreciation and amortization for assets held for sale					(120,236)					(10,011)					(10,372)
			Impairment of assets					(29,287)					(12,194)					(947)
		Total deductions						(731,219)					(272,252)					(227,619)
		Balance at end of year⁽³⁾					$	18,082,399			$		14,844,319			$		8,992,495

	Accumulated depreciation:
		Balance at beginning of year					$	1,194,476			$		836,966			$		677,851
		Additions:
			Depreciation and amortization expenses					533,585					423,605					202,543
			Amortization of above market leases					7,204					6,409					2,524
		Total additions						540,789					430,014					205,067
		Deductions:
			Sale of properties					(59,974)					(63,997)					(31,919)
			Reclassification of accumulated depreciation and amortization for assets held for sale					(120,236)					(8,507)					(14,033)
		Total deductions						(180,210)					(72,504)					(45,952)
		Balance at end of year					$	1,555,055			$		1,194,476			$		836,966


(3) The aggregate cost for tax purposes for real property equals $14,788,080,000, $13,604,448,000 and $8,802,656,000 at December 31, 2012, 2011 and 2010, respectively.
Health Care REIT, Inc.
Schedule IV - Mortgage Loans on Real Estate
December 31, 2012
										(in thousands)
Description				Interest Rate	Final Maturity Date	Monthly Payment Terms				Prior Liens				Face Amount of Mortgages			Carrying Amount of Mortgages			Principal Amount of Loans Subject to Delinquent Principal or Interest
First mortgage relating to one medical office building in Texas				6.18%	12/31/17	$114,643			$	-		$		22,244	$		22,244		$	-
First mortgage relating to one hospital in California				8.72%	12/01/17	$127,158				-				17,500			17,500			-
First mortgage relating to one medical office building in Texas				6.18%	12/31/17	$82,941				-				16,093			16,093			-
First mortgage relating to one hospital in California				10.14%	06/01/20	$160,435				-				21,050			15,187			-
First mortgage relating to one medical office building in Georgia				6.50%	10/01/14	$38,556				-				6,100			6,014			-
Second mortgage relating to one senior housing facility in New Hampshire				8.11%	10/01/16	$21,056				17,670				3,235			3,056			-
First mortgage relating to one senior housing facility in Arizona				3.55%	01/01/14	$12,275				-				4,500			2,650			2,650
First mortgage relating to one senior housing facility in Texas				10.25%	03/01/13	$56,307				-				2,635			2,498			-
Second mortgage relating to one hospital in California				9.83%	10/31/13	$138,308				15,187				13,000			1,323			-
First mortgage relating to one hospital in California				10.13%	01/14/14	$131,481				-				8,045			1,215			-
First mortgage relating to one medical office building in Georgia				8.11%	10/01/14	$1,206				-				800			175			-

Totals									$	32,857		$		115,202	$		87,955		$	2,650

				Year Ended December 31,
				2012		2011		2010
Reconciliation of mortgage loans:				(in thousands)
	Balance at beginning of year		$	63,934	$	109,283	$	74,517
	Additions:
		New mortgage loans		40,641		11,286		73,439
	Total additions			40,641		11,286		73,439
	Deductions:
		Collections of principal		(11,819)		(50,579)		(10,540)
		Conversions to real property		(3,300)		(4,000)		(10,070)
		Charge-offs		(1,501)		-		(18,063)
		Reclass to other real estate loans		-		(2,056)		-
	Total deductions			(16,620)		(56,635)		(38,673)
	Balance at end of year		$	87,955	$	63,934	$	109,283

Welltower (WELL) 8-K2012 Q4 Other Events