Supplemental information package

September 30, 2008—

Disclaimer

Certain information contained in this release includes forward-looking

statements. Forward-looking statements include statements regarding

our expectations, beliefs, intentions, plans, objectives, goals,

strategies, future events or performance and underlying assumptions

and other statements which are not statements of historical facts.

These statements may be identified, without limitation, by the use of

forward-looking

terminology

such

“may,”

“will,”

“anticipates,”

“expects,”

“believes,”

“intends,”

“should”

or comparable terms or the

negative thereof.

These forward-looking statements involve risks and uncertainties that

could cause actual results to differ materially from those described in

the statements. Risks and uncertainties associated with our business

include

(without

limitation)

the

following:

deterioration

the

operating

results or financial condition, including bankruptcies, of our tenants;

non-payment or late payment of rent by our tenants; our reliance on

two tenants for a significant percentage of our revenue; occupancy

levels

certain

facilities;

our

level

indebtedness;

changes

the

ratings of our debt securities; access to the capital markets and the

cost of capital; government regulations, including changes in the

reimbursement levels under the Medicare and Medicaid programs;

the general distress of the healthcare industry; increasing competition

in our business sector; the effect of economic and market conditions

and changes in interest rates; the amount and yield of any additional

investments; risks associated with acquisitions, including our ability to

identify

and

complete

favorable

transactions,

delays

failures

obtaining third party consents or approvals, the failure to achieve

perceived benefits, unexpected costs or liabilities and potential

litigation; the ability of our tenants to repay straight-line rent or loans

in future periods; the ability of our tenants to obtain and maintain

adequate liability and other insurance; our ability to attract new

tenants for certain facilities; our ability to sell certain facilities for their

book value; our ability to retain key personnel; potential liability under

environmental laws; the possibility that we could be required to

repurchase some of our senior notes; the rights and influence of

holders of our outstanding preferred stock; changes in or inadvertent

violations of tax laws and regulations and other factors that can affect

real estate investment trusts and our status as a real estate

investment trust; and other factors discussed from time to time in our

news releases, public statements and/or filings with the Securities

and Exchange Commission, especially the “Risk Factors”

sections of

our Annual and Quarterly Reports on Forms 10-K and 10-Q.

Forward-looking information is provided by us pursuant to the safe

harbor established under the Private Securities Litigation Reform Act

of 1995 and should be evaluated in the context of these factors. We

disclaim any intent or obligation to update these forward-looking

statements.

September 30, 2008—

Contents

Debt Covenants: Credit Facility & Bond Covenants

Year to date September 30, 2008 investments

Other Assets

Reconciliation of Net Income Guidance to Diluted FFO and Diluted FAD Guidance

Forward Capital Commitments: Acquisition Obligations, Capital Expenditures & Expansions

Portfolio Performance Measures Definitions

Medical Office Building Portfolio Performance Metrics

Unconsolidated JV Portfolio Performance Metrics

Geographic Benchmarks

Tenant Benchmarks

Consolidated Portfolio Performance Metrics—Same Store and Total

Portfolio Summary

Financial Measures Definitions

PORTFOLIO OVERVIEW_____________________________________________________________________

3rd Quarter 2008 Investments

INVESTMENTS & DISPOSITIONS________________________________________________________________

Lease Expirations and Mortgage Loans Receivable Principal Payments

Expected Dispositions

Unconsolidated Joint Venture Financial Statements

Interest and Fixed Charge Coverage

Debt Maturities and Debt Composition

Capitalization

Consolidated Balance Sheets

Reconciliation of Net Income to Funds Available for Distribution (FAD)

Reconciliation of Net Income to Funds From Operations (FFO)

Consolidated Statement of Operations

FINANCIAL RESULTS_________________________________________________________________________

COMPANY FACT SHEET______________________________________________________________________

September 30, 2008—

Company Fact Sheet

REIT structure provides opportunity to invest directly in real estate and

indirectly in healthcare industry

Quality healthcare real estate portfolio

Long-term triple-net master leases with quality operators

Strong affiliations with premiere hospital systems in growing medical office

building markets

Senior housing care a vital component of U.S. economy

High dividend yield and high dividend coverage

Financial stability

Well positioned to take advantage of investment opportunities and to

conservatively grow earnings and dividends

NHP is one of the few healthcare REITs with investment grade ratings by

Moody’s,

Standard

Poors

and

Fitch.

Nationwide Health Properties, Inc. (NHP), incorporated October 1985, is a

publicly

traded

real

estate

investment

trust

(REIT)

that

invests

senior

housing

facilities, long-term care facilities and medical office buildings throughout the

United States. NHP generally acquires real estate and then leases the assets

under long-term triple-net master leases to senior housing and long-term care

operators

and

various

types

leases

multiple

tenants

the

case

medical

office buildings.

REIT

specializing

healthcare

real

estate,

NHP

provides

focused

investment strategy with a well diversified portfolio. NHP employs a conservative,

long-term approach to real estate investments with an experienced professional

management team having extensive operating, real estate and finance

backgrounds.

$4.0 billion in healthcare real estate

580 properties in 43 states

259

Assisted and Independent Living

190

Skilled Nursing

78 Medical Office Buildings

Other

36 Unconsolidated JV Facilities

Over 80 multi-facility operators

Market Facts

Enterprise Value

$5.0 billion

Closing Price

$35.98

Market Capitalization

$3.6 billion

Dividend & Yield

$1.76 (4.9%)

52 week range

$25.56 –

$39.99

Shares & OP Units

100.8 million

Company Profile

Investor Highlights

Our Portfolio

(6%)

(11%)

(14%)

Credit Ratings

S&P BBB-

Moody’s Baa3 (positive outlook)

Fitch BBB-

(positive outlook)

as of September 30, 2008

September 30, 2008—

Consolidated Statement of Operations

In thousands, except per share data

2008

2007

2008

2007

Revenues:

Triple-net lease rent

$ 72,673

$ 70,188

$ 214,203

$ 199,111

Medical office building operating rent

16,188

3,560

43,058

9,133

88,861

73,748

257,261

208,244

Interest and other income

6,614

6,560

18,430

15,825

95,475

80,308

275,691

224,069

Expenses:

Interest and amortization of deferred financing costs

25,308

24,297

75,554

72,205

Depreciation and amortization

30,416

23,851

86,776

65,277

General and administrative

6,634

6,080

19,538

17,493

Medical office building operating expenses

7,220

1,891

18,782

5,084

69,578

56,119

200,650

160,059

Income before minority interests and unconsolidated joint ventures

25,897

24,189

75,041

64,010

Minority interests in net loss of consolidated joint ventures

107

139

Income from unconsolidated joint ventures

924

547

2,824

1,242

Gain on sale of facilities to joint ventures, net

29,350

29,949

Income from continuing operations

26,873

54,162

77,972

95,340

Discontinued operations:

Gain on sale of facilities, net

2,351

153,444

61,285

Income from discontinued operations

3,541

3,306

14,597

2,380

3,580

156,750

75,882

Net income

29,253

57,742

234,722

171,222

Preferred stock dividends

(2,061)

(3,791)

(6,185)

(11,372)

Income available to common stockholders

27,192

53,951

228,537

159,850

Basic earnings per share (EPS):

Income from continuing operations excluding gains

$ 0.26

$ 0.23

$ 0.75

$ 0.61

Gains in income from continuing operations

0.32

0.33

Income from continuing operations

$ 0.26

$ 0.55

$ 0.75

$ 0.94

Discontinued operations

0.02

0.04

1.63

0.84

Income available to common stockholders

$ 0.28

$ 0.59

$ 2.38

$ 1.78

Diluted EPS:

Income from continuing operations excluding gains

$ 0.25

$ 0.24

$ 0.74

$ 0.60

Gains in income from continuing operations

0.30

0.33

Income from continuing operations

$ 0.25

$ 0.54

$ 0.74

$ 0.93

Discontinued operations

0.02

0.04

1.60

0.84

Income

$ 0.27

$ 0.58

$ 2.34

$ 1.77

Weighted average shares outstanding for EPS:

Basic

96,975

91,089

96,203

89,690

Diluted

99,032

96,255

97,648

90,158

Three Months Ended September 30,

Nine Months Ended September 30,

September 30, 2008—

Reconciliation of Net Income to Funds From Operations (FFO)

See Financial Measures Definitions

2008

2007

2008

2007

Net income to FFO:

Net income

29,253

57,742

234,722

171,222

Preferred stock dividends

(2,061)

(3,791)

(6,185)

(11,372)

Real estate related depreciation and amortization

30,290

25,799

87,766

72,375

Depreciation in income from unconsolidated joint ventures

1,221

503

3,467

1,034

Gains on sale of facilities, net

(2,351)

(29,389)

(153,444)

(91,234)

FFO available to common stockholders

56,352

50,864

166,326

142,025

Series B preferred dividend add-back

2,061

2,062

6,185

6,187

Diluted FFO

58,413

52,926

172,511

148,212

Non-recurring settlement of delinquent tenant obligations

(1,965)

Recurring diluted FFO

58,413

50,961

172,511

146,247

Weighted average shares outstanding for FFO:

Diluted weighted average shares outstanding

99,032

96,255

97,648

90,158

Series B preferred stock add-back if not already converted

4,744

4,736

4,704

Fully diluted weighted average shares outstanding

103,776

96,255

102,384

94,862

Diluted per share amounts:

FFO

0.56

0.55

1.68

1.56

Recurring FFO

0.56

0.53

1.68

1.54

Dividends declared per common share

0.44

0.41

1.32

1.23

Recurring FFO payout ratio

79%

77%

79%

80%

Recurring FFO coverage

1.27

1.29

1.27

1.25

In thousands, except per share data

Three Months Ended September 30,

Nine Months Ended September 30,

September 30, 2008—

Reconciliation of Net Income to Funds Available for Distribution

(FAD)

See Financial Measures Definitions

2008

2007

2008

2007

Net income to FAD:

Net income

29,253

57,742

234,722

171,222

Preferred stock dividends

(2,061)

(3,791)

(6,185)

(11,372)

Real estate related depreciation and amortization

30,290

25,799

87,766

72,375

Gains on sale of facilities, net

(2,351)

(29,389)

(153,444)

(91,234)

Straight-lined rent

(2,280)

(226)

(7,877)

(1,924)

Amortization of above and below market lease intangibles

(137)

(69)

(411)

(22)

Non-cash stock-based compensation expense

1,500

1,248

4,271

3,486

Deferred finance cost amortization

741

683

2,265

2,066

Lease commissions and tenant and capital improvements

(1,105)

(565)

(2,999)

(1,498)

NHP's

share of FAD reconciling items from unconsolidated joint ventures:

Real estate related depreciation and amortization

1,221

503

3,467

1,034

Straight-lined rent

(44)

(54)

Deferred finance cost amortization

FAD available to common stockholders

55,048

51,941

161,584

144,143

Series B preferred dividend add-back

2,061

2,062

6,185

6,187

Diluted FAD

57,109

54,003

167,769

150,330

Non-recurring settlement of delinquent tenant obligations

(1,965)

Recurring diluted FAD

57,109

52,038

167,769

148,365

Weighted average shares outstanding for FAD:

Weighted average shares outstanding

99,032

96,255

97,648

90,158

Series B preferred stock add-back if not already converted

4,744

4,736

4,704

Fully diluted weighted average shares outstanding

103,776

96,255

102,384

94,862

Diluted per share amounts:

FAD

0.55

0.56

1.64

1.58

Recurring FAD

0.55

0.54

1.64

1.56

Dividends declared per common share

0.44

0.41

1.32

1.23

Recurring FAD payout ratio

80%

76%

80%

79%

Recurring FAD coverage

1.25

1.32

1.24

1.27

In thousands, except per share data

Three Months Ended September 30,

Nine Months Ended September 30,

September 30, 2008—

Consolidated Balance Sheets

September 30,

December 31,

2008

2007

Assets

Real estate related investments:

Land

313,530

301,100

Buildings and improvements

3,001,616

2,896,876

3,315,146

3,197,976

Less accumulated depreciation

(463,156)

(410,865)

Net real estate

2,851,990

2,787,111

Mortgage loans receivable, net

163,505

121,694

Investment in unconsolidated joint ventures

54,445

52,637

Net real estate related investments

3,069,940

2,961,442

Cash and cash equivalents

114,385

19,407

Receivables, net

5,203

3,808

Other assets

244,848

159,696

Total assets

3,434,376

3,144,353

Liabilities and Stockholders' Equity

Unsecured senior credit facility

41,000

Senior notes due 2008 -

2038

1,139,473

1,166,500

Notes and bonds payable

412,812

340,150

Accounts payable and accrued liabilities

134,141

107,844

Total liabilities

1,686,426

1,655,494

Minority interests

50,555

6,166

Stockholders' equity:

Series B convertible preferred stock

106,390

106,445

Common stock

9,825

9,481

Capital in excess of par value

1,678,965

1,565,249

Cumulative net income

1,523,473

1,288,751

Accumulated other comprehensive income

2,197

2,561

Cumulative dividends

(1,623,455)

(1,489,794)

Total stockholders' equity

1,697,395

1,482,693

Total liabilities and stockholders' equity

3,434,376

3,144,353

In thousands

September 30, 2008—

Capitalization

Debt

Unsecured senior credit facility

$ 41,000

Senior notes

1,139,473

1,166,500

Notes and bonds payable

412,812

340,150

Consolidated debt

1,552,285

1,547,650

NHP's

share of unconsolidated debt

86,284

79,234

Total debt

1,638,569

1,626,884

Book Capitalization

Consolidated debt

1,552,285

1,547,650

Minority interests

50,555

6,166

Total stockholders' equity

1,697,395

1,482,693

Consolidated book capitalization

3,300,235

3,036,509

Accumulated depreciation and amortization

463,156

410,865

Consolidated undepreciated

book capitalization

3,763,391

3,447,374

NHP's

share of unconsolidated debt

86,284

79,234

NHP's

share of unconsolidated accum. depreciation and amortization

5,147

1,703

Total undepreciated

book capitalization

3,854,822

3,528,311

Enterprise Value

Price

Common stock

98,267

35.98

3,535,648

94,806

31.37

2,974,057

Limited partnership units

1,471

35.98

52,918

Series B preferred stock

1,064

157.00

167,064

1,064

140.00

149,023

Consolidated market equity capitalization

3,755,630

3,123,080

Consolidated debt

1,552,285

1,547,650

Consolidated enterprise value

5,307,915

4,670,730

NHP's

share of unconsolidated debt

86,284

79,234

Total enterprise value

5,394,199

4,749,964

Leverage Ratios

Consolidated debt to consolidated undepreciated

book capitalization

41.2%

44.9%

Total debt to total undepreciated

book capitalization

42.5%

46.1%

Consolidated debt to consolidated enterprise value

29.2%

33.1%

Total debt to total enterprise value

30.4%

34.3%

December 31, 2007

September 30, 2008

In thousands, except stock prices and ratios

September 30, 2008—

Debt Maturities and Debt Composition

Principal

Rate

Principal

Rate

Principal

Rate

Principal

Rate

Principal

Rate

Principal

Rate

Q4 2008

33,500

(1)

7.6%

33,500

7.6%

33,500

7.6%

2009

87,000

(2)

7.8%

39,073

6.6%

126,073

7.4%

126,073

7.4%

2010

71,705

5.9%

71,705

5.9%

5,162

6.0%

76,867

5.9%

2011

350,000

6.5%

33,160

6.5%

383,160

6.5%

383,160

6.5%

2012

96,000

8.3%

46,159

7.2%

142,159

7.9%

14,000

6.0%

156,159

7.7%

2013

322,973

(3)

6.3%

40,675

6.0%

363,648

6.2%

363,648

6.2%

2014

22,794

6.0%

22,794

6.0%

25,616

5.8%

48,410

5.9%

2015

250,000

6.0%

52,743

5.7%

302,743

5.9%

34,028

5.9%

336,771

5.9%

2016

21,397

5.9%

21,397

5.9%

21,397

5.9%

2017

102

5.0%

102

5.0%

102

5.0%

2018

7,800

6.1%

7,800

6.1%

7,800

6.1%

Thereafter

77,204

4.9%

77,204

4.9%

7,478

6.9%

84,682

5.1%

Total

1,139,473

6.6%

412,812

5.9%

1,552,285

6.4%

86,284

6.0%

1,638,569

6.4%

Weighted average

maturity in years

3.9

7.4

4.8

6.8

4.9

Principal

Rate

% of Total

Principal

Rate

% of Total

Fixed rate debt

Senior notes

1,139,473

6.6%

69.5%

$ 1,166,500

6.6%

71.7%

Notes and bonds

322,479

6.1%

19.7%

277,930

6.3%

17.1%

NHP's

unconsolidated

debt

81,122

6.0%

5.0%

79,234

6.0%

4.9%

Total fixed rate debt

1,543,074

6.5%

94.2%

1,523,664

6.5%

93.7%

Variable rate debt

Credit facility

41,000

5.5%

2.5%

Notes and bonds

90,333

5.5%

62,220

5.7%

3.8%

NHP's

unconsolidated

debt

5,162

6.0%

0.3%

Total variable rate debt

95,495

5.5%

5.8%

103,220

5.6%

6.3%

Total debt

1,638,569

6.4%

100.0%

1,626,884

6.5%

100.0%

(1) Notes putable

November of 2008, 2013, 2018 and 2023 with a final maturity in 2028

(2)

Includes

$55

million

notes

putable

October

2009,

2012,

2017

and

2027

with

final

maturity

2037

(3)

Includes

$23

million

notes

putable

July

2013,

2018,

2023

and

2028

with

final

maturity

2038

NHP's

Share of

Unconsolidated Debt

Consolidated Debt

In thousands

Debt Maturities

Total Debt

Senior Notes

Notes and Bonds

Credit Facility

Period

September 30, 2008

December 31, 2007

Debt Composition

September 30, 2008—

Interest and Fixed Charge Coverage

See Financial Measures Definitions

2008

2007

2008

2007

Reconciliation of Net Income to EBITDA:

Net income

29,253

57,742

234,722

171,222

Interest and amortization of deferred financing costs in continuing operations

25,308

24,297

75,554

72,205

Interest and amortization of deferred financing costs in discontinued operations

1,090

1,004

3,279

Depreciation and amortization in continuing operations

30,416

23,851

86,776

65,277

Depreciation and amortization in discontinued operations

2,063

1,366

7,431

Consolidated EBITDA

84,977

109,043

399,422

319,414

NHP's

share of EBITDA reconciling items from unconsolidated joint ventures:

Interest and amortization of deferred financing costs

1,292

508

3,752

849

Depreciation and amortization

1,221

503

3,467

1,034

Total EBITDA

87,490

110,054

406,641

321,297

Gains on sale of facilities, net

(2,351)

(29,389)

(153,444)

(91,234)

Adjusted Total EBITDA

85,139

80,665

253,197

230,063

Adjusted Consolidated EBITDA

82,626

79,654

245,978

228,180

Interest Expense:

Consolidated interest expense (including discontinued operations)

24,568

24,704

74,293

73,418

NHP's

share of interest expense from unconsolidated joint ventures

1,271

502

3,689

839

Total interest expense

25,839

25,206

77,982

74,257

Fixed Charges:

Consolidated interest expense (including discontinued operations)

24,568

24,704

74,293

73,418

Preferred stock dividends

2,061

3,791

6,185

11,372

Consolidated fixed charges

26,629

28,495

80,478

84,790

NHP's

share of interest expense from unconsolidated joint ventures

1,271

502

3,689

839

Total fixed charges

27,900

28,997

84,167

85,629

Consolidated Adjusted Interest Coverage Ratio

3.36

3.22

3.31

3.11

Total Adjusted Interest Coverage Ratio

3.29

3.20

3.25

3.10

Consolidated Adjusted Fixed Charge Coverage Ratio

3.10

2.80

3.06

2.69

Total Adjusted Fixed Charge Coverage Ratio

3.05

2.78

3.01

2.69

In thousands

Three Months Ended September 30,

Nine Months Ended September 30,

September 30, 2008—

Unconsolidated Joint Venture Financial Statements

September 30, 2008

December 31, 2007

Assets

Land

35,042

Buildings and improvements

504,993

496,188

Gross real estate

540,035

531,230

Accumulated depreciation

(20,443)

(6,811)

Net real estate

519,592

524,419

Cash

3,060

3,689

Other assets

6,376

2,825

Total assets

529,028

530,933

Liabilities and equity

Notes payable

324,490

316,935

Accounts payable and accrued liabilities

4,626

3,461

Total liabilities

329,116

320,396

Equity contributions

227,269

215,970

Retained earnings

2,568

1,761

Distributions

(29,367)

(7,194)

Other comprehensive income

(558)

Total equity

199,912

210,537

Total liabilities and equity

529,028

530,933

NHP's

investment in joint venture

50,128

(1)

52,637

(1)

Excludes NHP's

investment in PMB Real Estate Services LLC ("PMBRES") and PMB SB 399-

401 East Highland LLC ("PMB SB"). NHP's

investment in PMBRES was $781,000 at

September 30, 2008. NHP's

investment in PMB SB was $3,537,000 at September 30, 2008.

Balance Sheet

September 30, 2008—

Unconsolidated Joint Venture Financial Statements (2)

2008

2007

2008

2007

Revenues

Rent

11,540

4,857

34,030

9,857

Interest and other income

Total revenues

11,557

4,938

34,091

9,950

Expenses

Interest and amortization of deferred finance costs

5,004

2,031

14,845

3,397

Depreciation and amortization

4,648

2,011

13,632

4,137

General and administrative*

1,625

542

4,807

1,106

Total expenses

11,277

4,584

33,284

8,640

Net income

280

354

807

1,310

NHP Income and FFO from Joint Venture

Share of net income - 25%

202

328

Management fee*

1,000

458

2,932

914

Income from joint venture (1)

1,068

547

3,134

1,242

Share of depreciation - 25%

1,162

503

3,408

1,034

FFO from joint venture

2,230

1,050

6,542

2,276

* NHP's management fee is included in the joint venture's general and administrative expense

(1)

Excludes NHP's loss from PMBRES and income from PMB SB. NHP's share of the loss from PMBRES was $164,000 and $329,000 for

the three and nine months ended September 30, 2008, respectively. NHP's share of the income from PMB SB was $21,000 for the three

and nine months ended September 30, 2008.

Income Statement

Three Months Ended September 30,

Nine Months Ended September 30,

September 30, 2008—

Financial Measures Definitions

Adjusted EBITDA:

We believe that adjusted EBITDA is an important supplemental operating and

liquidity measure primarily because it is used in the calculation of the Adjusted

Interest Coverage Ratio and the Adjusted Fixed Charge Coverage Ratio and

we present it solely for the purpose of being used in those calculations.

Adjusted EBITDA is calculated by adding back any gains and losses on the

sale of real estate and any impairments to EBITDA for a given period. We

believe

adjusted

EBITDA

most

useful

liquidity

measure

the

ratio

calculations noted above to enable investors to determine and compare a

company’s ability to meet its interest and Fixed Charges obligations.

However,

the

methodology

for

calculating

makes

net

income

the

most

directly

comparable

GAAP

measure.

such,

believe

investors

should

consider adjusted EBITDA, cash flows from operating activities and net

income when evaluating our ability to meet our interest and Fixed Charges

obligations. The usefulness of adjusted EBITDA is limited because it doesn’t

reflect, among other things, required principal payments, cash expenditures,

capital expenditures or capital commitments. Adjusted EBITDA does not

represent

net

income

cash

flows

from

operations

defined

GAAP

and

should not considered as an alternative to either of those measures. Our

calculation of Adjusted EBITDA may not be comparable to similar measures

reported by other companies.

Adjusted Fixed Charge Coverage Ratio:

We believe that the adjusted fixed charge coverage ratio is an important

supplemental liquidity measure that reflects a company’s ability to meet its

interest and preferred dividend payment obligations and allows investors to

compare interest and dividend paying capabilities among different companies.

We calculate the adjusted fixed charge coverage ratio by dividing Adjusted

EBITDA by Fixed Charges. In addition, credit rating agencies utilize similar

ratios

evaluating

the

credit

ratings

our

debt

instruments.

This

ratio’s

usefulness is limited by the same factors that limit the usefulness of the

components Adjusted EBITDA and Fixed Charges. Our calculation of the

adjusted

fixed

charge

coverage

ratio

should

not

considered

alternative

to the ratio of earnings to fixed charges as defined by Item 503(d) of

Regulation S-K and it may not be comparable to similar ratios reported by

other companies.

Adjusted Interest Coverage Ratio:

We believe that the adjusted interest coverage ratio is an important

supplemental liquidity measure that reflects a company’s ability to meet its

interest payment obligations and allows investors to compare interest paying

capabilities among different companies. We calculate the adjusted interest

coverage ratio by dividing Adjusted EBITDA by interest expense (including

capitalized interest, if any). In addition, credit rating agencies utilize similar

ratios

evaluating

the

credit

ratings

our

debt

instruments.

This

ratio’s

usefulness is limited by the same factors that limit the usefulness of the

component Adjusted EBITDA. Our calculations of the adjusted interest

coverage ratio may not be comparable to similar ratios reported by other

companies.

EBITDA:

We believe that EBITDA is an important supplemental operating and liquidity

measure primarily because it is used in the calculation of Adjusted EBITDA

which is in turn used in the calculation of the Adjusted Interest Coverage

Ratio and the Adjusted Fixed Charge Coverage Ratio and we present it solely

for the purpose of being used in those calculations. EBITDA is calculated by

adding interest, taxes, depreciation and amortization to net income. The real

estate industry uses EBITDA as a non-GAAP measure of both operating

performance and liquidity. We believe it is most useful as a liquidity measure

in the ratio calculations noted above to enable investors to determine and

compare a company’s ability to meet its interest and Fixed Charges

obligations. However, the methodology for calculating it makes net income

the most directly comparable GAAP measure. As such, we believe investors

should

consider

EBITDA,

cash

flows

from

operating

activities

and

net

income

when evaluating our ability to meet our interest and Fixed Charges

obligations. The usefulness of EBITDA is limited because it doesn’t reflect,

among other things, required principal payments, cash expenditures, capital

expenditures or capital commitments. EBITDA does not represent net

income or cash flows from operations as defined by GAAP and should not

considered as an alternative to either of those measures. Our calculation of

EBITDA may not be comparable to similar measures reported by other

companies.

September 30, 2008—

Financial Measures Definitions (2)

FAD Payout Ratio and FFO Coverage:

The FAD payout ratio is calculated by dividing the common dividend per

share by diluted FAD per share for any given period. FAD coverage is

calculated by dividing diluted FAD per share by the common dividend per

share for any given period. We believe that both of these amounts are

important supplemental liquidity measures that enable investors to compare

dividend security among REITs.

Fixed Charges:

Fixed charges is a measure of the total interest and preferred stock dividend

obligations of a company. It is calculated by adding interest expense

(including capitalized interest, if any) and preferred stock dividends for any

given period and is utilized in calculating the Adjusted Fixed Charge

Coverage Ratio. It’s usefulness is limited as, among other things, it does not

include required principal payments or any other contractual obligations a

company may have. Our calculation of fixed charges should not be

considered an alternative to fixed charges as defined by Item 503(d) of

Regulation S-K and it may not be comparable to fixed charges reported by

other companies.

Funds Available for Distribution (“FAD”):

While

net

income

and

its

per

amounts

defined

generally

accepted

accounting

principles

("GAAP")

are

the

most

appropriate

earnings

measures, we believe that FAD and its related per share amounts are

important

supplemental

measures

operating

performance.

