8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 31, 2005

Health Care REIT, Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 1-8923
(Commission
File Number) 34-1096634
(IRS Employer
Identification No.)

One SeaGate, Suite 1500, Toledo, Ohio
(Address of principal executive offices) 43604
(Zip Code)

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

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On January 31, 2005, Health Care REIT, Inc. issued a press release that announced operating results for its fourth quarter and year ended December 31, 2004. The press release is posted on the Company’s Web site (www.hcreit.com) under the heading Press Releases. A copy of the press release has been furnished as Exhibit 99.1 to this Current Report.

Item 9.01 Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired.

None.

(b) Pro Forma Financial Information.

None.

(c) Exhibits.

99.1     Press release dated January 31, 2005

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant had duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

HEALTH CARE REIT, INC.
By:	/s/ GEORGE L. CHAPMAN
George L. Chapman

Its: Chairman of the Board and Chief Executive Officer

Dated: January 31, 2005

EX-99.1

Exhibit 99.1

F O R    I M M E D I A T E     R E L E A S E

January 31, 2005
For more information contact:
Ray Braun — (419) 247-2800
Mike Crabtree — (419) 247-2800
Scott Estes — (419) 247-2800

Health Care REIT, Inc.
Reports Fourth Quarter and Year End Results

Increases 2005 Quarterly Dividend Rate

Toledo, Ohio, January 31, 2005........Health Care REIT, Inc. (NYSE/HCN) today announced operating results for its fourth quarter and year ended December 31, 2004.

“We enhanced the foundation for the future growth of Health Care REIT during 2004,” commented George L. Chapman, chief executive officer of Health Care REIT, Inc. “We incorporated a new contingency-based rental escalator in our lease structure, which provides for internal growth in FFO and FAD. We are pleased to have added $522 million of net new investments and six new operators. While we are disappointed that unanticipated G&A expenses and asset dispositions and transitions have caused us to miss our earnings estimate for 2004 and reduce our guidance for 2005, the company is positioned to generate strong recurring FAD per share growth in the range of 10-14% in 2005. As a result of this positive outlook, the Board of Directors approved an increase in the common stock dividend to $0.62 per quarter from $0.60 per quarter commencing with the May 2005 dividend.”

As previously announced, the Board of Directors declared a dividend for the quarter ended December 31, 2004 of $0.60 per share as compared to $0.585 per share for the same period in 2003. The dividend represents the 135^th consecutive dividend payment. The dividend will be payable February 22, 2005 to stockholders of record on January 31, 2005.

Page 1 of 16

4Q04 Earnings Release January 31, 2005

Summary of Fourth Quarter Results
(In thousands, except per share data)

	Three Months Ended			Three Months Ended
	December 31, 2004			December 31, 2003
Revenues	$	68,794		$	60,215
Net Income Available to Common Stockholders	$	15,767		$	16,935
Funds From Operations	$	37,299		$	33,205
Funds From Operations - Adjusted(1)	$	37,299		$	35,997
Funds Available for Distribution	$	35,642		$	25,302
Funds Available for Distribution - Adjusted(1)	$	35,642		$	28,094
Net Income Per Diluted Share	$	0.30		$	0.34
FFO Per Diluted Share	$	0.71		$	0.66
FFO Per Diluted Share - Adjusted(1)	$	0.71		$	0.72
FAD Per Diluted Share	$	0.68		$	0.50
FAD Per Diluted Share - Adjusted(1)	$	0.68		$	0.56
Dividend Per Share	$	0.60		$	0.585
FFO Payout Ratio		85	%		89	%
FFO Payout Ratio - Adjusted(1)		85	%		81	%
FAD Payout Ratio		88	%		117	%
FAD Payout Ratio - Adjusted(1)		88	%		104	%

(1) Excludes impairment charges in 2003.

