December 31, 2008

Supplemental Information

Exhibit 99.2

1

December 31, 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

as

“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

in

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

at

certain

facilities;

our

level

of

indebtedness;

changes

in

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

or

failures

in

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.

2

December 31, 2008—

Contents

Debt Covenants: Credit Facility & Bond Covenants

Year to Date December 31, 2008 Investments

Other Assets

Reconciliation of 2009 Net Income Guidance to Diluted FFO and Diluted FAD Guidance

Projected Funding Obligations through 2011

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

32

PORTFOLIO

OVERVIEW_______________________________________________________________________

4th Quarter 2008 Investments

23

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

4

FINANCIAL

RESULTS_________________________________________________________________________

3

COMPANY

FACT

SHEET______________________________________________________________________

3

December 31, 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 Fitch,

Moody’s, and Standard & Poors.

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

publicly

traded

real

estate

investment

trust

(REIT)

that

invests

in

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

of

leases

to

multiple

tenants

in

the

case

of

medical

office buildings.

As

a

REIT

specializing

in

healthcare

real

estate,

NHP

provides

a

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.

$4.3 billion in healthcare real estate

582 properties in 43 states

260

Assisted and Independent Living

189

Skilled Nursing

80  Medical Office Buildings

17

Other

36  Unconsolidated JV Facilities

Over 78 multi-facility tenants

Market Facts

Enterprise Value

$4.7 billion

Closing Price

$28.72

Market Capitalization

$2.9 billion

Dividend & Yield

$1.76 (6.1%)

52 week range

$18.13 –

$39.99

Shares & OP Units

104.9 million

Company Profile

Investor Highlights

Our Portfolio

WI

(6%)

MA

(6%)

WA

(6%)

CA

(12%)

TX

(13%)

Credit Ratings

Fitch BBB-

(positive outlook)

Moody’s Baa3 (positive outlook)

S&P  BBB-

as of December 31, 2008

as of December 31, 2008

4

December 31, 2008—

FINANCIAL RESULTS

5

December 31, 2008—

Consolidated Statement of Operations

In thousands, except per share data

2008

2007

2008

2007

Revenues:

Triple-net lease rent

$          72,691

$          70,651

$        285,398

$        268,346

Medical office building operating rent

17,229

6,928

60,287

16,061

89,920

77,579

345,685

284,407

Interest and other income

6,550

6,037

24,980

21,862

96,470

83,616

370,665

306,269

Expenses:

Interest and amortization of deferred financing costs

25,492

25,435

101,045

97,639

Depreciation and amortization

30,898

26,110

117,473

91,187

General and administrative

6,513

6,937

26,051

24,429

Medical office building operating expenses

7,849

3,512

26,631

8,596

70,752

61,994

271,200

221,851

25,718

21,622

99,465

84,418

Minority interests in net loss of consolidated joint ventures

24

73

131

212

Income from unconsolidated joint ventures

1,079

717

3,903

1,958

Gain on debt extinguishment, net

4,641

-

4,641

-

Gain on sale of facilities to joint ventures, net

-

16,097

-

46,045

Income from continuing operations

31,462

38,509

108,140

132,633

Discontinued operations:

Gain on sale of facilities, net

1,552

10,783

154,995

72,069

Income from discontinued operations

402

3,944

5,003

19,756

1,954

14,727

159,998

91,825

Net income

33,416

53,236

268,138

224,458

Preferred stock dividends

(1,452)

(2,062)

(7,637)

(13,434)

Income available to common stockholders

31,964

$        

51,174

$        

260,501

$      

211,024

$      

Basic earnings per share (EPS):

Income from continuing operations excluding gains

$              0.25

$              0.22

$              0.98

$              0.81

Gains in income from continuing operations

0.05

0.17

0.05

0.51

Income from continuing operations

0.30

0.39

1.03

1.32

Discontinued operations

0.02

0.16

1.65

1.01

Income available to common stockholders

$              0.32

$              0.55

$              2.68

$              2.33

Diluted EPS:

Income from continuing operations excluding gains

$              0.25

$              0.22

$              0.97

$              0.80

Gains in income from continuing operations

0.04

0.17

0.05

0.51

Income from continuing operations

0.29

0.39

1.02

1.31

Discontinued operations

0.02

0.15

1.62

1.01

Income

$              0.31

$              0.54

$              2.64

$              2.32

Weighted average shares outstanding for EPS:

Basic

100,353

93,399

97,246

90,625

Diluted

102,455

93,990

98,855

91,129

Three Months Ended December 31,

Year Ended December 31,

Income

before

minority

interests

and

unconsolidated

joint

ventures

6

December 31, 2008—

Reconciliation of Net Income to Funds From Operations (FFO)

See Financial Measures Definitions

2008

2007

2008

2007

Net income to FFO:

Net income

33,416

$           

53,236

$           

268,138

$         

224,458

$         

Preferred stock dividends

(1,452)

(2,062)

(7,637)

(13,434)

Real estate related depreciation and amortization

30,837

27,965

118,603

100,340

Depreciation in income from unconsolidated joint ventures

1,301

668

4,768

1,703

Gains on sale of facilities, net

(1,552)

(26,880)

(154,995)

(118,114)

FFO available to common stockholders

62,550

52,927

228,877

194,953

Series B preferred dividend add-back

1,452

2,062

7,637

8,250

Diluted FFO

64,002

54,989

236,514

203,203

Gain on debt extinguishment, net

(4,641)

-

(4,641)

-

Non-recurring settlement of delinquent tenant obligations

-

(1,667)

-

(3,632)

Recurring diluted FFO

59,361

$           

53,322

$           

231,873

$         

199,571

$         

Weighted average shares outstanding for FFO:

Diluted weighted average shares outstanding

102,455

93,990

98,855

91,129

Series B preferred stock add-back if not already converted

3,896

4,717

4,526

4,707

Fully diluted weighted average shares outstanding

106,351

98,707

103,381

95,836

Diluted per share amounts:

FFO

0.60

$                

0.56

$                

2.29

$                

2.12

$                

Recurring FFO

0.56

$                

0.54

$                

2.24

$                

2.08

$                

Dividends declared per common share

0.44

$                

0.41

$                

1.76

$                

1.64

$                

Recurring diluted FFO payout ratio

79%

76%

79%

79%

Recurring diluted FFO coverage

1.27

1.32

1.27

1.27

In thousands, except per share data

Three Months Ended December 31,

Year Ended December 31,

7

December 31, 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

33,416

$           

53,236

$           

268,138

$         

224,458

$         

Preferred stock dividends

(1,452)

(2,062)

(7,637)

(13,434)

Real estate related depreciation and amortization

30,837

27,965

118,603

100,340

Gains on sale of facilities, net

(1,552)

(26,880)

(154,995)

(118,114)

Gain on debt extinguishment, net

(4,641)

-

(4,641)

-

Straight-lined rent

(2,388)

(1,735)

(10,263)

(2,886)

Amortization of intangible assets and liabilities

(148)

(74)

(559)

(96)

Non-cash stock-based compensation expense

1,528

1,247

5,800

4,733

Deferred finance cost amortization

908

737

3,173

2,803

Lease commissions and tenant and capital improvements

(716)

(1,260)

(3,715)

(2,758)

NHP's

share of FAD reconciling items from unconsolidated joint ventures:

Real estate related depreciation and amortization

1,301

668

4,768

1,703

Straight-lined rent

(12)

-

(66)

-

Deferred finance cost amortization

21

10

84

20

FAD available to common stockholders

57,102

51,852

218,690

196,769

Series B preferred dividend add-back

1,452

2,062

7,637

8,250

Diluted FAD

58,554

53,914

226,327

205,019

Non-recurring settlement of delinquent tenant obligations

-

(1,667)

-

(3,632)

Recurring diluted FAD

58,554

$           

52,247

$           

226,327

$         

201,387

$         

Weighted average shares outstanding for FAD:

Weighted average shares outstanding

102,455

93,990

98,855

91,129

Series B preferred stock add-back if not already converted

3,896

4,717

4,526

4,707

Fully diluted weighted average shares outstanding

106,351

98,707

103,381

95,836

Diluted per share amounts:

FAD

0.55

$                

0.55

$                

2.19

$                

2.14

$                

Recurring FAD

0.55

$                

0.53

$                

2.19

$                

2.10

$                

Dividends declared per common share

0.44

$                

0.41

$                

1.76

$                

1.64

$                

Recurring diluted FAD payout ratio

80%

77%

80%

78%

Recurring diluted FAD coverage

1.25

1.29

1.24

1.28

In thousands, except per share data

Three Months Ended December 31,

Year Ended December 31,

8

December 31, 2008—

Actual

2008

Low

High

Net income

268,138

$                  

155,540

$                  

160,880

$                  

Preferred stock dividends

(7,637)

(5,813)

