10-Q

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File number 1-8923

HEALTH CARE REIT, INC.

(Exact name of registrant as specified in its charter) 

Delaware	34-1096634
(State or other jurisdiction of  incorporation or organization)	(I.R.S. Employer  Identification No.)
4500 Dorr Street, Toledo, Ohio	43615
(Address of principal executive office)	(Zip Code)

(419) 247-2800

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. Yes  þ  No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ  No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ Accelerated filer o Non-accelerated filer   o  (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No  þ

As of October 31, 2013, the registrant had 288,670,688 shares of common stock outstanding.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets — September 30, 2013 and December 31, 2012	3
Consolidated Statements of Comprehensive Income — Three and nine months ended September 30, 2013 and 2012	4
Consolidated Statements of Equity — Nine months ended September 30, 2013 and 2012	6
Consolidated Statements of Cash Flows — Nine months ended September 30, 2013 and 2012	7
Notes to Unaudited Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3. Quantitative and Qualitative Disclosures About Market Risk	59
Item 4. Controls and Procedures	60
PART II. OTHER INFORMATION
Item 1. Legal Proceedings Item 1A. Risk Factors	60 60
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 5. Other Information	60
Item 6. Exhibits	61
Signatures	62

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

HEALTH CARE REIT, INC. AND SUBSIDIARIES

(In thousands)

				September 30, 2013		December 31, 2012
				(Unaudited)		(Note)
Assets:
Real estate investments:
	Real property owned:
		Land and land improvements		$	1,869,234	$	1,365,391
		Buildings and improvements			20,387,577		15,635,127
		Acquired lease intangibles			1,050,542		673,684
		Real property held for sale, net of accumulated depreciation			2,141		245,213
		Construction in progress			158,006		162,984
			Gross real property owned		23,467,500		18,082,399
		Less accumulated depreciation and amortization			(2,168,334)		(1,555,055)
			Net real property owned		21,299,166		16,527,344
	Real estate loans receivable				307,377		895,665
	Net real estate investments				21,606,543		17,423,009
Other assets:
		Equity investments			475,574		438,936
		Goodwill			68,321		68,321
		Deferred loan expenses			68,569		66,327
		Cash and cash equivalents			164,838		1,033,764
		Restricted cash			80,890		107,657
		Receivables and other assets			585,070		411,095
			Total other assets		1,443,262		2,126,100
Total assets				$	23,049,805	$	19,549,109
Liabilities and equity
Liabilities:
		Borrowings under unsecured line of credit arrangement		$	847,670	$	0
		Senior unsecured notes			6,395,638		6,114,151
		Secured debt			3,115,862		2,336,196
		Capital lease obligations			84,069		81,552
		Accrued expenses and other liabilities			660,441		462,099
Total liabilities					11,103,680		8,993,998
Redeemable noncontrolling interests					31,706		34,592
Equity:
		Preferred stock			1,022,917		1,022,917
		Common stock			288,249		260,396
		Capital in excess of par value			12,349,678		10,543,690
		Treasury stock			(21,263)		(17,875)
		Cumulative net income			2,301,869		2,184,819
		Cumulative dividends			(4,363,376)		(3,694,579)
		Accumulated other comprehensive income (loss)			(23,475)		(11,028)
		Other equity			5,864		6,461
			Total Health Care REIT, Inc. stockholders’ equity		11,560,463		10,294,801
		Noncontrolling interests			353,956		225,718
Total equity					11,914,419		10,520,519
Total liabilities and equity				$	23,049,805	$	19,549,109

NOTE: The consolidated balance sheet at December 31, 2012 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

See notes to unaudited consolidated financial statements

3

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

HEALTH CARE REIT, INC. AND SUBSIDIARIES

(In thousands, except per share data)

			Three Months Ended				Nine Months Ended
			September 30,				September 30,
			2013		2012		2013		2012
Revenues:
	Rental income		$	311,731	$	277,919	$	909,659	$	789,748
	Resident fees and services			466,127		174,464		1,164,446		498,295
	Interest income			7,629		8,111		24,325		24,131
	Other income			1,443		1,339		3,168		4,505
		Total revenues		786,930		461,833		2,101,598		1,316,679
Expenses:
	Interest expense			116,530		91,915		336,585		271,223
	Property operating expenses			342,730		144,417		874,960		409,236
	Depreciation and amortization			242,668		127,844		628,700		373,344
	General and administrative			28,718		23,679		79,799		77,302
	Transaction costs			23,591		8,264		117,707		42,535
	Loss (gain) on derivatives, net			4,872		409		4,465		(1,712)
	Loss (gain) on extinguishment of debt, net			(4,068)		215		(4,376)		791
	Provision for loan losses			0		27,008		0		27,008
		Total expenses		755,041		423,751		2,037,840		1,199,727
Income (loss) from continuing operations before income taxes
	and income from unconsolidated entities			31,889		38,082		63,758		116,952
Income tax (expense) benefit				(3,077)		(836)		(7,055)		(3,754)
Income (loss) from unconsolidated entities				(331)		(739)		(3,529)		2,250
Income (loss) from continuing operations				28,481		36,507		53,174		115,448
Discontinued operations:
	Gain (loss) on sales of properties, net			4,707		12,827		57,202		46,046
	Impairment of assets			0		(6,952)		0		(6,952)
	Income (loss) from discontinued operations, net			417		11,124		2,212		33,294
		Discontinued operations, net		5,124		16,999		59,414		72,388
Net income				33,605		53,506		112,588		187,836
Less:		Preferred stock dividends		16,602		16,602		49,805		52,527
Less:		Preferred stock redemption charge		0		0		0		6,242
Less:		Net income (loss) attributable to noncontrolling interests(1)		(3,688)		(365)		(4,462)		(2,241)
Net income (loss) attributable to common stockholders			$	20,691	$	37,269	$	67,245	$	131,308
Average number of common shares outstanding:
	Basic			286,020		224,391		273,148		212,592
	Diluted			288,029		226,258		275,247		214,075
Earnings per share:
	Basic:
	Income (loss) from continuing operations
		attributable to common stockholders	$	0.05	$	0.09	$	0.03	$	0.28
	Discontinued operations, net			0.02		0.08		0.22		0.34
	Net income (loss) attributable to common stockholders*		$	0.07	$	0.17	$	0.25	$	0.62
	Diluted:
	Income (loss) from continuing operations
		attributable to common stockholders	$	0.05	$	0.09	$	0.03	$	0.28
	Discontinued operations, net			0.02		0.08		0.22		0.34
	Net income (loss) attributable to common stockholders*		$	0.07	$	0.16	$	0.24	$	0.61
Dividends declared and paid per common share			$	0.765	$	0.74	$	2.295	$	2.22

* Amounts may not sum due to rounding

(1) Includes amounts attributable to redeemable noncontrolling interests.

See notes to unaudited consolidated financial statements

4

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)

HEALTH CARE REIT, INC. AND SUBSIDIARIES

(In thousands)

			Three Months Ended September 30,				Nine Months Ended September 30,
			2013		2012		2013		2012
Net income			$	33,605	$	53,506	$	112,588	$	187,836
Other comprehensive income (loss):
	Unrecognized gain (loss) on equity investments			(260)		230		(346)		192
	Change in net unrealized gains (losses) on cash flow hedges:
		Unrealized gain (loss)		473		414		1,416		1,138
	Foreign currency translation gain (loss)			25,693		2,514		(18,164)		166
Total other comprehensive income (loss)				25,906		3,158		(17,094)		1,496
Total comprehensive income (loss)				59,511		56,664		95,494		189,332
Less: Total comprehensive income (loss) attributable to noncontrolling interests(1)				(3,881)		(365)		(9,109)		(2,241)
Total comprehensive income (loss) attributable to common stockholders			$	63,392	$	57,029	$	104,603	$	191,573
(1) Includes amounts attributable to redeemable noncontrolling interests.

See notes to unaudited consolidated financial statements

5

CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED)

HEALTH CARE REIT, INC. AND SUBSIDIARIES

(In thousands)

		Nine Months Ended September 30, 2013
														Accumulated
						Capital in								Other
		Preferred		Common		Excess of		Treasury		Cumulative		Cumulative		Comprehensive		Other		Noncontrolling
		Stock		Stock		Par Value		Stock		Net Income		Dividends		Income (Loss)		Equity		Interests		Total
Balances at beginning of period		$	1,022,917	$	260,396	$	10,543,690	$	(17,875)	$	2,184,819	$	(3,694,579)	$	(11,028)	$	6,461	$	225,718	$	10,520,519
Comprehensive income:
	Net income (loss)										117,050								(2,345)		114,705
	Other comprehensive income														(12,447)				(4,647)		(17,094)
Total comprehensive income																					97,611
Net change in noncontrolling interests					1,109		23,410												135,230		159,749
Amounts related to issuance of common stock
	from dividend reinvestment and stock
	incentive plans, net of forfeitures				2,756		176,840		(3,388)								(1,448)				174,760
Proceeds from issuance of common stock					23,000		1,607,281														1,630,281
Equity component of convertible debt					988		(1,543)														(555)
Option compensation expense																	851				851
Cash dividends paid:
	Common stock cash dividends												(618,992)								(618,992)
	Preferred stock cash dividends												(49,805)								(49,805)
Balances at end of period		$	1,022,917	$	288,249	$	12,349,678	$	(21,263)	$	2,301,869	$	(4,363,376)	$	(23,475)	$	5,864	$	353,956	$	11,914,419
		Nine Months Ended September 30, 2012
														Accumulated
						Capital in								Other
		Preferred		Common		Excess of		Treasury		Cumulative		Cumulative		Comprehensive		Other		Noncontrolling
		Stock		Stock		Par Value		Stock		Net Income		Dividends		Income (Loss)		Equity		Interests		Total
Balances at beginning of period		$	1,010,417	$	192,299	$	7,019,714	$	(13,535)	$	1,893,806	$	(2,972,129)	$	(11,928)	$	6,120	$	153,883	$	7,278,647
Comprehensive income:
	Net income (loss)										190,077								(1,272)		188,805
	Other comprehensive income														1,496						1,496
Total comprehensive income																					190,301
Net change in noncontrolling interests							(1,529)												13,767		12,238
Amounts related to issuance of common stock
	from dividend reinvestment and stock
	incentive plans, net of forfeitures				1,784		102,238		(3,996)								(1,046)				98,980
Proceeds from issuance of common stock					64,400		3,383,008														3,447,408
Proceeds from issuance of preferred stock			287,500				(9,813)														277,687
Redemption of preferred stock			(275,000)				6,202				(6,242)										(275,040)
Equity component of convertible debt					1,039		2,237														3,276
Option compensation expense																	2,371				2,371
Cash dividends paid:
	Common stock cash dividends												(460,936)								(460,936)
	Preferred stock cash dividends												(52,527)								(52,527)
Balances at end of period		$	1,022,917	$	259,522	$	10,502,057	$	(17,531)	$	2,077,641	$	(3,485,592)	$	(10,432)	$	7,445	$	166,378	$	10,522,405

See notes to unaudited consolidated financial statements

6

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

HEALTH CARE REIT, INC. AND SUBSIDIARIES

(In thousands)

			Nine Months Ended
			September 30,
			2013		2012
Operating activities:
Net income			$	112,588	$	187,836
Adjustments to reconcile net income to
	net cash provided from (used in) operating activities:
		Depreciation and amortization		630,579		393,243
		Other amortization expenses		6,662		11,702
		Provision for loan losses		0		27,008
		Impairment of assets		0		6,952
		Stock-based compensation expense		16,650		16,229
		Loss (gain) on derivatives, net		4,465		(1,712)
		Loss (gain) on extinguishment of debt, net		(4,376)		791
		Loss (income) from unconsolidated entities		3,529		(2,250)
		Rental income in excess of cash received		(31,226)		(32,069)
		Amortization related to above (below) market leases, net		313		767
		Loss (gain) on sales of properties, net		(57,202)		(46,046)
		Distributions by unconsolidated entities		0		3,920
		Increase (decrease) in accrued expenses and other liabilities		9,646		16,417
		Decrease (increase) in receivables and other assets		(65,721)		(19,318)
Net cash provided from (used in) operating activities				625,907		563,470
Investing activities:
	Investment in real property, net of cash acquired			(3,354,716)		(2,119,796)
	Capitalized interest			(4,698)		(7,113)
	Investment in real estate loans receivable			(77,336)		(35,894)
	Other investments, net of payments			(16,589)		26,752
	Principal collected on real estate loans receivable			85,555		16,577
	Contributions to unconsolidated entities			(381,667)		(227,735)
	Distributions by unconsolidated entities			31,699		12,592
	Proceeds from (payments on) derivatives			60,909		4,435
	Decrease (increase) in restricted cash			68,796		(69,809)
	Proceeds from sales of real property			385,493		302,377
Net cash provided from (used in) investing activities				(3,202,554)		(2,097,614)
Financing activities:
	Net increase (decrease) under unsecured lines of credit arrangements			834,050		(610,000)
	Proceeds from issuance of senior unsecured notes			497,862		842,323
	Payments to extinguish senior unsecured notes			(217,615)		(370,524)
	Net proceeds from the issuance of secured debt			85,140		145,713
	Payments on secured debt			(575,373)		(272,399)
	Net proceeds from the issuance of common stock			1,792,552		3,536,232
	Net proceeds from the issuance of preferred stock			0		277,687
	Redemption of preferred stock			0		(275,000)
	Decrease (increase) in deferred loan expenses			(12,398)		(5,119)
	Contributions by noncontrolling interests(1)			5,350		12,106
	Distributions to noncontrolling interests(1)			(22,502)		(15,283)
	Acquisitions of noncontrolling interests			(23,247)		0
	Cash distributions to stockholders			(668,797)		(513,463)
	Other financing activities			(1,710)		641
Net cash provided from (used in) financing activities				1,693,312		2,752,914
Effect of foreign currency translation on cash and cash equivalents				14,409		0
Increase (decrease) in cash and cash equivalents				(868,926)		1,218,770
Cash and cash equivalents at beginning of period				1,033,764		163,482
Cash and cash equivalents at end of period			$	164,838	$	1,382,252
Supplemental cash flow information:
	Interest paid		$	342,739	$	275,246
	Income taxes paid			5,146		3,012
(1) Includes amounts attributable to redeemable noncontrolling interests.

See notes to unaudited consolidated financial statements

7

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Business

     Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is an equity real estate investment trust (“REIT”) that invests in seniors housing and health care real estate. Our full service platform offers property management and development services to our customers. As of September 30, 2013, our diversified portfolio consisted of 1,197 properties in 46 states, the United Kingdom, and Canada.  Founded in 1970, we were the first real estate investment trust to invest exclusively in health care facilities.

2. Accounting Policies and Related Matters

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the nine months ended September 30, 2013 are not necessarily an indication of the results that may be expected for the year ending December 31, 2013. For further information, refer to the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013.

New Accounting Standards

     In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” which requires companies to provide information about the amounts that are reclassified out of accumulated other comprehensive income by component and by the respective line items of net income. The amendment to authoritative guidance associated with comprehensive income was effective for us on January 1, 2013. The adoption of this guidance did not have a material impact on our unaudited consolidated financial statements.

3. Real Property Acquisitions and Development

     The total purchase price for all properties acquired has been allocated to the tangible and identifiable intangible assets, liabilities and noncontrolling interests based upon their respective fair values in accordance with our accounting policies. The results of operations for these acquisitions have been included in our consolidated results of operations since the date of acquisition and are a component of the appropriate segments.  Transaction costs primarily represent costs incurred with property acquisitions, including due diligence costs, fees for legal and valuation services and termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees and other acquisition-related costs.

8

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

     Seniors Housing Triple-net Activity

		Nine Months Ended
(In thousands)		September 30, 2013(1)			September 30, 2012
Land and land improvements			$	56,665		$	79,325
Buildings and improvements				211,903			935,036
	Total assets acquired			268,568			1,014,361
Secured debt				-			(86,186)
Accrued expenses and other liabilities				-			(3,340)
	Total liabilities assumed			-			(89,526)
Capital in excess of par				-			1,024
Noncontrolling interests				-			(16,826)
Non-cash acquisition related activity				-			(310)
	Cash disbursed for acquisitions			268,568			908,723
Construction in progress additions				103,951			131,579
Less:	Capitalized interest			(3,337)			(4,228)
Cash disbursed for construction in progress				100,614			127,351
Capital improvements to existing properties				27,819			48,450
	Total cash invested in real property, net of cash acquired		$	397,001		$	1,084,524
(1) Includes acquisitions with an aggregate purchase price of $268,568,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

Seniors Housing Operating Activity

     Acquisitions of seniors housing operating properties are structured under RIDEA, which is described in Note 18.  This structure results in the inclusion of all resident revenues and related property operating expenses from the operation of these qualified health care properties in our consolidated statements of comprehensive income.  Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. See Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013, for information regarding our foreign currency policies.

9

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

		Nine Months Ended
(In thousands)		September 30, 2013(1)			September 30, 2012
Land and land improvements			$	437,046		$	46,391
Building and improvements				4,214,254			450,255
Acquired lease intangibles				377,929			39,875
Restricted cash				41,524			-
Receivables and other assets				81,546			2,247
	Total assets acquired(2)			5,152,299			538,768
Secured debt				(1,261,093)			(8,684)
Accrued expenses and other liabilities				(86,412)			(5,480)
	Total liabilities assumed			(1,347,505)			(14,164)
Noncontrolling interests				(230,441)			(2,054)
Non-cash acquisition related activity(3)				(856,103)			-
	Cash disbursed for acquisitions			2,718,250			522,550
Construction in progress additions				1,521			-
Less:	Capitalized interest			(18)			-
Cash disbursed for construction in progress				1,503			-
Capital improvements to existing properties				36,813			13,325
	Total cash invested in real property, net of cash acquired		$	2,756,566		$	535,875
(1) Includes acquisitions with an aggregate purchase price of $5,152,299,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $87,406,000 and $4,369,000 of cash acquired during the nine months ended September 30, 2013 and 2012, respectively.
(3) Represents Sunrise loan and noncontrolling interests acquisitions.

     Sunrise Merger

     In August 2012, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Sunrise Senior Living, Inc. (“Sunrise”), pursuant to which we agreed to acquire Sunrise in an all-cash merger (the “Merger”) in which Sunrise stockholders would receive $14.50 in cash for each share of Sunrise common stock. On January 9, 2013, we completed our acquisition of the Sunrise property portfolio.  The Sunrise Merger advances our strategic vision to own higher-end, private pay properties located in major metropolitan markets.  On July 1, 2013, we acquired the remaining interests in 49 previously unconsolidated properties.  As of September 30, 2013, 120 properties are wholly owned and 5 properties are held in unconsolidated entities (see Note 7 for additional information).  The total estimated purchase price of approximately $4,155,052,000, including approximately $2,456,011,000 of cash consideration, has been allocated on a preliminary basis to the tangible and identifiable intangible assets and liabilities in the table above based on respective fair values in accordance with our accounting policies. We funded the cash consideration and other associated costs of the acquisition from cash on-hand as well as draws on our primary unsecured line of credit and unsecured term loan (see Notes 9 and 10 for additional information).

     We recognized $201,941,000 and $443,221,000 of revenues and $65,942,000 and $145,264,000 of net operating income from continuing operations related to the consolidated Sunrise portfolio during the three and nine month periods ended September 30, 2013, respectively.  In addition, we incurred $72,337,000 of transaction costs, which include advisory fees, due diligence costs, severances, and fees for legal and valuation services during the nine month period ended September 30, 2013.  These amounts are included in the seniors housing operating results reflected in Note 17.

The following unaudited pro forma consolidated results of operation have been prepared as if the Sunrise Merger had occurred as of January 1, 2012 based on the preliminary purchase price allocations discussed above. Amounts are in thousands, except per share data:

10

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

		Nine Months Ended
		September 30,		September 30,
		2013		2012
Revenues		$	2,268,062	$	1,828,395
Income (loss) from continuing operations attributable to common stockholders		$	(2,079)	$	(59,769)
Income (loss) from continuing operations attributable to common stockholders per share:
	Basic	$	(0.01)	$	(0.28)
	Diluted	$	(0.01)	$	(0.28)

11

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Medical Facilities Activity

		Nine Months Ended
(In thousands)		September 30, 2013(1)			September 30, 2012
Land and land improvements			$	-	$	53,493
Buildings and improvements				144,708		487,255
Acquired lease intangibles				-		93,392
Restricted cash				505		975
Receivables and other assets				151		4,311
	Total assets acquired			145,364		639,426
Secured debt				(26,300)		(238,589)
Accrued expenses and other liabilities				(479)		(18,075)
	Total liabilities assumed			(26,779)		(256,664)
Non-cash acquisition activity				(12,056)(2)		(880)
	Cash disbursed for acquisitions			106,529		381,882
Construction in progress additions				87,882		94,462
Less:	Capitalized interest			(1,343)		(2,885)
	Accruals(3)			(9,806)		(4,567)
Cash disbursed for construction in progress				76,733		87,010
Capital improvements to existing properties				17,887		30,505
	Total cash invested in real property		$	201,149	$	499,397
(1) Includes acquisitions with an aggregate purchase price of $145,364,000 for which the allocation of purchase price consideration is preliminary and subject to change.
(2) Represents non-cash consideration exchanged in an asset swap transaction. Please see Note 5 for additional information.
(3) Represents non-cash accruals for amounts to be paid in future periods relating to properties that converted in the periods noted above.

Construction Activity

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

			Nine Months Ended
			September 30, 2013			September 30, 2012
	Development projects:
		Seniors housing triple-net		$	105,265		$	84,271
		Medical facilities			78,839			111,327
		Total development projects			184,104			195,598
	Expansion projects				14,229			240
Total construction in progress conversions				$	198,333		$	195,838

12

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

4. Real Estate Intangibles

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

		September 30, 2013		December 31, 2012
Assets:
	In place lease intangibles	$	918,507	$	541,729
	Above market tenant leases		54,091		56,086
	Below market ground leases		61,461		61,450
	Lease commissions		16,483		14,419
	Gross historical cost		1,050,542		673,684
	Accumulated amortization		(472,389)		(257,242)
	Net book value	$	578,153	$	416,442
	Weighted-average amortization period in years		17.1		16.4
Liabilities:
	Below market tenant leases	$	76,239	$	77,036
	Above market ground leases		9,490		9,490
	Gross historical cost		85,729		86,526
	Accumulated amortization		(32,894)		(27,753)
	Net book value	$	52,835	$	58,773
	Weighted-average amortization period in years		14.3		14.3

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Rental income related to above/below market tenant leases, net	$	235	$	(972)	$	596	$	452
Property operating expenses related to above/below market ground leases, net		(303)		(555)		(909)		(1,219)
Depreciation and amortization related to in place lease intangibles and lease commissions		(78,782)		(22,271)		(168,441)		(78,114)

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

		Assets		Liabilities
2013	$	93,415	$	1,730
2014		207,606		6,583
2015		58,816		5,623
2016		25,985		5,185
2017		26,825		4,894
Thereafter		165,506		28,820
Totals	$	578,153	$	52,835

13

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

5. Dispositions, Assets Held for Sale and Discontinued Operations

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

		Nine Months Ended
		September 30, 2013			September 30, 2012
Real property dispositions:
	Seniors housing triple-net		$	138,650		$	149,984
	Medical facilities			201,845			106,347
	Total dispositions			340,495			256,331
Gain (loss) on sales of real property, net				57,202			46,046
Non-cash disposition activity(1)				(12,204)			0
Proceeds from real property sales			$	385,493		$	302,377
(1) Represents non-cash consideration surrendered in an asset swap transaction.  Please see Note 3 for additional information.