Summary of Year to Date Results
(In thousands, except per share data)

	Year Ended			Year Ended
	December 31, 2004			December 31, 2003
Revenues	$	251,395		$	196,739
Net Income Available to Common Stockholders	$	72,634		$	70,732
Funds From Operations	$	146,742		$	119,463
Funds From Operations - Adjusted(1)	$	147,056		$	125,045
Funds Available for Distribution	$	132,950		$	104,535
Funds Available for Distribution - Adjusted(1)	$	133,264		$	110,117
Net Income Per Diluted Share	$	1.39		$	1.60
FFO Per Diluted Share	$	2.82		$	2.70
FFO Per Diluted Share - Adjusted(1)	$	2.82		$	2.83
FAD Per Diluted Share	$	2.55		$	2.36
FAD Per Diluted Share - Adjusted(1)	$	2.56		$	2.49
Dividend Per Share	$	2.385		$	2.34
FFO Payout Ratio		85	%		87	%
FFO Payout Ratio - Adjusted(1)		85	%		83	%
FAD Payout Ratio		94	%		99	%
FAD Payout Ratio - Adjusted(1)		93	%		94	%

(1) Excludes preferred stock redemption charge in 2003 and impairment charges in 2003 and 2004.

The company had a total outstanding debt balance of $1.2 billion at December 31, 2004, as compared with $1.0 billion at December 31, 2003, and stockholders’ equity of $1.3 billion, which represents a debt to total book capitalization ratio of 47 percent. The debt to total market capitalization at December 31, 2004 was 34 percent. The company’s coverage ratio of EBITDA to interest was 3.24 to 1.00 for the twelve months ended December 31, 2004. The company’s coverage ratio of EBITDA to fixed charges was 2.77 to 1.00 for the twelve months ended December 31, 2004.

Impairments and Write-offs. During the fourth quarter of 2004, the company transitioned a portfolio of 11 properties from an underperforming operator to three new operators. As a result of the transition, the company incurred a $3.8 million write-off relating to outstanding loans with the prior operator. In addition, during the third quarter of 2004, the company incurred an impairment charge of $314,000 on one property to reduce its book value to fair market value.

Straight-line Rent. The company recorded $1.7 million and $13.8 million of straight-line rent for the three and twelve months ended December 31, 2004, respectively. Straight-line rent is net of $3.0 million and $8.1 million in cash payments outside the normal monthly rental payments for the three and twelve month periods, respectively.

Page 2 of 16

4Q04 Earnings Release January 31, 2005

2004 Earnings Shortfall. During the fourth quarter, general and administrative expenses totaled $6.2 million, representing a $2.6 million increase compared to third quarter expenses. Of this $2.6 million sequential increase, approximately $2.0 million, or $0.04 per share, was not anticipated in the company’s previous 2004 guidance. Approximately half of this $2.0 million is comprised of professional services fees, with additional taxes, compensation expenses and transition costs associated with the removal of an underperforming operator comprising the remainder. The company anticipates that general and administrative expenses will total approximately $17.5 to $18.5 million for the full-year 2005.

Outlook for 2005. The company is reducing its 2005 guidance and now expects to report net income available to common stockholders in the range of $1.39 to $1.47 per diluted share and FFO in the range of $2.90 to $2.98 per diluted share. The guidance assumes net new investments of $200 million with leases that will not require rents to be straight-lined. The company expects to record straight-line rent of approximately $14 million for the full year 2005, before any payments outside the normal monthly rental payments. There are three primary factors that have contributed to the eight cent reduction in the company’s forecast relative to its previous expectations.

First, the company now anticipates dispositions of two high-yielding investments during early 2005 that were not in the previous guidance. These investments total approximately $50 million and generate a blended yield of 12.5%. Accordingly, the company has adjusted its net new investment guidance to $200 million, down from the previous estimate of $250 million. Based on an assumption that proceeds would be initially used to pay down a portion of the line of credit balance then later reinvested at an initial yield of 9.0-9.5%, this factor would represent an approximately $1.6 million, or $0.03 per share, reduction to the company’s 2005 forecast.

Second, as a result of ongoing professional services fees, the company’s current anticipated 2005 general and administrative expense of $17.5 to $18.5 million is approximately $1.0 million, or $0.02 per share, higher than previously estimated.

Third, through a successful transition process to replace an underperforming operator during the fourth quarter of 2004, the company provided one of the three replacement operators with a rent deferral during the first six months of 2005. This will result in an incremental reduction to the company’s 2005 forecast during the deferral period of approximately $1.65 million, or $0.03 per share.

