Net Investment in Direct Financing Leases (Tables)

12 Months Ended

Dec. 31, 2012

The components of net investment in DFLs consisted of the following (dollars in thousands):

	December 31,

	2012			2011
Minimum lease payments receivable⁽¹⁾	$	25,217,520		$	25,744,161
Estimated residual values		4,010,514			4,010,514
Less unearned income		(22,346,641	)		(23,026,898	)

Net investment in direct financing leases	$	6,881,393		$	6,727,777

Properties subject to direct financing leases		361			361

(1): The minimum lease payments receivable are primarily attributable to HCR ManorCare ($24 billion). The triple-net lease with HCR ManorCare provides for annual rent of $472.5 million in the first year and $489 million beginning April 1, 2012. The rent increases by 3.5% per year over the next four years and by 3% for the remaining portion of the initial lease term. The properties are grouped into four pools, and HCR ManorCare has a one-time extension option for each pool with rent increased for the first year of the extension option to the greater of fair market rent or a 3% increase over the rent for the prior year. Including the extension options, which the Company determined to be bargain renewal options, the four leased pools had total initial available terms ranging from 23 to 35 years.

Future minimum lease payments contractually due under direct financing leases at December 31, 2012, were as follows (in thousands):