We have reclassified the income and expenses attributable to all properties sold prior to or held for sale at September 30, 2013 to discontinued operations.  Expenses include an allocation of interest expense based on property carrying values and our weighted-average cost of debt.  The following illustrates the reclassification impact as a result of classifying properties as discontinued operations for the periods presented (in thousands):

			Three Months Ended				Nine Months Ended
			September 30,				September 30,
		2013		2012		2013		2012
Revenues:
	Rental income	$	810	$	20,747	$	5,972	$	70,166
Expenses:
	Interest expense		12		4,328		1,535		15,504
	Property operating expenses		68		281		346		1,469
	Provision for depreciation		313		5,014		1,879		19,899
	Total expenses		393		9,623		3,760		36,872
Income (loss) from discontinued operations, net		$	417	$	11,124	$	2,212	$	33,294

6. Real Estate Loans Receivable

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

		Nine Months Ended
		September 30, 2013						September 30, 2012
		Seniors						Seniors
		Housing		Medical				Housing		Medical
		Triple-net		Facilities		Totals		Triple-net		Facilities		Totals
Advances on real estate loans receivable:
	Investments in new loans	$	27,392	$	4,095	$	31,487	$	1,154	$	0	$	1,154
	Draws on existing loans		42,772		3,077		45,849		33,710		1,030		34,740
	Net cash advances on real estate loans		70,164		7,172		77,336		34,864		1,030		35,894
Receipts on real estate loans receivable:
	Loan payoffs		65,768		646		66,414		450		0		450
	Principal payments on loans		16,972		2,169		19,141		14,204		1,923		16,127
	Total receipts on real estate loans		82,740		2,815		85,555		14,654		1,923		16,577
Net cash advances (receipts) on real estate loans			(12,576)		4,357		(8,219)		20,210		(893)		19,317
Change in balance due to foreign currency translation			765		0		765		0		0		0
Net change in real estate loans receivable		$	(11,811)	$	4,357	$	(7,454)	$	20,210	$	(893)	$	19,317

We recorded no provision for loan losses during the nine months ended September 30, 2013.  At September 30, 2013, we had real estate loans with outstanding balances of $2,650,000 on non-accrual status with an allowance for loan losses of $0.

14

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

7. Investments in Unconsolidated Entities

     During the year ended December 31, 2010, we entered into a joint venture investment with Forest City Enterprises Inc. (NYSE:FCE.A and FCE.B). We acquired a 49% interest in a seven-building life science campus located at University Park in Cambridge, Massachusetts, which is immediately adjacent to the campus of the Massachusetts Institute of Technology. This investment is recorded as an investment in unconsolidated entities on the balance sheet.

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

     During the three months ended June 30, 2012, we entered into a joint venture (structured under RIDEA) with Chartwell Retirement Residences (TSX:CSH.UN). The portfolio contains 42 properties in Canada, 39 of which are owned 50% by us and Chartwell, and three of which we wholly own. All properties are managed by Chartwell. Our investment in the 39 properties is recorded as an investment in unconsolidated entities on the balance sheet. The aggregate remaining unamortized basis difference of our investment in this joint venture of $9,488,000 at September 30, 2013 is primarily attributable to transaction costs that will be amortized over the weighted-average useful life of the related properties and included in the reported amount of income from unconsolidated entities.

     In conjunction with the Sunrise Merger, we acquired joint venture interests in 54 properties and a 20% interest in a newly formed Sunrise management company, which manages the entire property portfolio. On July 1, 2013, we acquired the remaining interests in 49 of the properties.  Our original investment of $49,759,000 relating to the five remaining unconsolidated properties and the management company is recorded as an investment in unconsolidated entities on the balance sheet. See Note 3 for additional information.

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

	September 30, 2013		Nine Months Ended September 30,				Assets as of
	Percentage Ownership	Properties	2013 Income (loss)		2012 Income (loss)		September 30, 2013		December 31, 2012
Seniors housing triple-net(1)	10% to 49%	-	$	3,680	$	26	$	29,107	$	34,618
Seniors housing operating	33% to 50%	44		(13,946)		(4,090)		257,232		217,701
Medical facilities	36% to 49%	13		6,737		6,314		189,235		186,617
Total			$	(3,529)	$	2,250	$	475,574	$	438,936
(1) Asset amounts include an available-for-sale equity investment. See Note 16 for additional information.

15

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

8. Credit Concentration

     The following table summarizes certain information about our credit concentration as of September 30, 2013 (dollars in thousands):

		Number of	Total		Percent of
Concentration by investment:(1)		Properties(2)	Investment(2)		Investment(3)
	Sunrise Senior Living	120	$	4,060,818	19%
	Genesis HealthCare	177		2,662,196	12%
	Revera	47		1,221,148	6%
	Belmont Village	19		859,797	4%
	Benchmark	37		852,960	4%
	Remaining portfolio	740		11,949,624	55%
	Totals	1,140	$	21,606,543	100%

(1)Genesis is in our seniors housing triple-net segment.  Sunrise, Revera, and Belmont Village are in our seniors housing operating segment.  Benchmark is in both our seniors housing triple-net and seniors housing operating segments.

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

(3)Investments with our top five relationships comprised 37% of total investments at December 31, 2012.

9. Borrowings Under Line of Credit Arrangements and Related Items

     At September 30, 2013, we had a $2,250,000,000 unsecured line of credit arrangement with a consortium of 29 banks.  We have an option to upsize the facility by up to an additional $1,000,000,000 through an accordion feature, allowing for the aggregate commitment of up to $3,250,000,000.  The arrangement also allows us to borrow up to $500,000,000 in alternate currencies.  At September 30, 2013, we had $595,000,000 outstanding at 1.36%, and the U.S. dollar equivalent of $242,670,000 outstanding in Pound Sterling at 1.67%.  The revolving credit facility is scheduled to expire March 31, 2017, but can be extended for an additional year at our option.  Borrowings under the revolver are subject to interest payable in periods no longer than three months at either the agent bank’s prime rate of interest or the applicable margin over LIBOR interest rate, at our option (1.35% at September 30, 2013). The applicable margin is based on certain of our debt ratings and was 1.175% at September 30, 2013.  In addition, we pay a facility fee annually to each bank based on the bank’s commitment amount.  The facility fee depends on certain of our debt ratings and was 0.225% at September 30, 2013.  Principal is due upon expiration of the agreement.  In addition, at September 30, 2013, we had $10,000,000 outstanding in unsecured revolving demand notes bearing interest at a blended rate of 1.11%. 

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

		Three Months Ended September 30,				Nine Months Ended September 30,
		2013		2012		2013		2012
Balance outstanding at quarter end		$	847,670	$	0	$	847,670	$	0
Maximum amount outstanding at any month end		$	1,019,050	$	145,000	$	1,019,050	$	897,000
Average amount outstanding (total of daily
	principal balances divided by days in period)	$	562,978	$	165,000	$	527,890	$	255,639
Weighted average interest rate (actual interest
	expense divided by average borrowings outstanding)		1.51%		2.30%		1.43%		1.79%

10. Senior Unsecured Notes and Secured Debt

     We may repurchase, redeem or refinance convertible and non-convertible senior unsecured notes from time to time, taking advantage of favorable market conditions when available. We may purchase senior notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to their terms.   The non-convertible senior unsecured notes are redeemable at our option, at any time in whole or from time to time in part, at a redemption price equal to the sum of (1) the principal amount of the notes (or portion of such notes) being redeemed plus accrued and unpaid interest thereon up to the redemption date and (2) any “make-whole” amount due under the terms of the notes in connection with early redemptions.   Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.At September 30, 2013, the annual principal payments due on these debt obligations were as follows (in thousands):

16

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

	Senior		Secured
	Unsecured Notes(1,2)		Debt (1,3)		Totals
2013	$	300,000	$	75,866	$	375,866
2014		0		326,307		326,307
2015(4)		493,072		403,268		896,340
2016		1,200,000		384,127		1,584,127
2017		450,000		341,845		791,845
Thereafter		3,975,118		1,534,510		5,509,628
Totals	$	6,418,190	$	3,065,923	$	9,484,113
(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.
(2) Annual interest rates range from 2.25% to 6.5%, excluding the Canadian denominated unsecured term loan discussed in footnote 4 and the $500,000,000 unsecured term loan discussed below.
(3) Annual interest rates range from 1.0% to 9.1%.  Carrying value of the properties securing the debt totaled $6,336,955,000 at September 30, 2013.
(4) On July 30, 2012, we completed funding on a $250,000,000 Canadian denominated unsecured term loan (approximately $243,072,000 USD at exchange rates on September 30, 2013). The loan matures July 27, 2015 (with an option to extend for an additional year at our discretion) and bears interest at the Canadian Dealer Offered Rate plus 145 basis points (2.67% at September 30, 2013).

During the nine months ended September 30, 2013, we borrowed on a $500,000,000 unsecured term loan entered into as part of our unsecured line of credit arrangement.  The loan matures on March 31, 2016, but can be extended up to two years at our option and bears interest at LIBOR plus 1.35% (1.53% at September 30, 2013).

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

	Nine Months Ended
	September 30, 2013			September 30, 2012
			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	5,894,403	4.675%	$	4,464,927	5.133%
Debt issued		500,000	1.552%		600,000	4.125%
Debt extinguished		-	0.000%		(76,853)	8.000%
Debt redeemed		(219,285)	3.000%		(293,671)	4.750%
Ending balance	$	6,175,118	4.480%	$	4,694,403	5.030%

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

	Nine Months Ended
		September 30, 2013		September 30, 2012
			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	2,311,586	5.14%	$	2,108,373	5.34%
Debt issued		85,140	5.05%		145,713	4.13%
Debt assumed		1,241,898	4.11%		311,653	5.71%
Debt extinguished		(535,367)	3.52%		(237,259)	4.29%
Principal payments		(40,006)	5.27%		(28,247)	5.35%
Foreign currency		2,672	4.04%		288	5.62%
Ending balance	$	3,065,923	5.08%	$	2,300,521	5.42%

     Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of September 30, 2013, we were in compliance with all of the covenants under our debt agreements.

17

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

11. Derivative Instruments

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

I nterest Rate Swap Contracts Designated as Cash Flow Hedges

     For instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”), and reclassified into earnings in the same period, or periods, during which the hedged transaction affects earnings.  Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in earnings.  As of September 30, 2013, we had one interest rate swap for a total aggregate notional amount of $11,692,000.  The swap hedges interest payments associated with long-term LIBOR based borrowings and matures on December 31, 2013.  Approximately $1,910,000 of losses, which are included in accumulated other comprehensive income (“AOCI”), are expected to be reclassified into earnings in the next 12 months.

Foreign Currency Hedges

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

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

     On September 17, 2012, we entered into two forward exchange contracts to purchase $14,000,000 Canadian Dollars and £23,000,000 at a fixed rate in the future.  The forward contracts were used to limit exposure to fluctuations in foreign currency associated with future international transactions.  These forward contacts were settled on March 22, 2013 for a realized loss of $2,309,000.

     On January 14, 2013 and January 15, 2013, we entered into three forward exchange contracts to sell £675,000,000 at a fixed rate in the future.  The forward exchange contracts were used to hedge a portion of our investment in the United Kingdom at a fixed Pound Sterling rate in U.S. dollars and were settled on July 12, 2013. We received proceeds of $63,514,000.  The forward exchange contracts were designated as net investment hedges and the change in fair value is reported in OCI.

     On April 4, 2013, we entered into three forward exchange contracts to purchase $600,000,000 Canadian Dollars at a fixed rate in the future and three forward exchange contracts to sell $600,000,000 Canadian Dollars at a fixed rate in the future. The forward contracts were used to limit exposure to fluctuations in the Canadian Dollar to U.S. Dollar exchange rate associated with our initial cash investment funded for an acquisition in Canada. On May 22, 2013, the three forward exchange purchase contracts were settled for a realized loss of $10,355,000, which was reflected on the consolidated statement of comprehensive income, and the proceeds were used to fund our investment. On May 22, 2013, we designated the three forward exchange sell contracts as net investment hedges, and changes in fair value are reported in OCI as no ineffectiveness is anticipated. Prior to designating the three forward exchange sell contracts as net investments, they were marked to fair value and an unrealized gain of $13,071,000 was reflected on the consolidated statement of comprehensive income.

18

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

     On July 1, 2013, we entered into two forward exchange contracts to purchase £144,411,000 at a fixed rate in the future. The forward contracts were used to limit exposure to fluctuations in the Pound Sterling to U.S. Dollar exchange rate associated with our initial cash investment for an acquisition in the United Kingdom. In July 2013, these forward contracts were settled for a realized loss of $4,872,000, which was reflected on the consolidated statement of comprehensive income, and the proceeds were used to fund our investment.

     On July 12, 2013, we entered into three forward exchange contracts to sell £675,000,000 at a fixed rate in the future.  The forward exchange contracts were used to hedge a portion of our investment in the United Kingdom at a fixed Pound Sterling rate in U.S. dollars and mature on December 31, 2013.  The forward exchange contracts are designated as net investment hedges and changes in fair value are reported in OCI as no ineffectiveness is expected.

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

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	Location		2013		2012		2013		2012
Gain (loss) on interest rate swap recognized in OCI (effective portion)	OCI	$	(4)	$	797	$	(12)	$	2,342
Gain (loss) on interest rate swaps reclassified from AOCI into income (effective portion)	Interest expense		(477)		383		(1,428)		1,204
Gain (loss) on interest rate swaps recognized in income	Gain (loss) on derivatives, net		0		0		0		(96)
Gain (loss) on foreign exchange contracts recognized in income	Gain (loss) on derivatives, net		(4,872)		(409)		(4,465)		1,808
Gain (loss) on foreign exchange contracts and term loans designated as net investment hedge recognized in OCI	OCI		(110,404)		(12,663)		(19,867)		(5,747)

12. Commitments and Contingencies

     At September 30, 2013, we had six outstanding letter of credit obligations totaling $5,658,000 and expiring between 2013 and 2015.  At September 30, 2013, we had outstanding construction in process of $158,006,000 for leased properties and were committed to providing additional funds of approximately $261,625,000 to complete construction. At September 30, 2013, we had contingent purchase obligations totaling $59,561,000. These contingent purchase obligations relate to unfunded capital improvement obligations and contingent obligations on acquisitions. Rents due from the tenant are increased to reflect the additional investment in the property.

     We evaluate our leases for operating versus capital lease treatment in accordance with Accounting Standards Codification (“ASC”) Topic 840 “Leases.”  A lease is classified as a capital lease if it provides for transfer of ownership of the leased asset at the end of the lease term, contains a bargain purchase option, has a lease term greater than 75% of the economic life of the leased asset, or if the net present value of the future minimum lease payments are in excess of 90% of the fair value of the leased asset. Certain leases contain bargain purchase options and have been classified as capital leases.  At September 30, 2013, we had operating lease obligations of $882,088,000 relating to certain ground leases and company office space and capital lease obligations of $118,463,000 relating to certain investment properties. We incurred rental expense relating to company office space of $410,000 and $1,217,000 for the three months and nine months ended September 30, 2013, respectively, as compared to $330,000 and $931,000 for the same periods in 2012. Regarding ground leases, we have sublease agreements with certain of our operators that require the operators to reimburse us for our monthly operating lease obligations.  At September 30, 2013, aggregate future minimum rentals to be received under these noncancelable subleases totaled $44,987,000.

19

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

13. Stockholders’ Equity

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

	September 30, 2013	December 31, 2012
Preferred Stock:
Authorized shares	50,000,000	50,000,000
Issued shares	26,224,854	26,224,854
Outstanding shares	26,224,854	26,224,854
Common Stock, $1.00 par value:
Authorized shares	400,000,000	400,000,000
Issued shares	288,821,107	260,780,109
Outstanding shares	288,360,031	260,373,754

Preferred Stock. The following is a summary of our preferred stock activity during the periods indicated:

	Nine Months Ended
	September 30, 2013		September 30, 2012
		Weighted Avg.		Weighted Avg.
	Shares	Dividend Rate	Shares	Dividend Rate
Beginning balance	26,224,854	6.493%	25,724,854	7.013%
Shares issued	-	0.000%	11,500,000	6.500%
Shares redeemed	-	0.000%	(11,000,000)	7.716%
Ending balance	26,224,854	6.493%	26,224,854	6.493%

Common Stock. The following is a summary of our common stock issuances during the nine months ended September 30, 2013 and 2012 (dollars in thousands, except per share amounts):

	Shares Issued		Average Price		Gross Proceeds		Net Proceeds
February 2012 public issuance	20,700,000	$	53.50	$	1,107,450	$	1,062,256
August 2012 public issuance	13,800,000		58.75		810,750		778,011
September 2012 public issuance	29,900,000		56.00		1,674,400		1,607,140
2012 Dividend reinvestment plan issuances	1,485,598		55.65		82,678		82,678
2012 Option exercises	155,195		39.61		6,147		6,147
2012 Senior note conversions	1,039,721				0		0
2012 Totals	67,080,514			$	3,681,425	$	3,536,232
May 2013 public issuance	23,000,000	$	73.50	$	1,690,500	$	1,630,281
2013 Dividend reinvestment plan issuances	2,379,609		64.62		153,762		153,762
2013 Option exercises	200,467		42.45		8,509		8,509
2013 Senior note conversions	987,967				0		0
2013 Equity issued in acquisition of noncontrolling interest	1,108,917				0		0
2013 Totals	27,676,960			$	1,852,771	$	1,792,552

     During the three months ended September 30, 2013, we acquired the remaining 20% noncontrolling interest in an existing partnership for $91,000,000 which consisted of $23,247,000 of cash and 1,108,917 shares of common stock. In connection with the acquisition, we incurred $2,732,000 of transaction costs which we have included as a reduction to additional paid in capital.

20

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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

	Nine Months Ended
	September 30, 2013				September 30, 2012
	Per Share		Amount		Per Share		Amount
Common Stock	$	2.2950	$	618,992	$	2.2200	$	460,936
Series D Preferred Stock		-		0		0.5030		2,012
Series F Preferred Stock		-		0		0.4872		3,410
Series H Preferred Stock		2.1438		750		2.1438		750
Series I Preferred Stock		2.4375		35,039		2.4375		35,039
Series J Preferred Stock		1.2189		14,016		0.9841		11,316
Totals			$	668,797			$	513,463

     Accumulated Other Comprehensive Income.  The following is a summary of accumulated other comprehensive income (loss) for the periods presented (in thousands):

		Unrecognized gains (losses) related to:
		Foreign Currency Translation		Equity Investments		Actuarial losses		Cash Flow Hedges		Total
Balance at December 31, 2012	$	(881)	$	(216)	$	(2,974)	$	(6,957)	$	(11,028)
Other comprehensive income before reclassification adjustments		(13,517)		(346)		0		(12)		(13,875)
Reclassification amount to net income		0		0		0		1,428(1)		1,428
Net current-period other comprehensive income		(13,517)		(346)		0		1,416		(12,447)
Balance at September 30, 2013	$	(14,398)	$	(562)	$	(2,974)	$	(5,541)	$	(23,475)
Balance at December 31, 2011	$	0	$	(619)	$	(2,748)	$	(8,561)	$	(11,928)
Other comprehensive income before reclassification adjustments		166		192		0		2,342		2,700
Reclassification amount to net income		0		0		0		(1,204)(1)		(1,204)
Net current-period other comprehensive income		166		192		0		1,138		1,496
Balance at September 30, 2012	$	166	$	(427)	$	(2,748)	$	(7,423)	$	(10,432)
(1) Please see Note 11 for additional information.

14. Stock Incentive Plans

     Our Amended and Restated 2005 Long-Term Incentive Plan (“2005 Plan”) authorizes up to 6,200,000 shares of common stock to be issued at the discretion of the Compensation Committee of the Board of Directors. The 2005 Plan replaced the 1995 Stock Incentive Plan (“1995 Plan”) and the Stock Plan for Non-Employee Directors. The options granted to officers and key employees under the 1995 Plan vested through 2010 and expire ten years from the date of grant. Our non-employee directors, officers and key employees are eligible to participate in the 2005 Plan. The 2005 Plan allows for the issuance of, among other things, stock options, restricted stock, deferred stock units and dividend equivalent rights. Vesting periods for options, deferred stock units and restricted shares generally range from three years for non-employee directors to five years for officers and key employees. Options expire ten years from the date of grant.  Stock-based compensation expense totaled $3,956,000 and $16,650,000 for the three and nine months ended September 30, 2013, respectively, and $2,592,000 and $16,229,000 for the same periods in 2012.

21

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

15. Earnings Per Share

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

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2013		2012		2013		2012
Numerator for basic and diluted earnings
	per share - net income (loss) attributable
	to common stockholders	$	20,691	$	37,269	$	67,245	$	131,308
Denominator for basic earnings per
	share - weighted average shares		286,020		224,391		273,148		212,592
Effect of dilutive securities:
	Employee stock options		196		238		235		240
	Non-vested restricted shares		567		301		417		293
	Convertible senior unsecured notes		1,246		1,328		1,447		950
Dilutive potential common shares			2,009		1,867		2,099		1,483
Denominator for diluted earnings per
	share - adjusted weighted average shares		288,029		226,258		275,247		214,075
Basic earnings per share		$	0.07	$	0.17	$	0.25	$	0.62
Diluted earnings per share		$	0.07	$	0.16	$	0.24	$	0.61

The diluted earnings per share calculations exclude the dilutive effect of 0 and 237,000 common stock equivalents for the three months ended September 30, 2013 and 2012, respectively, and 0 common stock equivalents for the nine months ended September 30, 2013 and 2012, because the exercise prices were higher than the average market price.  The Series H Cumulative Convertible and Redeemable Preferred Stock and Series I Cumulative Convertible Perpetual Preferred Stock were not included in the calculations as the effect of conversions into common stock was anti-dilutive.

16. Disclosure about Fair Value of Financial Instruments

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

Mortgage Loans and Other Real Estate Loans Receivable — The fair value of mortgage loans and other real estate loans receivable is generally estimated by using Level 2 and Level 3 inputs such as discounting the estimated future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. 

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

Available-for-sale Equity Investments — Available-for-sale equity investments are recorded at their fair value based on Level 1 publicly available trading prices.

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

Senior Unsecured Notes — The fair value of the senior unsecured notes payable was estimated based on Level 1 publicly available trading prices.

Secured Debt — The fair value of fixed rate secured debt is estimated using Level 2 inputs by discounting the estimated future cash flows using the current rates at which similar loans would be made with similar credit ratings and for the same remaining maturities.  The carrying amount of variable rate secured debt approximates fair value because the borrowings are interest rate adjustable.

22

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Interest Rate Swap Agreements — Interest rate swap agreements are recorded in other assets or other liabilities on the balance sheet at fair market value.  Fair market value is estimated using Level 2 inputs by utilizing pricing models that consider forward yield curves and discount rates.

Foreign Currency Forward Contracts — Foreign currency forward contracts are recorded in other assets or other liabilities on the balance sheet at fair market value.  Fair market value is determined using Level 2 inputs by estimating the future value of the currency pair based on existing exchange rates, comprised of current spot and traded forward points, and calculating a present value of the net amount using a discount factor based on observable traded interest rates.