Due to the increased focus on FAD, the company has now provided a reconciliation of FAD within this press release and forecasts 2005 FAD in a range of $2.65 to $2.73 per share based on estimated straight-line rent of $14 million in 2005. This $2.65 to $2.73 per share FAD guidance for 2005 represents strong 10-14% growth over 2004 recurring FAD of $2.40 per share, excluding the impact of any potential one-time cash payments the company may receive in 2005 and the actual $8.1 million in one-time cash payments received during calendar year 2004.

The company’s guidance does not account for any impairments or unanticipated additions to the loan loss reserve. Additionally, the company plans to manage itself to maintain investment grade status with a capital structure consistent with its current profile. Please see Exhibit 15 for a reconciliation of the outlooks for net income, FFO and FAD.

Dividends for 2005. The Board of Directors approved a new quarterly dividend rate of $0.62 per share per quarter ($2.48 per share annually), commencing with the May 2005 dividend, up from $0.60, the rate during 2004. The company’s dividend policy is reviewed annually during the Board of Director’s January planning session. The declaration and payment of quarterly dividends remains subject to the review and approval of the Board of Directors.

Page 3 of 16

4Q04 Earnings Release January 31, 2005

Supplemental Reporting Measures. The company believes that net income, as defined by accounting principles generally accepted in the United States (U.S. GAAP), is the most appropriate earnings measurement. However, the company considers funds from operations (FFO) and funds available for distribution (FAD) to be a useful supplemental measure of its operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (NAREIT) created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means net income, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. FAD represents FFO excluding the non-cash straight-line rental adjustments.

In August 2003, the company adopted the SEC clarification of Emerging Issues Task Force (EITF) Topic D-42. To implement the clarified accounting pronouncement, the company’s 2003 results reflect a reduction in net income available to common stockholders resulting from a non-cash, non-recurring charge of $2,790,000, or $0.06 per diluted share, due to the redemption of the company’s 8.875% Series B Cumulative Redeemable Preferred Stock in July 2003. NAREIT has issued its recommendation that preferred stock redemption charges should not be added back to net income in the calculation of FFO. Although the company has adopted this recommendation, it has also disclosed FFO and FAD adjusted for the preferred stock redemption charge for enhanced clarity. Additionally, the company believes that the nature of the charge is non-recurring because there was not a similar charge during the two preceding years and the company does not anticipate a similar charge in the succeeding two years.

In October 2003, NAREIT informed its member companies that the SEC had changed its position on certain aspects of the NAREIT FFO definition, including impairment charges. Previously, the SEC accepted NAREIT’s view that impairment charges were effectively an early recognition of an expected loss on an impending sale of property and thus should be excluded from FFO similar to other gains and losses on sales. However, the SEC’s clarified interpretation is that recurring impairments taken on real property may not be added back to net income in the calculation of FFO. Although the company has adopted this recommendation, it has also disclosed FFO and FAD adjusted for the impairment charges for enhanced clarity.

EBITDA stands for earnings before interest, taxes, depreciation and amortization. Additionally, the company excludes the non-cash provision for loan losses. The company believes that EBITDA, along with net income and cash flow provided from operating activities, is an important supplemental measure because it provides additional information to assess and evaluate the performance of its operations. Additionally, restrictive covenants in the company’s long-term debt arrangements contain financial ratios based on EBITDA. The company primarily utilizes EBITDA to measure its interest coverage ratio which represents EBITDA divided by interest expense.

FFO, FAD and EBITDA are financial measures that are widely used by investors, equity and debt analysts and rating agencies in the valuation, comparison, rating and investment recommendations of companies. The company’s management uses these financial measures to facilitate internal and external comparisons to historical operating results, in making operating decisions and for budget planning purposes. Additionally, FFO and FAD are internal evaluation metrics utilized by the Board of Directors to evaluate management. FFO, FAD and EBITDA do not represent net income or cash flow provided from operating activities as determined in accordance with U.S. GAAP and should not be considered as alternative measures of profitability or liquidity. Finally, FFO, FAD and EBITDA, as defined by the company, may not be comparable to similarly entitled items reported by other real estate investment trusts or other companies. Please see Exhibits 13, 14, 15 and 16 for reconciliations of FAD, FFO and EBITDA to net income.