GAAP

requires

the use of straight-line depreciation of historical costs and implies that real

estate values diminish predictably and ratably over time. However, real

estate values have historically risen and fallen based on various market

conditions and other factors. FFO was developed as a supplemental

measure of operating performance primarily in order to exclude historical cost

based depreciation and amortization and its effects as it does not generally

reflect the actual change in value of real estate over time. FAD was

developed as a supplemental measure of operating performance primarily to

exclude non-cash revenues and expenses that are included in FFO. FAD is

defined as net income (computed in accordance with GAAP) excluding gains

and

losses

from

the

sale

real

estate

plus

real

estate

depreciation

and amortization, plus or minus straight-lined rent (plus cash in excess of rent

or minus rent in excess of cash), plus or minus amortization of above or

below market lease intangibles, plus non-cash stock based compensation,

plus deferred finance cost amortization plus any impairments minus lease

commissions,

tenant

improvements

and

capital

improvements

paid.

The

same

adjustments are made to reflect our share of these same items from

unconsolidated joint ventures. We believe that the use of FAD and its related

per share amounts and FFO and its related per share amounts in conjunction

with the required GAAP disclosures provides investors with a more

comprehensive understanding of the operating results of a real estate

investment trust ("REIT") and enables investors to compare the operating

results between REITs without having to account for differences caused by

different depreciation assumptions and different non-cash revenues and

expenses. Additionally, FAD is widely used by industry analysts as a

measure

operating

performance

for

equity

REITs.

FAD

does

not

represent

cash flow from operating activities or net income as defined by GAAP and,

therefore should not be considered as an alternative to cash flow as a

measure of liquidity or net income as the primary indicator of operating

performance. Our calculations of FAD may not be comparable to FAD

reported by other REITs or analysts that define it differently than we do.

Funds from Operations (“FFO”):

While

net

income

and

its

per

amounts

defined

generally

accepted

accounting

principles

("GAAP")

are

the

most

appropriate

earnings

measures, we believe that FFO and its related per share amounts are

important

supplemental

measures

operating

performance.

GAAP

requires

the use of straight-line depreciation of historical costs and implies that real

estate values diminish predictably and ratably over time. However, real

estate values have historically risen and fallen based on various market

conditions and other factors. FFO was developed as a supplemental measure

of operating performance primarily in order to exclude historical cost based

depreciation and amortization and its effects as it does not generally

reflect

the

actual

change

value

real

estate

over

time.

calculate

FFO

in accordance with the National Association of Real Estate Investment Trusts'

definition. FFO is defined as net income (computed in accordance

with GAAP)

excluding gains and losses from the sale of real estate plus real estate

depreciation

and

amortization.

The

same

adjustments

are

made

reflect our share of gains and losses from the sale of real estate and real

estate related

depreciation

and

amortization

from

unconsolidated

joint

ventures. We believe that the use of FFO and its related per share amounts

in conjunction with the required GAAP disclosures provides investors with a

September 30, 2008—

Financial Measures Definitions (3)

more comprehensive understanding of the operating results of a real estate

investment trust ("REIT") and enables investors to compare the operating

results between REITs without having to account for differences caused by

different depreciation assumptions. Additionally, FFO is widely used by

industry analysts as a measure of operating performance for equity REITs.

FFO does not represent cash flow from operating activities or net income as

defined by GAAP and, therefore should not be considered as an alternative to

cash

flow

measure

liquidity

net

income

the

primary

indicator

operating performance. Our calculations of FFO may not be comparable to

FFO reported by other REITs that do not define the term in accordance with

the NAREIT definition or that interpret that definition differently than we do.

Gross Investment:

define

Gross

Investment

our

total

investment

property

which

includes land, building, improvements, equipment as well as any other

identifiable assets included in the caption Other Assets on our balance

sheets. Items classified in Other Assets generally pertain to our medical office

buildings and may include such things as tenant improvements, leasing

commissions, above/(below) market lease value, lease in place value and

other items.

Recurring FAD:

Recurring FAD excludes from FAD any material one-time items reflected in

the financial statements for a given period.

Recurring FFO:

The NAREIT definition of FFO doesn’t exclude impairments of assets. We

believe that impairments are equivalent to losses on sale that are taken early

due to the current requirements of GAAP, therefore we generally present

Recurring

FFO,

which

excludes

impairments,

for

any

period

where

our

net

income includes an impairment. We also exclude any material one-time

items reflected in the financial statements for a given period.

September 30, 2008—

Quarter 2008 Investments

Gross investment in thousands

Investment

Number of

Square

Average

Gross

Per Bed/Unit

Initial

Facilities

Beds/Units/

Feet

Age

Investment

Square Foot

Yield

Owned Facilities

Assisted and independent living facilities

0.0%

Skilled nursing facilities

605

31,000

51,000

9.6%

Total senior housing and long-term care

605

31,000

51,000

9.6%

Medical office buildings

105,518

43,000

408

7.8%

Total acquisitions

605

105,518

74,000

8.5%

Capital expenditures

10,000

Total investments

605

105,518

84,000

Loans

Skilled nursing facilities

0.0%

Total senior housing and long-term care

0.0%

Medical office buildings

172,000

48,000

6.5%

Other loans

1,000

9.0%

Total loans

172,000

49,000

6.6%

Total Consolidated

Assisted and independent living facilities

0.0%

Skilled nursing facilities

605

31,000

51,000

9.6%

Total senior housing and long-term care

605

31,000

51,000

9.6%

Other loans

1,000

9.0%

Medical office buildings

277,518

91,000

328

7.1%

Total acquisitions

605

277,518

123,000

7.7%

Capital expenditures

10,000

Total investments

605

277,518

133,000

Unconsolidated Joint Venture

Medical office buildings

3,000

Capital expenditures

4,000

Total investments

7,000

Total Investments

Assisted and independent living facilities

Skilled nursing facilities

605

31,000

51,000

9.6%

Total senior housing and long-term care

605

31,000

51,000

9.6%

Medical office buildings

105,518

46,000

436

7.2%

Total real estate acquisitions

605

105,518

77,000

8.2%

Total loans

172,000

49,000

6.6%

Total acquisitions

605

277,518

126,000

7.6%

Capital expenditures

14,000

Total investments

605

277,518

140,000

134,000

7.3%

June 30, 2008—

Year to Date September 30, 2008 Investments

Gross investment in thousands

Building

Investment

Number of

Square

Average

Gross

Per Bed/Unit

Initial

Facilities

Beds/Units

Feet

Age

Investment

Square Foot

Yield

Owned Facilities

Assisted and independent living facilities

418

42,000

100,000

8.8%

Skilled nursing facilities

1,119

54,000

48,000

9.4%

Total senior housing and long-term care

1,537

96,000

62,000

9.1%

Medical office buildings

661,180

243,000

368

6.5%

Total acquisitions

1,537

661,180

339,000

7.2%

Capital expenditures

27,000

Total investments

1,537

661,180

366,000

Loans

Skilled nursing facilities

130

7,000

54,000

10.0%

Total senior housing and long-term care

130

7,000

54,000

10.0%

Medical office buildings

48,000

6.5%

Other loans

33,000

7.8%

Total loans

130

88,000

7.3%

Total Consolidated

Assisted and independent living facilities

418

42,000

100,000

8.8%

Skilled nursing facilities

1,249

61,000

49,000

9.5%

Total senior housing and long-term care

1,667

103,000

62,000

9.3%

Other loans

33,000

7.8%

Medical office buildings

833,180

291,000

349

6.5%

Total acquisitions

1,667

833,180

427,000

7.3%

Capital expenditures

27,000

Total investments

1,667

833,180

454,000

Unconsolidated Joint Venture

Medical office buildings

Capital expenditures

9,000

Total investments

12,000

Total Investments

Assisted and independent living facilities

418

42,000

100,000

8.8%

Skilled nursing facilities

1,119

54,000

48,000

9.4%

Total senior housing and long-term care

1,537

96,000

62,000

9.1%

Medical office buildings

661,180

246,000

372

6.5%

Total real estate acquisitions

1,537

661,180

342,000

7.2%

Total loans

130

172,000

88,000

7.3%

Total acquisitions

1,667

833,180

430,000

7.2%

Capital expenditures

36,000

Total investments

1,667

833,180

466,000

172,000

279,000

134,000

3,000

7.3%

Expected Dispositions

Investment

Actual

Full Year

Gross

Required at 8.5%

% Financing

Revenue

Proceeds

Gain

Assumed Yield

From Proceeds

Through September 30, 2008

Purchase options

2,231,000

2,838,000

28,699,000

16,769,000

33,388,000

86%

Loan payoffs

954,000

1,023,000

8,892,000

12,035,000

74%

Asset Recycling

734,000

4,500,000

1,736,000

8,635,000

52%

Lease Restructuring

244,000

245,000

2,882,000

Strategic asset sales

13,601,000

18,134,000

305,000,000

134,583,000

213,341,000

143%

17,030,000

22,974,000

347,091,000

153,088,000

270,281,000

128%

Projected for the Remainder of 2008

Certain

[A]

Purchase options

346,000

3,654,000

1,584,000

4,071,000

90%

Total certain

346,000

3,654,000

1,584,000

4,071,000

90%

High

[B]