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

		September 30, 2013				December 31, 2012
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
	Mortgage loans receivable	$	131,138	$	133,554	$	87,955	$	88,975
	Other real estate loans receivable		176,239		182,153		807,710		820,195
	Available-for-sale equity investments		1,037		1,037		1,384		1,384
	Cash and cash equivalents		164,838		164,838		1,033,764		1,033,764
	Foreign currency forward contracts		7,669		7,669		0		0
Financial liabilities:
	Borrowings under unsecured line of credit arrangements	$	847,670	$	847,670	$	0	$	0
	Senior unsecured notes		6,395,638		6,806,353		6,114,151		6,793,424
	Secured debt		3,115,862		3,262,955		2,336,196		2,515,145
	Interest rate swap agreements		68		68		264		264
	Foreign currency forward contracts		79,544		79,544		7,247		7,247

U.S. GAAP provides authoritative guidance for measuring and disclosing fair value measurements of assets and liabilities.  The guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  The guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The guidance describes three levels of inputs that may be used to measure fair value:

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

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Please see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013, for additional information.

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

Items Measured at Fair Value on a Recurring Basis

The market approach is utilized to measure fair value for our financial assets and liabilities reported at fair value on a recurring basis.  The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The following summarizes items measured at fair value on a recurring basis (in thousands):

23

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

	Fair Value Measurements as of September 30, 2013
	Total		Level 1		Level 2		Level 3
Available-for-sale equity investments(1)	$	1,037	$	1,037	$	0	$	0
Interest rate swap agreements(2)		(68)		0		(68)		0
Foreign currency forward contracts(2)		(71,875)		0		(71,875)		0
Totals	$	(70,906)	$	1,037	$	(71,943)	$	0
(1) Unrealized gains or losses on equity investments are recorded in accumulated other comprehensive income (loss) at each measurement date.
(2) Please see Note 11 for additional information.

Items Measured at Fair Value on a Nonrecurring Basis

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

24

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

17. Segment Reporting

We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our five operating segments: seniors housing triple-net, seniors housing operating, medical office buildings, hospitals and life science. Our seniors housing triple-net properties include skilled nursing/post-acute facilities, assisted living facilities, independent living/continuing care retirement communities and combinations thereof. Under the seniors housing triple-net segment, we invest in seniors housing and health care real estate through acquisition and financing of primarily single tenant properties. Properties acquired are primarily leased under triple-net leases and we are not involved in the management of the property. Our seniors housing operating properties include seniors housing communities that are owned and/or operated through RIDEA structures (see Notes 3 and 18).

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

     The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013). The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments.  There are no intersegment sales or transfers.

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

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

     Summary information for the reportable segments for the three and nine months ended September 30, 2013 and 2012 is as follows (in thousands):

Three Months Ended September 30, 2013:		Seniors Housing Triple-net				Seniors Housing Operating			Medical Facilities				Non-segment / Corporate				Total
Rental income	$	199,408		$		-		$	112,323			$	-			$	311,731
Resident fees and services		-				466,127			-				-				466,127
Interest income		5,035				-			2,594				-				7,629
Other income		778				167			466				32				1,443
Total revenues		205,221				466,294			115,383				32				786,930
Property operating expenses		-				(311,575)			(31,155)				-				(342,730)
Net operating income from continuing operations		205,221				154,719			84,228				32				444,200
Reconciling items:
Interest expense		(5,968)				(24,693)			(9,143)				(76,726)				(116,530)
(Loss) gain on derivatives, net		(4,872)				-			-				-				(4,872)
Depreciation and amortization		(58,148)				(144,578)			(39,942)				-				(242,668)
General and administrative		-				-			-				(28,718)				(28,718)
Transaction costs		(4,026)				(18,882)			(683)				-				(23,591)
(Loss) gain on extinguishment of debt, net		-				5,252			-				(1,184)				4,068
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	132,207		$		(28,182)		$	34,460			$	(106,596)			$	31,889
Total assets	$	9,222,731		$		9,031,224		$	4,645,540			$	150,310			$	23,049,805
Three Months Ended September 30, 2012:			Seniors Housing Triple-net				Seniors Housing Operating				Medical Facilities				Non-segment / Corporate				Total
Rental income	$		178,193		$		-			$	99,726			$	-			$	277,919
Resident fees and services			-				174,464				-				-				174,464
Interest income			6,116				-				1,995				-				8,111
Other income			662				-				400				277				1,339
Total revenues			184,971				174,464				102,121				277				461,833
Property operating expenses			-				(118,369)				(26,048)				-				(144,417)
Net operating income from continuing operations			184,971				56,095				76,073				277				317,416
Reconciling items:
Interest expense			(347)				(17,474)				(7,940)				(66,154)				(91,915)
(Loss) gain on derivatives, net			-				(409)				-				-				(409)
Depreciation and amortization			(52,294)				(39,591)				(35,959)				-				(127,844)
General and administrative			-				-				-				(23,679)				(23,679)
Transaction costs			(5,590)				(1,966)				(708)				-				(8,264)
(Loss) gain on extinguishment of debt, net			(126)				(89)				-				-				(215)
Provision for loan losses			(27,008)				-				-				-				(27,008)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$		99,606		$		(3,434)			$	31,466			$	(89,556)			$	38,082
Nine Months Ended September 30, 2013:		Seniors Housing Triple-net				Seniors Housing Operating			Medical Facilities				Non-segment / Corporate				Total
Rental income	$	573,112		$		-		$	336,547			$	-			$	909,659
Resident fees and services		-				1,164,446			-				-				1,164,446
Interest income		16,311				757			7,257				-				24,325
Other income		1,183				169			1,539				277				3,168
Total revenues		590,606				1,165,372			345,343				277				2,101,598
Property operating expenses		-				(785,050)			(89,910)				-				(874,960)
Net operating income from continuing operations		590,606				380,322			255,433				277				1,226,638
Reconciling items:
Interest expense		(15,841)				(63,175)			(28,441)				(229,128)				(336,585)
(Loss) gain on derivatives, net		(4,872)				407			-				-				(4,465)
Depreciation and amortization		(169,603)				(338,099)			(120,998)				-				(628,700)
General and administrative		-				-			-				(79,799)				(79,799)
Transaction costs		(15,730)				(101,006)			(971)				-				(117,707)
(Loss) gain on extinguishment of debt, net		-				5,560			-				(1,184)				4,376
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	384,560		$		(115,991)		$	105,023			$	(309,834)			$	63,758
Nine Months Ended September 30, 2012:			Seniors Housing Triple-net				Seniors Housing Operating				Medical Facilities				Non-segment / Corporate				Total
Rental income	$		508,004		$		-			$	281,744			$	-			$	789,748
Resident fees and services			-				498,295				-				-				498,295
Interest income			17,977				-				6,154				-				24,131
Other income			2,268				-				1,482				755				4,505
Total revenues			528,249				498,295				289,380				755				1,316,679
Property operating expenses			-				(336,952)				(72,284)				-				(409,236)
Net operating income from continuing operations			528,249				161,343				217,096				755				907,443
Reconciling items:
Interest expense			(602)				(49,537)				(22,338)				(198,746)				(271,223)
(Loss) gain on derivatives, net			(96)				1,808				-				-				1,712
Depreciation and amortization			(147,074)				(123,820)				(102,450)				-				(373,344)
General and administrative			-				-				-				(77,302)				(77,302)
Transaction costs			(30,796)				(6,365)				(5,374)				-				(42,535)
(Loss) gain on extinguishment of debt, net			(2,363)				1,089				483				-				(791)
Provision for loan losses			(27,008)				-				-				-				(27,008)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$		320,310		$		(15,482)			$	87,417			$	(275,293)			$	116,952

25

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

     Our portfolio of properties and other investments are located in the United States, the United Kingdom and Canada.  Revenues and assets are attributed to the country in which the property is physically located.  The following is a summary of geographic information for our operations for the periods presented (dollars in thousands):

		Three Months Ended						Nine Months Ended
		September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	669,968	85.1%	$	454,742	98.5%	$	1,837,068	87.4%	$	1,307,533	99.3%
International		116,962	14.9%		7,091	1.5%		264,530	12.6%		9,146	0.7%
Total	$	786,930	100.0%	$	461,833	100.0%	$	2,101,598	100.0%	$	1,316,679	100.0%
		As of
		September 30, 2013			December 31, 2012
Assets:		Amount	%		Amount	%
United States	$	19,622,576	85.1%	$	18,692,214	95.6%
International		3,427,229	14.9%		856,895	4.4%
Total	$	23,049,805	100.0%	$	19,549,109	100.0%

27

HEALTH CARE REIT, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

18. Income Taxes and Distributions

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

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

     Our consolidated provision for income taxes for the nine months ended September 30, 2013 and 2012 was $7,055,000 and $3,754,000, respectively.  Income tax expense reflected in the financial statements primarily represents U.S. federal and state and local income taxes as well as non-U.S. income taxes on certain investments located in jurisdictions outside the U.S.  Net deferred tax liabilities with respect to our TRS entities totaled $10,388,000 and $1,419,000 as of September 30, 2013 and December 31, 2012, respectively, and related primarily to differences between the financial reporting and tax bases of fixed and intangible assets and to net operating losses.

     Generally, given current statutes of limitations, we are subject to audit by the Internal Revenue Service (“IRS”) for the year ended December 31, 2010 and subsequent years and by state taxing authorities for the year ended December 31, 2009 and subsequent years.  We are also subject to audit by the Canada Revenue Agency (“CRA”) and provincial authorities generally for periods subsequent to our Chartwell investment in May 2012 related to entities acquired or formed in connection with the investments, and by HM Revenue & Customs for periods subsequent to our Sunrise-related acquisitions in August 2012 related to entities acquired or formed in connection with the acquisitions.

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

     The balance of our unrecognized tax benefits as of September 30, 2013 and December 31, 2012 was $6,327,000 and $6,098,000, respectively.  As of September 30, 2013, $5,916,000 (exclusive of accrued interest and penalties) relates to the April 1, 2011 Genesis HealthCare Corporation transaction (“Genesis Acquisition”) and is included in accrued expenses and other liabilities on the consolidated balance sheet.  As a part of the Genesis Acquisition, we received a full indemnification from FC-GEN Operations Investment, LLC covering income taxes or other taxes as well as  interest and penalties relating to tax positions taken by FC-GEN Operations Investment, LLC prior to the acquisition.  Accordingly, an offsetting indemnification asset is recorded in receivables and other assets on the consolidated balance sheet.  Such indemnification asset is reviewed for collectability periodically.  Unrecognized tax benefits, as currently accrued for, have an immaterial impact on the effective tax rate to the extent that they would be recognized.  There were insignificant uncertain tax positions as of September 30, 2013 for which it is reasonably possible that the amount of unrecognized tax benefits would decrease during 2013.  Interest and penalties totaled $154,000 and $366,000 for the three and nine months ended September 30, 2013, respectively, and are included in income tax expense.

19. Subsequent Events

Debt Activity.  On October 7, 2013, we completed the issuance of $400 million of 4.5% senior unsecured notes due 2024, generating approximately $393 million in proceeds.

28

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

EXECUTIVE SUMMARY
Company Overview      Business Strategy      Capital Market Outlook      Key Transactions in 2013      Key Performance Indicators, Trends and Uncertainties      Corporate Governance	30 30 31 31 33 35
LIQUIDITY AND CAPITAL RESOURCES
Sources and Uses of Cash      Off-Balance Sheet Arrangements      Contractual Obligations      Capital Structure	36 36 37 37
RESULTS OF OPERATIONS
Summary      Seniors Housing Triple-net      Seniors Housing Operating      Medical Facilities      Non-Segment/Corporate	38 39 42 45 47
NON-GAAP FINANCIAL MEASURES & OTHER
FFO Reconciliations      EBITDA & Adjusted EBITDA Reconciliations      NOI and SSCNOI Reconciliations	49 50 52
Health Care Reimbursements and Other Related Laws	55
Critical Accounting Policies      Forward-Looking Statements and Risk Factors	57 57

29

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion and analysis is based primarily on the consolidated financial statements of Health Care REIT, Inc. for the periods presented and should be read together with the notes thereto contained in this Quarterly Report on Form 10-Q. Other important factors are identified in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013,  including factors identified under the headings “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  References herein to “we,” “us,” “our,” or the “company” refer to Health Care REIT, Inc. and its subsidiaries unless specifically noted otherwise.

Executive Summary

Company Overview

     Health Care REIT, Inc. is a real estate investment trust (“REIT”) that has been at the forefront of seniors housing and health care real estate since the company was founded in 1970.  We are an S&P 500 company headquartered in Toledo, Ohio. Our portfolio spans the full spectrum of seniors housing and health care real estate, including seniors housing communities, skilled nursing/post-acute facilities, medical office buildings, inpatient and outpatient medical centers and life science facilities. Our capital programs, when combined with comprehensive planning, development and property management services, make us a single-source solution for acquiring, planning, developing, managing, repositioning and monetizing real estate assets.  The following table summarizes our consolidated portfolio as of September 30, 2013:

	Investments		Percentage of	Number of
Type of Property	(in thousands)		Investments	Properties
Seniors housing triple-net	$	8,905,928	41.2%	618
Seniors housing operating(1)		8,443,984	39.1%	276
Medical facilities(2)		4,256,631	19.7%	246
Totals	$	21,606,543	100.0%	1,140
(1) Excludes 44 properties with an investment amount of $405,770,000 that relates to our share of investments in unconsolidated entities with Chartwell and Sunrise. Please see Note 7 to our consolidated financial statements for additional information.
(2) Excludes 13 properties with an investment amount of $367,134,000 that relates to our share of investments in unconsolidated entities with Forest City and a strategic medical partnership. Please see Note 7 to our consolidated financial statements for additional information.

Business Strategy

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

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

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

30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     For the nine months ended September 30, 2013, rental income and resident fees and services represented 43% and 55%, respectively, of total revenues (including discontinued operations).  Substantially all of our operating leases are designed with escalating rent structures. Leases with fixed annual rental escalators are generally recognized on a straight-line basis over the initial lease period, subject to a collectability assessment. Rental income related to leases with contingent rental escalators is generally recorded based on the contractual cash rental payments due for the period. Our yield on loans receivable depends upon a number of factors, including the stated interest rate, the average principal amount outstanding during the term of the loan and any interest rate adjustments.

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

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

     Depending upon market conditions, we believe that new investments will be available in the future with spreads over our cost of capital that will generate appropriate returns to our stockholders. It is also possible that investment dispositions may occur in the future. To the extent that investment dispositions exceed new investments, our revenues and cash flows from operations could be adversely affected. We expect to reinvest the proceeds from any investment dispositions in new investments. To the extent that new investment requirements exceed our available cash on-hand, we expect to borrow under our primary unsecured line of credit arrangement. At September 30, 2013, we had $164,838,000 of cash and cash equivalents, $80,890,000 of restricted cash and $1,402,330,000 of available borrowing capacity under our primary unsecured line of credit arrangement.

Capital Market Outlook

     We believe the capital markets remain supportive of our investment strategy.  For the year ended December 31, 2012, we raised over $6.0 billion in aggregate gross proceeds through the issuance of common and preferred stock, unsecured debt and a Canadian denominated term loan.  Through October 7, 2013, we funded a $500 million unsecured term loan, issued $400 million unsecured notes, expanded our primary unsecured line of credit arrangement to $2.25 billion and raised $1.8 billion of common equity.  The capital raised, in combination with available cash and borrowing capacity under our line of credit, supported $4.9 billion in gross new investments during 2012 and $5.3 billion year-to-date in 2013.  We expect attractive investment opportunities to remain available in the future as we continue to leverage the benefits of our relationship investment strategy.

Key Transactions in 2013

Capital.  In January 2013, we closed a $2.75 billion unsecured line of credit arrangement consisting of a $2.25 billion revolver and a $500 million term loan.  The facility replaced our existing $2.0 billion unsecured line of credit arrangement. The revolver matures on March 31, 2017, but can be extended for an additional year at our option.  The term loan matures on March 31, 2016, but can be extended up to two years at our option.  The revolver bears interest at LIBOR plus 117.5 basis points and has an annual facility fee of 22.5 basis points.  The term loan bears interest at LIBOR plus 135 basis points. We have an option to upsize the facility by up to an additional $1.0 billion through an accordion feature, allowing for aggregate commitments of up to $3.75 billion.  The facility also allows us to borrow up to $500 million in alternate currencies. In May 2013, we completed the public issuance of 23 million shares of common stock for $1.7 billion of gross proceeds.  In October 2013, we issued $400 million of 4.5% 10-year senior unsecured notes, generating $393 million of net proceeds. In addition, for the nine months ended September 30, 2013, we raised $154 million through our dividend reinvestment program.

Investments.  We completed $5.3 billion of gross investments during the nine months ended September 30, 2013, including 71% from existing relationships.  The following summarizes investments made during the nine months ended September 30, 2013 (dollars in thousands):

31

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Properties		Investment Amount(1)	Capitalization Rates(2)		Book Amount(3)
Acquisitions/JVs:
Seniors housing triple-net	16	$	268,697	7.0%	$	268,568
Seniors housing operating(4)	164		4,585,817	6.6%		5,202,058
Medical facilities	7		144,705	8.6%		145,364
Total acquisitions/JVs	187		4,999,219	6.7%		5,615,990
Construction in progress			193,354			193,354
Loan advances			77,336			77,336
Total		$	5,269,909		$	5,886,680
(1) Represents stated purchase price including cash and any assumed debt but excludes fair value adjustments pursuant to U.S. GAAP.
(2) Represents annualized contractual or projected income to be received in cash divided by investment amounts.
(3) Represents amounts recorded on our books including fair value adjustments pursuant to U.S. GAAP.  See Notes 3, 6 and 7 to our consolidated financial statements for additional information.
(4) Excludes $580,834,000 for the Sunrise loan which was acquired upon merger consummation on January 9, 2013. See Note 21 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013, for additional information.

Dispositions.  We completed $407 million of dispositions, generating $466 million in proceeds and $57 million in net gains as of September 30, 2013.  The following summarizes dispositions made for the nine months ended September 30, 2013 (dollars in thousands):

	Properties		Proceeds(1)	Capitalization Rates(2)		Book Amount(3)
Property sales:
Seniors housing triple-net	19	$	195,140	10.5%	$	138,650
Medical facilities	12		216,188(4)	6.0%		201,845
Total property sales	31		411,328	8.1%		340,495
Loan payoffs(5)			66,414			66,414
Total dispositions		$	477,742		$	406,909
(1) Represents proceeds received upon disposition including any seller financing. See Notes 5 and 6 to our consolidated financial statements for additional information.
(2) Represents annualized contractual income that was being received in cash at date of disposition divided by disposition proceeds.
(3) Represents carrying value of assets at time of disposition.
(4) Includes non-cash proceeeds attributable to an asset swap that are excluded from the statement of cash flows. See Note 5 to our consolidated financial statements for additional information.
(5) Excludes $580,834,000 for the Sunrise loan which was acquired upon merger consummation on January 9, 2013.

The following additional event occurred during the nine months ended September 30, 2013:

·Our Board of Directors increased the annual cash dividend to $3.06 per common share ($0.765 per share quarterly), as compared to $2.96 per common share for 2012, beginning in February 2013.  The dividend declared for the quarter ended September 30, 2013 represents the 170^th consecutive quarterly dividend payment.

32

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Key Performance Indicators, Trends and Uncertainties

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

Operating Performance. We believe that net income attributable to common stockholders (“NICS”) is the most appropriate earnings measure. Other useful supplemental measures of our operating performance include funds from operations (“FFO”), net operating income from continuing operations (“NOI”) and same store cash NOI (“SSCNOI”); however, these supplemental measures are not defined by U.S. generally accepted accounting principles (“U.S. GAAP”). Please refer to the section entitled “Non-GAAP Financial Measures” for further discussion and reconciliations of FFO, NOI and SSCNOI. These earnings measures and their relative per share amounts are widely used by investors and analysts in the valuation, comparison and investment recommendations of companies. The following table reflects the recent historical trends of our operating performance measures for the periods presented (in thousands):

		Three Months Ended
		March 31,		June 30,		September 30,		December 31,		March 31,		June 30,		September 30,
		2012		2012		2012		2012			2013	2013		2013
Net income (loss) attributable to common stockholders		$	39,307	$	54,735	$	37,269	$	90,576	$	55,058	$	(8,508)	$	20,691
Funds from operations			163,857		157,932		170,725		205,047		170,878		230,666		258,263
Net operating income from continuing operations			287,644		302,379		317,416		338,094		379,408		403,028		444,200
Same store cash net operating income			226,624		230,660		231,582		233,759		233,166		238,900		241,124
Per share data (fully diluted):
	Net income (loss) attributable to common stockholders	$	0.19	$	0.25	$	0.16	$	0.35	$	0.21	$	(0.03)	$	0.07
	Funds from operations		0.81		0.73		0.75		0.78		0.65		0.83		0.90

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

33

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

		March 31,	June 30,	September 30,	December 31,	March 31,	June 30,	September 30,
		2012	2012	2012	2012	2013	2013	2013
Asset mix:
	Real property	95%	93%	93%	91%	91%	92%	95%
	Real estate loans receivable	2%	2%	2%	5%	1%	1%	1%
	Investments in unconsolidated entities	3%	5%	5%	4%	8%	7%	4%
Investment mix:(1)
	Seniors housing triple-net	53%	53%	53%	47%	43%	40%	41%
	Seniors housing operating	20%	20%	20%	28%	35%	39%	39%
	Medical facilities	27%	27%	27%	25%	22%	21%	20%
Relationship mix:(1)
	Sunrise Senior Living				6%	14%	13%	19%
	Genesis HealthCare	18%	18%	17%	15%	14%	13%	12%
	Revera						6%	6%
	Belmont Village				5%	5%	4%	4%
	Benchmark Senior Living	6%	6%	5%	5%	4%		4%
	Merrill Gardens	8%	7%	7%	6%	6%	5%
	Brandywine Senior Living	5%	5%	5%
	Senior Living Communities	4%	4%	4%
	Remaining relationships	59%	60%	62%	63%	57%	59%	55%
Geographic mix:(1)
	California	10%	9%	9%	9%	9%	8%	10%
	New Jersey	10%	9%	9%	9%	8%	8%	8%
	England					8%	7%	8%
	Texas	9%	9%	9%	9%	8%	8%	7%
	Florida	7%	7%	8%	7%	6%	5%	5%
	Pennsylvania	6%	6%	5%	5%
	Remaining geographic areas	58%	60%	60%	61%	61%	64%	62%
(1) Excludes our share of investments in unconsolidated entities.