Page 4 of 16

4Q04 Earnings Release January 31, 2005

Conference Call Information. The company has scheduled a conference call on February 1, 2005, at 9:00 a.m. Eastern time to discuss its fourth quarter and year end results, industry trends, portfolio performance and outlook for 2005. To participate on the webcast, log on to www.hcreit.com or www.fulldisclosure.com 15 minutes before the call to download the necessary software. Replays will be available for 90 days through the same Web sites. This earnings release is posted on the company’s Web site under the heading Press Releases.

Health Care REIT, Inc., with headquarters in Toledo, Ohio, is a real estate investment trust that invests in health care facilities, primarily skilled nursing and assisted living facilities. At December 31, 2004, the company had investments in 394 health care facilities in 35 states with 50 operators and had total assets of approximately $2.5 billion. The portfolio included 234 assisted living facilities, 152 skilled nursing facilities and eight specialty care hospitals. More information is available on the Internet at www.hcreit.com.

This document may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern the possible expansion of the company’s portfolio; the performance of its operators and properties; its ability to enter into agreements with new viable tenants for properties which it takes back from financially troubled tenants, if any; its ability to make distributions; its policies and plans regarding investments, financings and other matters; its tax status as a real estate investment trust; its ability to appropriately balance the use of debt and equity; its ability to access capital markets or other sources of funds; and its ability to meet its earnings guidance. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” or similar expressions, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The company’s expected results may not be achieved, and actual results may differ materially from expectations. This may be a result of various factors, including, but not limited to: the status of the economy; the status of capital markets, including prevailing interest rates; serious issues facing the health care industry, including compliance with, and changes to, regulations and payment policies and operators’ difficulty in obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care and senior housing industries; changes in federal, state and local legislation; negative developments in the operating results or financial condition of operators, including, but not limited to, their ability to pay rent and repay loans; the company’s ability to transition or sell facilities with a profitable results; and changes in rules or practices governing the company’s financial reporting. Finally, the company assumes no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements.

FINANCIAL SCHEDULES FOLLOW

#####

Page 5 of 16

4Q04 Earnings Release January 31, 2005

HEALTH CARE REIT, INC.
Financial Supplement

CONSOLIDATED BALANCE SHEETS (unaudited)

(In thousands)

	December 31
	2004			2003
Assets
Real estate investments:
Real property owned
Land	$	208,173		$	166,408
Buildings & improvements		2,176,327			1,712,868
Construction in progress		25,463			14,701
		2,409,963			1,893,977
Less accumulated depreciation		(219,536	)		(152,440	)
Total real property owned		2,190,427			1,741,537
Loans receivable
Real property loans		213,067			213,480
Subdebt investments		43,739			45,254
		256,806			258,734
Less allowance for losses on loans receivable		(5,261	)		(7,825	)
		251,545			250,909
Net real estate investments		2,441,972			1,992,446
Other assets:
Equity investments		3,298			3,299
Deferred loan expenses		6,958			10,331
Cash and cash equivalents		19,763			124,496
Receivables and other assets		77,652			52,159
		107,671			190,285
Total assets	$	2,549,643		$	2,182,731
Liabilities and stockholders’ equity
Liabilities:
Borrowings under unsecured lines of credit arrangements	$	151,000		$	0
Senior unsecured notes		875,000			865,000
Secured debt		160,225			148,184
Accrued expenses and other liabilities		28,139			19,868
Total liabilities		1,214,364			1,033,052
Stockholders’ equity:
Preferred stock		283,751			120,761
Common stock		52,860			50,298
Capital in excess of par value		1,139,723			1,069,887
Treasury stock		(1,286	)		(523	)
Cumulative net income		745,817			660,446
Cumulative dividends		(884,890	)		(749,166	)
Accumulated other comprehensive income		1			1
Other equity		(697	)		(2,025	)
Total stockholders’ equity		1,335,279			1,149,679
Total liabilities and stockholders’ equity	$	2,549,643		$	2,182,731

Page 6 of 16

4Q04 Earnings Release January 31, 2005

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(In thousands, except per share data)