Purchase options

16,000

396,000

4,250,000

1,005,000

4,659,000

91%

Loan payoffs*

101,000

2,684,000

23,020,000

9,902,000

31,576,000

73%

Asset recycling

9,000

626,000

4,297,000

(471,000)

7,365,000

58%

Total high

126,000

3,706,000

31,567,000

10,436,000

43,600,000

72%

Total Actual & Projected 2008

Total actual

17,030,000

22,974,000

347,091,000

153,088,000

270,281,000

128%

Total certain

346,000

3,654,000

1,584,000

4,071,000

90%

Total high

126,000

3,706,000

31,567,000

10,436,000

43,600,000

72%

17,156,000

27,026,000

382,312,000

165,108,000

317,952,000

120%

*The gain on the loan payoff represents the gain deferred at the time we financed the sale of the facilities

[A] Projected dispositions categorized as "Certain" represent items where NHP received written notice from the tenant or entered into agreements related to the facilities

[B] Projected dispositions categorized as "High" represent items where NHP estimates a high probability of disposition based on an analysis of facility performance,

the tenant's financial condition and current financing options available

September 30, 2008—

Forward Capital Commitments | Acquisition Obligations, Capital Expenditures & Expansions

September 30, 2008—

Operator/Manager

Est. Take Down

Beds/Units/SQFT

Property Type

Amount ($000s)

Est. NOI ($000s)

Initial Yield

PMB -

Chula Vista, CA

Nov 2008

67,000

MOB

$ 22,738

$ 1,429

6.3%

PMB -

Reno, NV

Nov 2008

60,953

MOB

$ 16,808

$ 1,056

6.3%

PMB -

Poway, CA

Dec 2008

172,000

MOB

$ 42,595

$ 2,471

5.8%

PMB -

Mission Viejo, CA

Dec 2008

136,732

MOB

$ 96,080

$ 5,606

5.8%

2008 Total

$ 178,221

$ 10,563

5.9%

PMB -

Honolulu, HI

Feb 2009

92,650

MOB

$ 28,281

$ 1,975

7.0%

PMB -

Reno, NV

Apr 2009

91,937

MOB

$ 21,684

$ 1,375

6.3%

PMB -

Burbank, CA

Jul 2009

93,772

MOB

$ 58,231

$ 3,399

5.8%

PMB -

Orange, CA

Jul 2009

125,970

MOB

$ 86,470

$ 5,035

5.8%

PMB -

Pomona, CA

Sep 2009

70,000

MOB

$ 37,500

$ 2,625

7.0%

PMB -

Pasadena, CA

Jan 2010

183,652

MOB

$ 104,547

$ 6,093

5.8%

PMB -

Gilbert, AZ

Jun 2010

63,973

MOB

$ 24,355

$ 1,463

6.0%

Willowcreek

Hillsboro, OR

Jun 2014

230

ALF

$ 59,000

$ 4,720

8.0%

Remaining Total

$ 420,067

$ 26,685

6.4%

$ 598,288

$ 40,040

6.7%

Original

Amount Funded

Remaining

Additional

Avg. Yield on

Commitment

through 9/30/2008

Commitment

NOI

Funded Amount

NHP Consolidated

178,492

49,306

$ 129,186

$ 4,339

8.8%

Unconsolidated Joint Venture

23,917

8,054

$ 15,863

$ 669

8.3%

Combined Expansion, Renovation & Capex

Total

$ 202,409

$ 57,361

$ 145,049

$ 5,007

8.7%

NHP Consolidated Acquisition Obligations

NHP Consolidated Total Acquisition Obligations

Expansion, Renovation & Capital Expenditures

September 30, 2008—

Lease Expirations and Mortgage Loans Receivable Principal Payments

Dollars in thousands

Minimum

Number of

Minimum

Number of

Minimum

Number of

Minimum

Number of

Minimum

Percent

Number of

Year

Rent

Facilities

Rent

Facilities

Rent

Facilities

Rent

Facilities

Rent

of Total

Facilities

2008

2009

988

3,503

4,491

2010

4,671

8,333

551

13,555

2011

8,611

2012

7,586

4,427

1,511

1,800

15,324

2013

11,499

3,245

363

15,107

2014

8,346

1,077

4,872

14,295

2015

1,756

3,627

3,231

8,614

2016

10,614

13,333

2,505

26,452

10%

2017

2,510

5,029

1,863

9,402

Thereafter

107,722

183

35,723

4,103

5,539

153,087

57%

265

155,692

250

86,908

171

11,400

14,938

268,938

100%

456

Minimum

Number of

Minimum

Number of

Minimum

Number of

Minimum

Percent

Number of

Principal

Percent

Number of

Year

Rent

Facilities

Rent

Facilities

Rent

Facilities

Rent

of Total

Facilities

Payments

of Total

Facilities

2008

76,269

42%

2009

39,592

22%

2010

14,745

2011

659

2012

5,643

13%

715

2013

16,027

2014

837

2015

3,028

2016

1,300

2,748

2017

578

Thereafter

13,316

20,928

2,480

36,724

84%

27,557

15%

20,259

20,928

2,480

43,667

100%

182,755

100%

(1) Excludes PMBRES and PMB SB.

Skilled Nursing

Continuing Care

Consolidated Triple-Net

Other Triple Net

Mortgage Loans Receivable

Consolidated Lease Expirations

Assisted and Independent

Unconsolidated JV Lease Expirations (1)