(5,813)

Real estate related depreciation and amortization

118,603

115,095

115,095

Depreciation in income from unconsolidated joint ventures

4,768

5,052

5,052

Minority interest - NHP/PMB

341

341

Gains on sale of facilities, net

(154,995)

(36,988)

(36,988)

FFO available to common stockholders

228,877

233,227

238,567

Series B preferred dividends

7,637

5,813

5,813

Diluted FFO

236,514

239,040

244,380

Gain on extinguishment of debt, net

(4,641)

-

-

Recurring diluted FFO

231,873

239,040

244,380

Straight-lined rent

         (10,263)

                    (6,463)

                    (6,463)

Amortization of intangible assets and liabilities

               (559)

                       (562)

                       (562)

Non-cash stock-based compensation expense

             5,800

                      7,473

                      7,473

Deferred finance cost amortization

             3,173

                      3,154

                      3,154

Lease commissions and tenant and capital improvements

           (3,715)

                    (5,608)

                    (5,608)

Unconsolidated Joint Ventures:

Straight-lined rent

                 (66)

                         (26)

                         (26)

Deferred finance cost amortization

                   84

                           84

                           84

Recurring diluted FAD

$                  226,327

$                  237,092

$                  242,432

Recurring diluted FFO per share

2.24

$                        

2.20

$                        

2.25

$                        

Recurring diluted FAD per share

2.19

$                        

2.18

$                        

2.23

$                        

Weighted average shares outstanding for diluted FFO:

Diluted weighted average shares outstanding

97,773

103,410

103,410

NHP/PMB OP units

1,082

1,830

1,830

Series B preferred stock conversion

4,526

3,375

3,375

Fully diluted weighted average shares outstanding

103,381

108,615

108,615

Guidance

Year Ended December 31, 2009

NATIONWIDE HEALTH PROPERTIES, INC.

RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

Reconciliation of Net Income to Recurring Diluted FFO and FAD Per Share

9

December 31, 2008—

Consolidated Balance Sheets

December 31,

December 31,

2008

2007

Assets

Real estate related investments:

Land

320,394

$          

301,100

$          

Buildings and improvements

3,079,819

2,896,876

3,400,213

3,197,976

Less accumulated depreciation

(490,112)

(410,865)

Net real estate

2,910,101

2,787,111

Mortgage loans receivable, net

112,399

121,694

Mortgage loan receivable from related party

47,500

-

Investment in unconsolidated joint ventures

54,299

52,637

Net real estate related investments

3,124,299

2,961,442

Cash and cash equivalents

82,250

19,407

Receivables, net

6,066

3,808

Assets held for sale

4,542

-

Intangible assets

109,434

58,481

Other assets

131,534

101,215

Total assets

3,458,125

$       

3,144,353

$       

Liabilities and Stockholders' Equity

Unsecured senior credit facility

-

$                   

41,000

$            

Senior

notes

due

2009

-

2038

1,056,233

1,166,500

Notes and bonds payable

435,199

340,150

Accounts payable and accrued liabilities

144,566

107,844

Total liabilities

1,635,998

1,655,494

Minority interests

61,460

6,166

Stockholders' equity:

Series B convertible preferred stock

74,918

106,445

Common stock

10,228

9,481

Capital in excess of par value

1,786,193

1,565,249

Cumulative net income

1,556,889

1,288,751

Accumulated other comprehensive income

1,846

2,561

Cumulative dividends

(1,669,407)

(1,489,794)

Total stockholders' equity

1,760,667

1,482,693

Total liabilities and stockholders' equity

3,458,125

$       

3,144,353

$       

In thousands

10

December 31, 2008—

Other Assets

December 31,

December 31,

2008

2007

Other receivables, net

64,998

$            

34,379

$            

Straight-line rent receivables, net

21,224

10,727

Deferred financing costs

15,377

17,927

Capitalized lease and loan origination costs

2,631

2,307

Investments and restricted funds

13,257

18,024

Prepaid ground leases

10,241

10,431

Other

3,806

7,420

131,534

$          

101,215

$          

In thousands

11

December 31, 2008—

Capitalization

Debt

Unsecured senior credit facility

-

$            

$        41,000

Senior notes

1,056,233

1,166,500

Notes and bonds payable

435,199

340,150

Consolidated debt

1,491,432

1,547,650

NHP's

share of unconsolidated debt

91,108

79,234

Total debt

1,582,540

$ 

1,626,884

$ 

Book Capitalization

Consolidated debt

1,491,432

$ 

1,547,650

$ 

Minority interests

61,460

6,166

Total stockholders' equity

1,760,667

1,482,693

Consolidated book capitalization

3,313,559

3,036,509

Accumulated depreciation and amortization

490,112

410,865

Consolidated undepreciated

book capitalization

3,803,671

3,447,374

NHP's

share of unconsolidated debt

91,108

79,234

NHP's

share of unconsolidated accum. depreciation and amortization

6,670

1,703

Total undepreciated

book capitalization

3,901,449

$ 

3,528,311

$ 

Enterprise Value

Shares

Price

Shares

Price

Common stock

102,280

28.72

$   

2,937,480

$ 

94,806

31.37

$   

2,974,057

$ 

Limited partnership units

1,830

28.72

$   

52,545

-

-

$      

-

Series B preferred stock

749

126.00

$ 

94,397

1,064

140.00

$ 

149,023

Consolidated market equity capitalization

3,084,422

3,123,080

Consolidated debt

1,491,432

1,547,650

Consolidated enterprise value

4,575,854

4,670,730

NHP's

share of unconsolidated debt

91,108

79,234

Total enterprise value

4,666,962

$ 

4,749,964

$ 

Leverage Ratios

Consolidated debt to consolidated undepreciated

book capitalization

39.2%

44.9%

Total debt to total undepreciated

book capitalization

40.6%

46.1%

Consolidated debt to consolidated enterprise value

32.6%

33.1%

Total debt to total enterprise value

33.9%

34.3%

December 31, 2007

December 31, 2008

In thousands, except stock prices and ratios

12

December 31, 2008—

Capitalization (2)

Undepreciated

Book Basis

Enterprise

Value

59% Equity

41% Debt

66% Equity

34% Debt

67%

Unsecured

33%

Secured

94%

6%

Fixed

Variable

Debt Composition

Based

on

total

debt

including

NHP’s

share

of

unconsolidated

joint

venture

13

December 31, 2008—

Debt Maturities and Debt Composition

Principal

Rate

Principal

Rate

Principal

Rate

Principal

Rate

Principal

Rate

Principal

Rate

2009

-

$         

-

87,000

$         

(1)

7.8%

39,071

$   

(3)

6.6%

126,071

$     

7.4%

-

$                

-

126,071

$     

7.4%

2010

-

-

-

-

71,263

5.9%

71,263

5.9%

5,148

6.0%

76,411

5.9%

2011

-

-

339,040

6.5%

33,096

6.5%

372,136

6.5%

-

-

372,136

6.5%

2012

-

-

72,950

8.3%

46,007

7.2%

118,957

7.8%

14,000

6.0%

132,957

7.6%

2013

-

-

322,823

(2)

6.3%

40,406

6.0%

363,229

6.2%

-

-

363,229

6.2%

2014

-

-

-

-

22,693

6.0%

22,693

6.0%

25,616

5.8%

48,309

5.9%

2015

-

-

234,420

6.0%

60,830

5.7%

295,250

5.9%

34,028

5.9%

329,278

5.9%

2016

-

-

-

-

21,319

5.9%

21,319

5.9%

-

-

21,319

5.9%

2017

-

-

-

-

100

5.0%

100

5.0%

-

-

100

5.0%

2018

-

-

-

-

7,800

6.1%

7,800

6.1%

-

-

7,800

6.1%

Thereafter

-

-

-

-

92,614

5.1%

92,614

5.1%

12,316

6.4%

104,930

5.3%

Total

-

$         

-

1,056,233

$    

6.5%

435,199

$ 

6.0%

1,491,432

$  

6.4%

91,108

$         

6.0%

1,582,540

$  

6.3%

Weighted average

maturity in years

-

3.8

7.9

5.0

7.7

5.2

Principal

Rate

% of Total

Principal

Rate

% of Total

Fixed rate debt

Senior notes

1,056,233

$    

6.5%

66.7%

$   1,166,500

6.6%

71.7%

Notes and bonds

339,110

6.1%

21.4%

277,930

6.3%

17.1%

NHP's

share of unconsolidated debt

85,960

6.0%

5.4%

79,234

6.0%

4.9%

Total fixed rate debt

1,481,303

6.4%

93.6%

1,523,664

6.5%

93.7%

Variable rate debt

Credit facility

-

-

-

41,000

5.5%

2.5%

Notes and bonds

96,089

5.6%

6.1%

62,220

5.7%

3.8%

NHP's

share of unconsolidated debt

5,148

6.0%

0.3%

-

-

-

Total variable rate debt

101,237

5.6%

6.4%

103,220

5.6%

6.3%

Total debt

1,582,540

$    

6.3%

100.0%

1,626,884

$  

6.5%

100.0%

(1) Includes

$55

million

of

notes

putable

October

of

2009,

2012,

2017

and

2027

with

a

final

maturity

in

2037

(2) Includes

$23

million

of

notes

putable

July

of

2013,

2018,

2023

and

2028

with

a

final

maturity

in

2038

(3) Includes a $33 million note for which the first of two available 12-month extensions was exercised subsequent to year-end

General Notes:

Debt Maturity excludes Principal Amortization

NHP's

Share of

Unconsolidated Debt

Consolidated Debt

In thousands

Debt Maturities

Total Debt

Senior Notes

Notes and Bonds

Credit Facility

Period

December 31, 2008

December 31, 2007

Debt Composition

14

December 31, 2008—

Credit Facility Covenants

The debt covenant metrics below reflect how much of the compliance range, on a percentage basis, is currently

being utilized. The difference between 100% and the stated percentage represents the availability under each

covenant.