	Three Months Ended						Year Ended
	December 31						December 31
	2004			2003			2004			2003
Revenues:
Rental income	$	62,564		$	53,723		$	226,095		$	172,212
Interest income		5,622			4,841			22,818			20,768
Transaction fees and other income		558			1,651			2,432			3,759
Prepayment fees		50			0			50			0
Gross revenues		68,794			60,215			251,395			196,739
Expenses:
Interest expense		18,721			16,731			71,994			52,811
Provision for depreciation		20,236			15,642			73,036			49,349
General and administrative		6,247			3,032			16,585			11,483
Loan expense		825			889			3,393			2,921
Impairment of assets		0			2,792			314			2,792
Provision for loan losses		300			2,120			1,200			2,870
Total expenses		46,329			41,206			166,522			122,226
Income from continuing operations		22,465			19,009			84,873			74,513
Discontinued operations:
Gain (loss) on sales of properties		(1,272	)		(173	)		(143	)		4,139
Income (loss) from discontinued operations, net		16			243			641			4,088
		(1,256	)		70			498			8,227
Net income		21,209			19,079			85,371			82,740
Preferred dividends		5,442			2,144			12,737			9,218
Preferred stock redemption charge		0			0			0			2,790
Net income available to common stockholders	$	15,767		$	16,935		$	72,634		$	70,732
Average number of common shares outstanding:
Basic		52,326			49,440			51,544			43,572
Diluted		52,784			50,119			52,082			44,201
Net income available to common stockholders per share:
Basic	$	0.30		$	0.34		$	1.41		$	1.62
Diluted		0.30			0.34			1.39			1.60
Dividends per share	$	0.60		$	0.585		$	2.385		$	2.34

Page 7 of 16

4Q04 Earnings Release January 31, 2005

HEALTH CARE REIT, INC.
Financial Supplement – December 31, 2004

Exhibit 1

Portfolio Composition ($000’s)

	# Properties		# Beds/Units		Balance		% Balance
Balance Sheet Data
Real Property		373		35,219	$	2,190,427		90	%
Loans Receivable (1)		21		2,643		213,067		9	%
Subdebt Investments		0		0		43,739		1	%
Total Investments		394		37,862	$	2,447,233		100	%
	# Properties		# Beds/Units		Investment (2)		% Investment
Investment Data
Assisted Living Facilities		234		15,776	$	1,335,717		54	%
Skilled Nursing Facilities		152		20,975		965,328		39	%
Specialty Care Facilities		8		1,111		151,833		7	%
Real Estate Investments		394		37,862	$	2,452,878		100	%

Notes: (1)	Includes $35,918,000 of loans on non-accrual.
(2)	Real Estate Investments include gross real estate investments and credit enhancements which amounted to $2,447,233,000 and $5,645,000, respectively.

Exhibit 2

Revenue Composition ($000’s)

	Three Months Ended				Year Ended
	December 31, 2004				December 31, 2004
Revenue by Investment Type (1)
Real Property	$	63,134	92	%	$	230,278	91	%
Loans Receivable		4,588	7	%		18,482	7	%
Subdebt Investments		1,183	1	%		4,817	2	%
Total	$	68,905	100	%	$	253,577	100	%
Revenue by Facility Type (1)
Assisted Living Facilities	$	36,625	53	%	$	139,440	55	%
Skilled Nursing Facilities		28,401	41	%		98,677	39	%
Specialty Care Facilities		3,879	6	%		15,460	6	%
Total	$	68,905	100	%	$	253,577	100	%

Notes: (1) Revenues include gross revenues and revenues from discontinued operations.

Page 8 of 16

4Q04 Earnings Release January 31, 2005

Exhibit 3

Operator Concentration ($000’s)
Concentration by Investment	# Properties		Investment		% Investment
Emeritus Corporation		48	$	361,367		15	%
Southern Assisted Living, Inc.		43		200,750		8	%
Commonwealth Communities L.L.C.		13		196,560		8	%
Delta Health Group, Inc.		25		178,221		7	%
Home Quality Management, Inc.		32		176,081		7	%
Remaining Operators (45)		233		1,339,899		55	%
Total		394	$	2,452,878		100	%

Exhibit 4

Geographic Concentration ($000’s)
Concentration by Region	# Properties		Investment		% Investment
South		244	$	1,285,128		52	%
Northeast		56		499,171		20	%
West		49		322,758		13	%
Midwest		45		345,821		15	%
Total		394	$	2,452,878		100	%

Concentration by State	# Properties		Investment		% Investment
Florida		59	$	376,115		15	%
Massachusetts		33		341,935		14	%
North Carolina		42		197,036		8	%
Ohio		17		158,283		6	%
Texas		36		145,529		6	%
Remaining States (30)		207		1,233,980		51	%
Total		394	$	2,452,878		100	%