34

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

		Three Months Ended
		March 31,	June 30,	September 30,	December 31,	March 31,	June 30,	September 30,
		2012	2012	2012	2012	2013	2013	2013
Debt to book capitalization ratio		45%	48%	41%	45%	49%	44%	47%
Debt to undepreciated book
	capitalization ratio	41%	45%	38%	41%	45%	41%	43%
Debt to market capitalization ratio		34%	36%	31%	33%	34%	32%	35%
Interest coverage ratio		3.03x	3.21x	2.94x	3.60x	3.42x	2.88x	3.32x
Fixed charge coverage ratio		2.33x	2.52x	2.30x	2.82x	2.72x	2.27x	2.62x

     Lease Expirations. The following table sets forth information regarding lease expirations for certain portions of our portfolio as of September 30, 2013 (dollars in thousands):

			Expiration Year
			2013	2014	2015	2016	2017	2018	2019	2020	2021	2022	Thereafter
Seniors housing triple-net:
	Properties		1	15	1	0	36	51	0	12	23	42	412
	Base rent(1)	$	769	25,947	1,435	0	16,561	37,398	0	14,982	36,372	40,270	676,064
	% of base rent		0.1%	3.1%	0.2%	0.0%	1.9%	4.4%	0.0%	1.8%	4.3%	4.7%	79.5%
Hospitals:
	Properties		0	0	0	0	0	0	0	0	0	0	31
	Base rent(1)	$	0	0	0	0	0	0	0	0	0	0	89,484
	% of base rent		0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	100.0%
Medical office buildings:
	Square feet		106,148	640,387	707,332	801,814	1,125,709	813,647	682,805	741,685	867,934	1,956,503	3,503,708
	Base rent(1)	$	2,365	13,838	15,492	17,438	27,163	18,891	16,505	18,006	21,648	39,706	93,101
	% of base rent		0.8%	4.9%	5.5%	6.1%	9.6%	6.6%	5.8%	6.3%	7.6%	14.0%	32.8%
(1) The most recent monthly base rent including straight line for leases with fixed escalators or annual cash rents for leases with contingent escalators.  Base rent does not include tenant recoveries or amortization of above and below market lease intangibles.

     We evaluate our key performance indicators in conjunction with current expectations to determine if historical trends are indicative of future results. Our expected results may not be achieved and actual results may differ materially from our expectations. Factors that may cause actual results to differ from expected results are described in more detail in “Forward-Looking Statements and Risk Factors” and other sections of this Quarterly Report on Form 10-Q. Management regularly monitors economic and other factors to develop strategic and tactical plans designed to improve performance and maximize our competitive position. Our ability to achieve our financial objectives is dependent upon our ability to effectively execute these plans and to appropriately respond to emerging economic and company-specific trends. Please refer to our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013, under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further discussion of these risk factors.

Corporate Governance

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

35

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

are available on the Internet at www.hcreit.com.

Liquidity and Capital Resources

Sources and Uses of Cash

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

		Nine Months Ended				Change
		September 30, 2013		September 30, 2012		$		%
Cash and cash equivalents at beginning of period		$	1,033,764	$	163,482	$	870,282	532%
Cash provided from (used in):
Operating activities			625,907		563,470		62,437	11%
Investing activities			(3,202,554)		(2,097,614)		(1,104,940)	53%
Financing activities			1,693,312		2,752,914		(1,059,602)	-38%
Effect of foreign currency translation on cash and cash equivalents			14,409		0		14,409	n/a
	Cash and cash equivalents at end of period	$	164,838	$	1,382,252	$	(1,217,414)	-88%

Operating Activities. The change in net cash provided from operating activities is primarily attributable to increases in NOI, which is primarily due to acquisitions.  Please see “Results of Operations” for further discussion. For the nine months ended September 30, 2013, cash distributions to stockholders exceeded cash flow provided from operations.  The source of funds for these excess distributions was available cash on-hand, which was $1.0 billion at December 31, 2012 and $165 million at September 30, 2013.

Investing Activities.  The changes in net cash used in investing activities are primarily attributable to net changes in real property investments, real estate loans receivable and investments in unconsolidated entities, which are summarized above in “Key Transactions in 2013.”  Please refer to Notes 3, 6 and 7 of our consolidated financial statements for additional information.

      Financing Activities.  The changes in net cash provided from financing activities are primarily attributable to changes related to our long-term debt arrangements, the issuance/redemptions of common and preferred stock and dividend payments, which are summarized above in “Key Transactions in 2013.” Please refer to Notes 9, 10 and 13 of our consolidated financial statements for additional information.

Off-Balance Sheet Arrangements

     At September 30, 2013, we had investments in unconsolidated entities with our ownership ranging from 10% to 50%. Please see Note 7 to our consolidated financial statements for additional information.  We use financial derivative instruments to hedge interest rate and foreign currency exchange rate exposure. Please see Note 11 to our consolidated financial statements for additional information.  At September 30, 2013, we had six outstanding letter of credit obligations. Please see Note 12 to our consolidated financial statements for additional information.

36

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Contractual Obligations

     The following table summarizes our payment requirements under contractual obligations as of September 30, 2013 (in thousands):

	Payments Due by Period
Contractual Obligations	Total		2013		2014-2015		2016-2017		Thereafter
Unsecured line of credit arrangements	$	847,670	$	10,000	$	0	$	837,670	$	0
Senior unsecured notes(1)		6,418,190		300,000		493,072		1,650,000		3,975,118
Secured debt(1)		3,476,041		86,018		902,135		847,762		1,640,126
Contractual interest obligations		3,535,574		110,773		872,432		670,904		1,881,465
Capital lease obligations		118,463		1,345		18,549		9,464		89,105
Operating lease obligations		882,088		3,497		28,213		30,091		820,287
Purchase obligations		321,186		60,805		260,381		0		0
Other long-term liabilities		6,522		0		1,580		2,463		2,479
Total contractual obligations	$	15,605,734	$	572,438	$	2,576,362	$	4,048,354	$	8,408,580
(1) Amounts represent principal amounts due and do not reflect unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.

     At September 30, 2013, we had an unsecured line of credit arrangement with an aggregate commitment amount of $2,250,000,000.  See Note 9 to our unaudited consolidated financial statements for additional information.   Total contractual interest obligations on these arrangements totaled $32,051,000 at September 30, 2013, using interest rates in place at that date.

     We have $5,675,118,000 of senior unsecured notes principal outstanding with annual fixed interest rates ranging from 2.25% to 6.5%, payable semi-annually. A total of $275,118,000 of our senior unsecured notes are convertible notes that also contain put features. In addition, we have a $250,000,000 Canadian denominated unsecured term loan (approximately $243,072,000 USD at exchange rates on September 30, 2013).  The loan matures on July 27, 2015 with an option to extend for an additional year at our discretion. We also have a $500,000,000 unsecured term loan that matures on March 16, 2016 and can be extended for two additional years at our option.  See Note 10 to our unaudited consolidated financial statements for more information.  Total contractual interest obligations on senior unsecured notes, the Canadian term loan and the $500,000,000 term loan totaled $2,481,111,000 at September 30, 2013.

     We have consolidated secured debt with total outstanding principal of $3,065,923,000, collateralized by owned properties, with fixed annual interest rates ranging from 1.0% to 9.1%, payable monthly. The carrying values of the properties securing the debt totaled $6,336,955,000 at September 30, 2013. Total contractual interest obligations on consolidated secured debt totaled $959,989,000 at September 30, 2013.  Additionally, our share of non-recourse debt associated with unconsolidated entities (as reflected in the contractual obligations table above) is $410,118,000 at September 30, 2013.  Our share of contractual interest obligations on our unconsolidated entities’ secured debt is $62,423,000 at September 30, 2013. 

     At September 30, 2013, we had operating lease obligations of $882,088,000 relating primarily to ground leases at certain of our properties and office space leases and capital lease obligations of $118,463,000 relating to certain leased investment properties that contain bargain purchase options.

    Purchase obligations include unfunded construction commitments and contingent purchase obligations. At September 30, 2013, we had outstanding construction financings of $158,006,000 for leased properties and were committed to providing additional financing of approximately $261,625,000 to complete construction. At September 30, 2013, we had contingent purchase obligations totaling $59,561,000. These contingent purchase obligations relate to unfunded capital improvement obligations and contingent obligations on acquisitions. Upon funding, amounts due from the tenant are increased to reflect the additional investment in the property. 

     Other long-term liabilities relate to our Supplemental Executive Retirement Plan, which is discussed in Note 19 to the financial statement included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013.

Capital Structure

          Please refer to “Credit Strength” above for a discussion of our leverage and coverage ratio trends.  Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintain certain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of September 30, 2013, we were in compliance with all of the covenants under our debt agreements. Please refer to the section entitled “Non-GAAP Financial Measures” for further discussion. None of our debt agreements contain provisions for acceleration which could

37

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

be triggered by our debt ratings. However, under our primary unsecured line of credit arrangement, the ratings on our senior unsecured notes are used to determine the fees and interest charged.  A summary of certain covenants and our results as of September 30, 2013 is as follows:

	Per Agreement
	Unsecured Line of Credit(1)	Senior Unsecured Notes	Actual at
Covenant			September 30, 2013
Total Indebtedness to Book Capitalization Ratio maximum	60%	n/a	47%
Secured Indebtedness to Total Assets Ratio maximum	30%	40%	14%
Total Indebtedness to Total Assets maximum	n/a	60%	45%
Unsecured Debt to Unencumbered Assets maximum	60%	n/a	41%
Adjusted Interest Coverage Ratio minimum	n/a	1.50x	3.33x
Adjusted Fixed Charge Coverage minimum	1.50x	n/a	2.62x
(1) Canadian denominated term loan covenants are the same as those contained in our primary unsecured line of credit agreement.

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

     On May 4, 2012, we filed an open-ended automatic or “universal” shelf registration statement with the Securities and Exchange Commission covering an indeterminate amount of future offerings of debt securities, common stock, preferred stock, depositary shares, warrants and units. As of October 31, 2013, we had an effective registration statement on file in connection with our enhanced dividend reinvestment plan under which we may issue up to 10,000,000 shares of common stock. As of October 31, 2013, 8,162,812 shares of common stock remained available for issuance under this registration statement. We have entered into separate Equity Distribution Agreements with each of UBS Securities LLC, RBS Securities Inc., KeyBanc Capital Markets Inc. and Credit Agricole Securities (USA) Inc. relating to the offer and sale from time to time of up to $630,015,000 aggregate amount of our common stock (“Equity Shelf Program”). As of October 31, 2013, we had $457,112,000 of remaining capacity under the Equity Shelf Program. Depending upon market conditions, we anticipate issuing securities under our registration statements to invest in additional properties and to repay borrowings under our unsecured line of credit arrangements.

Results of Operations

Summary

Our primary sources of revenue include rent and resident fees and services. Our primary expenses include interest expense, depreciation and amortization, property operating expenses, transaction costs and general and administrative expenses. We evaluate our business and make resource allocations on our three business segments: seniors housing triple-net, seniors housing operating and medical facilities. The primary performance measures for our properties are NOI and SSCNOI, which are discussed below.  Please see Note 17 to our consolidated financial statements for additional information. The following is a summary of our results of operations (dollars in thousands, except per share amounts):

38

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Three Months Ended				Change			Nine Months Ended				Change
	September 30,		September 30,					September 30,		September 30,
	2013		2012		Amount		%	2013		2012		Amount		%
Net income (loss) attributable to common stockholders	$	20,691	$	37,269	$	(16,578)	-44%	$	67,245	$	131,308	$	(64,063)	-49%
Funds from operations		258,263		170,725		87,538	51%		659,810		492,511		167,299	34%
EBITDA		396,205		283,443		112,762	40%		1,088,342		871,560		216,782	25%
Net operating income from continuing operations (NOI)		444,200		317,416		126,784	40%		1,226,638		907,443		319,195	35%
Same store cash NOI		241,124		231,582		9,542	4%		713,188		688,866		24,322	4%
Per share data (fully diluted):
Net income (loss) attributable to common stockholders	$	0.07	$	0.16	$	(0.09)	-56%	$	0.24	$	0.61	$	(0.37)	-61%
Funds from operations		0.90	$	0.75	$	0.15	20%	$	2.40	$	2.30	$	0.10	4%
Interest coverage ratio		3.32x		2.94x		0.38x	13%		3.21x		3.06x		0.15x	5%
Fixed charge coverage ratio		2.62x		2.30x		0.32x	14%		2.54x		2.38x		0.16x	7%

Seniors Housing Triple-net

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

	Three Months Ended					Change			Nine Months Ended					Change
		September 30,		September 30,						September 30,		September 30,
		2013		2012		$		%		2013		2012		$		%
SSCNOI(1)		$	142,269	$	136,889	$	5,380	4%		$	421,744	$	406,894	$	14,850	4%
Non-cash NOI attributable to same store properties(1)			8,111		8,561		(450)	-5%			24,744		25,007		(263)	-1%
NOI attributable to non same store properties(2)			54,841		39,521		15,320	39%			144,118		96,348		47,770	50%
NOI		$	205,221	$	184,971	$	20,250	11%		$	590,606	$	528,249	$	62,357	12%
(1) Due to increases in cash and non-cash revenues (described below) related to 445 same store properties.
(2) Primarily due to acquisitions of 122 properties and conversions of 16 construction projects into revenue-generating properties subsequent to January 1, 2012.

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

39

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

			Three Months Ended				Change			Nine Months Ended				Change
			September 30,		September 30,					September 30,		September 30,
			2013		2012		$		%	2013		2012		$		%
Revenues:
	Rental income		$	199,408	$	178,193	$	21,215	12%	$	573,112	$	508,004	$	65,108	13%
	Interest income			5,035		6,116		(1,081)	-18%		16,311		17,977		(1,666)	-9%
	Other income			778		662		116	18%		1,183		2,268		(1,085)	-48%
		Net operating income from continuing operations (NOI)		205,221		184,971		20,250	11%		590,606		528,249		62,357	12%
Expenses:
	Interest expense			5,968		347		5,621	1620%		15,841		602		15,239	2531%
	Loss (gain) on derivatives, net			4,872		0		4,872	n/a		4,872		96		4,776	4975%
	Depreciation and amortization			58,148		52,294		5,854	11%		169,603		147,074		22,529	15%
	Transaction costs			4,026		5,590		(1,564)	-28%		15,730		30,796		(15,066)	-49%
	Loss (gain) on extinguishment of debt, net			0		126		(126)	-100%		0		2,363		(2,363)	-100%
	Provision for loan losses			0		27,008		(27,008)	-100%		0		27,008		(27,008)	-100%
				73,014		85,365		(12,351)	-14%		206,046		207,939		(1,893)	-1%
Income from continuing operations before income taxes and income (loss) from unconsolidated entities				132,207		99,606		32,601	33%		384,560		320,310		64,250	20%
Income tax benefit (expense)				(1,582)		(735)		(847)	115%		(2,113)		(1,505)		(608)	40%
Income (loss) from unconsolidated entities				1,200		28		1,172	4186%		3,680		26		3,654	14054%
Income from continuing operations				131,825		98,899		32,926	33%		386,127		318,831		67,296	21%
Discontinued operations:
	Gain (loss) on sales of properties, net			(1,247)		25,348		(26,595)	n/a		49,457		57,710		(8,253)	-14%
	Impairment of assets			-		(6,952)		6,952	-100%		-		(6,952)		6,952	-100%
	Income (loss) from discontinued operations, net			0		9,683		(9,683)	-100%		1,062		30,583		(29,521)	-97%
	Discontinued operations, net			(1,247)		28,079		(29,326)	n/a		50,519		81,341		(30,822)	-38%
Net income				130,578		126,978		3,600	3%		436,646		400,172		36,474	9%
Less: Net income (loss) attributable to noncontrolling interests				374		101		273	270%		1,113		108		1,005	931%
Net income attributable to common stockholders			$	130,204	$	126,877	$	3,327	3%	$	435,533	$	400,064	$	35,469	9%

     The increase in rental income is primarily attributable to the acquisitions of new properties, the conversion of newly constructed seniors housing triple-net properties from which we receive rent and the transition of 38 properties from the seniors housing operating segment on September 1, 2013. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index and/or changes in the gross operating revenues of the tenant’s properties.  These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period.  If gross operating revenues at our facilities and/or the Consumer Price Index do not increase, a portion of our revenues may not continue to increase.  Sales of real property would offset revenue increases and, to the extent that they exceed new acquisitions, could result in decreased revenues.  Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income.  For the three months ended September 30, 2013, we had no lease renewals but we had 20 leases with rental rate increasers ranging from 0.15% to 0.50% in our seniors housing triple-net portfolio.  The decrease in interest income is attributable to loan payoffs (see Note 6 to our consolidated financial statements for additional information).

     Interest expense for the nine months ended September 30, 2013 and 2012 represents $16,503,000 and $9,645,000, respectively, of secured debt interest expense, which is offset by interest allocated to discontinued operations.  The change in secured debt interest expense is due to the net effect and timing of assumptions, extinguishments and principal amortizations.  The following is a summary of our seniors housing triple-net property secured debt principal activity (dollars in thousands):

40

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Three Months Ended						Nine Months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
			Wtd. Avg.			Wtd. Avg.			Wtd. Avg.			Wtd. Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	216,421	5.390%	$	201,901	5.278%	$	218,741	5.393%	$	259,000	5.105%
Debt transferred		367,997	5.298%		-	0.000%		367,997	5.298%		-	0.000%
Debt issued		13,800	5.480%		-	0.000%		13,800	5.480%		-	0.000%
Debt assumed		-	0.000%		26,665	6.064%		-	0.000%		83,002	5.304%
Debt extinguished		(13,526)	2.587%		(8,052)	6.055%		(13,526)	2.587%		(119,647)	4.889%
Principal payments		(1,600)	5.637%		(887)	5.422%		(3,920)	5.598%		(2,728)	5.573%
Ending balance	$	583,092	5.399%	$	219,627	5.344%	$	583,092	5.399%	$	219,627	5.344%
Monthly averages	$	338,300	5.395%	$	202,097	5.281%	$	257,711	5.393%	$	215,500	5.217%

     Depreciation and amortization increased primarily as a result of new property acquisitions, the conversions of newly constructed investment properties and the transition of 38 properties from the seniors housing operating segment on September 1, 2013. To the extent that we acquire or dispose of additional properties in the future, our provision for depreciation and amortization will change accordingly.  The change in year to date transaction costs is primarily due to lower transaction volume offset by a lease termination fee recorded in the current year.

     Changes in gains on sales of properties are related to property sales, which totaled 19 and 29 for the nine months ended September 30, 2013 and 2012, respectively.  The following illustrates the reclassification impact as a result of classifying the properties sold prior to or held for sale at September 30, 2013 as discontinued operations for the periods presented.  Please refer to Note 5 to our consolidated financial statements for further discussion.

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2013		2012		2013		2012
Rental income		$	0	$	14,218	$	2,486	$	49,614
Expenses:
	Interest expense		0		2,373		662		9,043
	Provision for depreciation		0		2,162		762		9,988
Income from discontinued operations, net		$	0	$	9,683	$	1,062	$	30,583

41

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Seniors Housing Operating

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

	Three Months Ended					Change			Nine Months Ended					Change
		September 30,		September 30,						September 30,		September 30,
		2013		2012		$		%		2013		2012		$		%
SSCNOI(1)		$	38,505	$	35,967	$	2,538	7%		$	111,923	$	106,730	$	5,193	5%
NOI attributable to non same store properties(2)			116,214		20,128		96,086	477%			268,399		54,613		213,786	391%
NOI		$	154,719	$	56,095	$	98,624	176%		$	380,322	$	161,343	$	218,979	136%
(1) Due to increases in revenues (described below) related to 74 same store properties.
(2) Primarily due to the acquisition of 202 properties subsequent to January 1, 2012 and the transfer of 38 properties to Seniors Housing Triple-net on September 1, 2013.

As discussed in Note 3 to our consolidated financial statements, we completed additional acquisitions within our seniors housing operating segment during the nine months ended September 30, 2013. The results of operations for these properties have been included in our consolidated results of operations from the dates of acquisition. The seniors housing operating acquisitions were structured under RIDEA, which is discussed in Note 18 to our consolidated financial statements. When considering new acquisitions utilizing the RIDEA structure, we look for opportunities with best-in-class operators with a strong seasoned leadership team, high-quality real estate in attractive markets, growth potential above the standard rent escalators in our triple-net lease seniors housing portfolio, and alignment of economic interests with our operating partner.  Our seniors housing operating properties offer us the opportunity for external growth because we have the right to fund future seniors housing investment opportunities sourced by our operating partners. The increases in NOI are almost entirely attributable to 202 property acquisitions that have occurred subsequent to January 1, 2012. The following is a summary of our seniors housing operating results of operations (dollars in thousands):

42

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

		Three Months Ended				Change			Nine Months Ended				Change
		September 30,		September 30,					September 30,		September 30,
		2013		2012		$		%	2013		2012		$		%
Revenues:
	Resident fees and services	$	466,127	$	174,464	$	291,663	167%	$	1,164,446	$	498,295	$	666,151	134%
	Interest income		-		-		-	n/a		757		-		757	n/a
	Other income		167		-		167	n/a		169		-		169	n/a
			466,294		174,464		291,830	167%		1,165,372		498,295		667,077	134%
Property operating expenses			311,575		118,369		193,206	163%		785,050		336,952		448,098	133%
	Net operating income from continuing operations (NOI)		154,719		56,095		98,624	176%		380,322		161,343		218,979	136%
Other expenses:
	Interest expense		24,693		17,474		7,219	41%		63,175		49,537		13,638	28%
	Loss (gain) on derivatives, net		0		409		(409)	-100%		(407)		(1,808)		1,401	-77%
	Depreciation and amortization		144,578		39,591		104,987	265%		338,099		123,820		214,279	173%
	Transaction costs		18,882		1,966		16,916	860%		101,006		6,365		94,641	1487%
	Loss (gain) on extinguishment of debt, net		(5,252)		89		(5,341)	-6001%		(5,560)		(1,089)		(4,471)	411%
			182,901		59,529		123,372	207%		496,313		176,825		319,488	181%
Income (loss) from continuing operations before income taxes and income (loss) from unconsolidated entities			(28,182)		(3,434)		(24,748)	721%		(115,991)		(15,482)		(100,509)	649%
Income tax expense			(372)		265		(637)	-240%		(4,517)		(486)		(4,031)	829%
Income (loss) from unconsolidated entities			(4,391)		(3,162)		(1,229)	39%		(13,946)		(4,090)		(9,856)	241%
Net income (loss)			(32,945)		(6,331)		(26,614)	420%		(134,454)		(20,058)		(114,396)	570%
Less: Net income (loss) attributable to noncontrolling interests			(4,167)		(478)		(3,689)	772%		(5,830)		(2,489)		(3,341)	134%
Net income (loss) attributable to common stockholders		$	(28,778)	$	(5,853)	$	(22,925)	392%	$	(128,624)	$	(17,569)	$	(111,055)	632%

     Fluctuations in revenues and property operating expenses are primarily a result of acquisitions subsequent to September 30, 2012, offset by the transition of 38 properties to seniors housing triple-net on September 1, 2013. The fluctuations in depreciation and amortization are due to acquisitions and variations in amortization of short-lived intangible assets. To the extent that we acquire or dispose of additional properties in the future, these amounts will change accordingly. Loss from unconsolidated entities during the three and nine month periods ended September 30, 2013 is primarily attributable to depreciation and amortization of short-lived intangible assets related to our joint ventures described in Note 7 to our consolidated financial statements. Interest income relates to the Sunrise loan that was acquired upon merger consummation on January 9, 2013.

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

43

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

	Three Months Ended						Nine Months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
			Weighted Avg.			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	1,908,250	4.738%		1,377,933	5.203%	$	1,369,526	4.874%		1,318,647	5.125%
Debt issued		-	0.000%		6,318	2.506%		71,340	4.961%		145,713	4.131%
Debt assumed		678,742	3.925%		-	0.000%		1,215,598	4.055%		8,316	5.624%
Debt extinguished		(472,685)	3.482%		-	0.000%		(521,841)	3.548%		(79,990)	2.644%
Debt transferred		(367,997)	5.298%		-	0.000%		(367,997)	5.298%		-	0.000%
Principal payments		(9,492)	4.575%		(5,445)	4.667%		(22,916)	4.738%		(13,880)	4.701%
Foreign currency		9,564	4.045%		288	5.624%		2,672	4.045%		288	5.624%
Ending balance	$	1,746,382	4.619%	$	1,379,094	4.832%	$	1,746,382	4.619%	$	1,379,094	4.832%
Monthly averages	$	2,190,049	4.824%		1,378,980	4.835%	$	1,719,287	4.870%		1,394,989	4.760%

     The increase in gains on debt extinguishment is primarily due to an increased volume of secured debt extinguishments during the three months ended September 30, 2013. The change in net derivative gains is due to foreign currency hedges relating to our international investments which are described in Note 11 to our unaudited consolidated financial statements.