48%

64%

62%

43%

50%

Net Asset Value

Total Liabilities to

Capitalization Value

Fixed Charges Ratio

Secured Indebtedness Ratio

Unsecured Debt to

Unencumbered Asset Ratio

1.

With our current asset value, we can increase total debt by up to $1.0 billion and remain in

compliance

2.

With our current EBITDA, we can increase total fixed charges (interest expense, debt service

and preferred dividends) by up to $75.0 million and remain in compliance

15

December 31, 2008—

Bonds Covenants (Bonds Issued Prior to 2006)

1.

With our current unencumbered assets, we can increase total unsecured debt by up to $1.0

billion and remain in compliance

2.

With our current EBITDA, we can increase total interest expense by up to $122.3 million and

remain in compliance

The debt covenant metrics below reflect how much of the compliance range, on a percentage basis, is currently

being utilized. The difference between 100% and the stated percentage represents the availability under each

covenant.

7%

42%

28%

40%

Limitation on Secured

Debt Under Bond Indenture

Senior Debt to

Capital Base

Senior Debt to

Tangible Net Worth

Senior and Non-recourse

Debt to Capital Base

16

December 31, 2008—

New Bond Covenants (Bonds Issued After 2006)

1.

With our current unencumbered assets, we can increase total unsecured debt by up to $1.0

billion and remain in compliance

2.

With our current EBITDA, we can increase total interest expense by up to $122.3 million and

remain in compliance

The debt covenant metrics below reflect how much of the compliance range, on a percentage basis, is currently

being utilized. The difference between 100% and the stated percentage represents the availability under each

covenant.

48%

63%

47%

41%

Unencumbered Assets to

Unsecured Debt

Total Indebtedness

EBITDA to Interest Expense

Limitation on Secured Debt 

17

December 31, 2008—

Interest and Fixed Charge Coverage

See Financial Measures Definitions

2008

2007

2008

2007

Reconciliation of Net Income to EBITDA:

Net income

33,416

$           

53,236

$           

268,138

$         

224,458

$         

Interest and amortization of deferred financing costs in continuing operations

25,492

25,435

101,045

97,639

Interest and amortization of deferred financing costs in discontinued operations

-

1,060

1,004

4,340

Depreciation and amortization in continuing operations

30,898

26,110

117,473

91,187

Depreciation and amortization in discontinued operations

67

1,977

1,634

9,607

Consolidated EBITDA

89,873

107,818

489,294

427,231

NHP's

share of EBITDA reconciling items from unconsolidated joint ventures:

Interest and amortization of deferred financing costs

1,340

746

5,093

1,595

Depreciation and amortization

1,301

668

4,768

1,703

Total EBITDA

92,514

109,232

499,155

430,529

Gain on debt extinguishment, net

(4,641)

-

(4,641)

-

Gains on sale of facilities, net

(1,552)

(26,880)

(154,995)

(118,114)

Adjusted Total EBITDA

86,321

$           

82,352

$           

339,519

$         

312,415

$         

Adjusted Consolidated EBITDA

83,680

$           

80,938

$           

329,658

$         

309,117

$         

Interest Expense:

Consolidated interest expense (including discontinued operations)

24,584

$           

25,711

$           

98,876

$           

99,170

$           

NHP's

share of interest expense from unconsolidated joint ventures

1,319

736

5,009

1,575

Total interest expense

25,903

26,447

103,885

100,745

Fixed Charges:

Consolidated interest expense (including discontinued operations)

24,584

$           

25,711

$           

98,876

$           

99,170

$           

Preferred stock dividends

1,452

2,062

7,637

13,434

Consolidated fixed charges

26,036

27,773

106,513

112,604

NHP's

share of interest expense from unconsolidated joint ventures

1,319

736

5,009

1,575

Total fixed charges

27,355

$           

28,509

$           

111,522

$         

114,179

$         

Consolidated Adjusted Interest Coverage Ratio

3.40

3.15

3.33

3.12

Total Adjusted Interest Coverage Ratio

3.33

3.11

3.27

3.10

Consolidated Adjusted Fixed Charge Coverage Ratio

3.21

2.91

3.10

2.75

Total Adjusted Fixed Charge Coverage Ratio

3.16

2.89

3.04

2.74

In thousands

Three Months Ended December 31,

Year Ended December 31,

18

December 31, 2008—

Unconsolidated Joint Venture Financial Statements

In thousands

December 31, 2008

December 31, 2007

Assets

Land

38,892

$                    

35,042

$                    

Buildings and improvements

525,214

496,188

Gross real estate

564,106

531,230

Accumulated depreciation

(24,138)

(6,811)

Net real estate

539,968

524,419

Cash

3,216

3,689

Receivables

45

-

Other assets

5,964

2,825

Total assets

549,193

$                 

530,933

$                 

Liabilities and equity

Notes payable

343,842

$                 

316,935

$                 

Accounts payable and accrued liabilities

19,623

3,461

Total liabilities

363,465

320,396

Equity contributions

229,475

215,970

Distributions

(32,148)

(7,194)

Retained earnings

2,760

1,761

Other comprehensive income

(14,359)

-

Total equity

185,728

210,537

Total liabilities and equity

549,193

$                 

530,933

$                 

NHP's investment in joint venture

50,032

$                    

(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 $967,000 at December

31, 2008. NHP's investment in PMB SB was $3,300,000 at December 31, 2008.

Balance Sheet

19

December 31, 2008—

Unconsolidated Joint Venture Financial Statements (2)

(1) Excludes NHP's income/loss from PMBRES and PMB SB. NHP's share of the income from PMBRES was $57,000 for the three months

ended December 31, 2008. NHP's share of the loss from PMB SB was $35,000 for the three months ended December 31, 2008. NHP's

share of the loss from PMBRES and PMB SB was $273,000 and $14,000, respectively, for the year ended December 31, 2008.

In thousands

2008

2007

2008

2007

Revenues

Rent

11,511

$           

6,703

$             

45,541

$           

16,560

$           

Interest and other income

40

17

101

110

Total revenues

11,551

6,720

45,642

16,670

Expenses

Interest and amortization of deferred finance costs

5,094

2,982

19,939

6,379

Depreciation and amortization

4,727

2,674

18,359

6,811

General and administrative*

1,538

613

6,345

1,719

Total expenses

11,359

6,269

44,643

14,909

Net income

192

$                 

451

$                 

999

$                 

1,761

$             

NHP Income and FFO from Joint Venture

Share of net income

48

$                   

112

$                 

250

$                 

440

$                 

Management fee*

1,009

604

3,940

1,518

Income from joint venture (1)

1,057

716

4,190

1,958

Share of depreciation

1,182

668

4,590

1,703

FFO from joint venture

2,239

$             

1,384

$             

8,780

$             

3,661

$             

* NHP's

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

Income Statement

Three Months Ended December 31,

Year Ended December 31,

20

December 31, 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

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

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

or

cash

flows

from

operations

as

defined

by

GAAP

and

should

not

be

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

in

evaluating

the

credit

ratings

on

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

be

considered

an

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

in

evaluating

the

credit

ratings

on

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

be

considered

as

an

alternative

to

either

of

those

measures.

Our

calculation

of

EBITDA

may

not

be

comparable

to

similar

measures

reported

by

other

companies.

21

December 31, 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

related

per

share

amounts

as

defined

by

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

of

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

of

real

estate

plus

real

estate

related

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

of

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

related

per

share

amounts

as

defined

by

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

of

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.

We

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

related

depreciation

and

amortization.

The

same

adjustments

are

made

to

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

22

December 31, 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

as

a

measure

of

liquidity

or

net

income

as

the

primary

indicator

of

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

interpret

that

definition

differently

than

we

do.