Page 9 of 16

4Q04 Earnings Release January 31, 2005

Exhibit 5

Committed Investment Balances
($000’s except Investment per Bed/Unit)

					Committed		Investment
	# Properties		# Beds/Units		Balance (1)		per Bed/Unit
Assisted Living Facilities		234		15,776	$	1,339,550	$	84,911
Skilled Nursing Facilities		152		20,975		965,328		46,023
Specialty Care Facilities		8		1,111		151,833		136,663
Total		394		37,862	$	2,456,711	-na-

Notes: (1)  Committed Balance includes gross real estate investments, credit enhancements and unfunded construction commitments for which initial funding had commenced.

Exhibit 6

Selected Facility Data

										Coverage Data
				% Payor Mix						Before		After
	Census			Private			Medicare			Mgt. Fees		Mgt. Fees
Assisted Living Facilities		87	%		86	%		0	%		1.45x		1.23x
Skilled Nursing Facilities		87	%		16	%		15	%		2.11x		1.62x
Specialty Care Facilities		66	%		23	%		40	%		2.69x		2.08x
				Weighted Averages							1.78x		1.44x

Notes: Data as of September 30, 2004.

Exhibit 7

Credit Support ($000’s)

	Balance		% Investment
Cross Defaulted	$	2,344,328	96% of gross real estate investments
Cross Collateralized		165,589	78% of real property loans receivable
Master Leases		1,852,702	85% of real property owned

Current Capitalization ($000’s except share price)

	Balance		% Balance
Borrowings Under Bank Lines	$	151,000		6	%
Long-Term Debt Obligations		1,035,225		41	%
Stockholders’ Equity		1,335,279		53	%
Total Book Capitalization	$	2,521,504		100	%
Common Shares Outstanding (000’s)		52,925
Year-end Share Price	$	38.15
Common Stock Market Value	$	2,019,089		58	%
Preferred Stock		283,751		8	%
Borrowings Under Bank Lines		151,000		4	%
Long-Term Debt Obligations		1,035,225		30	%
Total Market Capitalization	$	3,489,065		100	%

Leverage & Performance Ratios

Debt/Total Book Cap		47	%
Debt/Total Market Cap		34	%
Interest Coverage	3.25x 4th Qtr.
	3.24x YTD
Fixed Charge Coverage	2.53x 4th Qtr.
	2.77x YTD

Page 10 of 16

4Q04 Earnings Release January 31, 2005

Exhibit 8

Revenue Maturities ($000’s)

Operating Lease Expirations & Loan Maturities

	Current Lease		Current Interest		Lease and
Year	Revenue (1)		Revenue (1)		Interest Revenue		% of Total
2005	$	0	$	718	$	718		0	%
2006		0		2,880		2,880		1	%
2007		0		4,825		4,825		2	%
2008		0		4,219		4,219		2	%
2009		0		3,046		3,046		1	%
Thereafter		251,480		5,846		257,326		94	%
Total	$	251,480	$	21,534	$	273,014		100	%

Notes: (1) Revenue impact by year, annualized.

Exhibit 9

Debt Maturities and Principal Payments ($000’s)

Year	Lines of Credit (1)		Senior Notes		Secured Debt		Total
2005	$	30,000	$	0	$	6,276	$	36,276
2006		310,000		50,000		2,977		362,977
2007		0		175,000		15,004		190,004
2008		0		100,000		10,194		110,194
2009		0		0		13,278		13,278
2010		0		0		9,313		9,313
2011		0		0		21,149		21,149
Thereafter		0		550,000		82,034		632,034
Total	$	340,000	$	875,000	$	160,225	$	1,375,225

Notes: (1) Reflected at 100% capacity.