    The change in transaction costs is due to both the volume and nature of transactions completed in the current year. The majority of our seniors housing operating properties are formed through partnership interests. Net income attributable to noncontrolling interests for the three and nine month periods ended September 30, 2013 and 2012 represents our partners’ share of net income (loss) related to those properties.

44

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Medical Facilities

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

	Three Months Ended					Change			Nine Months Ended					Change
		September 30,		September 30,						September 30,		September 30,
		2013		2012		$		%		2013		2012		$		%
SSCNOI(1)		$	60,350	$	58,726	$	1,624	3%		$	179,521	$	175,241	$	4,280	2%
Non-cash NOI attributable to same store properties(1)			1,505		1,650		(145)	-9%			4,789		5,380		(591)	-11%
NOI attributable to non same store properties(2)			22,373		15,697		6,676	43%			71,123		36,475		34,648	95%
NOI		$	84,228	$	76,073	$	8,155	11%		$	255,433	$	217,096	$	38,337	18%
(1) Due to increases in cash and non-cash revenues (described below) related to 169 same store properties.
(2) Primarily due to acquisitions of 41 properties and conversions of construction projects into eight revenue-generating properties subsequent to January 1, 2012.

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

		Three Months Ended				Change			Nine Months Ended				Change
		September 30,		September 30,					September 30,		September 30,
		2013		2012		$		%	2013		2012		$		%
Revenues:
	Rental income	$	112,323	$	99,726	$	12,597	13%	$	336,547	$	281,744	$	54,803	19%
	Interest income		2,594		1,995		599	30%		7,257		6,154		1,103	18%
	Other income		466		400		66	17%		1,539		1,482		57	4%
			115,383		102,121		13,262	13%		345,343		289,380		55,963	19%
Property operating expenses			31,155		26,048		5,107	20%		89,910		72,284		17,626	24%
	Net operating income from continuing operations (NOI)		84,228		76,073		8,155	11%		255,433		217,096		38,337	18%
Other expenses:
	Interest expense		9,143		7,940		1,203	15%		28,441		22,338		6,103	27%
	Depreciation and amortization		39,942		35,959		3,983	11%		120,998		102,450		18,548	18%
	Transaction costs		683		708		(25)	-4%		971		5,374		(4,403)	-82%
	Loss (gain) on extinguishment of debt, net		0		0		0	n/a		0		(483)		483	-100%
			49,768		44,607		5,161	12%		150,410		129,679		20,731	16%
Income from continuing operations before income taxes and income from unconsolidated entities			34,460		31,466		2,994	10%		105,023		87,417		17,606	20%
Income tax expense			(1,123)		(143)		(980)	685%		(408)		(316)		(92)	29%
Income from unconsolidated entities			2,860		2,395		465	19%		6,737		6,314		423	7%
Income from continuing operations			36,197		33,718		2,479	7%		111,352		93,415		17,937	19%
Discontinued operations:
	Gain (loss) on sales of properties, net		5,954		(12,521)		18,475	n/a		7,745		(11,664)		19,409	n/a
	Income (loss) from discontinued operations, net		417		1,441		(1,024)	-71%		1,150		2,711		(1,561)	-58%
	Discontinued operations, net		6,371		(11,080)		17,451	n/a		8,895		(8,953)		17,848	n/a
Net income (loss)			42,568		22,638		19,930	88%		120,247		84,462		35,785	42%
Less: Net income (loss) attributable to noncontrolling interests			105		12		93	775%		255		140		115	82%
Net income (loss) attributable to common stockholders		$	42,463	$	22,626	$	19,837	88%	$	119,992	$	84,322	$	35,670	42%

45

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The increase in rental income is primarily attributable to the acquisitions of new properties and the construction conversions of medical facilities from which we receive rent. Certain of our leases contain annual rental escalators that are contingent upon changes in the Consumer Price Index.  These escalators are not fixed, so no straight-line rent is recorded; however, rental income is recorded based on the contractual cash rental payments due for the period.  If the Consumer Price Index does not increase, a portion of our revenues may not continue to increase.  Sales of real property would offset revenue increases and, to the extent that they exceed new acquisitions, could result in decreased revenues.  Our leases could renew above or below current rent rates, resulting in an increase or decrease in rental income.  For the three months ended September 30, 2013, our consolidated medical office building portfolio signed 56,578 square feet of new leases and 187,177 square feet of renewals.  The weighted-average term of these leases was five years, with a rate of $22.39 per square foot and tenant improvement and lease commission costs of $14.98 per square foot.  Substantially all of these leases during the referenced quarter contain an annual fixed or contingent escalation rent structure ranging from the change in CPI to 3%.  For the three months ended September 30, 2013, we had no lease renewals and one lease with a rental rate increaser of 0.27% in our hospital portfolio.

     Interest expense for the nine months ended September 30, 2013 and 2012 represents $29,314,000 and $28,799,000, respectively, of secured debt interest expense, which is offset by interest allocated to discontinued operations.  The change in secured debt interest expense is primarily due to the net effect and timing of assumptions, extinguishments and principal amortizations.  The following is a summary of our medical facilities secured debt principal activity (dollars in thousands):

	Three Months Ended						Nine Months Ended
	September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
			Weighted Avg.			Weighted Avg.			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	705,322	5.947%	$	695,454	5.947%	$	713,720	5.950%	$	520,026	5.981%
Debt assumed		26,300	6.439%		-	0.000%		26,300	6.439%		220,335	5.861%
Debt extinguished		-	0.000%		-	0.000%		0	0.000%		(37,622)	5.858%
Principal payments		(3,905)	6.032%		(3,513)	6.021%		(12,303)	6.132%		(10,798)	6.130%
Ending balance	$	727,717	5.964%	$	691,941	5.947%	$	727,717	5.964%	$	691,941	5.947%
Monthly averages	$	709,921	5.952%	$	693,684	5.947%	$	710,146	5.950%	$	661,406	5.953%

     The increase in property operating expenses and depreciation and amortization is primarily attributable to acquisitions and construction conversions of new medical facilities for which we incur certain property operating expenses offset by property operating expenses associated with discontinued operations.  The change in transaction costs is due primarily to lower transaction volume in the current year.  Income from unconsolidated entities includes our share of net income related to our joint venture investment with Forest City Enterprises and certain unconsolidated property investments related to our strategic joint venture relationship with a national medical office building company.  See Note 7 to our consolidated financial statements for additional information.

     Changes in gains/losses on sales of properties is related to property sales, which totaled twelve and thirteen for the nine months ended September 30, 2013, and 2012, respectively.  The following illustrates the reclassification impact as a result of classifying the properties sold prior to or held for sale at September 30, 2013 as discontinued operations for the periods presented.  Please refer to Note 5 to our consolidated financial statements for further discussion.

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2013		2012		2013		2012
Rental income		$	810	$	6,529	$	3,486	$	20,553
Expenses:
	Interest expense		12		1,955		873		6,461
	Property operating expenses		68		281		346		1,469
	Provision for depreciation		313		2,852		1,117		9,912
Income from discontinued operations, net		$	417	$	1,441	$	1,150	$	2,711

46

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     Non-Segment/Corporate

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

		Three Months Ended				Change			Nine Months Ended				Change
		September 30,		September 30,					September 30,		September 30,
		2013		2012		$		%	2013		2012		$		%
Revenues:
	Other income	$	32	$	277	$	(245)	-88%	$	277	$	755	$	(478)	-63%
Expenses:
	Interest expense		76,726		66,154		10,572	16%		229,128		198,746		30,382	15%
	General and administrative		28,718		23,679		5,039	21%		79,799		77,302		2,497	3%
	Loss on extinguishment of debt, net		1,184		0		1,184	n/a		1,184		0		1,184	n/a
			106,628		89,833		16,795	19%		310,111		276,048		34,063	12%
Loss from continuing operations before income taxes			(106,596)		(89,556)		(17,040)	19%		(309,834)		(275,293)		(34,541)	13%
Income tax (expense) benefit			-		(223)		223	-100%		(17)		(1,447)		1,430	-99%
Loss from continuing operations			(106,596)		(89,779)		(16,817)	19%		(309,851)		(276,740)		(33,111)	12%
Less: Preferred stock dividends			16,602		16,602		-	0%		49,805		52,527		(2,722)	-5%
Less: Preferred stock redemption charge			-		-		-	n/a		-		6,242		(6,242)	-100%
Net loss attributable to common stockholders		$	(123,198)	$	(106,381)	$	(16,817)	16%	$	(359,656)	$	(335,509)	$	(24,147)	7%

     Other income primarily represents income from non-real estate activities such as interest earned on temporary investments of cash reserves.  The following is a summary of our non-segment/corporate interest expense (dollars in thousands):

	Three Months Ended				Change			Nine Months Ended				Change
	September 30,		September 30,					September 30,		September 30,
	2013		2012		$		%	2013		2012		$		%
Senior unsecured notes	$	71,533	$	62,172	$	9,361	15%	$	216,688	$	186,277	$	30,411	16%
Secured debt		122		138		(16)	-12%		358		402		(44)	-11%
Unsecured lines of credit		4,445		3,078		1,367	44%		11,967		9,717		2,250	23%
Capitalized interest		(1,706)		(2,555)		849	-33%		(4,698)		(7,113)		2,415	-34%
Swap savings		(4)		(12)		8	-67%		(11)		(92)		81	-88%
Loan expense		2,336		3,333		(997)	-30%		4,824		9,555		(4,731)	-50%
Totals	$	76,726	$	66,154	$	10,572	16%	$	229,128	$	198,746	$	30,382	15%

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

     General and administrative expenses as a percentage of consolidated revenues (including revenues from discontinued operations) for the three months ended September 30, 2013 and 2012 were 3.65% and 4.99%, respectively.  The decline in percent of revenue is primarily related to the increasing revenue base as a result of our acquisitions.  The loss on extinguishment of debt is due to the redemption of convertible senior notes.  The changes in preferred stock dividends are primarily attributable to the net effect of issuances, redemptions and conversions.  Please see Note 13 to our consolidated financial statements for additional information.  In

47

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

connection with the preferred stock redemptions, we recognized charges of $6,242,000 for the nine months ended September 30, 2012.

Non-GAAP Financial Measures

     We believe that net income, as defined by U.S. GAAP, is the most appropriate earnings measurement. However, we consider FFO to be a useful supplemental measure of our operating performance. Historical cost accounting for real estate assets in accordance with U.S. GAAP implicitly assumes that the value of real estate assets diminishes predictably over time as evidenced by the provision for depreciation. However, since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient. In response, the National Association of Real Estate Investment Trusts (“NAREIT”) created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation from net income. FFO, as defined by NAREIT, means net income, computed in accordance with U.S. GAAP, excluding gains (or losses) from sales of real estate and impairment of depreciable assets, plus depreciation and amortization, and after adjustments for unconsolidated entities.

     Net operating income from continuing operations (“NOI”) is used to evaluate the operating performance of our properties. We define NOI as total revenues, including tenant reimbursements, less property level operating expenses. Property operating expenses represent costs associated with managing, maintaining and servicing tenants for our seniors housing operating and medical facility properties.  These expenses include, but are not limited to, property-related payroll and benefits, property management fees, marketing, housekeeping, food service, maintenance, utilities, property taxes and insurance.  General and administrative expenses represent costs unrelated to property operations or transaction costs.  These expenses include, but are not limited to, payroll and benefits, professional services, office expenses and depreciation of corporate fixed assets.  Same store cash NOI (“SSCNOI”) is used to evaluate the cash-based operating performance of our properties under a consistent population which eliminates changes in the composition of our portfolio.  As used herein, same store is generally defined as those revenue-generating properties in the portfolio for the reporting period subsequent to January 1, 2012.  Any properties acquired, developed, transitioned or classified in discontinued operations during that period are excluded from the same store amounts.  We believe NOI and SSCNOI provide investors relevant and useful information because they measure the operating performance of our properties at the property level on an unleveraged basis. We use NOI and SSCNOI to make decisions about resource allocations and to assess the property level performance of our properties.

     EBITDA stands for earnings before interest, taxes, depreciation and amortization. We believe that EBITDA, along with net income and cash flow provided from operating activities, is an important supplemental measure because it provides additional information to assess and evaluate the performance of our operations. We primarily utilize EBITDA to measure our interest coverage ratio, which represents EBITDA divided by total interest, and our fixed charge coverage ratio, which represents EBITDA divided by fixed charges. Fixed charges include total interest, secured debt principal amortization and preferred dividends. 

     A covenant in our primary unsecured line of credit arrangement and Canadian denominated term loan contains a financial ratio based on a definition of EBITDA that is specific to that agreement. Failure to satisfy these covenants could result in an event of default that could have a material adverse impact on our cost and availability of capital, which could in turn have a material adverse impact on our consolidated results of operations, liquidity and/or financial condition. Due to the materiality of these debt agreements and the financial covenants, we have disclosed Adjusted EBITDA, which represents EBITDA as defined above and adjusted for stock-based compensation expense, provision for loan losses and gain/loss on extinguishment of debt. We use Adjusted EBITDA to measure our adjusted fixed charge coverage ratio, which represents Adjusted EBITDA divided by fixed charges on a trailing twelve months basis. Fixed charges include total interest (excluding capitalized interest and non-cash interest expenses), secured debt principal amortization and preferred dividends. Our covenant requires an adjusted fixed charge ratio of at least 1.50 times.

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

48

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

		Three Months Ended
		March 31,				June 30,				September 30,		December 31,		March 31,		June 30,		September 30,
FFO Reconciliations:		2012				2012				2012		2012		2013		2013		2013
Net income (loss) attributable to common stockholders		$		39,307		$	54,735			$	37,269	$	90,576	$	55,058	$	(8,508)	$	20,691
Depreciation and amortization				127,422			132,963				132,858		140,342		187,122		200,477		242,981
Impairment of assets				0			0				6,952		22,335		0		0		0
Loss (gain) on sales of properties, net				(769)			(32,450)				(12,827)		(54,502)		(82,492)		29,997		(4,707)
Noncontrolling interests				(4,990)			(5,189)				(5,440)		(5,439)		(5,793)		(7,821)		(12,328)
Unconsolidated entities				2,887			7,873				11,913		11,735		16,983		16,521		11,626
Funds from operations		$		163,857		$	157,932			$	170,725	$	205,047	$	170,878	$	230,666	$	258,263
Average common shares outstanding:
	Basic			199,661			213,498				224,391		259,290		260,036		273,091		286,020
	Diluted			201,658			215,138				226,258		261,210		262,525		276,481		288,029
Per share data:
Net income attributable to
	common stockholders
	Basic	$		0.20		$	0.26			$	0.17	$	0.35	$	0.21	$	(0.03)	$	0.07
	Diluted			0.19			0.25				0.16		0.35		0.21		(0.03)		0.07
Funds from operations
	Basic	$		0.82		$	0.74			$	0.76	$	0.79	$	0.66	$	0.84	$	0.90
	Diluted			0.81			0.73				0.75		0.78		0.65		0.83		0.90
			Nine Months Ended
			September 30,					September 30,
FFO Reconciliations:			2012					2013
Net income attributable to common stockholders			$		131,308			$	67,245
Depreciation and amortization					393,243				630,579
Impairment of assets					6,952				0
Loss (gain) on sales of properties, net					(46,046)				(57,202)
Noncontrolling interests					(15,619)				(25,942)
Unconsolidated entities					22,673				45,130
Funds from operations			$		492,511			$	659,810
Average common shares outstanding:
	Basic				212,592				273,148
	Diluted				214,075				275,247
Per share data:
Net income attributable to
	common stockholders
	Basic		$		0.62			$	0.25
	Diluted				0.61				0.24
Funds from operations
	Basic		$		2.32			$	2.42
	Diluted				2.30				2.40

49

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

		Three Months Ended
		March 31,		June 30,		September 30,		December 31,		March 31,			June 30,	September 30,
EBITDA Reconciliations:		2012		2012		2012		2012		2013			2013	2013
Net income		$	57,458	$	76,875	$	53,506	$	107,005	$	71,799	$	7,181	$	33,605
Interest expense			93,722		96,762		96,243		96,573		110,734		110,844		116,542
Income tax expense (benefit)			1,470		1,447		836		3,858		2,763		1,215		3,077
Depreciation and amortization			127,422		132,963		132,858		140,342		187,122		200,477		242,981
EBITDA		$	280,072	$	308,047	$	283,443	$	347,778	$	372,418	$	319,717	$	396,205
Interest Coverage Ratio:
Interest expense		$	93,722	$	96,762	$	96,243	$	96,573	$	110,734	$	110,844	$	116,542
Non-cash interest expense			(3,693)		(2,849)		(2,241)		(2,612)		(3,494)		(1,237)		951
Capitalized interest			2,420		2,140		2,556		2,664		1,606		1,386		1,706
	Total interest		92,449		96,053		96,558		96,625		108,846		110,993		119,199
EBITDA		$	280,072	$	308,047	$	283,443	$	347,778	$	372,418	$	319,717	$	396,205
	Interest coverage ratio		3.03x		3.21x		2.94x		3.60x		3.42x		2.88x		3.32x
Fixed Charge Coverage Ratio:
Total interest		$	92,449	$	96,053	$	96,558	$	96,625	$	108,846	$	110,993	$	119,199
Secured debt principal payments			8,529		9,567		10,141		10,317		11,319		13,277		15,297
Preferred dividends			19,207		16,719		16,602		16,602		16,602		16,602		16,602
	Total fixed charges		120,185		122,339		123,301		123,544		136,767		140,872		151,098
EBITDA		$	280,072	$	308,047	$	283,443	$	347,778	$	372,418	$	319,717	$	396,205
	Fixed charge coverage ratio		2.33x		2.52x		2.30x		2.82x		2.72x		2.27x		2.62x

		Nine Months Ended
		September 30,		September 30,
EBITDA Reconciliations:		2012			2013
Net income		$	187,836	$	112,588
Interest expense			286,727		338,120
Income tax expense (benefit)			3,754		7,055
Depreciation and amortization			393,243		630,579
EBITDA		$	871,560	$	1,088,342
Interest Coverage Ratio:
Interest expense		$	286,727	$	338,120
Non-cash interest expense			(8,783)		(3,779)
Capitalized interest			7,113		4,698
	Total interest		285,057		339,039
EBITDA		$	871,560	$	1,088,342
	Interest coverage ratio		3.06x		3.21x
Fixed Charge Coverage Ratio:
Total interest		$	285,057	$	339,039
Secured debt principal payments			28,237		39,893
Preferred dividends			52,527		49,805
	Total fixed charges		365,821		428,737
EBITDA		$	871,560	$	1,088,342
	Fixed charge coverage ratio		2.38x		2.54x

50

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

		Twelve Months Ended
Adjusted EBITDA		March 31,		June 30,		September 30,		December 31,		March 31,		June 30,		September 30,
Reconciliations:		2012		2012		2012		2012		2013		2013		2013
Net income		$	238,363	$	229,029	$	230,181	$	294,841	$	309,183	$	239,491	$	219,590
Interest expense			356,390		368,379		376,811		383,300		400,312		414,394		434,693
Income tax expense (benefit)			2,729		3,965		4,578		7,611		8,904		8,672		10,913
Depreciation and amortization			476,259		498,169		515,387		533,585		593,285		660,799		770,922
Stock-based compensation expense			16,552		16,177		17,003		18,521		17,728		17,607		18,971
Provision for loan losses			1,762		1,595		28,471		27,008		27,008		27,008		0
Loss (gain) on extinguishment of debt, net			(979)		(403)		(188)		(775)		(1,083)		(1,659)		(5,942)
Adjusted EBITDA		$	1,091,076	$	1,116,911	$	1,172,243	$	1,264,091	$	1,355,337	$	1,366,312	$	1,449,147
Adjusted Fixed Charge Coverage Ratio:
Interest expense		$	356,390	$	368,379	$	376,811	$	383,300	$	400,312	$	414,394	$	434,693
Capitalized interest			10,919		10,745		10,190		9,777		8,964		8,211		7,362
Non-cash interest expense			(13,882)		(14,033)		(12,560)		(11,395)		(11,196)		(9,584)		(6,392)
	Total interest		353,427		365,091		374,441		381,682		398,080		413,021		435,663
Adjusted EBITDA		$	1,091,076	$	1,116,911	$	1,172,243	$	1,264,091	$	1,355,337	$	1,366,312	$	1,449,147
	Adjusted interest coverage ratio		3.09x		3.06x		3.13x		3.31x		3.40x		3.31x		3.33x
Total interest		$	353,427	$	365,091	$	374,441	$	381,682	$	398,080	$	413,021	$	435,663
Secured debt principal payments			30,427		32,983		35,920		38,554		41,344		45,054		50,210
Preferred dividends			71,028		70,394		69,762		69,129		66,525		66,408		66,408
	Total fixed charges		454,882		468,468		480,123		489,365		505,949		524,483		552,281
Adjusted EBITDA		$	1,091,076	$	1,116,911	$	1,172,243	$	1,264,091	$	1,355,337	$	1,366,312	$	1,449,147
	Adjusted fixed charge coverage ratio		2.40x		2.38x		2.44x		2.58x		2.68x		2.61x		2.62x

51

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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