Gross Investment:

We

define

Gross

Investment

as

our

total

investment

in

a

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.

23

December 31, 2008—

INVESTMENTS & DISPOSITIONS

*

*

*

*

*

*

*

*

24

December 31, 2008—

4

th

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

3

151

7

18,000

$       

119,000

$       

8.5%

Skilled nursing facilities

1

122

17

9,000

74,000

$         

10.3%

Total senior housing and long-term care

4

273

11

27,000

99,000

$         

9.1%

Medical office buildings

2

-

127,953

7

49,000

(1)

289

$              

6.0%

Subtotal

6

273

127,953

76,000

7.1%

Capital expenditures

-

-

-

18,000

Total investments

6

273

127,953

94,000

Total Consolidated

Assisted and independent living facilities

3

151

7

18,000

119,000

$       

8.5%

Skilled nursing facilities

1

122

17

9,000

74,000

$         

10.3%

Total senior housing and long-term care

4

273

11

27,000

99,000

$         

9.1%

Medical office buildings

2

-

127,953

7

49,000

(1)

289

$              

6.0%

Subtotal

6

273

127,953

76,000

7.1%

Capital expenditures

-

-

-

18,000

Total investments

6

273

127,953

94,000

Unconsolidated Joint Venture

Assisted and independent living facilities

-

-

-

8,000

(2)

-

$               

8.0%

Skilled nursing facilities

-

-

-

13,000

(2)

-

$               

9.3%

Subtotal

-

-

-

21,000

-

$               

8.8%

Capital expenditures

-

-

3,000

Total investments

-

-

24,000

Total Investments

Assisted and independent living facilities

3

151

7

26,000

172,000

$       

8.4%

Skilled nursing facilities

1

122

17

22,000

180,000

$       

9.7%

Total senior housing and long-term care

4

273

11

48,000

176,000

$       

9.0%

Medical office buildings

2

-

127,953

7

49,000

(1)

289

$              

6.0%

Subtotal

6

273

127,953

97,000

7.5%

Capital expenditures

-

-

-

21,000

(3)

Total investments

6

273

127,953

118,000

$     

(1)

(2)

(3)

Includes $12 million of additional acquisition costs recorded in Q4 2008 related to previous acquisitions under our February 2008 agreement with Pacific Medical

Buildings LLC and certain of its affiliates.

Reflects exercise of a purchase option on one assisted/independent living facility and one skilled nursing facility in which the JV already had leasehold interests.

The total investments for capital expenditures includes $20.0 million of revenue producing capital expenditures on our existing triple net portfolio at a blended yield of

7.8%.

25

December 31, 2008—

MOB ACQUISITION | Pacific Medical Buildings California MOB (November 2008)

Purchase Price:

$22M

Price per SQFT:

$328

Lease: Triple Net

Average Age: 8 year

No. of Facilities: 1

Facility Type: MOB

Rentable Square Feet: 67,000

Occupancy: 100%

Key Stats

Chula Vista, California

Location

26

December 31, 2008—

MOB ACQUSITION | Pacific Medical Buildings Nevada MOB (December 2008)

Purchase Price:

$16.2M

Price per SQFT:

$266

Lease: Multi Tenant

Age: 5 years

No. of Facilities: 1

Facility Type: MOB

Rentable Square Feet: 60,953

Occupancy: 90%

Key Stats

Reno, Nevada

Location

27

December 31, 2008—

Year to Date December 31, 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

18

569

22

60,000

$       

105,000

$          

8.7%

Skilled nursing facilities

12

1,241

24

63,000

51,000

$            

9.5%

Total senior housing and long-term care

30

1,810

23

123,000

68,000

$            

9.1%

Medical office buildings

23

-

789,133

9

292,000

370

$                 

6.2%

Subtotal

53

1,810

789,133

415,000

7.1%

Capital expenditures

-

-

-

45,000

(1)

Total investments

53

1,810

789,133

460,000

Loans

Skilled nursing facilities

1

130

35

7,000

54,000

$            

10.0%

Total senior housing and long-term care

1

130

35

7,000

54,000

$            

10.0%

Medical office buildings

1

-

172,000

1

48,000

279

$                 

6.5%

Other loans

-

-

-

33,000

7.8%

Total loans

2

130

172,000

4

88,000

7.3%

Total Consolidated

Assisted and independent living facilities

18

569

22

60,000

105,000

$          

8.8%

Skilled nursing facilities

13

1,371

25

70,000

51,000

$            

9.6%

Total senior housing and long-term care

31

1,940

24

130,000

67,000

$            

9.2%

Other loans

-

-

33,000

7.8%

Medical office buildings

24

-

961,133

8

340,000

354

$                 

6.2%

Subtotal

55

1,940

961,133

503,000

7.1%

Capital expenditures

-

-

-

45,000

(1)

Total investments

55

1,940

961,133

548,000

Unconsolidated Joint Venture

Assisted and independent living facilities

-

-

-

8,000

(2)

-

$                   

8.0%

Skilled nursing facilities

-

-

-

13,000

(2)

-

$                   

9.3%

Medical office buildings

2

-

134,000

20

19,000

-

$                   

7.3%

Subtotal

2

-

134,000

-

40,000

-

$                   

8.1%

Capital expenditures

-

-

-

12,000

(1)

Total investments

2

-

134,000

52,000

Total Investments

Assisted and independent living facilities

18

569

22

68,000

120,000

$          

8.7%

Skilled nursing facilities

12

1,241

24

76,000

61,000

$            

9.6%

Total senior housing and long-term care

30

1,810

23

144,000

80,000

$            

9.2%

Medical office buildings

25

-

923,133

9

311,000

337

$                 

6.3%

Total real estate acquisitions

55

1,810

923,133

455,000

7.2%

Total loans

2

130

172,000

4

88,000

7.3%

Subtotal

57

1,940

1,095,133

543,000

7.2%

Capital expenditures

-

-

-

57,000

(1)

Total investments

57

1,940

1,095,133

600,000

$     

(1)

(2)

Reflects exercise of a purchase option on one assisted/independent living facility and one skilled nursing facility in which the JV already had leasehold interests.

The total investments for capital expenditures includes $48.0 million of revenue producing capital expenditures on our existing triple net portfolio at a blended yield of 8.0%.

28

December 31, 2008—

Expected Dispositions

Investment

Actual

Full Year

Gross

Required at 8.5%

% Financing

Revenue

Revenue

Proceeds

Gain

Assumed Yield

From Proceeds

For the Year Ended 2008

Purchase options

2,231,000

$   

3,193,000

$      

32,369,000

$        

18,386,000

$   

37,565,000

$   

86%

Loan payoffs

1,007,000

1,414,000

13,243,000

-

16,635,000

80%

Asset Recycling

-

734,000

4,500,000

1,765,000

8,635,000

52%

Lease Restructuring

244,000

365,000

-

-

4,294,000

Strategic asset sales

13,601,000

18,134,000

305,000,000

134,583,000

213,341,000

143%

17,083,000

$ 

23,840,000

$    

355,112,000

$      

154,734,000

$ 

280,470,000

$ 

127%

Projected 2009

Certain

[A]

Purchase options

2,597,000

$   

3,130,000

$      

35,000,000

$        

21,125,000

$   

36,824,000

$   

95%

Loan payoffs

264,000

304,000

3,002,000

-

3,576,000

84%

Total certain

2,861,000

$   

3,434,000

$      

38,002,000

$        

21,125,000

$   

40,400,000

$   

94%

High

[B]

Purchase options

1,250,000

$   

1,913,000

$      

26,139,000

$        

5,961,000

$     

22,506,000

$   

116%

Loan payoffs*

2,758,000

5,530,000

66,286,000

9,902,000

65,059,000

102%

Asset recycling

318,000

401,000

3,342,000

-

4,718,000

71%

Lease restructuring

-

743,000

-

-

8,741,000

Total high

4,326,000

$   

8,587,000

$      

95,767,000

$        

15,863,000

$   

101,024,000

$ 

95%

Total Projected 2009

Total certain

2,861,000

3,434,000

38,002,000

21,125,000

40,400,000

94%

Total high

4,326,000

8,587,000

95,767,000

15,863,000

101,024,000

95%

7,187,000

$   

12,021,000

$    

133,769,000

$      

36,988,000

$   

141,424,000

$ 

95%

*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

29

December 31, 2008—

The $ 700 million credit facility matures in December of 2010, but can be extended at NHP's option to December 2011

Above analysis does not include future potential additional capital sources such as retained operating cash flows, formation of joint ventures or capital transactions

Projected Funding Obligations through 2011 (as of December 31, 2008)

Nationwide Health Properties

Funding Obligations Through 2011

(as of December 31, 2008)

NHP Consolidated Acquisition Obligations

Est. Closing

Date

Amount

($000s)