Page 11 of 16

4Q04 Earnings Release January 31, 2005

Exhibit 10

Investment Activity ($000’s)

	Three Months Ended				Year Ended
	December 31, 2004				December 31, 2004
Funding by Investment Type
Real Property	$	125,179	99	%	$	554,102	95	%
Loans Receivable		643	1	%		9,438	2	%
Subdebt Investments		53	0	%		21,391	3	%
Total	$	125,875	100	%	$	584,931	100	%
Funding by Facility Type
Assisted Living Facilities	$	22,135	18	%	$	228,365	39	%
Skilled Nursing Facilities		103,207	82	%		350,262	60	%
Specialty Care Facilities		533	0	%		6,304	1	%
Total	$	125,875	100	%	$	584,931	100	%

Exhibit 11

Disposition Activity ($000’s)

	Three Months Ended				Year Ended
	December 31, 2004				December 31, 2004
Dispositions by Investment Type
Real Property	$	3,902	14	%	$	37,710	60	%
Loans Receivable		9,881	36	%		10,992	18	%
Subdebt Investments		13,882	50	%		13,882	22	%
Total	$	27,665	100	%	$	62,584	100	%
Dispositions by Facility Type
Assisted Living Facilities	$	18,772	68	%	$	39,889	64	%
Skilled Nursing Facilities		8,893	32	%		12,340	20	%
Specialty Care Facilities						10,355	16	%
Total	$	27,665	100	%	$	62,584	100	%

Exhibit 12

Discontinued Operations ($000’s)

	Three Months Ended				Year Ended
	December 31				December 31
	2004		2003		2004		2003
Revenues
Rental income	$	111	$	1,033	$	2,182	$	10,175
Expenses
Interest expense		21		335		562		2,566
Provision for depreciation		74		455		979		3,521
Income (loss) from discontinued operations, net	$	16	$	243	$	641	$	4,088

Page 12 of 16

4Q04 Earnings Release January 31, 2005

Exhibit 13

Funds Available For Distribution Reconciliation
(Amounts in 000’s except per share data)

	Three Months Ended						Year Ended
	December 31						December 31
	2004			2003			2004			2003
Net income available to common stockholders	$	15,767		$	16,935		$	72,634		$	70,732
Provision for depreciation (1)		20,310			16,097			74,015			52,870
Loss (gain) on sales of properties		1,272			173			143			(4,139	)
Prepayments fees		(50	)		0			(50	)		0
Rental income in excess of cash received		(1,657	)		(7,903	)		(13,792	)		(14,928	)
Funds available for distribution		35,642			25,302			132,950			104,535
Impairment of assets		0			2,792			314			2,792
Preferred stock redemption charge		0			0			0			2,790
Funds available for distribution - adjusted		35,642			28,094			133,264			110,117
Non-recurring rental cash payments		(3,036	)		(197	)		(8,144	)		(6,271	)
Funds available for distribution - recurring	$	32,606		$	27,897		$	125,120		$	103,846
Average common shares outstanding:
Basic		52,326			49,440			51,544			43,572
Diluted		52,784			50,119			52,082			44,201
Per share data:
Net income available to common stockholders
Basic	$	0.30		$	0.34		$	1.41		$	1.62
Diluted		0.30			0.34			1.39			1.60
Funds available for distribution
Basic	$	0.68		$	0.51		$	2.58		$	2.40
Diluted		0.68			0.50			2.55			2.36
Funds available for distribution - adjusted
Basic	$	0.68		$	0.57		$	2.59		$	2.53
Diluted		0.68			0.56			2.56			2.49
Funds available for distribution - recurring
Basic	$	0.62		$	0.56		$	2.43		$	2.38
Diluted		0.62			0.56			2.40			2.35
FAD Payout Ratio
Dividends per share	$	0.60		$	0.585		$	2.385		$	2.34
FAD per diluted share	$	0.68		$	0.50		$	2.55		$	2.36
FAD payout ratio		88	%		117	%		94	%		99	%
FAD Payout Ratio - Adjusted
Dividends per share	$	0.60		$	0.585		$	2.385		$	2.34
FAD per diluted share - adjusted	$	0.68		$	0.56		$	2.56		$	2.49
FAD payout ratio - adjusted		88	%		104	%		93	%		94	%
FAD Payout Ratio - Recurring
Dividends per share	$	0.60		$	0.585		$	2.385		$	2.34
FAD per diluted share - recurring	$	0.62		$	0.56		$	2.40		$	2.35
FAD payout ratio - recurring		97	%		104	%		99	%		100	%

Notes: (1) Provision for depreciation includes provision for depreciation from discontinued operations.