					Three Months Ended
					March 31,				June 30,				September 30,						December 31,						March 31,				June 30,				September 30,
NOI Reconciliations:					2012				2012				2012						2012						2013				2013				2013
Total revenues:
	Seniors housing triple-net				$	167,621			$	175,656			$	184,971					$		187,269				$	190,813			$		194,573		$		205,221
	Seniors housing operating					158,174				165,654				174,464							205,470					328,081					370,995				466,294
	Medical facilities					90,509				96,751				102,121							106,821					113,980					115,980				115,383
	Non-segment/corporate					235				243				277							158					81					164				32
			Total revenues			416,539				438,304				461,833							499,718					632,955					681,712				786,930
Property operating expenses:
	Seniors housing operating					107,243				111,340				118,369							134,726					224,503					248,972				311,575
	Medical facilities					21,652				24,585				26,048							26,898					29,044					29,712				31,155
			Total property operating expenses			128,895				135,925				144,417							161,624					253,547					278,684				342,730
Net operating income:
	Seniors housing triple-net					167,621				175,656				184,971							187,269					190,813					194,573				205,221
	Seniors housing operating					50,931				54,314				56,095							70,744					103,578					122,023				154,719
	Medical facilities					68,857				72,166				76,073							79,923					84,936					86,268				84,228
	Non-segment/corporate					235				243				277							158					81					164				32
			Net operating income from continuing operations (NOI)			287,644				302,379				317,416							338,094					379,408					403,028				444,200
Reconciling items:
	Interest expense					(88,247)				(91,061)				(91,915)							(93,514)					(109,571)					(110,483)				(116,530)
	Loss (gain) on derivatives, net					(555)				2,676				(409)							113					(2,309)					2,716				(4,872)
	Depreciation and amortization					(119,219)				(126,281)				(127,844)							(137,041)					(186,332)					(199,701)				(242,668)
	General and administrative					(27,751)				(25,870)				(23,679)							(20,039)					(27,179)					(23,902)				(28,718)
	Transaction costs					(5,579)				(28,691)				(8,264)							(19,074)					(65,980)					(28,136)				(23,591)
	Loss (gain) on extinguishment of debt, net					-				(576)				(215)							1,566					308					-				4,068
	Provision for loan losses					-				-				(27,008)							-					-					-				-
	Income tax benefit (expense)					(1,470)				(1,447)				(836)							(3,858)					(2,763)					(1,215)				(3,077)
	Income (loss) from unconsolidated entities					1,532				1,456				(739)							232					2,262					(5,461)				(331)
	Income (loss) from discontinued operations, net					11,103				44,290				16,999							40,525					83,955					(29,665)				5,124
	Preferred dividends					(19,207)				(16,719)				(16,602)							(16,602)					(16,602)					(16,602)				(16,602)
	Preferred stock redemption charge					-				(6,242)				-							-					-					-				-
	Loss (income) attributable to noncontrolling interests					1,056				821				365							174					(139)					913				3,688
						(248,337)				(247,644)				(280,147)							(247,518)					(324,350)					(411,536)				(423,509)
Net income (loss) attributable to common stockholders					$	39,307			$	54,735			$	37,269					$		90,576				$	55,058			$		(8,508)		$		20,691
															Nine Months Ended
															September 30,					September 30,
NOI Reconciliations:															2012					2013
Total revenues:
	Seniors housing triple-net														$	528,249				$			590,606
	Seniors housing operating															498,295							1,165,372
	Medical facilities															289,380							345,343
	Non-segment/corporate															755							277
			Total revenues													1,316,679							2,101,598
Property operating expenses:
	Seniors housing operating															336,952							785,050
	Medical facilities															72,284							89,910
			Total property operating expenses													409,236							874,960
Net operating income:
	Seniors housing triple-net															528,249							590,606
	Seniors housing operating															161,343							380,322
	Medical facilities															217,096							255,433
	Non-segment/corporate															755							277
			Net operating income from continuing operations													907,443							1,226,638
Reconciling items:
	Interest expense															(271,223)							(336,585)
	Loss (gain) on derivatives, net															1,712							(4,465)
	Depreciation and amortization															(373,344)							(628,700)
	General and administrative															(77,302)							(79,799)
	Transaction costs															(42,535)							(117,707)
	Loss (gain) on extinguishment of debt, net															(791)							4,376
	Provision for loan losses															(27,008)							-
	Income tax benefit (expense)															(3,754)							(7,055)
	Income (loss) from unconsolidated entities															2,250							(3,529)
	Income (loss) from discontinued operations, net															72,388							59,414
	Preferred dividends															(52,527)							(49,805)
	Preferred stock redemption charge															(6,242)							-
	Loss (income) attributable to noncontrolling interests															2,241							4,462
																(776,135)							(1,159,393)
Net income (loss) attributable to common stockholders															$	131,308				$			67,245
							Three Months Ended
							March 31,				June 30,						September 30,					December 31,					March 31,			June 30,				September 30,
Same Store Cash NOI Reconciliations:							2012				2012						2012					2012					2013			2013				2013
Net operating income from continuing operations:
	Seniors housing triple-net						$	167,621			$	175,656					$	184,971				$		187,269			$	190,813		$		194,573		$		205,221
	Seniors housing operating							50,931				54,314						56,095						70,744				103,578				122,023				154,719
	Medical facilities							68,857				72,166						76,073						79,923				84,936				86,268				84,228
			Total					287,409				302,136						317,139						337,936				379,327				402,864				444,168
Adjustments:
	Seniors housing triple-net:
		Non-cash NOI on same store properties						(8,384)				(8,062)						(8,561)						(8,737)				(8,779)				(7,855)				(8,111)
		NOI attributable to non same store properties						(25,968)				(30,858)						(39,521)						(41,485)				(43,484)				(45,792)				(54,841)
			Subtotal					(34,352)				(38,920)						(48,082)						(50,222)				(52,263)				(53,647)				(62,952)
	Seniors housing operating:
		NOI attributable to non same store properties						(15,928)				(18,553)						(20,128)						(33,216)				(68,401)				(83,781)				(116,214)
			Subtotal					(15,928)				(18,553)						(20,128)						(33,216)				(68,401)				(83,781)				(116,214)
	Medical facilities:
		Non-cash NOI on same store properties						(2,061)				(1,669)						(1,650)						(1,649)				(1,601)				(1,684)				(1,505)
		NOI attributable to non same store properties						(8,444)				(12,334)						(15,697)						(19,090)				(23,896)				(24,852)				(22,373)
			Subtotal					(10,505)				(14,003)						(17,347)						(20,739)				(25,497)				(26,536)				(23,878)
Same store cash net operating income:				Properties
	Seniors housing triple-net			445				133,269				136,736						136,889						137,047				138,550				140,926				142,269
	Seniors housing operating			74				35,003				35,761						35,967						37,528				35,177				38,242				38,505
	Medical facilities			169				58,352				58,163						58,726						59,184				59,439				59,732				60,350
			Total	688			$	226,624			$	230,660					$	231,582				$		233,759				233,166		$		238,900		$		241,124

52

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

					Nine Months Ended
						September 30,		September 30,
Same Store Cash NOI Reconciliations:						2012		2013
Net operating income from continuing operations:
	Seniors housing triple-net					$	528,249	$	590,606
	Seniors housing operating						161,343		380,322
	Medical facilities						217,096		255,433
			Total				906,688		1,226,361
Adjustments:
	Seniors housing triple-net:
		Non-cash NOI on same store properties					(25,007)		(24,744)
		NOI attributable to non same store properties					(96,348)		(144,118)
			Subtotal				(121,355)		(168,862)
	Seniors housing operating:
		Non-cash NOI on same store properties					-		-
		NOI attributable to non same store properties					(54,613)		(268,399)
			Subtotal				(54,613)		(268,399)
	Medical facilities:
		Non-cash NOI on same store properties					(5,380)		(4,789)
		NOI attributable to non same store properties					(36,475)		(71,123)
			Subtotal				(41,855)		(75,912)
Same store cash net operating income:				Properties
	Seniors housing triple-net			445			406,894		421,744
	Seniors housing operating			74			106,730		111,923
	Medical facilities			169			175,241		179,521
			Total	688		$	688,865	$	713,188

54

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Other Disclosures

Health Care Reimbursements

Policy and legislative changes that increase or decrease government reimbursement may impact our operators and tenants that participate in Medicare, Medicaid or other government programs.  To the extent that policy or legislative changes decrease government reimbursement to our operators and tenants, our revenue and operations may be indirectly adversely affected. 

On July 31, 2013 the Centers for Medicare and Medicaid Services (“CMS”) issued a final rule for the skilled nursing prospective payment system that sets forth payment rate changes for the 2014 fiscal year, which began on October 1, 2013.  Under the final rule, skilled nursing facilities (“SNFs”) will receive a net payment increase of 1.3%, which is based on a 2.3% increase in the SNF market basket, less a 0.5% forecast error adjustment, and less a 0.5% multi-factor productivity adjustment.  CMS is implementing a forecast error adjustment because the forecasted fiscal year 2012 market basket percentage change exceeded the actual SNF market basket percentage change by 0.51%, a figure that is in excess of the 0.5% threshold adopted by the agency for determining when a forecast error adjustment will be applied. 

On November 21, 2011, the Joint Select Committee on Deficit Reduction, which was created by the Budget Control Act of 2011, concluded its work and issued a statement that it was not able to make a bipartisan agreement, thus triggering the sequestration process.  On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (“Taxpayer Relief Act”), which delayed the sequestration process until March 1, 2013.  While the sequester went into effect March 1, 2013, effective April 1, 2013, provider payments under Medicare Parts A and B, Medicare Advantage, and Medicare Part D, will be reduced up to 2% annually.  However, Medicaid spending and most of the spending on subsidies is exempt from reduction. 

The Balanced Budget Act of 1997 mandated caps on Medicare reimbursement for certain therapy services.  However, Congress imposed various waivers on the implementation of those caps.  The Middle Class Tax Relief and Job Creation Act of 2012 (“Job Creation Act”) made a number of changes effective on October 1, 2012, including applying the therapy caps to outpatient hospitals, creating two new threshold amounts of $3,700 (one for each therapy cap amount), and requiring a manual medical review process of claims over these new thresholds. CMS announced on March 1, 2013 that, until the agency provides further guidance, all therapy claims that are suspended for Manual Medical Review of Therapy Services above the $3,700 threshold will be subject to prepayment medical review.  On July 9, 2013, CMS released an advanced copy of its proposed calendar year 2014 Medicare Physician Fee Schedule, which proposes to extend the therapy cap limitation to services provided at critical access hospitals.  The Taxpayer Relief Act extended the Job Creation Act provisions related to payment for Medicare outpatient therapy services and extended the historical therapy cap waiver and exceptions process through December 31, 2013.  The Taxpayer Relief Act also increased the multiple procedure discount for Medicare Part B therapy services from 25% to 50% effective April 1, 2013, which will lower revenues for certain operators or tenants.

 CMS annually adjusts the Medicare Physician Fee Schedule payment rates based on an update formula that includes application of the Sustainable Growth Rate (“SGR”), which is an annual growth rate established by CMS and is intended to control growth in aggregate Medicare expenditures for physicians’ services and the allowed and actual expenditures for physicians’ services.  On November 1, 2012, CMS published the calendar year 2013 Physician Fee Schedule final rule that called for a negative 26.5% update under the statutory SGR formula.  The Taxpayer Relief Act provided for a zero percent update, blocking this cut through December 31, 2013.  In March 2013, CMS estimated a negative 24.4% update under the statutory SGR formula for calendar year 2014.  Additionally, in late July 2013, the House Energy and Commerce and Ways and Means Committee approved H.R. 2810, a proposal to replace the SGR updates with a quality measure system by a bipartisan vote of 51-0, but House lawmakers have yet to formally adopt the proposal.  According to a recent estimate by the Congressional Budget Office, the House bill would cost $175 billion over 10 years, through 2023.  The Senate Finance Committee is also moving forward on its own version of a bill to replace the SGR.

Medicaid is a major payor source for residents in our SNFs and hospitals.  The federal and state government share responsibility for financing Medicaid.  President Obama’s proposed fiscal year budget for 2013 included several proposals that were not implemented that would have lowered federal spending for Medicaid, potentially impacting provider Medicaid reimbursement rates.  The proposals included new limits on state provider taxes, phasing down the existing Medicaid provider tax, and blending the Federal matching rate for state Medicaid and the Children’s Health Insurance Program.  Although the President’s proposed fiscal year budget for 2014 did not include these proposals, provider tax reductions continue to be discussed as a potential cost savings measure. The President’s 2014 budget called for an overall reduction in federal health care spending by $401 billion over ten years, with savings stemming from several cost-saving proposals including reduced Medicare payments for long-term care hospitals, SNFs, and other post-acute care providers.  In June 2013, leaders of the House Ways and Means and Senate Finance committees solicited input from stakeholders on proposals to reform Medicare payment for post-acute services, requesting comments by August 19 on proposals by

55

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

the Medicare Payment Advisory Commission, the Obama administration, the Bipartisan Policy Center, and the Simpson-Bowles Commission for market-basket cuts, site-neutral payment, SNF readmission penalties, and bundled payments.

                On August 2, 2013, CMS issued a final rule for the Medicare Inpatient Prospective Payment System, which sets forth acute care and long-term care hospital payment rate changes for the 2014 fiscal year, which began on October 1, 2013.  Under the final rule, the Medicare rates for inpatient services at acute care hospitals will increase by 0.7% and rates for long-term care hospitals will increase by 0.4%, accounting for adjustments, such as the multifactor productivity adjustment and the second year adjustment for a three-year phase-in of a one-time 3.75% budget neutrality adjustment to the long-term care hospital rate.  CMS finalized its proposal to let expire the one-year extension of the existing moratorium on the 25% threshold policy, a policy that imposes lower Medicare payments, in certain circumstances, on those long-term care hospitals that admit more than 25% of their patients from a single acute care hospital.  The expiration of the moratorium on the 25% threshold policy impacts cost reporting periods that began on or after October 1, 2013.  Under the final rule, CMS also finalized a number of changes to comply with the Health Reform Laws.  Beginning in fiscal year 2014, hospitals that rank among the lowest-performing 25% with regard to hospital-acquired conditions will see a 1% reduction in Medicare payment rates.  CMS will also increase the maximum payment reduction under the Hospital Readmissions Reduction program, which began on October 1, 2012, to 2% of payment amounts in fiscal year 2014.  For fiscal year 2014, CMS is increasing the applicable percentage reduction, the portion of Medicare payments available to fund the Value-Based Purchasing Program’s value-based incentive payments, to 1.25%, as required by statute.

On July 31, 2013, CMS issued a final rule for the Medicare Inpatient Rehabilitation Facilities Prospective Payment System that sets forth payment rate changes for the 2014 fiscal year, which began on October 1, 2013.  Under the final rule for fiscal year 2014, the Medicare rates for inpatient rehabilitation facilities will increase by 1.8%, which includes a 2.6% market basket increase factor, reduced by a 0.5% multi-factor productivity adjustment and an additional 0.3% point reduction as required by the Health Reform Laws.

A number of additional rules recently proposed by CMS could have further implications on the reimbursement for our operators and tenants if finalized.  For example, on March 18, 2013, CMS published a proposed rule that would allow Medicare to pay for additional hospital inpatient services under Medicare Part B.  Specifically, the proposed rule would allow additional Part B payment when a Medicare Part A claim is denied because the beneficiary should have been treated as an outpatient, rather than being admitted to the hospital as an inpatient. 

On September 18, 2013, CMS published a final rule that sets forth the annual reductions for Medicaid disproportionate share hospital (“DSH”) payments for fiscal years 2014 and 2015, which were mandated by the Health Reform Laws, based on the assumption that the number of uninsured people will fall sharply beginning in 2014.  Although the Health Reform Laws mandated reductions in Medicaid DSH spending from 2014 through 2020, the final rule addresses only DHS reductions for 2014 and 2015.  In the final rule, CMS explained that, while the President’s FY 2014 budget proposed to delay these reductions until 2015, the Department of Health and Human Services has no flexibility to institute a delay without congressional action.

On September 18, 2013, the Commission on Long-Term Care, a 15-member federal, bipartisan advisory commission created by the 2012 American Taxpayer Relief Act, issued a pre-publication version of its report to Congress outlining its recommendations for long-term care service delivery, workforce, and financing.  With regard to financing, such commission was unable to agree on an approach and, instead, offered two contrasting approaches – one focused on using private options for long-term care, the other focused on strengthening long-term care options, primarily though changes to Medicare.  If adopted by Congress, certain of such commission’s recommendations may decrease revenues for our operators and tenants, while other recommendations may increase revenues.  

The House Ways and Means Committee is currently reviewing public comments on draft legislation to significantly reform Medicare post-acute care policy, which incorporates input from stakeholders, including, the Medicare Payment Advisory Commission, the Obama administration, the Bipartisan Policy Center, and the Simpson-Bowles Commission.  The draft legislation calls for market-basket cuts, site-neutral payment, modification criteria for IRF status, the establishment of a SNF readmissions program, and bundled payments.

Other Related Laws

All health care providers are subject to a number of federal and state health care fraud and abuse laws, including, but not limited to, the Federal Anti-Kickback Statute (“AKS”), which generally prohibits persons from offering, providing, soliciting, or receiving remuneration to induce either the referral of an individual or the furnishing of a good or service for which payment may be made under a federal health care program, such as Medicare or Medicaid.  On April 17, 2013, the Department of Health and Human

56

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Services’ (“HHS”) Office of Inspector General (“OIG”), which is the agency charged with enforcement of the AKS, released a revised provider self-disclosure protocol (“SDP”).  The SDP establishes a process for providers to voluntarily identify and disclose potential cases of fraud involving federal health care programs.  The SDP notes that damages calculations will begin at 1.5 times the amount actually paid by federal health care programs and that disclosing entities should expect minimum settlement amounts of $50,000 for kickback-related submissions and $10,000 for all other matters eligible for disclosure under the SDP.  Such settlements could have an adverse effect on a property operator’s liquidity and financial condition, which could negatively impact the operator’s ability to make payments.

Certain provisions in the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) require health care providers to utilize federally mandated standards for certain electronic transactions and maintain the privacy and security of medical records and other protected health information about individuals.  Operators may face significant financial and criminal liability if they fail to maintain the privacy and security of medical records and other protected health information or otherwise abide by applicable requirements.  The Health Information Technology for Economic and Clinical Health (“HITECH”) Act, passed in February 2009, strengthened the HHS Secretary’s authority to impose civil money penalties for HIPAA violations occurring after February 18, 2009.  In October 2009, the Office for Civil Rights (“OCR”) issued an interim Final Rule which conformed HIPAA enforcement regulations to the HITECH Act, increasing the maximum penalty for multiple violations of a single requirement or prohibition in a calendar year to $1.5 million.  Additionally, on January 25, 2013, OCR promulgated a final rule, which expands the applicability of HIPAA and HITECH and strengthens the government’s ability to enforce these laws.  The changes also strengthen the HITECH breach notification requirements by clarifying when breaches of unsecured health information must be reported to HHS. Generally, covered entities and business associates must come into compliance with the final rule by September 23, 2013, though some exceptions exist (e.g., a later deadline for modification of certain business associate agreements). 

Critical Accounting Policies

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

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

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

Management has discussed the development and selection of its critical accounting policies with the Audit Committee of the Board of Directors.  Management believes the current assumptions and other considerations used to estimate amounts reflected in our consolidated financial statements are appropriate and are not reasonably likely to change in the future.  However, since these estimates require assumptions to be made that were uncertain at the time the estimate was made, they bear the risk of change.  If actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations, liquidity and/or financial condition.  Please refer to Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013, for further information regarding significant accounting policies that impact us.  There have been no material changes to these policies in 2013.

Forward-Looking Statements and Risk Factors

    This Quarterly Report on Form 10-Q may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements concern and are based upon, among other things, the possible expansion of the company’s portfolio; the sale of facilities; the performance of its operators/tenants and facilities; its ability to enter into agreements with viable new tenants for vacant space or for facilities that the company takes back from financially troubled tenants, if any; its occupancy rates; its ability to acquire, develop and/or manage facilities; its ability to make distributions to stockholders; its policies and plans regarding investments, financings and other matters; its ability to manage the risks associated with international expansion and operations; its tax status as a real estate investment trust; its critical accounting policies; its ability to appropriately balance the use of debt and equity; its ability to access capital markets or other sources of funds; and its ability to meet its earnings guidance. When the company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions, it is making forward-looking statements.  Forward-looking statements are not guarantees of future performance and involve risks and uncertainties.  The company’s expected results may not be achieved, and actual results may differ materially from expectations.  This may be a result of various factors, including, but not limited to: the status of the economy; the status of capital markets, including availability and cost of capital; issues facing the health care industry, including compliance with, and changes to, regulations and payment policies, responding to government investigations and punitive settlements and operators’/tenants’ difficulty in cost-effectively obtaining and maintaining adequate liability and other insurance; changes in financing terms; competition within the health care, seniors housing and life science industries; negative developments in the operating results or financial condition of

57

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

operators/tenants, including, but not limited to, their ability to pay rent and repay loans; the company’s ability to transition or sell facilities with profitable results; the failure to make new investments as and when anticipated; acts of God affecting the company’s facilities; the company’s ability to re-lease space at similar rates as vacancies occur; the company’s ability to timely reinvest sale proceeds at similar rates to assets sold; operator/tenant or joint venture partner bankruptcies or insolvencies; the cooperation of joint venture partners; government regulations affecting Medicare and Medicaid reimbursement rates and operational requirements; regulatory approval and market acceptance of the products and technologies of life science tenants; liability or contract claims by or against operators/tenants; unanticipated difficulties and/or expenditures relating to future acquisitions; environmental laws affecting the company’s facilities; changes in rules or practices governing the company’s financial reporting; the movement of foreign currency exchange rates; and legal and operational matters, including real estate investment trust qualification and key management personnel recruitment and retention.  Other important factors are identified in the company’s Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013, including factors identified under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Finally, the company assumes no obligation to update or revise any forward-looking statements or to update the reasons why actual results could differ from those projected in any forward-looking statements.

58

Item 3. Quantitative and Qualitative Disclosures about Market Risk

     We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign currency exchange rates. We seek to mitigate the effects of fluctuations in interest rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent possible. We may or may not elect to use financial derivative instruments to hedge interest rate exposure. These decisions are principally based on our policy to match our variable rate investments with comparable borrowings, but are also based on the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. This section is presented to provide a discussion of the risks associated with potential fluctuations in interest rates.

      We historically borrow on our primary unsecured line of credit arrangement to acquire, construct or make loans relating to health care and seniors housing properties. Then, as market conditions dictate, we will issue equity or long-term fixed rate debt to repay the borrowings under the unsecured line of credit arrangements.

      A change in interest rates will not affect the interest expense associated with our fixed rate debt. Interest rate changes, however, will affect the fair value of our fixed rate debt. Changes in the interest rate environment upon maturity of this fixed rate debt could have an effect on our future cash flows and earnings, depending on whether the debt is replaced with other fixed rate debt, variable rate debt or equity or repaid by the sale of assets. To illustrate the impact of changes in the interest rate markets, we performed a sensitivity analysis on our fixed rate debt instruments whereby we modeled the change in net present values arising from a hypothetical 1% increase in interest rates to determine the instruments’ change in fair value. The following table summarizes the analysis performed as of the dates indicated (in thousands):

	September 30, 2013				December 31, 2012
	Principal		Change in		Principal		Change in
	balance		fair value		balance		fair value
Senior unsecured notes	$	6,418,190	$	(368,667)	$	6,145,457	$	(451,478)
Secured debt		2,809,721		(108,124)		2,024,454		(96,290)
Totals	$	9,227,911	$	(476,791)	$	8,169,911	$	(547,768)

     Our variable rate debt, including our unsecured line of credit arrangements, is reflected at fair value. At September 30, 2013, we had $847,670,000 outstanding related to our variable rate lines of credit and $256,202,000 outstanding related to our variable rate secured debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would result in increased annual interest expense of $11,039,000. At December 31, 2012, we had no amounts outstanding under our variable rate lines of credit and $223,270,000 outstanding related to our variable rate secured debt. Assuming no changes in outstanding balances, a 1% increase in interest rates would have resulted in increased annual interest expense of $2,233,000.

     We are subject to risks associated with debt financing, including the risk that existing indebtedness may not be refinanced or that the terms of refinancing may not be as favorable as the terms of current indebtedness. The majority of our borrowings were completed under indentures or contractual agreements that limit the amount of indebtedness we may incur. Accordingly, in the event that we are unable to raise additional equity or borrow money because of these limitations, our ability to acquire additional properties may be limited.

     We are subject to currency fluctuations that may, from time to time, affect our financial condition and results of operations. Increases or decreases in the value of the Canadian Dollar or Pounds Sterling relative to the U.S. Dollar impacts the amount of net income we earn from our investments in Canada and the United Kingdom. We seek to mitigate these underlying foreign currency exposures with gains and losses on derivative contracts hedging these exposures.  If we increase our international presence through investments in, or acquisitions or development of, seniors housing properties outside the United States, we may also decide to transact additional business or borrow funds in currencies other than U.S. Dollar, Canadian Dollars or Pounds Sterling.