Initial

Yield

2009

2010

2011

Total

[A]

PMB -

Pomona, CA

Sep 2009

37,500

$ 

7.0%

37,500

$     

37,500

$     

NHP Consolidated Total Acquisition Obligations

37,500

$     

-

$           

-

$           

37,500

$     

Expansion, Renovation & Capital Expenditures

2009

2010

2011

Total

[B]

NHP Consolidated

55,852

$     

34,510

$     

18,438

$     

108,800

$   

Unconsolidated Joint Venture

2,562

$       

294

$          

294

$          

3,151

$       

Total Expansion, Renovation & Capital Expenditures

58,414

$     

34,804

$     

18,732

$     

111,950

$   

Debt Maturities

2009

[C]

2010

2011

Total

Amount ($000s)

133,506

$   

75,389

$     

372,136

$   

581,031

$   

Rate

6.7%

6.0%

6.5%

6.5%

Total Forward Capital Commitments

229,420

$   

110,193

$   

390,868

$   

730,481

$   

Estimated Proceeds from Purchase Options, Loan Payoffs and Asset

Sales

133,769

$   

Cash Balance as of December 31, 2008

82,250

$     

Remaining Availability on Credit Facility

700,000

$   

Total

Funding

Availabity

as

of

December

31,

2008

916,019

$   

General Notes:

Cash Required ($000s)

[A] The total reflects an estimate through December 2011 only and does not include a June 2014 obligation for $59 million (Willowcreek - Hillsboro, OR)

[B] The total reflects an estimate of commitments through December 2011 only; the total remaining commitment after 2011 equals $19.2 million

[C] Subsequent to year end, NHP exercised the first of two available 12-month extension options on a $33M loan that was scheduled to mature in 2Q09

30

December 31, 2008—

Conditional Pacific Medical Buildings Acquisition Obligations through 2011 (as of December 31, 2008)

Nationwide Health Properties

Conditional Funding Obligations Through 2011

(as of December 31, 2008)

NHP

Consolidated

Conditional

Obligations

[A]

Initial

Yield

2009

2010

2011

Total

PMB -

Poway, CA

5.8%

42,595

$   

42,595

$   

PMB -

Mission Viejo, CA

5.8%

96,080

$   

96,080

$   

PMB -

Honolulu, HI

7.0%

-

$         

-

$         

PMB -

Reno, NV

6.3%

21,684

$   

21,684

$   

PMB -

Burbank, CA

5.8%

58,231

$   

58,231

$   

PMB -

Orange, CA

5.8%

86,470

$   

86,470

$   

PMB -

Pasadena, CA

5.8%

104,547

$ 

104,547

$ 

PMB -

Gilbert, AZ

6.0%

24,355

$   

24,355

$   

5.8%

305,060

$ 

128,902

$ 

-

$         

433,962

$ 

Est. Closing Date

Purchase Price Per Contribution Agreement ($000s)

Indefinitely postponed

[B]

Indefinitely postponed

[B]

Obligation terminated

Apr 2009

Jul 2009

Jul 2009

Jan 2010

Jun 2010

7 to 10 REIT index (measured five business days before any

anticipated closing date) exceeds 7.34%. As of January 31, 2009, the index was 12.24%.

[B] Closing originally scheduled for December 2008

[A] Pursuant to the contribution agreement, NHP is under no obligation to acquire properties if the trailing 20-day average rate for the JP Morgan JULI BBB

31

December 31, 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

2009

701

5

-

-

-

-

-

-

701

0%

5

2010

4,671

7

8,297

18

551

1

-

-

13,519

5%

26

2011

-

-

6,389

19

-

-

-

-

6,389

2%

19

2012

7,586

8

4,332

8

1,511

1

1,800

1

15,229

6%

18

2013

11,499

11

5,657

11

363

1

-

-

17,519

6%

23

2014

8,346

12

4,109

8

4,872

3

-

-

17,327

6%

23

2015

1,756

4

3,627

5

-

-

3,231

1

8,614

3%

10

2016

11,046

10

13,235

26

-

-

4,037

6

28,318

10%

42

2017

2,510

9

5,029

15

-

-

1,863

1

9,402

3%

25

2018

1,335

2

2,794

8

-

-

-

-

4,129

2%

10

Thereafter

107,972

184

34,126

54

4,103

4

5,539

17

151,740

57%

259

157,422

$  

252

87,595

$   

172

11,400

$   

10

16,470

$    

26

272,887

$  

100%

460

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

2009

-

-

-

-

-

-

-

-

-

67,996

38%

7

2010

-

-

-

-

-

-

-

-

-

20,320

11%

7

2011

-

-

-

-

-

-

-

-

-

33,658

19%

5

2012

5,643

6

-

-

-

-

5,643

13%

6

715

0%

-

2013

-

-

-

-

-

-

-

-

-

16,163

9%

1

2014

-

-

-

-

-

-

-

-

-

777

0%

-

2015

-

-

-

-

-

-

-

-

-

3,105

2%

1

2016

1,300

1

-

-

-

-

1,300

3%

1

2,835

2%

1

2017

-

-

-

-

-

-

-

-

-

15,483

9%

2

2018

5,914

3%

1

Thereafter

13,316

12

20,928

14

2,480

1

36,724

84%

27

12,214

7%

2

20,259

$    

19

20,928

$   

14

2,480

$     

1

43,667

$    

100%

34

179,180

$  

100%

27

(1) Excludes PMBRES and PMB SB.

Assisted and Independent

Consolidated

Skilled Nursing

Total JV

Continuing Care

Mortgage Loans Receivable

Consolidated Lease Expirations

Assisted and Independent

Unconsolidated JV Lease Expirations (1)