Assisted and Independent

Consolidated

Skilled Nursing

Total JV

Continuing Care

September 30, 2008—

Portfolio Summary

Gross investment, NOI and security deposits in thousands

Building

Investment

Percentage of

Percentage

Number of

Square

Gross

Per Bed/Unit/

Investment

of NOI by

Facilities

Beds/Units

Feet

Investment

Square Foot

by Category

NOI

Category

Owned Facilities

Assisted and independent living facilities

250

17,778

1,704,215

96,000

48%

128,451

51%

Skilled nursing facilities

171

19,049

900,716

47,000

25%

67,254

26%

Continuing care retirement communities

1,952

124,808

64,000

9,294

Specialty hospitals

303

74,312

245,000

6,078

Total senior housing and long-term care

438

39,082

2,804,051

72,000

78%

211,077

83%

Triple-net medical office buildings

372,001

98,215

264

3,126

Total triple-net

456

39,082

372,001

2,902,266

81%

214,203

84%

Multi-tenant medical office buildings

2,673,083

528,406

198

15%

24,276

Total owned

515

39,082

3,045,084

3,430,672

96%

238,479

93%

Mortgage Loans Receivable

Assisted and independent living facilities

668

47,555

71,000

4,207

Skilled nursing facilities

2,679

59,355

22,000

5,816

Continuing care retirement communities

180

9,095

51,000

544

Total senior housing and long-term care

3,527

116,005

33,000

10,567

Multi-tenant medical office buildings

172,000

47,500

276

111

Total mortgage loans receivable

3,527

172,000

163,505

10,678

Other Income

7,752

Assets Held for Sale

Total Consolidated Portfolio

544

42,609

3,217,084

3,594,177

100%

256,909

100%

Consolidated Portfolio by Type

Assisted and independent living facilities

259

18,446

1,751,770

95,000

49%

132,658

53%

Skilled nursing facilities

190

21,728

960,071

44,000

26%

73,070

28%

Continuing care retirement communities

2,132

133,903

63,000

9,838

Specialty hospitals

303

74,312

245,000

6,078

Total senior housing and long-term care

466

42,609

2,920,056

69,000

81%

221,644

87%

Medical office buildings

3,217,084

674,121

210

19%

27,513

10%

Total owned and mortgage loans receivable

544

42,609

3,217,084

3,594,177

100%

249,157

97%

Other income

7,752

Assets held for sale

Total consolidated

544

42,609

3,217,084

3,594,177

100%

256,909

100%

Unconsolidated JV Ownership

Assisted and independent living facilities

1,806

252,514

140,000

47%

16,158

48%

Skilled nursing facilities

1,884

257,851

137,000

47%

16,010

47%

Continuing care retirement communities

148

29,670

200,000

1,862

Total senior housing and long-term care

3,838

540,035

141,000

99%

34,030

100%

Medical office buildings

135,884

3,537

Total JV

3,838

135,884

543,572

100%

34,051

100%

Other income

Total JV

34,112

100%

Total Portfolio

580

46,447

3,352,968

4,137,749

291,021

* Multi-tenant medical office building gross investment includes

115,527

of amounts classified as other assets

Triple-Net Leased Security Information

Owned

Mortgages

Total

Owned

Mortgages

Total

Owned

Bank letters of credit

52,954

2,584

55,538

9,900

Master leases

84%

100%

Cash deposits

19,611

1,124

20,735

Property tax

70%

52%

64%

74%

72,565

3,708

76,273

9,981

Cap ex

46%

28%

42%

59%

Consolidated

Percentage with Impounds

Security Deposits

Consolidated

September 30, 2008—

Portfolio Performance Summary

Gross investment and annualized cash rent in thousands

Number of

Average

Gross

Annualized

Current

EBITDARM

Facilities

Age

Investment

Cash Rent/NOI

Yield

Occupancy

Coverage

Owned Facilities

Assisted and independent living facilities

250

1,704,215

163,683

9.6%

84.5%

1.26x

Skilled nursing facilities

171

900,716

92,167

10.2%

82.8%

2.01x

Continuing care retirement communities

124,808

12,409

9.9%

87.3%

1.60x

Specialty hospitals

74,312

8,012

10.8%

68.6%

2.80x

Total senior housing and long-term care

438

2,804,051

276,271

9.9%

83.7%

1.57x

Triple-net medical office buildings

98,215

7,495

7.6%

100.0%

Total triple-net

456

2,902,266

283,766

9.8%

Multi-tenant medical office buildings

528,406

34,595

6.5%

91.0%

Total owned

515

3,430,672

318,361

9.3%

Mortgage Loans Receivable

Assisted and independent living facilities

47,555

5,462

11.5%

82.4%

1.38x

Skilled nursing facilities

59,355

8,109

13.7%

83.5%

2.67x

Continuing care retirement communities

9,095

728

8.0%

90.6%

3.47x

Total senior housing and long-term care

116,005

14,299

12.3%

83.7%

2.40x

Multi-tenant medical office buildings

47,500

3,088

6.5%

95.0%

Total mortgage loans receivable

163,505

17,387

10.6%

Total NHP Consolidated Portfolio

544

3,594,177

335,748

9.3%

1.61x

Consolidated Portfolio by Type

Assisted and independent living facilities

259

1,751,770

169,145

9.7%

84.4%

1.26x

Skilled nursing facilities

190

960,072

100,276

10.4%

80.7%

2.06x

Continuing care retirement communities

133,903

13,137

9.8%

87.6%

1.71x

Specialty hospitals

74,312

8,012

10.8%

68.6%

2.80x

Total senior housing and long-term care

466

2,920,057

290,570

10.0%

82.7%

1.61x

Medical Office Buildings

674,121

45,178

6.7%

93.1%

Total consolidated

544

3,594,177

335,748

9.3%

Unconsolidated JV Ownership

Assisted and independent living facilities

252,514

21,164

8.4%

87.0%

1.17x

Skilled nursing facilities

257,850

21,207

8.2%

93.5%

1.82x

Continuing care retirement communities

29,670

2,480

8.4%

87.0%

1.67x

Total senior housing and long-term care

540,035

44,851

8.3%

90.0%

1.51x

Medical office buildings

3,537

252

7.1%

86.8%

Total unconsolidated JV

543,572

45,103

8.3%

Total Portfolio

580

4,137,749

380,851

9.2%

1.60x

* Medical office building cost per square foot and gross investment reflects total purchase price including amounts classified as other assets

September 30, 2008—

Consolidated Portfolio Performance by Asset Type (excluding MOBs)

SEP 2008

JUN 2008

Q/Q Chg

SEP 2007

Y/Y Chg

SEP 2008

JUN 2008

SEP 2007

Assisted and independent living

Annualized Facility Revenue ($000s)

584,191

580,403

0.7%

558,059

4.7%

605,073

602,411

693,328

Occupancy

84.4%

83.8%

0.6%

86.0%

-1.6%

84.4%

83.8%

85.0%

Monthly revenue per occupied bed/unit

3,002

2,961

1.4%

2,895

3.7%

2,997

3,007

3,389

Annualized Facility EBITDARM ($000s)

206,702

204,647

1.0%

205,329

0.7%

213,218

211,268

255,627

Facility EBITDARM %

35.4%

35.3%

0.1%

36.8%

-1.4%

35.2%

35.1%

36.9%

NHP Annualized Cash Rent ($000s)

162,825

161,472

0.8%

158,163

2.9%

169,145

168,489

201,628

Facility EBITDARM coverage

1.27x

0.2%

1.30x

-2.2%

1.26x

1.25x

1.27x

Facility EBITDAR coverage

1.09x

0.2%

1.12x

-2.8%

1.08x

1.10x

Facility EBITDAR -

Capex

coverage

1.02x

0.3%

1.06x

-3.1%

1.01x

1.04x

Skilled nursing facilities

Annualized Facility Revenues ($000s)

1,133,266

1,131,039

0.2%

1,062,476

6.7%

1,275,077

1,272,376

1,226,008

Occupancy

83.1%

82.8%

0.3%

84.1%

-0.9%

80.7%

81.3%

80.9%

Monthly revenue per occupied bed/unit

6,147

6,098

0.8%

5,745

7.0%

6,211

6,143

5,819

Q-Mix (Private + Medicare)

46.4%

45.6%

0.8%

41.8%

4.6%

45.7%

44.6%

40.0%

Annualized Facility EBITDARM ($000s)

192,051

186,822

2.8%

169,441

13.3%

206,569

208,204

193,765

16.9%

16.5%

0.4%

15.9%

1.0%

16.2%

16.4%

15.8%

NHP Annualized Cash Rent ($000s)

89,010

88,508

0.6%

85,057

4.6%

100,276

99,145

94,898

Facility EBITDARM coverage

2.16x

2.11x

2.2%

1.99x

8.3%

2.06x

2.10x

2.04x

Facility EBITDAR coverage

1.52x

1.47x

3.3%

1.37x

11.2%

1.42x

1.46x

1.40x

Facility EBITDAR -

Capex

coverage

1.43x

1.38x

3.6%

1.28x

12.3%

1.33x

1.37x

1.30x

SAME PROPERTY (PERFORMANCE)

TOTAL

September 30, 2008—

Consolidated Portfolio Performance (excluding MOBs )

SEP 2008

JUN 2008

Q/Q Chg

SEP 2007

Y/Y Chg

SEP 2008

JUN 2008

SEP 2007

NHP Consolidated Portfolio

(excluding

MOBs)

Annualized Facility Revenue ($000s)

1,896,990

1,894,987

0.1%

1,790,021

6.0%

2,064,605

2,062,999

2,110,762

Occupancy

84.1%

83.5%

0.6%

85.2%

-1.1%

82.7%

82.6%

82.9%

Monthly revenue per occupied bed/unit

4,749

4,681

1.5%

4,324

9.8%

4,776

4,754

4,688

Annualized Facility EBITDARM ($000s)

443,789

436,429

1.7%

415,524

6.8%

468,051

464,509

492,406

Facility EBITDARM %

23.4%

23.0%

0.4%

23.2%

0.2%

22.7%

22.5%

23.3%

Total NHP Annualized Cash Rent ($000s)

272,594

269,997

1.0%

264,391

3.1%

290,570

285,664

319,297

NHP Rent (Payor

Mix)

Private

70.5%

70.6%

-0.1%

69.0%

1.4%

69.1%

69.8%

71.4%

Medicare

10.7%

10.6%

0.1%

10.9%

-0.2%

11.1%

10.8%

10.1%

Medicaid

18.7%

-0.1%

19.9%

-1.2%

19.6%

19.3%

18.4%

Other

0.2%

0.1%

0.0%

0.2%

-0.1%

0.2%

0.1%

0.2%

Total NHP Annualized Cash Rent

100.0%

Facility EBITDARM coverage

1.63x

1.62x

0.9%

1.58x

3.1%

1.61x

1.63x

1.55x

Facility EBITDAR coverage

1.28x

1.27x

1.3%

1.24x

3.3%

1.26x

1.27x

1.22x

Facility EBITDAR

Capex

coverage

1.21x

1.19x

1.4%

1.17x

3.5%

1.18x

1.19x

1.15x

Total

Portfolio

Facility

Payor

Mix

SEP 2008

JUN 2008

SEP 2007

SEP 2008

JUN 2008

SEP 2007

SEP 2008

JUN 2008

SEP 2007

Private

99.6%

99.5%

98.9%

18.7%

18.8%

18.4%

49.1%

48.1%

48.6%

Medicare

0.0%

0.2%

0.3%

27.0%

26.6%

27.9%

17.7%

18.1%

18.4%

Medicaid

0.4%

0.3%

0.8%

53.8%

54.2%

53.1%

32.8%

33.6%

32.6%

Other

0.0%

0.5%

0.4%

0.6%

0.4%

0.2%

0.4%

Total Tenant Revenue

100.0%

Q-Mix (Private + Medicare)

99.6%

99.7%

99.2%

45.7%

45.4%

46.3%

66.8%

66.2%

67.0%

Excludes

assets

held

for

sale,

medical

office

buildings

and

assets

ALF/ILF

SNF

Total

SAME PROPERTY (PERFORMANCE)

TOTAL

Tenant Concentration

September 30, 2008—

Gross investment and annualized cash rent in thousands

Number of

Beds/Units

Gross

Percent by

Annualized

Percent by

Average

Remaining

EBITDARM

Tenant Concentration

Facilities

Inservice

Investment

Cash Rent/NOI

Cash Rent

Age

Term

Coverage

Brookdale

Senior Living

[A]

5,619

464,195

12.9%

51,579

15.4%

13.8

1.45x

Hearthstone Senior Services

3,794

431,297

12.0%

36,044

10.7%

12.8

1.20x

Wingate Healthcare

2,528

243,364

6.8%

20,602

6.1%

11.2

1.87x

Senior Services of America

1,368

124,934

3.5%

11,533

3.4%

12.7

1.23x

Laureate Group

1,526

118,946

3.3%

10,749

3.2%

4.3

1.44x

Top 5

174

14,835

1,382,737

38.5%

130,507

38.9%

12.2

1.43x

Magnolia Health Systems

2,255

114,699

3.2%

10,109

3.0%

18.4

1.81x

Carillon Assisted Living

928

105,847

2.9%

8,676

2.6%

13.3

1.38x

Beverly Enterprises

3,100

105,240

2.9%

14,501

4.3%

5.7

2.18x

Atria Senior Living

1,457

83,717

2.3%

13,792

4.1%

12.4

1.27x

Nexion

Health Management

2,267

70,211

2.0%

8,708

2.6%

4.9

1.60x

Top 10

267

24,842

1,862,450

51.8%

186,293

55.5%

11.8

1.50x

Emeritus Corporation

[A]