     For additional information regarding fair values of financial instruments, see “Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” and Notes 11 and 16 to our unaudited consolidated financial statements.

59

Item 4. Controls and Procedures

     Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by us in the reports we file with or submit to the Securities and Exchange Commission (“SEC”) under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. No changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

     From time to time, there are various legal proceedings pending to which we are a party or to which some of our properties are subject arising in the normal course of business. We do not believe that the ultimate resolution of these proceedings will have a material adverse effect on our consolidated financial position or results of operations.

Item 1A. Risk Factors

     Except as provided in “Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations — Forward Looking Statements and Risk Factors,” there have been no material changes from the risk factors identified under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

     On September 3, 2013, we issued 1,108,917 shares of our common stock to a joint venture partner in connection with our acquisition of such joint venture partner’s noncontrolling interest in the joint venture.  These shares were issued without registration in reliance upon the federal statutory exemption of Section 4(2) of the Securities Act of 1933, as amended.

     On September 27, 2013, we issued 9,867 shares of our common stock to a national medical office partner pursuant to the terms of our strategic partnership.   These shares were issued without registration in reliance upon the federal statutory exemption of Section 4(2) of the Securities Act of 1933, as amended, upon such partnership earning success fees in connection with the development of new projects.

Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased(1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1, 2013 through July 31, 2013	-	$	-
August 1, 2013 through August 31, 2013	247		61.28
September 1, 2013 through September 30, 2013	-		-
Totals	247	$	61.28
(1) During the three months ended September 30, 2013, the company acquired shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.
(2) No shares were purchased as part of publicly announced plans or programs.

Item 5. Other Information

None.

60

Item 6. Exhibits

2.1              Agreement and Plan of Merger, dated as of August 21, 2012, by and among Sunrise Senior Living, Inc., Brewer Holdco, Inc., Brewer Holdco Sub, Inc., the company and Red Fox, Inc. (the exhibits and schedules to the Agreement and Plan of Merger have been omitted pursuant to Item 601(b)(2) of Regulation S-K) (filed with the SEC as Exhibit 2.1 to the company’s Form 8-K filed August 22, 2012 (File No. 001-08923), and incorporated herein by reference thereto).

3.1              Certificate of Elimination of 7 7/8% Series D Cumulative Redeemable Preferred Stock of the company (filed with the SEC as Exhibit 3.1 to the company’s Form 10-Q filed August 6, 2013 (File No. 001-08923), and incorporated herein by reference thereto).

3.2              Certificate of Elimination of 7 5/8% Series F Cumulative Redeemable Preferred Stock of the company (filed with the SEC as Exhibit 3.2 to the company’s Form 10-Q filed August 6, 2013 (File No. 001-08923), and incorporated herein by reference thereto).

10.1            Sixth Amended and Restated Employment Agreement, dated July 16, 2013, by and between the company and George L. Chapman (filed with the SEC as Exhibit 10.1 to the company’s Form 8-K filed July 17, 2013 (File No. 001-08923), and incorporated herein by reference thereto).

12               Statement Regarding Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends (Unaudited)

31.1            Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2            Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32.1            Certification pursuant to 18 U.S.C. Section 1350 by Chief Executive Officer.

32.2            Certification pursuant to 18 U.S.C. Section 1350 by Chief Financial Officer.

101.INS     XBRL Instance Document*

101.SCH   XBRL Taxonomy Extension Schema Document*

101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document*

101.LAB   XBRL Taxonomy Extension Label Linkbase Document*

101.PRE    XBRL Taxonomy Extension Presentation Linkbase Document*

101.DEF    XBRL Taxonomy Extension Definition Linkbase Document*

* Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following materials, formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets at September 30, 2013 and December 31, 2012, (ii) the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2013 and 2012, (iii) the Consolidated Statements of Equity for the nine months ended September 30, 2013 and 2012, (iv) the Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012 and (v) the Notes to Unaudited Consolidated Financial Statements.

61

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HEALTH CARE REIT, INC.
Date: November 5, 2013	By:	/s/ GEORGE L. CHAPMAN
	George L. Chapman,
	Chairman, Chief Executive Officer and President  (Principal Executive Officer)
Date: November 5, 2013	By:	/s/ SCOTT A. ESTES
	Scott A. Estes,
	Executive Vice President and Chief Financial Officer  (Principal Financial Officer)
Date: November 5, 2013	By:	/s/ PAUL D. NUNGESTER, JR.
	Paul D. Nungester, Jr.,
	Senior Vice President and Controller  (Principal Accounting Officer)

62

EX-12

 

EXHIBIT 12
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS (UNAUDITED)
	Year Ended December 31,										Nine Months Ended September 30,
	2008		2009		2010		2011		2012		2012		2013
	(dollars in thousands)
Earnings:
Pretax income from continuing operations before adjustment for income or loss from equity investees(1)	$	90,596	$	103,478	$	34,122	$	113,505	$	187,056	$	116,952	$	63,758
Fixed charges		112,147		107,260		137,635		293,364		363,119		269,553		337,504
Capitalized interest		(25,029)		(41,170)		(20,792)		(13,164)		(9,777)		(7,113)		(4,698)
Amortized premiums, discounts and capitalized expenses related to indebtedness		11,231		11,898		13,945		13,905		11,395		8,783		3,779
Noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges		(126)		342		(357)		4,894		2,415		2,241		4,462
Earnings	$	188,819	$	181,808	$	164,553	$	412,504	$	554,208	$	390,416	$	404,805
Fixed charges:
Interest expense(1)	$	98,349	$	77,988	$	130,788	$	294,105	$	364,737	$	271,223	$	336,585
Capitalized interest		25,029		41,170		20,792		13,164		9,777		7,113		4,698
Amortized premiums, discounts and capitalized expenses related to indebtedness		(11,231)		(11,898)		(13,945)		(13,905)		(11,395)		(8,783)		(3,779)
Fixed charges	$	112,147	$	107,260	$	137,635	$	293,364	$	363,119	$	269,553	$	337,504
Consolidated ratio of earnings to fixed charges		1.68		1.70		1.20		1.41		1.53		1.45		1.20
Earnings:
Pretax income from continuing operations before adjustment for income or loss from equity investees(1)	$	90,596	$	103,478	$	34,122	$	113,505	$	187,056	$	116,952	$	63,758
Fixed charges		112,147		107,260		137,635		293,364		363,119		269,553		337,504
Capitalized interest		(25,029)		(41,170)		(20,792)		(13,164)		(9,777)		(7,113)		(4,698)
Amortized premiums, discounts and capitalized expenses related to indebtedness		11,231		11,898		13,945		13,905		11,395		8,783		3,779
Noncontrolling interest in pre-tax income of subsidiaries that have not incurred fixed charges		(126)		342		(357)		4,894		2,415		2,241		4,462
Earnings	$	188,819	$	181,808	$	164,553	$	412,504	$	554,208	$	390,416	$	404,805
Fixed charges:
Interest expense(1)	$	98,349	$	77,988	$	130,788	$	294,105	$	364,737	$	271,223	$	336,585
Capitalized interest		25,029		41,170		20,792		13,164		9,777		7,113		4,698
Amortized premiums, discounts and capitalized expenses related to indebtedness		(11,231)		(11,898)		(13,945)		(13,905)		(11,395)		(8,783)		(3,779)
Fixed charges		112,147		107,260		137,635		293,364		363,119		269,553		337,504
Preferred stock dividends		23,201		22,079		21,645		60,502		69,129		52,527		49,805
Combined fixed charges and preferred stock dividends	$	135,348	$	129,339	$	159,280	$	353,866	$	432,248	$	322,080	$	387,309
Consolidated ratio of earnings to combined fixed charges and preferred stock dividends		1.40		1.41		1.03		1.17		1.28		1.21		1.05
(1) We have reclassified the income and expenses attributable to the properties sold prior to or held for sale at September 30, 2013 to discontinued operations.

EX-31.1

 

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, George L. Chapman, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Health Care REIT, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 5, 2013

/s/ GEORGE L. CHAPMAN

George L. Chapman, 

Chief Executive Officer 

EX-31.2

 

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Scott A. Estes, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Health Care REIT, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 5, 2013

/s/ SCOTT A. ESTES

Scott A. Estes, 

Chief Financial Officer 

EX-32.1

 

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

          I, George L. Chapman, the Chief Executive Officer of Health Care REIT, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that (i) the Quarterly Report on Form 10-Q for the Company for the quarter ended September 30, 2013 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ GEORGE L. CHAPMAN

George L. Chapman, 

Chief Executive Officer

 Date: November 5, 2013

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

 

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

          I, Scott A. Estes, the Chief Financial Officer of Health Care REIT, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that (i) the Quarterly Report on Form 10-Q for the Company for the quarter ended September 30, 2013 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ SCOTT A. ESTES

Scott A. Estes, 

Chief Financial Officer

 Date: November 5, 2013 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Derivative Instruments

9 Months Ended

Sep. 30, 2013

Derivative Instruments [Abstract]

Derivative Instruments

11. Derivative Instruments

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

Interest Rate Swap Contracts Designated as Cash Flow Hedges

For instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”), and reclassified into earnings in the same period, or periods, during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in earnings. As of September 30, 2013, we had one interest rate swap for a total aggregate notional amount of $11,692,000. The swap hedges interest payments associated with long-term LIBOR based borrowings and matures on December 31, 2013. Approximately $1,910,000 of losses, which are included in accumulated other comprehensive income (“AOCI”), are expected to be reclassified into earnings in the next 12 months.

Foreign Currency Hedges

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

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

On September 17, 2012, we entered into two forward exchange contracts to purchase $14,000,000 Canadian Dollars and £23,000,000 at a fixed rate in the future.  The forward contracts were used to limit exposure to fluctuations in foreign currency associated with future international transactions. These forward contacts were settled on March 22, 2013 for a realized loss of $2,309,000.

     On January 14, 2013 and January 15, 2013, we entered into three forward exchange contracts to sell £675,000,000 at a fixed rate in the future.  The forward exchange contracts were used to hedge a portion of our investment in the United Kingdom at a fixed Pound Sterling rate in U.S. dollars and were settled on July 12, 2013. We received proceeds of $63,514,000. The forward exchange contracts were designated as net investment hedges and the change in fair value is reported in OCI.

On April 4, 2013, we entered into three forward exchange contracts to purchase $600,000,000 Canadian Dollars at a fixed rate in the future and three forward exchange contracts to sell $600,000,000 Canadian Dollars at a fixed rate in the future. The forward contracts were used to limit exposure to fluctuations in the Canadian Dollar to U.S. Dollar exchange rate associated with our initial cash investment funded for an acquisition in Canada. On May 22, 2013, the three forward exchange purchase contracts were settled for a realized loss of $10,355,000, which was reflected on the consolidated statement of comprehensive income, and the proceeds were used to fund our investment. On May 22, 2013, we designated the three forward exchange sell contracts as net investment hedges, and changes in fair value are reported in OCI as no ineffectiveness is anticipated. Prior to designating the three forward exchange sell contracts as net investments, they were marked to fair value and an unrealized gain of $13,071,000 was reflected on the consolidated statement of comprehensive income.

     On July 1, 2013, we entered into two forward exchange contracts to purchase £144,411,000 at a fixed rate in the future. The forward contracts were used to limit exposure to fluctuations in the Pound Sterling to U.S. Dollar exchange rate associated with our initial cash investment for an acquisition in the United Kingdom. In July 2013, these forward contracts were settled for a realized loss of $4,872,000, which was reflected on the consolidated statement of comprehensive income, and the proceeds were used to fund our investment.

     On July 12, 2013, we entered into three forward exchange contracts to sell £675,000,000 at a fixed rate in the future.  The forward exchange contracts were used to hedge a portion of our investment in the United Kingdom at a fixed Pound Sterling rate in U.S. dollars and mature on December 31, 2013. The forward exchange contracts are designated as net investment hedges and changes in fair value are reported in OCI as no ineffectiveness is expected.

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

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	Location		2013		2012		2013		2012
Gain (loss) on interest rate swap recognized in OCI (effective portion)	OCI	$	(4)	$	797	$	(12)	$	2,342
Gain (loss) on interest rate swaps reclassified from AOCI into income (effective portion)	Interest expense		(477)		383		(1,428)		1,204
Gain (loss) on interest rate swaps recognized in income	Gain (loss) on derivatives, net		0		0		0		(96)
Gain (loss) on foreign exchange contracts recognized in income	Gain (loss) on derivatives, net		(4,872)		(409)		(4,465)		1,808
Gain (loss) on foreign exchange contracts and term loans designated as net investment hedge recognized in OCI	OCI		(110,404)		(12,663)		(19,867)		(5,747)

XML

Borrowings Under Line of Credit Arrangements and Related Items (Details Textual) (USD $)	9 Months Ended
	Sep. 30, 2013 Number
Line Of Credit Facility [Line Items]
Unsecured line of credit arrangement	$ 2,250,000,000
Additional unsecured line of credit arrangement	1,000,000,000
Maximum aggregate commitment	3,250,000,000
Number of banks in consortium	29
Maximum Interest payable period in months	3
Available to borrow in alternate currencies	500,000,000
Agent bank's prime rate of interest	1.35%
Interest Rate margin	1.175%
Annual facility fee for each bank based on commitment amount	0.225%
Unsecured Revolving Demand Note	10,000,000
Unsecured Revolving Demand Note Rate	1.11%
Debt instrument maturity date	Mar. 31, 2017
Balance outstanding at quarter end	847,670,000
United States [Member]
Line Of Credit Facility [Line Items]
Agent bank's prime rate of interest	1.36%
Balance outstanding at quarter end	595,000,000
United Kingdom [Member]
Line Of Credit Facility [Line Items]
Agent bank's prime rate of interest	1.67%
Balance outstanding at quarter end	$ 242,670,000

XML

Consolidated Statements of Comprehensive Income (Unaudited) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 33,605,000		$ 53,506,000		$ 112,588,000		$ 187,836,000
Other comprehensive income (loss):
Unrecognized gain (loss) on equity investments	(260,000)		230,000		(346,000)		192,000
Unrecognized gain (loss) on cash flow hedges	473,000		414,000		1,416,000		1,138,000
Unrecognized gain (loss) on foreign currency translation	25,693,000		2,514,000		(18,164,000)		166,000
Total other comprehensive income (loss)	25,906,000		3,158,000		(17,094,000)		1,496,000
Total comprehensive income (loss)	59,511,000		56,664,000		95,494,000		189,332,000
Total comprehensive income (loss) attributable to noncontrolling interests	(3,881,000)	[1]	(365,000)	[1]	(9,109,000)	[1]	(2,241,000)	[1]
Total comprehensive income (loss) attributable to controlling interests	$ 63,392,000		$ 57,029,000		$ 104,603,000		$ 191,573,000

[1] (1) Includes amounts attributable to redeemable noncontrolling interests.

XML

Real Estate Intangibles

9 Months Ended

Sep. 30, 2013

Real Estate Intangibles [Abstract]

Real Estate Intangibles

4. Real Estate Intangibles

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

		September 30, 2013		December 31, 2012
Assets:
	In place lease intangibles	$	918,507	$	541,729
	Above market tenant leases		54,091		56,086
	Below market ground leases		61,461		61,450
	Lease commissions		16,483		14,419
	Gross historical cost		1,050,542		673,684
	Accumulated amortization		(472,389)		(257,242)
	Net book value	$	578,153	$	416,442
	Weighted-average amortization period in years		17.1		16.4
Liabilities:
	Below market tenant leases	$	76,239	$	77,036
	Above market ground leases		9,490		9,490
	Gross historical cost		85,729		86,526
	Accumulated amortization		(32,894)		(27,753)
	Net book value	$	52,835	$	58,773
	Weighted-average amortization period in years		14.3		14.3

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Rental income related to above/below market tenant leases, net	$	235	$	(972)	$	596	$	452
Property operating expenses related to above/below market ground leases, net		(303)		(555)		(909)		(1,219)
Depreciation and amortization related to in place lease intangibles and lease commissions		(78,782)		(22,271)		(168,441)		(78,114)

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

		Assets		Liabilities
2013	$	93,415	$	1,730
2014		207,606		6,583
2015		58,816		5,623
2016		25,985		5,185
2017		26,825		4,894
Thereafter		165,506		28,820
Totals	$	578,153	$	52,835

XML

Income Taxes and Distributions

9 Months Ended

Sep. 30, 2013

Income Taxes And Distributions [Abstract]

Income Taxes And Distributions

18. Income Taxes and Distributions

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

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

Our consolidated provision for income taxes for the ninemonths ended September 30, 2013and 2012was $7,055,000 and $3,754,000, respectively. Income tax expense reflected in the financial statements primarily represents U.S. federal and state and local income taxes as well as non-U.S. income taxes on certain investments located in jurisdictions outside the U.S.Net deferred tax liabilities with respect to our TRS entities totaled $10,388,000 and $1,419,000 as of September 30, 2013and December 31, 2012, respectively, and related primarily to differences between the financial reporting and tax bases of fixed and intangible assets and to net operating losses.

Generally, given current statutes of limitations, we are subject to audit by the Internal Revenue Service (“IRS”) for the year ended December 31, 2010 and subsequent years and by state taxing authorities for the year ended December 31, 2009 and subsequent years. We are also subject to audit by the Canada Revenue Agency (“CRA”) and provincial authorities generally for periods subsequent to our Chartwell investment in May 2012 related to entities acquired or formed in connection with the investments, and by HM Revenue & Customs for periods subsequent to our Sunrise-related acquisitions in August 2012 related to entities acquired or formed in connection with the acquisitions.

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

The balance of our unrecognized tax benefits as of September 30, 2013and December 31, 2012was $6,327,000 and $6,098,000, respectively. As of September 30, 2013, $5,916,000 (exclusive of accrued interest and penalties) relates to the April 1, 2011 Genesis HealthCare Corporation transaction (“Genesis Acquisition”) and is included in accrued expenses and other liabilities on the consolidated balance sheet. As a part of the Genesis Acquisition, we received a full indemnification from FC-GEN Operations Investment, LLC covering income taxes or other taxes as well as interest and penalties relating to tax positions taken by FC-GEN Operations Investment, LLC prior to the acquisition. Accordingly, an offsetting indemnification asset is recorded in receivables and other assets on the consolidated balance sheet. Such indemnification asset is reviewed for collectability periodically. Unrecognized tax benefits, as currently accrued for, have an immaterial impact on the effective tax rate to the extent that they would be recognized. There were insignificant uncertain tax positions as of September 30, 2013for which it is reasonably possible that the amount of unrecognized tax benefits would decrease during 2013. Interest and penalties totaled $154,000 and $366,000for the three and ninemonths ended September 30, 2013, respectively, and are included in income tax expense.

XML

Earnings Per Share (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Computation of basic and diluted earnings per share
Numerator for basic and diluted earnings per share - net income (loss) attributable to common stockholders	$ 20,691,000	$ 37,269,000	$ 67,245,000	$ 131,308,000
Denominator for basic earnings per share - weighted average shares	286,020,000	224,391,000	273,148,000	212,592,000
Effect of dilutive securities:
Employee stock options	196,000	238,000	235,000	240,000
Non-vested restricted shares	567,000	301,000	417,000	293,000
Convertible senior unsecured notes	1,246,000	1,328,000	1,447,000	950,000
Dilutive potential common shares	2,009,000	1,867,000	2,099,000	1,483,000
Denominator for diluted earnings per share - adjusted weighted average shares	288,029,000	226,258,000	275,247,000	214,075,000
Basic earnings per share	$ 0.07	$ 0.17	$ 0.25	$ 0.62
Diluted earnings per share	$ 0.07	$ 0.16	$ 0.24	$ 0.61
Earnings Per Share (Textual) [Abstract]
Securities Excluded From Computation Of Diluted Earnings Per Share	0	237,000	0	0

XML

Senior Unsecured Notes and Secured Debt (Details 2) (USD $)	9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Dec. 31, 2011
Secured debt principal activity
Secured debt issued	$ 85,140,000	$ 145,713,000
Secured debt extinguished	575,373,000	272,399,000
Excluding Fair Value Adjustments [Member]
Secured debt principal activity
Secured debt principal balance	3,065,923,000	2,300,520,800	2,311,586,000	2,108,373,000
Secured debt issued	85,140,000	145,713,000
Secured debt assumed	1,241,898,000	311,653,000
Secured debt extinguished	(535,367,000)	(237,259,000)
Secured debt principal payments	(40,006,000)	(28,247,000)
Secured debt foreign currency	$ 2,672,000	$ 287,800
Secured debt principal balance average rate	0.0508	0.0542	0.0514	0.0534
Secured debt principal issued average rate	0.0505	0.0413
Secured debt principal assumed average rate	0.0411	0.0571
Secured debt principal extinguished average rate	0.0352	0.0429
Secured debt principal payment average rate	0.0527	0.0535
Secured debt principal foreign currency average rate	0.0404	0.0562

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

At September 30, 2013, we had six outstanding letter of credit obligations totaling $5,658,000 and expiring between 2013 and 2015. At September 30, 2013, we had outstanding construction in process of $158,006,000 for leased properties and were committed to providing additional funds of approximately $261,625,000 to complete construction. At September 30, 2013, we had contingent purchase obligations totaling $59,561,000. These contingent purchase obligations relate to unfunded capital improvement obligations and contingent obligations on acquisitions. Rents due from the tenant are increased to reflect the additional investment in the property.

     We evaluate our leases for operating versus capital lease treatment in accordance with Accounting Standards Codification (“ASC”) Topic 840 “Leases.”  A lease is classified as a capital lease if it provides for transfer of ownership of the leased asset at the end of the lease term, contains a bargain purchase option, has a lease term greater than 75% of the economic life of the leased asset, or if the net present value of the future minimum lease payments are in excess of 90% of the fair value of the leased asset. Certain leases contain bargain purchase options and have been classified as capital leases. At September 30, 2013, we had operating lease obligations of $882,088,000 relating to certain ground leases and company office space and capital lease obligations of $118,463,000 relating to certain investment properties. We incurred rental expense relating to company office space of $410,000 and $1,217,000 for the three months and nine months ended September 30, 2013, respectively, as compared to $330,000 and $931,000 for the same periods in 2012. Regarding ground leases, we have sublease agreements with certain of our operators that require the operators to reimburse us for our monthly operating lease obligations. At September 30, 2013, aggregate future minimum rentals to be received under these noncancelable subleases totaled $44,987,000.