Skilled Nursing

Continuing Care

Consolidated Triple-Net

Other Triple Net

32

December 31, 2008—

PORTFOLIO OVERVIEW

*

*

*

*

*

*

*

*

33

December 31, 2008—

Portfolio Summary

Gross investment, NOI and security deposits in thousands

Building

Investment

Percentage of

Percentage

Number of

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

251

17,742

1,724,765

$           

97,000

$        

48%

169,049

$         

50%

Skilled nursing facilities

172

19,116

912,414

48,000

$        

25%

90,885

26%

Continuing care retirement communities

10

1,952

124,808

64,000

$        

3%

12,440

4%

Specialty hospitals

7

303

75,781

250,000

$      

2%

8,199

2%

Total senior housing and long-term care

440

39,113

2,837,768

73,000

$        

78%

280,573

82%

Triple-net medical office buildings

19

438,302

121,781

278

$             

3%

4,825

1%

Total triple-net

459

39,113

438,302

2,959,549

81%

285,398

83%

Multi-tenant medical office buildings

60

2,737,557

555,600

203

$             

15%

33,656

10%

Total owned

519

39,113

3,175,859

3,515,149

96%

319,054

93%

Mortgage Loans Receivable

Assisted and independent living facilities

9

668

47,555

71,000

$        

1%

5,509

2%

Skilled nursing facilities

17

2,436

55,766

23,000

$        

2%

7,648

2%

Continuing care retirement communities

-

180

9,078

50,000

$        

0%

714

0%

Total senior housing and long-term care

26

3,284

112,399

34,000

$        

3%

13,871

4%

Multi-tenant medical office buildings

1

172,000

47,500

276

$             

1%

883

0%

Total mortgage loans receivable

27

3,284

172,000

159,899

4%

14,754

4%

Other Income

10,226

3%

Total Consolidated Portfolio

546

42,397

3,347,859

3,675,048

$           

100%

344,034

$         

100%

Consolidated Portfolio by Type

Assisted and independent living facilities

260

18,410

1,772,320

$           

96,000

$        

48%

174,558

$         

51%

Skilled nursing facilities

189

21,552

968,180

45,000

$        

26%

98,533

29%

Continuing care retirement communities

10

2,132

133,886

63,000

$        

4%

13,154

4%

Specialty hospitals

7

303

75,781

250,000

$      

2%

8,199

2%

Total senior housing and long-term care

466

42,397

2,950,167

70,000

$        

80%

294,444

86%

Medical office buildings

80

3,347,859

724,881

217

$             

20%

39,364

11%

Total owned and mortgage loans receivable

546

42,397

3,347,859

3,675,048

100%

333,808

97%

Other income

10,226

3%

Total consolidated

546

42,397

3,347,859

3,675,048

100%

344,034

100%

Unconsolidated JV Ownership

Assisted and independent living facilities

19

1,806

260,914

144,000

$      

45%

21,597

48%

Skilled nursing facilities

14

1,884

273,522

145,000

$      

47%

21,462

46%

Continuing care retirement communities

1

148

29,670

200,000

$      

5%

2,482

5%

Total senior housing and long-term care

34

3,838

564,106

147,000

$      

97%

45,541

99%

Medical office buildings

2

135,884

19,400

143

$             

3%

608

1%

Total JV owned

36

3,838

135,884

583,506

100%

46,149

100%

Other income

101

0%

Total JV

36

3,838

135,884

583,506

100%

46,250

100%

Total Portfolio

582

46,235

3,483,743

4,258,554

$           

390,284

$         

*

Consolidated medical office building gross investment includes

of amounts classified as other assets

Unconsolidated medical office building gross investment includes

of amounts classified as other assets

Triple-Net Leased Security Information

JV

JV

Owned

Mortgages

Total

Owned

Owned

Mortgages

Total

Owned

Bank letters of credit

53,755

$           

2,675

$        

56,430

$      

9,900

$       

Master leases

84%

100%

Cash deposits

18,952

1,124

20,076

81

Property tax

74%

48%

72%

74%

72,707

$           

3,799

$        

76,506

$      

9,981

$       

Cap ex

46%

11%

44%

59%

Consolidated

Percentage with Impounds

Security Deposits

Consolidated

114,936

$         

1,630

$             

34

December 31, 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

251

13

1,724,765

$    

165,343

$        

9.6%

84.3%

1.26x

Skilled nursing facilities

172

28

912,414

94,066

10.3%

82.2%

1.98x

Continuing care retirement communities

10

25

124,808

12,431

10.0%

88.0%

1.60x

Specialty hospitals

7

16

75,781

8,190

10.8%

75.3%

2.82x

Total senior housing and long-term care

440

19

2,837,768

280,030

9.9%

83.9%

1.56x

Triple-net medical office buildings

19

12

121,781

9,003

7.4%

100.0%

Total triple-net

459

2,959,548

289,033

9.8%

Multi-tenant medical office buildings

60

13

555,600

36,110

6.5%

90.2%

Total owned

519

18

3,515,148

325,143

9.2%

Mortgage Loans Receivable

Assisted and independent living facilities

9

13

47,555

5,471

11.5%

84.4%

1.37x

Skilled nursing facilities

17

34

55,766

7,555

13.5%

84.9%

2.91x

Continuing care retirement communities

-

37

9,078

643

7.1%

92.5%

3.98x

Total senior housing and long-term care

26

26

112,399

13,669

12.2%

85.3%

2.35x

Multi-tenant medical office buildings

1

2

47,500

3,095

6.5%

95.0%

Total mortgage loans receivable

27

19

159,899

16,764

10.5%

Total NHP Consolidated Portfolio

546

18

3,675,048

$    

341,907

$        

9.3%

1.60x

Consolidated Portfolio by Type

Assisted and independent living facilities

260

13

1,772,320

$    

170,814

$        

9.6%

84.3%

1.26x

Skilled nursing facilities

189

29

968,180

101,621

10.5%

82.4%

2.04x

Continuing care retirement communities

10

26

133,886

13,074

9.8%

88.4%

1.71x

Specialty hospitals

7

16

75,781

8,190

10.8%

75.3%

2.82x

Total senior housing and long-term care

466

19

2,950,167

293,698

10.0%

83.3%

1.59x

Medical Office Buildings

80

12

724,881

48,209

6.7%

91.6%

Total consolidated

546

18

3,675,048

341,907

9.3%

Unconsolidated JV Ownership

Assisted and independent living facilities

19

13

260,914

21,297

8.2%

86.4%

1.15x

Skilled nursing facilities

14

21

273,522

21,426

7.8%

92.9%

1.82x

Continuing care retirement communities

1

12

29,670

2,480

8.4%

87.0%

1.66x

Total senior housing and long-term care

34

17

564,106

45,202

8.0%

89.4%

1.50x

Medical office buildings

2

27

19,400

1,316

6.8%

87.8%

Total unconsolidated JV

36

17

583,506

46,518

8.0%

Total Portfolio

582

18

4,258,554

$    

388,425

$        

9.1%

1.59x

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

** Total Facilities does not include 1 ALF facility that was held for sale as of December 31, 2008 and sold in January 2009

35

December 31, 2008—

Portfolio Performance Summary (2)

Top 5   = 40%

Top 10 = 55%

Top 15 = 62%

Asset Type

Pay Source

Locations

Tenant/Operator

WI

(6%)

MA

(6%)

CA

(12%)

TX

(13%)

(based on investment)

(based on investment*)

(based on revenue)

WA

(6%)

*Investment includes all asset types

Private Pay

74%

Medicaid

16%

Medicare

10%

Independent

and

Assisted Living

48%

Skilled Nursing

26%

MOBs

20%

Other

6%

36

December 31, 2008—

Consolidated Portfolio Performance by Asset Type (excluding MOBs)

DEC 2008

SEP 2008

Q/Q Chg

DEC 2007

Y/Y Chg

DEC 2008

SEP 2008

DEC 2007

Assisted and independent living

Annualized Facility Revenue ($000s)

586,787

$     

585,058

$    

0.3%

564,276

$     

4.0%

604,454

$     

601,469

$     

660,972

$     

Occupancy

83.7%

84.2%

-0.5%

86.7%

-3.0%

84.3%

83.8%

85.4%

Monthly revenue per occupied bed/unit

3,045

$         

3,009

$        

1.2%

2,908

$         

4.7%

3,128

$         

3,010

$         

3,338

$         

Annualized Facility EBITDARM ($000s)

208,257

$     

206,360

$    

0.9%

203,140

$     

2.5%

214,698

$     

211,459

$     

239,326

$     

Facility EBITDARM %

35.5%

35.3%

0.2%

36.0%

-0.5%

35.5%

35.2%

36.2%

NHP Annualized Cash Rent ($000s)

163,511

$     

161,970

$    

1.0%

158,459

$     

3.2%

170,814

$     

167,406

$     

181,123

$     

Facility EBITDARM coverage

1.27x

1.27x

0.0%

1.28x

-0.6%

1.26x

1.26x

1.32x

Facility EBITDAR coverage

1.09x

1.09x

0.1%

1.10x

-0.9%

1.08x

1.08x

1.14x

Facility EBITDAR -

Capex

coverage

1.03x

1.03x

0.1%

1.04x

-1.1%

1.01x

1.02x

1.08x

Skilled nursing facilities

Annualized Facility Revenues ($000s)

1,188,138

$  

1,177,201

$ 

0.9%

1,126,049

$  

5.5%

1,306,563

$  

1,283,216

$  

1,262,962

$  

Occupancy

83.1%

82.4%

0.6%

84.0%

-1.0%

82.4%

80.0%

82.4%

Monthly revenue per occupied bed/unit

6,189

$         

6,058

$        

2.2%

5,781

$         

7.1%

6,374

$         

6,227

$         

5,717

$         

Q-Mix (Private + Medicare)

46.5%

44.2%

2.3%

42.1%

4.4%

46.4%

43.5%

39.8%

Annualized Facility EBITDARM ($000s)

196,631

$     

197,406

$    

-0.4%

186,066

$     

5.7%

207,737

$     

206,314

$     

206,067

$     

16.5%

16.8%

-0.2%

16.5%

0.0%

15.9%

16.1%

16.3%

NHP Annualized Cash Rent ($000s)

94,078

$       

93,422

$      

0.7%

91,219

$       

3.1%

101,621

$     

100,167

$     

96,989

$       

Facility EBITDARM coverage

2.09x

2.11x

-1.1%

2.04x

2.5%

2.04x

2.06x

2.12x

Facility EBITDAR coverage

1.46x

1.48x

-1.6%

1.42x

2.5%

1.40x

1.42x

1.47x

Facility EBITDAR -

Capex

coverage

1.37x

1.39x

-1.7%

1.33x

2.9%

1.31x

1.33x

1.38x

SAME PROPERTY (PERFORMANCE)

TOTAL

37

December 31, 2008—

Consolidated Portfolio Performance (excluding MOBs )

DEC 2008

SEP 2008

Q/Q Chg

DEC 2007

Y/Y Chg

DEC 2008

SEP 2008

DEC 2007

NHP Consolidated Portfolio

(excluding MOBs)

Annualized Facility Revenue ($000s)

1,959,789

$  

1,945,533

$ 

0.7%

1,860,965

$  

5.3%

2,100,949

$  

2,072,881

$  

2,112,162

$  

Occupancy

83.8%

83.7%

0.1%

85.5%

-1.8%

83.3%

82.0%

84.2%

Monthly revenue per occupied bed/unit

4,997

$         

4,687

$        

6.6%

4,513

$         

10.7%

5,045

$         

4,730

$         

4,842

$         

Annualized Facility EBITDARM ($000s)

449,980

$     

448,946

$    

0.2%

429,012

$     

4.9%

467,905

$     

463,229

$     

488,408

$     

Facility EBITDARM %

23.0%

23.1%

-0.1%

23.1%

-0.1%

22.3%

22.3%

23.1%

Total NHP Annualized Cash Rent ($000s)