Page 13 of 16

4Q04 Earning Release January 31, 2005

Funds From Operations Reconciliation	Exhibit 14
(Amounts in 000’s except per share data)

	Three Months Ended						Year Ended
	December 31						December 31
	2004			2003			2004			2003
Net income available to common stockholders	$	15,767		$	16,935		$	72,634		$	70,732
Provision for depreciation (1)		20,310			16,097			74,015			52,870
Loss (gain) on sales of properties		1,272			173			143			(4,139	)
Prepayments fees		(50	)		0			(50	)		0
Funds from operations		37,299			33,205			146,742			119,463
Impairment of assets		0			2,792			314			2,792
Preferred stock redemption charge		0			0			0			2,790
Funds from operations — adjusted	$	37,299		$	35,997		$	147,056		$	125,045
Average common shares outstanding:
Basic		52,326			49,440			51,544			43,572
Diluted		52,784			50,119			52,082			44,201
Per share data:
Net income available to common stockholders
Basic	$	0.30		$	0.34		$	1.41		$	1.62
Diluted		0.30			0.34			1.39			1.60
Funds from operations
Basic	$	0.71		$	0.67		$	2.85		$	2.74
Diluted		0.71			0.66			2.82			2.70
Funds from operations — adjusted
Basic	$	0.71		$	0.73		$	2.85		$	2.87
Diluted		0.71			0.72			2.82			2.83
FFO Payout Ratio
Dividends per share	$	0.60		$	0.585		$	2.385		$	2.34
FFO per diluted share	$	0.71		$	0.66		$	2.82		$	2.70
FFO payout ratio		85	%		89	%		85	%		87	%
FFO Payout Ratio — Adjusted
Dividends per share	$	0.60		$	0.585		$	2.385		$	2.34
FFO per diluted share — adjusted	$	0.71		$	0.72		$	2.82		$	2.83
FFO payout ratio — adjusted		85	%		81	%		85	%		83	%

Notes: (1) Provision for depreciation includes provision for depreciation from discontinued operations.

Page 14 of 16

4Q04 Earning Release January 31, 2005

FFO Outlook Reconciliation	Exhibit 15
(Amounts in 000’s except per share data)

	Year Ended
	December 31, 2005
	Low			High
Net income available to common stockholders	$	76,500		$	80,900
Provision for depreciation (1)		83,000			83,000
Funds from operations		159,500			163,900
Rental income in excess of cash received		(14,000	)		(14,000	)
Funds available for distribution	$	145,500		$	149,900
Average common shares outstanding (diluted)		55,000			55,000
Per share data (diluted):
Net income available to common stockholders	$	1.39		$	1.47
Funds from operations		2.90			2.98
Funds available for distribution		2.65			2.73

Notes: (1) Provision for depreciation includes provision for depreciation from discontinued operations.

Page 15 of 16

4Q04 Earning Release January 31, 2005

EBITDA Reconciliation ($000’s) Exhibit 16

	Three Months Ended						Year Ended
	December 31						December 31
	2004			2003			2004			2003
Net income	$	21,209		$	19,079		$	85,371		$	82,740
Provision for depreciation (1)		20,310			16,097			74,015			52,870
Interest expense (1)		18,742			17,066			72,556			55,377
Capitalized interest		285			407			875			1,535
Amortization (2)		1,016			1,102			4,247			3,957
Provision for loan losses		300			2,120			1,200			2,870
EBITDA	$	61,862		$	55,871		$	238,264		$	199,349
Interest Coverage Ratio
Interest expense (1)	$	18,742		$	17,066		$	72,556		$	55,377
Capitalized interest		285			407			875			1,535
Total interest		19,027			17,473			73,431			56,912
EBITDA	$	61,862		$	55,871		$	238,264		$	199,349
Interest coverage ratio		3.25	x		3.20	x		3.24	x		3.50	x
Fixed Charge Coverage Ratio
Total interest (1)	$	19,027		$	17,473		$	73,431		$	56,912
Preferred dividends		5,442			2,144			12,737			9,218
Total fixed charges		24,469			19,617			86,168			66,130
EBITDA	$	61,862		$	55,871		$	238,264		$	199,349
Fixed charge coverage ratio		2.53	x		2.85	x		2.77	x		3.01	x

Notes:	(1	)	Provision for depreciation and interest expense include provision for depreciation and interest expense from discontinued operations.
	(2	)	Amortization includes amortization of deferred loan expenses, restricted stock and stock options.

Page 16 of 16