533

70,177

2.0%

6,172

1.8%

8.3

1.27x

Primrose Retirement Associates

429

55,016

1.5%

4,407

1.3%

13.3

1.13x

Epic Group

892

52,478

1.5%

4,407

1.3%

7.6

2.05x

Trans Healthcare

1,062

46,676

1.3%

5,543

1.7%

1.5

0.83x

HEALTHSOUTH

[A]

120

45,645

1.3%

4,959

1.5%

5.4

2.08x

Top 15

297

27,878

2,132,442

59.3%

211,781

63.1%

11.2

1.49x

Other -

Senior Housing and

Long-Term Care Tenants

169

14,077

787,615

21.9%

78,789

23.5%

8.2

2.00x

Medical Office Buildings

674,121

18.8%

45,178

13.5%

Total NHP Consolidated Portfolio

544

41,955

3,594,177

100.0%

335,748

100.0%

10.4

1.61x

* Performance metrics exclude assets held for sale and JV assets

[A] Public company tenant

September 30, 2008—

Geographic Performance Metrics

Gross investment and annualized cash rent in thousands

Number of

Medicaid as

Number of

Beds/Units

Gross

Percent by

Annualized

Percent by

Percent of

Facilities

Inservice

Investment

Cash Rent

[A]

Texas

6,205

446,075

15.3%

43,747

15.1%

3.7%

California

2,837

184,620

6.3%

26,590

9.2%

1.6%

Massachusetts

2,421

217,747

7.5%

18,760

6.5%

3.3%

Wisconsin

2,837

210,494

7.2%

19,675

6.8%

1.3%

Washington

1,465

106,102

3.6%

11,133

3.8%

0.8%

Top 5

171

15,765

1,165,038

39.9%

119,905

41.3%

10.7%

Florida

2,460

148,287

5.1%

13,432

4.6%

1.6%

Tennessee

1,927

174,940

6.0%

14,154

4.9%

1.2%

Indiana

2,349

132,741

4.6%

10,725

3.7%

2.0%

Ohio

1,661

113,465

3.9%

11,807

4.1%

1.2%

Michigan

1,500

105,993

3.6%

10,076

3.5%

1.2%

Top 10

285

25,662

1,840,464

63.0%

180,100

62.0%

17.8%

North Carolina

1,120

111,135

3.8%

9,519

3.3%

0.5%

New York

846

101,437

3.5%

9,837

3.4%

1.2%

Missouri

1,149

53,142

1.8%

5,421

1.9%

0.9%

Minnesota

849

66,247

2.3%

5,574

1.9%

1.0%

Alabama

557

42,068

1.4%

3,830

1.3%

0.0%

Top 15

337

30,183

2,214,493

75.8%

214,280

73.8%

21.4%

Other States

129

11,772

705,564

24.2%

76,290

26.2%

12.9%

Total

466

41,955

2,920,057

100.0%

290,570

100.0%

34.3%

Medical Office Buildings

674,121

45,178

Total NHP Consolidated Portfolio

544

3,594,177

335,748

* Performance metrics exclude assets held for sale, medical office buildings and JV assets

[A]

Medicaid as a percent of cash rent represents an estimate of the portion of NHP's

total senior housing and long-term care portfolio total

rental income derived from the underlying Medicaid reimbursement of our tenants and borrowers (Medicaid income of our tenant divided by

total income of our tenant multiplied by the rent or interest paid to NHP)

September 30, 2008—

Geographic Performance Metrics

Gross investment and annualized cash rent in thousands

Number of

Revenue

Number of

Beds/Units

Gross

Annualized

EBITDARM

per occupied

Average

Remaining

% SNF by

Facilities

Inservice

Investment

Cash Rent

Coverage

bed/unit

Age

Term

Cash Rent

Texas

6,205

446,075

43,747

1.58x

4,411

8.4

29.0%

California

2,837

184,620

26,590

1.33x

5,501

10.2

16.7%

Massachusetts

2,421

217,747

18,760

1.93x

7,340

10.8

81.5%

Wisconsin

2,837

210,494

19,675

1.49x

3,183

10.3

16.3%

1,465

106,102

11,133

1.97x

4,678

15.9

37.8%

Top 5

171

15,765

1,165,038

119,905

1.60x

4,915

10.2

33.2%

Florida

2,460

148,287

13,432

1.96x

4,822

9.7

21.1%

Tennessee

1,927

174,940

14,154

1.05x

3,527

8.8

17.3%

Indiana

2,349

132,741

10,725

1.68x

5,087

16.1

79.5%

Ohio

1,661

113,465

11,807

1.11x

4,558

7.9

25.6%

Michigan

1,500

105,993

10,076

1.67x

4,545

11.7

5.9%

Top 10

285

25,662

1,840,464

180,100

1.56x

4,771

10.3

31.8%

North Carolina

1,120

111,135

9,519

1.47x

3,309

12.7

3.7%

New York

846

101,437

9,837

1.40x

6,612

9.7

50.3%

Missouri

1,149

53,142

5,421

1.97x

4,751

6.2

99.0%

Minnesota

849

66,247

5,574

1.30x

4,135

10.7

40.3%

Alabama

557

42,068

3,830

0.72x

2,235

9.6

0.0%

Top 15

337

30,183

2,214,493

214,280

1.54x

4,713

10.3

32.7%

Other States

129

11,772

705,564

76,290

1.84x

5,085

10.7

24.3%

Total

466

41,955

2,920,057

290,570

1.61x

4,776

10.4

30.5%

Medical Office Buildings

674,121

45,178

Total NHP Consolidated Portfolio

544

3,594,177

335,748

* Performance metrics exclude assets held for sale, medical office buildings and JV assets

Note: Lease

terms

for

NHP

facilties

generally

are

between

ten

and

fifteen

years

with

renewal

options,

exercised,

that

add

ten

fifteen

additional

years.

general,

NHP

receives

contractual

rent

escalators

the

range

1.5%

2.5%

for

skilled

nursing

assets

and

2.0%

3.0%

for

assisted

living

assets

Washington

September 30, 2008—

Unconsolidated JV Portfolio Performance Metrics

Assisted and

Skilled

Independent Living

Nursing

CCRC

Portfolio

SEP 2008

Unconsolidated JV Portfolio

Annualized Facility Revenue ($000s)

72,723

155,608

13,361

241,692

Occupancy

87.0%

93.5%

87.0%

90.0%

Monthly revenue per occupied bed/unit

3,955

9,049

10,892

6,566

Q-Mix (Private + Medicare)

98.4%

63.7%

100.0%

76.2%

Annualized Facility EBITDARM ($000s)

24,806

38,697

4,136

67,639

Facility EBITDARM %

34.1%

24.9%

31.0%

28.0%

Total JV Annualized Cash Rent ($000s)

21,164

21,207

2,480

44,851

JV Rent (Payor Mix)