277,609

$     

275,665

$    

0.7%

269,554

$     

3.0%

293,698

$     

288,455

$     

298,533

$     

NHP Rent (Payor

Mix)

Private

70.1%

69.2%

0.9%

68.9%

1.3%

69.5%

68.6%

70.1%

Medicare

10.8%

11.1%

-0.3%

10.9%

-0.1%

11.0%

11.3%

10.4%

Medicaid

19.0%

19.6%

-0.6%

20.0%

-1.0%

19.4%

20.0%

19.2%

Other

0.1%

0.2%

-0.1%

0.2%

-0.1%

0.1%

0.2%

0.2%

Total NHP Annualized Cash Rent

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

Facility EBITDARM coverage

1.62x

1.63x

-0.6%

1.59x

1.6%

1.59x

1.61x

1.64x

Facility EBITDAR coverage

1.27x

1.28x

-0.8%

1.25x

1.5%

1.24x

1.25x

1.28x

Facility

EBITDAR -

Capex

coverage

1.19x

1.20x

-0.8%

1.17x

1.6%

1.16x

1.17x

1.21x

Total

Portfolio

|

Facility

Payor

Mix

DEC 2008

SEP 2008

DEC 2007

DEC 2008

SEP 2008

DEC 2007

DEC 2008

SEP 2008

DEC 2007

Private

99.9%

99.8%

99.1%

19.5%

17.2%

17.3%

49.1%

46.1%

47.4%

Medicare

0.0%

0.0%

0.0%

26.5%

27.3%

27.1%

17.7%

18.9%

18.2%

Medicaid

0.1%

0.2%

0.9%

53.6%

55.0%

54.9%

32.8%

34.7%

34.0%

Other

0.0%

0.0%

0.0%

0.4%

0.5%

0.7%

0.4%

0.3%

0.4%

Total Tenant Revenue

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

Q-Mix (Private + Medicare)

99.9%

99.8%

99.1%

46.0%

44.5%

44.4%

66.8%

65.0%

65.6%

*

Excludes

assets

held

for

sale,

medical

office

buildings

and

JV

assets

ALF/ILF

SNF

Total

SAME PROPERTY (PERFORMANCE)

TOTAL

38

December 31, 2008—

Tenant Concentration

Gross investment and annualized cash rent in thousands

Number of

Number of

Beds/Units

Gross

Percent by

Annualized

Percent by

Average

Remaining

EBITDARM

Tenant Concentration

Facilities

Inservice

Investment

Investment

Cash Rent/NOI

Cash Rent

Age

Term

Coverage

1

Brookdale

Senior Living

[A]

96

5,945

467,348

$     

12.7%

51,841

$         

15.2%

14

10.7

1.43x

2

Hearthstone Senior Services

32

3,794

431,297

11.7%

36,311

10.6%

10

12.5

1.25x

3

Wingate Healthcare

19

2,528

244,942

6.7%

20,781

6.1%

21

11.0

1.75x

4

Beverly Enterprises

28

3,100

105,240

2.9%

14,651

4.3%

33

5.5

2.16x

5

Atria Senior Living

9

1,314

81,524

2.2%

12,441

3.6%

28

12.1

1.27x

Top 5

184

16,681

1,330,350

36.2%

136,025

39.8%

16

10.3

1.50x

6

Senior Services of America

18

1,408

126,717

3.5%

11,744

3.4%

16

12.4

1.15x

7

Laureate Group

9

1,526

118,946

3.2%

10,784

3.2%

16

4.1

1.44x

8

Magnolia Health Systems

27

2,322

125,026

3.4%

10,167

3.0%

30

18.2

1.73x

9

Nexion

Health Management

20

2,177

70,393

1.9%

8,762

2.6%

23

4.6

1.72x

10

Carillon Assisted Living

9

928

105,847

2.9%

8,719

2.6%

8

13.0

1.37x

Top 10

267

25,042

1,877,279

51.1%

186,201

54.5%

17

10.6

1.49x

11

Emeritus Corporation

[A]

6

533

70,177

1.9%

6,218

1.8%

11

7.8

1.29x

12

Trans Healthcare

[B]

7

1,062

46,676

1.3%

5,576

1.6%

41

5.0

0.70x

13

HEALTHSOUTH

2

120

45,689

1.2%

4,990

1.5%

18

5.2

2.06x

14

Epic Group

7

892

52,601

1.4%

4,445

1.3%

36

7.3

1.78x

15

Primrose Retirement Associates

[A]

8

429

55,016

1.5%

4,436

1.3%

9

13.1

1.10x

Top 15

297

28,078

2,147,437

58.4%

211,866

62.0%

18

10.4

1.47x

Other -

Senior Housing and

Long-Term Care Tenants

169

13,688

802,730

21.9%

81,832

23.9%

21

7.9

1.99x

Medical Office Buildings

80

724,881

19.7%

48,209

14.1%

12

Total NHP Consolidated Portfolio

546

41,766

3,675,048

$  

100.0%

341,907

$       

100.0%

19

9.5

1.60x

* Performance metrics exclude assets held for sale and JV assets

**Ranked by Annualized Cash Rent/NOI

[A] Public company tenant

[B] Effective November 1, 2009, four of Trans Healthcare facilities will be trasfered to another operator; reducing the total annualized cash rent from Trans Healthcare to $3.2 million.

39

December 31, 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

Investment

Cash Rent

Cash Rent

Cash Rent

[A]

1

Texas

61

6,205

447,684

$      

15.2%

44,101

$     

15.0%

3.7%

2

Massachusetts

19

2,421

219,324

7.4%

18,936

6.4%

3.3%

3

Wisconsin

49

2,837

210,555

7.1%

19,794

6.7%

1.3%

4

California

26

2,837

188,546

6.4%

26,742

9.1%

1.6%

5

Tennessee

22

1,977

182,824

6.2%

14,782

5.0%

1.2%

Top 5

177

16,277

1,248,934

42.3%

124,355

42.3%

11.1%

6

Florida

26

2,460

149,343

5.1%

13,633

4.6%

1.5%

7

Indiana

32

2,575

142,818

4.8%

12,108

4.1%

2.4%

8

Ohio

18

1,661

116,624

4.0%

11,881

4.0%

1.2%

9

Washington

17

1,465

115,361

3.9%

11,236

3.8%

0.8%

10

North Carolina

11

1,120

111,135

3.8%

9,567

3.3%

0.6%

Top 10

281

25,558

1,884,214

63.9%

182,780

62.2%

17.5%

11

New York

6

846

101,868

3.5%

9,885

3.4%

1.2%

12

Michigan

17

1,357

100,487

3.4%

8,717

3.0%

1.0%

13

Minnesota

13

849

66,341

2.3%

5,574

1.9%

0.9%

14

Arizona

6

615

57,015

1.9%

6,801

2.3%

0.1%

15

Missouri

16

1,149

53,142

1.8%

5,454

1.9%

0.9%

Top 15

339

30,374

2,263,067

76.7%

219,211

74.6%

21.6%

Other States

127

11,392

687,100

23.3%

74,487

25.4%

12.5%

Total

466

41,766

2,950,167

$   

100.0%

293,698

$   

100.0%

34.1%

Medical Office Buildings

80

724,881

48,209

Total NHP Consolidated Portfolio

546

3,675,048

341,907

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

**Ranked by Annualized Gross Investment

[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)

40

December 31, 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

1

Texas

61

6,205

447,684

$     

44,101

$      

1.61x

4,424

$        

14

7.5

29.0%

2

Massachusetts

19

2,421

219,324

18,936

1.73x

7,624

24

10.5

81.5%

3

isconsin

49

2,837

210,555

19,794

1.51x

3,340

18

10.1

16.5%

4

California

26

2,837

188,546

26,742

1.38x

5,816

12

8.0

16.6%

5

Tennessee

22

1,977

182,824

14,782

1.09x

3,609

13

8.6

16.7%

Top 5

177

16,277

1,248,934

124,355

1.50x

4,911

16

8.9

30.9%

6

Florida

26

2,460

149,343

13,633

1.93x

5,118

17

9.5

20.7%

7

Indiana

32

2,575

142,818

12,108

1.62x

5,430

27

16.0

81.7%

8

Ohio

18

1,661

116,624

11,881

1.06x

4,772

17

8.3

25.6%

9

ashington

17

1,465

115,361

11,236

1.98x

5,207

18

10.8

37.3%

10

North Carolina

11

1,120

111,135

9,567

1.46x

3,444

8

12.5

3.7%

Top 10

281

25,558

1,884,214

182,780

1.54x

4,924

16

10.2

32.1%

11

New York

6

846

101,868

9,885

1.44x

6,883

17

9.4

50.3%

12

Michigan

17

1,357

100,487

8,717

1.91x

4,789

9

11.4

6.9%

13

Minnesota

13

849

66,341

5,574

1.30x

4,328

26

10.4

40.0%

14

Arizona

6

615

57,015

6,801

1.62x

8,021

14

9.2

0.0%

15

Missouri

16

1,149

53,142

5,454

1.89x

4,678

20

4.3

98.9%

Top 15

339

30,374

2,263,067

219,211

1.55x

5,015

17

9.8

32.8%

Other States

127

11,392

687,100

74,487

1.78x

5,134

19

6.7

24.8%

Total

466

41,766

2,950,167

$  

293,698

$    

1.59x

5,038

$        

18

9.5

30.8%

Medical Office Buildings

80

724,881

48,209

12

Total NHP Consolidated Portfolio

546

3,675,048

341,907

18

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

**Ranked by Annualized Gross Investment

Note:  Lease terms for NHP facilties generally are between ten and fifteen years with renewal options, if exercised, that add ten to fifteen additional years. 

In general, NHP receives contractual rent escalators in the range of 1.5% to 2.5% for skilled nursing assets and 2.0% to 3.0% for assisted living assets

W

W

41

December 31, 2008—

Portfolio Performance Summary | Asset Class Composition Trends (by Investment)

61%

62%

63%

56%

56%

50%

49%

48%

30%

29%

28%

27%

27%

27%

27%

26%

2%

2%

2%

11%

11%

17%

18%

20%

7%

7%

7%

6%

6%

6%

6%

6%

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

ALF

SNF

MOB

Other

42

December 31, 2008—

Portfolio Performance Summary | Private Pay Composition Trends (by Revenue)

68%

71%

71%

71%

71%

74%

73%

74%

21%

18%

18%

19%

19%

17%

17%

16%

11%

11%

11%

10%

10%

9%

10%

10%

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

Private

Medicaid

Medicare

43

December 31, 2008—

Portfolio Performance Summary | Top Tenant Concentration Trends (by Revenue)

48%

49%

49%

46%

41%

39%

39%

40%

65%

65%

64%

61%

57%

56%

56%

55%

75%

73%

71%

69%

66%

64%

63%

62%

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

Top 5

Top 10

Top 15

44

December 31, 2008—

Unconsolidated JV Portfolio Performance Metrics

Assisted and

Skilled

Independent Living

Nursing

CCRC

Portfolio

DEC 2008

DEC 2008

DEC 2008

DEC 2008

Unconsolidated JV Portfolio

Annualized Facility Revenue ($000s)

72,521

$                          

156,270

$                        

13,437

$                          

242,229

$                        

Occupancy

86.4%

92.9%

87.0%

89.4%

Monthly revenue per occupied bed/unit

3,775

$                            

8,260

$                            

8,289

$                            

6,094

$                            

Q-Mix (Private + Medicare)

97.1%

63.4%

100.0%

75.5%

Annualized Facility EBITDARM ($000s)

24,533

$                          

39,026

$                          

4,119

$                            

67,678

$                          

Facility EBITDARM %

33.8%

25.0%

30.7%

27.9%

Total JV Annualized Cash Rent ($000s)

21,297

$                          

21,426

$                          

2,480

$                            

45,202

$                          

JV Rent (Payor

Mix)

Private

97.1%

39.4%

73.5%

68.5%

Medicare

0.0%

24.0%

26.5%

12.8%

Medicaid

2.9%

36.6%

0.0%

18.7%

Other

0.0%

0.0%

0.0%

0.0%

Total JV Annualized Cash Rent

100.0%

100.0%

100.0%

100.0%

Facility EBITDARM coverage

1.15x

1.82x

1.66x

1.50x

Facility EBITDAR coverage

0.98x

1.46x

1.39x

1.23x

Facility EBITDAR -

Capex

coverage

0.93x

1.43x

1.37x

1.19x

Total

45

December 31, 2008—

Medical Office Building Portfolio Performance Metrics

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 I  -

90%

20

56,861

$       

76

60.0%

21

752,793

82.2%

81.9%

0.3%

BROE II -

95%

16

94,624

169

100.0%

16

558,707

89.4%

McShane

-

95%

7

46,773

116

57.1%

16

404,227

92.9%

Unconsolidated JV

2

19,400

146

100.0%

27

133,001

87.8%

NHP Multi-Tenant -

100%

17

357,343

351

76.5%

11

1,018,327

95.4%

NHP Triple-Net -

100%

19

121,781

279

5.3%

12

437,013

100.0%

NHP Multi-Tenant Mortgages

1

47,500

276

100.0%

2

172,000

95.0%

Total MOB Portfolio

82

744,281

$     

214

$           

59.8%

12

3,476,068

91.6%

Current Year

Prior Year

% Change

Current Year

Prior Year

% Change

Current Year

Prior Year

Change

BROE I  -

90%

11,009

$        

11,018

$       

-0.1%

5,160

$          

4,767

$        

8.2%

46.9%

43.3%

3.6%

BROE II -

95%

11,479

6,487

56.5%

McShane

-

95%

7,216

3,382

46.9%

Unconsolidated JV

1,316

1,316

NHP Multi-Tenant -

100%

34,306

21,082

61.5%

NHP Triple-Net -

100%

9,003

9,003

NHP Multi-Tenant Mortgages

3,095

3,095

Total MOB Portfolio

77,423

$        

49,524

$        

56.4%

Gross 

Building

Number of

Gross

Percent by

Investment

Square

Percent by

MOBs

by state

Facilities

Investment

Investment

per SQFT

Feet

Square Feet

1

California

10

245,052

$     

32.9%

344

$             

712,869

20.5%

2

Washington

7

118,684

16.0%

324

$             

366,483

10.5%

3

Illinois

12

67,073

9.0%

175

$             

383,058

11.0%

4

Missouri

7

46,773

6.3%

116

$             

404,227

11.6%

5

Florida

10

42,053

5.7%

356

$             

118,206

3.4%

Top 5

46

519,635

69.8%

262

$             

1,984,843

57.1%

6

Nevada

2

38,127

5.1%

262

$             

145,637

4.2%

7

Oregon

1

32,121

4.3%

306

$             

104,856

3.0%

8

Texas

7

32,560

4.4%

111

$             

294,152

8.5%

9

Louisiana

8

31,141

4.2%

81

$                

384,588

11.1%

10

Alabama

1

16,706

2.2%

273

$             

61,219

1.8%

Top 10

65

670,289

90.1%

225

$             

2,975,295

85.6%

11

South Carolina

2

16,302

2.2%

149

$             

109,704

3.2%

12

Indiana

4

15,725

2.1%

282

$             

55,814

1.6%

13

Ohio

1

13,269

1.8%

199

$             

66,776

1.9%

14

Georgia

3

10,045

1.4%

81

$                

123,294

3.6%

15

Virginia

3

6,749

0.9%

103

$             

65,315

1.9%

Top 15

78

732,380

98.4%

216

$             

3,396,198

97.7%

Other States

4

11,900

1.6%

149

$             

79,870

2.3%

Medical Office Buildings

82

744,281

$     

100.0%

214

$             

3,476,068

100.0%

Annualized Revenue

Annualized Cash Rent/NOI

Operating Margin

Occupancy

46

December 31, 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.

We

use

EBITDAR

to

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

a

facility

is

to

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

by

Annualized

Cash

Rent.

This

ratio

is

a

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

we

utilize

to

calculate

EBITDAR

-

Capex.

All

facility

financial

information

was

derived

solely

from

information

provided

by

our

tenants

and

borrowers

and

we

have

not

verified

such

information.

We

use

EBITDAR

-

Capex

to

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

to

maintain

the

facility.

EBITDAR

-

Capex

Coverage

of

1.0X

would

indicate

the

EBITDAR

-

Capex

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

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. 

47

December 31, 2008—

Portfolio Performance Measures Definitions (2)

Gross Investment:

We

define

Gross

Investment

as

our

total

investment

in

a

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

to

evaluate

the

operating

performance

of

our

facilities.

We

define

NOI

for

our

triple-net

leases

segment

as

rent

revenues.

For

our

multi-tenant

leases

segment,

we

define

NOI

as

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

of

deferred

financing

costs,

depreciation

and

amortization

expense,

general

and

administrative

expense

and

discontinued

operations.

We

present

NOI

as

it

effectively

presents

our

portfolio

on

a

“net”

rent

basis

and

provides

relevant

and

useful

information

as

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

is

most

directly

comparable

to

NOI.

However,

NOI

should

not

be

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

of

a

Tenant’s

private

and

medicare

revenues

as

a

percentage

of

total

revenues.

As

private

and

medicare

rates

are

generally

higher

at

long-term

care

facilities,

Tenants

can

oftentimes

improve

margins

by

selectively

targeting

medicare

and

private-pay

residents.

As

such,

an

increase

in

the

Q-Mix

generally

results

in

a

corresponding

increase

in

a

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.