Private

98.4%

39.5%

73.2%

69.2%

Medicare

0.0%

24.2%

26.8%

12.9%

Medicaid

1.6%

36.3%

0.0%

17.9%

Other

0.0%

Total JV Annualized Cash Rent

100.0%

Facility EBITDARM coverage

1.17x

1.82x

1.67x

1.51x

Facility EBITDAR coverage

1.00x

1.46x

1.40x

1.24x

Facility EBITDAR - Capex coverage

0.95x

1.43x

1.38x

1.20x

Total

Medical Office Building Portfolio Performance Metrics

September 30, 2008—

Gross investment dollars in thousands

Gross

Number of

Gross

Investment

Percent

Average

Rentable

Ownership

Facilities

Investment

per SQFT

On Campus

Age

SQFT

Current Year

Prior Year

Change

BROE

90%

57,091

60.0%

752,793

85.4%

83.4%

2.0%

BROE

95%

94,945

170

100.0%

558,707

89.9%

McShane

95%

46,337

115

57.1%

404,227

92.2%

Unconsolidated JV

3,537

100.0%

135,884

86.8%

NHP

Multi-Tenant

100%

330,033

345

75.0%

957,356

96.0%

NHP

Triple-Net

100%

98,215

264

5.6%

372,001

100.0%

NHP Multi-Tenant Mortgages

47,500

276

100.0%

172,000

95.0%

Total MOB Portfolio

677,658

202

60.0%

3,352,968

92.1%

Current Year

Prior Year

% Change

Current Year

Prior Year

% Change

Current Year

Prior Year

Change

BROE

90%

11,099

10,946

1.4%

5,065

4,767

6.2%

45.6%

43.6%

2.1%

BROE

95%

11,210

6,040

53.9%

McShane

95%

7,005

3,348

47.8%

Unconsolidated JV

668

252

37.7%

NHP

Multi-Tenant

100%

32,211

20,142

62.5%

NHP

Triple-Net

100%

7,495

NHP Multi-Tenant Mortgages

3,088

Total MOB Portfolio

72,776

45,430

56.0%

Gross

Building

Number of

Gross

Percent by

Investment

Square

Percent by

MOBs

by state

Facilities

Investment

per SQFT

Feet

Square Feet

California

187,852

27.7%

290

648,752

19.4%

Washington

118,493

17.5%

323

366,483

10.9%

Illinois

67,114

9.9%

175

383,058

11.4%

Missouri

46,337

6.8%

115

404,227

12.1%

Florida

42,052

6.2%

351

119,871

3.6%

Top 5

461,847

68.2%

240

1,922,391

57.3%

Oregon

33,205

4.9%

317

104,856

3.1%

Texas

32,346

4.8%

110

294,152

8.8%

Louisiana

31,403

4.6%

384,588

11.5%

Nevada

27,793

4.1%

328

84,666

2.5%

Alabama

16,706

2.5%

273

61,219

1.8%

Top 10

603,301

89.0%

212

2,851,872

85.1%

South Carolina

16,362

2.4%

149

109,704

3.3%

Indiana

15,725

2.3%

282

55,814

1.7%

Ohio

13,519

2.0%

202

66,776

2.0%

Georgia

10,051

1.5%

123,294

3.7%

Virginia

6,795

1.0%

104

65,315

2.0%

Top 15

665,753

98.2%

203

3,272,775

97.6%

Other States

11,905

1.8%

148

80,193

2.4%

Medical Office Buildings

677,658

100.0%

202

3,352,968

100.0%

Annualized Revenue

Annualized Cash Rent/NOI

Operating Margin

Occupancy

September 30, 2008—

Portfolio Performance Measures Definitions

Annualized Cash Rent/NOI:

The most recent monthly total cash rent due from our tenants as of the end of

the current reporting period multiplied by twelve. For our multi-tenant medical

office building portfolio, NOI rather than cash rent is annualized. We use

Annualized Cash Rent to calculate our EBITDARM, EBITDAR and EBITDAR –

Capex

coverages.

Facility EBITDAR:

Earnings before interest, taxes, depreciation, amortization and rent on an

annualized basis. We believe EBITDAR is a good estimate of facility cash

flows after payment of management fees. We use a standardized imputed

management fee equal to 5% of the revenues our tenants or borrowers

generate at each individual facility (Facility Revenues) which we believe

represents typical management fees for our senior housing and long-term care

portfolios. We receive periodic facility financial information from our tenants

that we utilize to calculate EBITDAR. All facility financial information was

derived solely from information provided by our tenants and borrowers and we

have

not

verified

such

information.

use

EBITDAR

calculate

the

EBITDAR (cash flow) coverage for our portfolio.

Facility EBITDAR Coverage:

Annualized EBITDAR divided by Annualized Cash Rent. This ratio is a

measure of a facility’s ability to cover its cash rent obligations. EBITDAR

Coverage of 1.0X would indicate the EBITDAR is just sufficient to pay the cash

rent.

The

higher

the

coverage,

the

better

able

facility

meet

its

rent

obligations. This is the mid-range coverage calculation we utilize.

Facility EBITDARM:

Earnings before interest, taxes, depreciation, amortization, rent and

management fees on an annualized basis. We believe EBITDARM is a good

estimate of facility cash flows before payment of management fees. We use a

standardized imputed management fee equal to 5% of the revenues our

tenants or borrowers generate at each individual facility (Facility Revenues)

which we believe represents typical management fees for our senior housing

and long-term care portfolios. We receive periodic facility financial information

from our tenants that we utilize to calculate EBITDARM. All facility financial

information was derived solely from information provided by our tenants and

borrowers and we have not verified such information. We use EBITDARM to

calculate the EBITDARM (cash flow before management fee) coverage for our

portfolio.

Facility EBITDARM Coverage:

Annualized

EBITDARM

divided

Annualized

Cash

Rent.

This

ratio

measure of a facility’s ability to cover its cash rent obligations assuming it

doesn’t have to pay its management fee. EBITDARM Coverage of 1.0X

would indicate the EBITDARM is just sufficient to pay the cash rent. The

higher the coverage, the better able a facility is to meet its rent obligations.

This is the least restrictive coverage measure we utilize.

Facility

EBITDAR

Capex:

Earnings before interest, taxes, depreciation, amortization and rent less

minimum capital expenditures (capex) calculated on an annualized basis.

We believe EBITDAR is a good estimate of facility cash flows after a reserve

for minimum capital expenditures required to maintain a facility. We use a

standardized imputed capital expenditure schedule in our calculations based

on the type, size and age of each facility which we believe represents typical

minimum capital expenditures for our senior housing and long-term care

portfolios. We receive periodic facility financial information from our tenants

that

utilize

calculate

EBITDAR

Capex.

All

facility

financial

information

was derived solely from information provided by our tenants and borrowers

and

have

not

verified

such

information.

use

EBITDAR

Capex

calculate

the

EBITDAR

–

Capex

(cash

flow

after

reserves

for

minimum

capex

requirements) coverage for our portfolio.

Facility

EBITDAR

Capex

Coverage:

Annualized EBITDAR

Capex

divided by Annualized Cash Rent. This ratio is

a measure of a facility’s ability to cover its cash rent obligations after it makes

the

minimum

capital

expenditures

required

maintain

the

facility.

EBITDAR

Capex

Coverage

1.0X

would

indicate

the

EBITDAR

Capex

just

sufficient to pay the cash rent. The higher the coverage, the better able a

facility is to meet its rent obligations. This is the most restrictive coverage

measure we utilize.

Facility Revenues:

The revenues generated by each individual facility on an annualized basis.

We receive periodic facility financial information from our tenants that we

utilize to calculate Facility Revenues. All facility financial information was

derived solely from information provided by our tenants and borrowers and

we have not verified such information.

September 30, 2008—

Portfolio Performance Measures Definitions (2)

Gross Investment:

define

Gross

Investment

our

total

investment

property

which

includes land, building, improvements, equipment as well as any other

identifiable assets included in the caption Other Assets on our balance sheets.

Items classified in Other Assets generally pertain to our medical office

buildings and may include such things as tenant improvements, leasing

commissions, above/(below) market lease value, lease in place value and

other items.

Monthly Revenue per Occupied Bed/Unit:

For our senior housing and long-term care portfolio, monthly revenue per

occupied bed or unit is derived by determining the monthly revenue generated

by each individual facility divided by the total number of actual resident days

for a 30-day month. All facility performance data were derived solely from

information provided by our tenants and borrowers and we have not verified

such information.

Occupancy:

For our senior housing and long-term care portfolio, occupancy represents a

facility’s actual resident days (total number of beds or units occupied multiplied

by the number of days in the period) divided by the total resident capacity

(total number of beds or units in service for the period multiplied by the number

of days in the period). For medical office buildings, facility occupancy

represents the leased square feet divided by the total rentable square feet. In

all cases (senior housing, long-term care and medical office buildings), the

reporting period represents the month prior to quarter end. All facility

performance data were derived solely from information provided by our

tenants and borrowers and we have not verified such information.

NOI:

Net operating income (“NOI”) is a non-GAAP supplemental financial measure

used

evaluate

the

operating

performance

our

facilities.

define

NOI

for

our triple-net leases segment as rent revenues. For our multi-tenant leases

segment,

define

NOI

revenues

minus

medical

office

building

operating

expenses. In some cases, revenue for medical office buildings includes

expense reimbursements for common area maintenance charges. NOI

excludes

interest

expense

and

amortization

deferred

financing

costs,

depreciation and amortization expense, general and administrative expense

and discontinued operations. We present NOI as it effectively presents our

portfolio

“net”

rent

basis

and

provides

relevant

and

useful

information

NOI (continued):

it measures the operating performance at the facility level on an unleveraged

basis. We use NOI to make decisions about resource allocations and to

assess the property level performance of our properties. Furthermore, we

believe that NOI provides investors relevant and useful information because

it measures the operating performance of our real estate at the property level

on an unleveraged basis. We believe that net income is the GAAP measure

that

most directly

comparable

NOI.

However,

NOI

should

not

considered as an alternative to net income as the primary indicator of

operating performance as it excludes the items described above.

Additionally, NOI as presented above may not be comparable to other REITs

or companies as their definitions of NOI may differ from ours.

Q-Mix:

For our long-term care portfolio, Q-Mix (abbreviation for Quality-Mix) refers to

the

combination

Tenant’s

private

and

medicare

revenues

percentage

total

revenues.

private

and

medicare

rates

are

generally

higher at long-term care facilities, Tenants can oftentimes improve margins

selectively

targeting

medicare

and

private-pay

residents.

such,

increase

the

Q-Mix

generally

results

corresponding

increase

Tenant’s total revenues.

Rentable Square Feet:

For our medical office building portfolio, rentable square feet represents the

area measured to the inside finished surface of the dominant portion of the

permanent outer building walls, excluding any major vertical penetrations of

the floor. An add-on or load factor is used to charge the tenant for a

percentage of the common areas, so that the total rentable square footage

for the building is equal to sum of each floor’s rentable area.

Same Property (Performance):

Results shown under the Same Property caption present the financial or

other performance measures for only those facilities that were in our portfolio

for more than twelve month at the end of all periods presented.