XML

Real Estate Loans Receivable (Details) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Advances on real estate loans receivable:
Investments in new loans	$ 31,487,000	$ 1,154,000
Draws on existing loans	45,849,000	34,740,000
Net cash advances on real estate loans	77,336,000	35,894,000
Receipts on real estate loans receivable:
Loan payoffs	66,414,000	450,000
Principal payments on loans	19,141,000	16,127,000
Total receipts on real estate loans	85,555,000	16,577,000
Net advances (receipts) on real estate loans	(8,219,000)	19,317,000
Change in balance due to foreign currency translation	765,000	0
Net Change Real Estate Loans Receivable	(7,454,000)	19,317,000
Seniors Housing Facilities Triple Net [Member]
Advances on real estate loans receivable:
Investments in new loans	27,392,000	1,154,000
Draws on existing loans	42,772,000	33,710,000
Net cash advances on real estate loans	70,164,000	34,864,000
Receipts on real estate loans receivable:
Loan payoffs	65,768,000	450,000
Principal payments on loans	16,972,000	14,204,000
Total receipts on real estate loans	82,740,000	14,654,000
Net advances (receipts) on real estate loans	(12,576,000)	20,210,000
Change in balance due to foreign currency translation	765,000	0
Net Change Real Estate Loans Receivable	(11,811,000)	20,210,000
Medical facilities [Member]
Advances on real estate loans receivable:
Investments in new loans	4,095,000	0
Draws on existing loans	3,077,000	1,030,000
Net cash advances on real estate loans	7,172,000	1,030,000
Receipts on real estate loans receivable:
Loan payoffs	646,000	0
Principal payments on loans	2,169,000	1,923,000
Total receipts on real estate loans	2,815,000	1,923,000
Net advances (receipts) on real estate loans	4,357,000	(893,000)
Change in balance due to foreign currency translation	0	0
Net Change Real Estate Loans Receivable	$ 4,357,000	$ (893,000)

XML

Derivative Instruments (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Derivative [Line Items]
Gain (loss) recognized in income	$ 4,872,000	$ 409,000	$ 4,465,000	$ (1,712,000)
Interest Rate Swap [Member]
Derivative [Line Items]
Gain (loss) recognized in OCI	(4,000)	797,000	(12,000)	2,342,000
Gain (loss) reclassified from AOCI into income	(477,000)	383,000	(1,428,000)	1,204,000
Gain (loss) recognized in income	0	0	0	(96,000)
Foreign Exchange Contract [Member]
Derivative [Line Items]
Gain (loss) recognized in OCI	(110,404,000)	(12,663,000)	(19,867,000)	(5,747,000)
Gain (loss) recognized in income	$ (4,872,000)	$ (409,000)	$ (4,465,000)	$ 1,808,000

XML

Disclosure about Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Disclosure about Fair Value of Financial Instruments (Tables) [Abstract]

Carrying amounts and estimated fair values of financial instruments

		September 30, 2013				December 31, 2012
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
	Mortgage loans receivable	$	131,138	$	133,554	$	87,955	$	88,975
	Other real estate loans receivable		176,239		182,153		807,710		820,195
	Available-for-sale equity investments		1,037		1,037		1,384		1,384
	Cash and cash equivalents		164,838		164,838		1,033,764		1,033,764
	Foreign currency forward contracts		7,669		7,669		0		0
Financial liabilities:
	Borrowings under unsecured line of credit arrangements	$	847,670	$	847,670	$	0	$	0
	Senior unsecured notes		6,395,638		6,806,353		6,114,151		6,793,424
	Secured debt		3,115,862		3,262,955		2,336,196		2,515,145
	Interest rate swap agreements		68		68		264		264
	Foreign currency forward contracts		79,544		79,544		7,247		7,247

The Market approach utilized to measure fair value of financial assets and liabilities on recurring basis

	Fair Value Measurements as of September 30, 2013
	Total		Level 1		Level 2		Level 3
Available-for-sale equity investments(1)	$	1,037	$	1,037	$	0	$	0
Interest rate swap agreements(2)		(68)		0		(68)		0
Foreign currency forward contracts(2)		(71,875)		0		(71,875)		0
Totals	$	(70,906)	$	1,037	$	(71,943)	$	0
(1) Unrealized gains or losses on equity investments are recorded in accumulated other comprehensive income (loss) at each measurement date.
(2) Please see Note 11 for additional information.

XML

Real Property Acquisitions and Development (Tables)

9 Months Ended

Sep. 30, 2013

Real property acquisitions and development [Line Items]

Pro forma consolidated results of operations

		Nine Months Ended
		September 30,		September 30,
		2013		2012
Revenues		$	2,268,062	$	1,828,395
Income (loss) from continuing operations attributable to common stockholders		$	(2,079)	$	(59,769)
Income (loss) from continuing operations attributable to common stockholders per share:
	Basic	$	(0.01)	$	(0.28)
	Diluted	$	(0.01)	$	(0.28)

Estimated fair value of allocated updated purchase price calculation of asset and liabilities

		Nine Months Ended
(In thousands)		September 30, 2013(1)			September 30, 2012
Land and land improvements			$	56,665		$	79,325
Buildings and improvements				211,903			935,036
	Total assets acquired			268,568			1,014,361
Secured debt				-			(86,186)
Accrued expenses and other liabilities				-			(3,340)
	Total liabilities assumed			-			(89,526)
Capital in excess of par				-			1,024
Noncontrolling interests				-			(16,826)
Non-cash acquisition related activity				-			(310)
	Cash disbursed for acquisitions			268,568			908,723
Construction in progress additions				103,951			131,579
Less:	Capitalized interest			(3,337)			(4,228)
Cash disbursed for construction in progress				100,614			127,351
Capital improvements to existing properties				27,819			48,450
	Total cash invested in real property, net of cash acquired		$	397,001		$	1,084,524
(1) Includes acquisitions with an aggregate purchase price of $268,568,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

		Nine Months Ended
(In thousands)		September 30, 2013(1)			September 30, 2012
Land and land improvements			$	437,046		$	46,391
Building and improvements				4,214,254			450,255
Acquired lease intangibles				377,929			39,875
Restricted cash				41,524			-
Receivables and other assets				81,546			2,247
	Total assets acquired(2)			5,152,299			538,768
Secured debt				(1,261,093)			(8,684)
Accrued expenses and other liabilities				(86,412)			(5,480)
	Total liabilities assumed			(1,347,505)			(14,164)
Noncontrolling interests				(230,441)			(2,054)
Non-cash acquisition related activity(3)				(856,103)			-
	Cash disbursed for acquisitions			2,718,250			522,550
Construction in progress additions				1,521			-
Less:	Capitalized interest			(18)			-
Cash disbursed for construction in progress				1,503			-
Capital improvements to existing properties				36,813			13,325
	Total cash invested in real property, net of cash acquired		$	2,756,566		$	535,875
(1) Includes acquisitions with an aggregate purchase price of $5,152,299,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $87,406,000 and $4,369,000 of cash acquired during the nine months ended September 30, 2013 and 2012, respectively.
(3) Represents Sunrise loan and noncontrolling interests acquisitions.

		Nine Months Ended
(In thousands)		September 30, 2013(1)			September 30, 2012
Land and land improvements			$	-	$	53,493
Buildings and improvements				144,708		487,255
Acquired lease intangibles				-		93,392
Restricted cash				505		975
Receivables and other assets				151		4,311
	Total assets acquired			145,364		639,426
Secured debt				(26,300)		(238,589)
Accrued expenses and other liabilities				(479)		(18,075)
	Total liabilities assumed			(26,779)		(256,664)
Non-cash acquisition activity				(12,056)(2)		(880)
	Cash disbursed for acquisitions			106,529		381,882
Construction in progress additions				87,882		94,462
Less:	Capitalized interest			(1,343)		(2,885)
	Accruals(3)			(9,806)		(4,567)
Cash disbursed for construction in progress				76,733		87,010
Capital improvements to existing properties				17,887		30,505
	Total cash invested in real property		$	201,149	$	499,397
(1) Includes acquisitions with an aggregate purchase price of $145,364,000 for which the allocation of purchase price consideration is preliminary and subject to change.
(2) Represents non-cash consideration exchanged in an asset swap transaction. Please see Note 5 for additional information.
(3) Represents non-cash accruals for amounts to be paid in future periods relating to properties that converted in the periods noted above.

Summary of construction projects placed into service and generating revenues

			Nine Months Ended
			September 30, 2013			September 30, 2012
	Development projects:
		Seniors housing triple-net		$	105,265		$	84,271
		Medical facilities			78,839			111,327
		Total development projects			184,104			195,598
	Expansion projects				14,229			240
Total construction in progress conversions				$	198,333		$	195,838

XML

Accounting Policies and Related Matters (Policies)

9 Months Ended

Sep. 30, 2013

Accounting Policies and Related Matters (Policies) [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the ninemonths ended September 30, 2013 are not necessarily an indication of the results that may be expected for the year ending December 31, 2013. For further information, refer to the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013.

New Accounting Standards

New Accounting Standards

In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” which requires companies to provide information about the amounts that are reclassified out of accumulated other comprehensive income by component and by the respective line items of net income. The amendment to authoritative guidance associated with comprehensive income was effective for us on January 1, 2013. The adoption of this guidance did not have a material impact on our unaudited consolidated financial statements.

XML

Real Estate Intangibles (Details 1) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Real Estate Intangible Amortization [Abstract]
Rental income related to above/below market tenant leases, net	$ 235,000	$ (972,000)	$ 596,000	$ 452,000
Property operating expenses related to above/below market ground leases, net	(303,000)	(555,000)	(909,000)	(1,219,000)
Depreciation and amortization related to in place lease intangibles and lease commissions	$ (78,782,000)	$ (22,271,000)	$ (168,441,000)	$ (78,114,000)

XML

Senior Unsecured Notes and Secured Debt (Tables)

9 Months Ended

Sep. 30, 2013

Senior Unsecured Notes And Secured Debt (Tables) [Abstract]

Principal payments due on debt obligations

	Senior		Secured
	Unsecured Notes(1,2)		Debt (1,3)		Totals
2013	$	300,000	$	75,866	$	375,866
2014		0		326,307		326,307
2015(4)		493,072		403,268		896,340
2016		1,200,000		384,127		1,584,127
2017		450,000		341,845		791,845
Thereafter		3,975,118		1,534,510		5,509,628
Totals	$	6,418,190	$	3,065,923	$	9,484,113
(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.
(2) Annual interest rates range from 2.25% to 6.5%, excluding the Canadian denominated unsecured term loan discussed in footnote 4 and the $500,000,000 unsecured term loan discussed below.
(3) Annual interest rates range from 1.0% to 9.1%. Carrying value of the properties securing the debt totaled $6,336,955,000 at September 30, 2013.
(4) On July 30, 2012, we completed funding on a $250,000,000 Canadian denominated unsecured term loan (approximately $243,072,000 USD at exchange rates on September 30, 2013). The loan matures July 27, 2015 (with an option to extend for an additional year at our discretion) and bears interest at the Canadian Dealer Offered Rate plus 145 basis points (2.67% at September 30, 2013).

Summary of senior unsecured note activity excluding the Canadian denominated unsecured term loan

	Nine Months Ended
	September 30, 2013			September 30, 2012
			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	5,894,403	4.675%	$	4,464,927	5.133%
Debt issued		500,000	1.552%		600,000	4.125%
Debt extinguished		-	0.000%		(76,853)	8.000%
Debt redeemed		(219,285)	3.000%		(293,671)	4.750%
Ending balance	$	6,175,118	4.480%	$	4,694,403	5.030%

Secured debt principal activity

	Nine Months Ended
		September 30, 2013		September 30, 2012
			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	2,311,586	5.14%	$	2,108,373	5.34%
Debt issued		85,140	5.05%		145,713	4.13%
Debt assumed		1,241,898	4.11%		311,653	5.71%
Debt extinguished		(535,367)	3.52%		(237,259)	4.29%
Principal payments		(40,006)	5.27%		(28,247)	5.35%
Foreign currency		2,672	4.04%		288	5.62%
Ending balance	$	3,065,923	5.08%	$	2,300,521	5.42%

XML

Business (Details)	Sep. 30, 2013 Number properties
Business [Line Items]
Number of properties in diversified portfolio	1,140	[1],[2]
Number of states in diversified portfolio	46
Controlling [Member]
Business [Line Items]
Number of properties in diversified portfolio	1,197

[1] Excludes our share of investments in unconsolidated entities. Please see Note 7 for additional information.

[2] Genesis is in our seniors housing triple-net segment. Sunrise, Revera, and Belmont Village are in our seniors housing operating segment. Benchmark is in both our seniors housing triple-net and seniors housing operating segments.

XML

Real Estate Loans Receivable (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Real Estate Loans Receivable (Textual) [Abstract]
Provision for loan losses	$ 0	$ 27,008,000	$ 0	$ 27,008,000
Real estate loans with outstanding balances	$ 2,650,000		$ 2,650,000

XML

Investments in Unconsolidated Entities (Tables)

9 Months Ended

Sep. 30, 2013

Investments In Unconsolidated Entities (Tables) [Abstract]

Summary Of Investments In Unconsolidated Entities [Text Block]

	September 30, 2013		Nine Months Ended September 30,				Assets as of
	Percentage Ownership	Properties	2013 Income (loss)		2012 Income (loss)		September 30, 2013		December 31, 2012
Seniors housing triple-net(1)	10% to 49%	-	$	3,680	$	26	$	29,107	$	34,618
Seniors housing operating	33% to 50%	44		(13,946)		(4,090)		257,232		217,701
Medical facilities	36% to 49%	13		6,737		6,314		189,235		186,617
Total			$	(3,529)	$	2,250	$	475,574	$	438,936
(1) Asset amounts include an available-for-sale equity investment. See Note 16 for additional information.

XML

Stockholder's Equity (Details 5) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Summary of dividend payments
Dividends declared and paid per common share	$ 0.765	$ 0.74	$ 2.295	$ 2.22
Common stock cash dividends			$ 618,992,000	$ 460,936,000
Total dividend paid			668,797,000	513,463,000
Series D Preferred Stock [Member]
Summary of dividend payments
Dividends declared and paid per preferred share			$ 0	$ 0.503
Preferred stock cash dividends			0	2,012,000
Series F Preferred Stock [Member]
Summary of dividend payments
Dividends declared and paid per preferred share			$ 0	$ 0.4872
Preferred stock cash dividends			0	3,410,000
Series H Preferred Stock [Member]
Summary of dividend payments
Dividends declared and paid per preferred share			$ 2.1438	$ 2.1438
Preferred stock cash dividends			750,000	750,000
Series I Preferred Stock [Member]
Summary of dividend payments
Dividends declared and paid per preferred share			$ 2.4375	$ 2.4375
Preferred stock cash dividends			35,039,000	35,039,000
Series J Preferred Stock [Member]
Summary of dividend payments
Dividends declared and paid per preferred share			$ 1.2189	$ 0.9841
Preferred stock cash dividends			$ 14,016,000	$ 11,316,000

XML

Subsequent Events (Details) (USD $)	0 Months Ended
	Oct. 07, 2013
Subsequent Event [Line Items]
Senior Unsecured Notes Issued	$ 400,000,000
Interest rate	4.50%
Debt issuance proceeds	$ 393,000,000

XML

Stockholder's Equity (Details 4)	9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Dec. 31, 2011
Stockholders' Equity [Line Items]
Preferred Stock, Shares Outstanding	26,224,854	26,224,854	26,224,854	25,724,854
Preferred stock, shares issued during period	0	11,500,000
Preferred stock redeemed, shares	0	(11,000,000)
Preferred stock balance average rate	0.06493	0.06493	0.06493	0.07013
Preferred stock balance issued average rate	0	0.065
Preferred stock balance redeemed average rate	0	0.07716

XML

Real Property Acquisitions and Development (Details 2) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Development projects:
Total development projects	$ 184,104,000	$ 195,598,000
Expansion projects	14,229,000	240,000
Total construction in progress conversions	198,333,000	195,838,000
Medical facilities [Member]
Development projects:
Total development projects	78,839,000	111,327,000
Seniors Housing Facilities Triple Net [Member]
Development projects:
Total development projects	$ 105,265,000	$ 84,271,000

XML

Disclosure about Fair Value of Financial Instruments (Details 1) (USD $)	Sep. 30, 2013		Dec. 31, 2012
The Market approach utilized to measure fair value of financial assets and liabilities on recurring basis
Available-for-sale equity investments	$ 1,037,000	[1]	$ 1,384,000
Interest rate swap agreements	(68,000)	[2]
Foreign currency forward contracts	(71,875,000)	[2]
Totals	(70,906,000)
Level 1 [Member]
The Market approach utilized to measure fair value of financial assets and liabilities on recurring basis
Available-for-sale equity investments	1,037,000	[1]
Interest rate swap agreements	0	[2]
Foreign currency forward contracts	0	[2]
Totals	1,037,000
Level 2 [Member]
The Market approach utilized to measure fair value of financial assets and liabilities on recurring basis
Available-for-sale equity investments	0	[1]
Interest rate swap agreements	(68,000)	[2]
Foreign currency forward contracts	(71,875,000)	[2]
Totals	(71,943,000)
Level 3 [Member]
The Market approach utilized to measure fair value of financial assets and liabilities on recurring basis
Available-for-sale equity investments	0	[1]
Interest rate swap agreements	0	[2]
Foreign currency forward contracts	0	[2]
Totals	$ 0

[1] (1) Unrealized gains or losses on equity investments are recorded in accumulated other comprehensive income (loss) at each measurement date.

[2] (2) Please see Note 11 for additional information.

XML

Subsequent Events

9 Months Ended

Sep. 30, 2013

Subsequent Events

Subsequent Events

19. Subsequent Events

Debt Activity. On October 7, 2013, we completed the issuance of $400 million of 4.5% senior unsecured notes due 2024, generating approximately $393 million in proceeds.

XML

Consolidated Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012
Operating activities
Net income	$ 112,588,000		$ 187,836,000
Adjustments to reconcile net income to net cash provided from (used in) operating activities:
Depreciation and amortization	630,579,000		393,243,000
Other amortization expenses	6,662,000		11,702,000
Provision for loan losses	0		27,008,000
Impairment of assets	0		(6,952,000)
Stock-based compensation expense	16,650,000		16,229,000
Loss (gain) on derivatives, net	4,465,000		(1,712,000)
Loss (gain) on extinguishment of debt, net	(4,376,000)		791,000
Income from unconsolidated entities	3,529,000		(2,250,000)
Rental income in excess of cash received	(31,226,000)		(32,069,000)
Amortization related to above (below) market leases, net	313,000		767,000
Loss (gain) on sales of properties, net	(57,202,000)		(46,046,000)
Distributions by unconsolidated entities	0		3,920,000
Increase (decrease) in accrued expenses and other liabilities	9,646,000		16,417,000
Decrease (increase) in receivables and other assets	(65,721,000)		(19,318,000)
Net cash provided from (used in) operating activities	625,907,000		563,470,000
Investing activities
Investment in real property, net of cash acquired	(3,354,716,000)		(2,119,796,000)
Capitalized interest	(4,698,000)		(7,113,000)
Investment in real estate loans receivable	(77,336,000)		(35,894,000)
Other investments, net of payments	(16,589,000)		26,752,000
Principal collected on real estate loans receivable	85,555,000		16,577,000
Contributions to unconsolidated entities	(381,667,000)		(227,735,000)
Distributions by unconsolidated entities	31,699,000		12,592,000
Proceeds from (payments on) derivatives	60,909,000		4,435,000
Decrease (increase) in restricted cash	68,796,000		(69,809,000)
Proceeds from sales of real property	385,493,000		302,377,000
Net cash provided from (used in) investing activities	(3,202,554,000)		(2,097,614,000)
Financing activities
Net increase (decrease) under unsecured lines of credit arrangements	834,050,000		(610,000,000)
Proceeds from issuance of senior unsecured notes	497,862,000		842,323,000
Payments to extinguish senior unsecured notes	(217,615,000)		(370,524,000)
Secured debt issued	85,140,000		145,713,000
Payments on secured debt	(575,373,000)		(272,399,000)
Net proceeds from the issuance of common stock	1,792,552,000		3,536,232,000
Net proceeds from the issuance of preferred stock	0		277,687,000
Redemption of preferred stock	0		(275,000,000)
Decrease (increase) in deferred loan expenses	(12,398,000)		(5,119,000)
Contributions by noncontrolling interests	5,350,000	[1]	12,106,000	[1]
Distributions to noncontrolling interests	(22,502,000)	[1]	(15,283,000)	[1]
Acquisitions of noncontrolling interests	(23,247,000)		0
Cash distributions to stockholders	(668,797,000)		(513,463,000)
Other financing activities	(1,710,000)		641,000
Net cash provided from (used in) financing activities	1,693,312,000		2,752,914,000
Effect of foreign currency translation on cash and cash equivalents	14,409,000		0
Increase (decrease) in cash and cash equivalents	(868,926,000)		1,218,770,000
Cash and cash equivalents at beginning of period	1,033,764,000		163,482,000
Cash and cash equivalents at end of period	164,838,000		1,382,252,000
Supplemental cash flow information:
Interest paid	342,739,000		275,246,000
Income taxes paid	$ 5,146,096		$ 3,012,000

[1] (1) Includes amounts attributable to redeemable noncontrolling interests.

XML

Accounting Policies and Related Matters

9 Months Ended

Sep. 30, 2013

Accounting Policies and Related Matters [Abstract]

Accounting Policies and Related Matters

2. Accounting Policies and Related Matters

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the ninemonths ended September 30, 2013 are not necessarily an indication of the results that may be expected for the year ending December 31, 2013. For further information, refer to the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013.

New Accounting Standards

In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-02, “Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income,” which requires companies to provide information about the amounts that are reclassified out of accumulated other comprehensive income by component and by the respective line items of net income. The amendment to authoritative guidance associated with comprehensive income was effective for us on January 1, 2013. The adoption of this guidance did not have a material impact on our unaudited consolidated financial statements.

XML

Dispositions, Assets Held for Sale and Discontinued Operations

9 Months Ended

Sep. 30, 2013

Disclosure Dispositions, Assets Held for Sale and Discontinued Operations [Abstract]

Dispositions, Assets Held for Sale and Discontinued Operations

5. Dispositions, Assets Held for Sale and Discontinued Operations

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

		Nine Months Ended
		September 30, 2013			September 30, 2012
Real property dispositions:
	Seniors housing triple-net		$	138,650		$	149,984
	Medical facilities			201,845			106,347
	Total dispositions			340,495			256,331
Gain (loss) on sales of real property, net				57,202			46,046
Non-cash disposition activity(1)				(12,204)			0
Proceeds from real property sales			$	385,493		$	302,377
(1) Represents non-cash consideration surrendered in an asset swap transaction. Please see Note 3 for additional information.

We have reclassified the income and expenses attributable to all properties sold prior to or held for sale at September 30, 2013 to discontinued operations. Expenses include an allocation of interest expense based on property carrying values and our weighted-average cost of debt. The following illustrates the reclassification impact as a result of classifying properties as discontinued operations for the periods presented (in thousands):

			Three Months Ended				Nine Months Ended
			September 30,				September 30,
		2013		2012		2013		2012
Revenues:
	Rental income	$	810	$	20,747	$	5,972	$	70,166
Expenses:
	Interest expense		12		4,328		1,535		15,504
	Property operating expenses		68		281		346		1,469
	Provision for depreciation		313		5,014		1,879		19,899
	Total expenses		393		9,623		3,760		36,872
Income (loss) from discontinued operations, net		$	417	$	11,124	$	2,212	$	33,294

XML

Real Property Acquisitions and Development

9 Months Ended

Sep. 30, 2013

Real Property Acquisitions and Development [Abstract]

Real Property Acquisitions and Development

3. Real Property Acquisitions and Development

The total purchase price for all properties acquired has been allocated to the tangible and identifiable intangible assets, liabilities and noncontrolling interests based upon their respective fair values in accordance with our accounting policies. The results of operations for these acquisitions have been included in our consolidated results of operations since the date of acquisition and are a component of the appropriate segments. Transaction costs primarily represent costs incurred with property acquisitions, including due diligence costs, fees for legal and valuation services and termination of pre-existing relationships computed based on the fair value of the assets acquired, lease termination fees and other acquisition-related costs.

Seniors Housing Triple-net Activity

		Nine Months Ended
(In thousands)		September 30, 2013(1)			September 30, 2012
Land and land improvements			$	56,665		$	79,325
Buildings and improvements				211,903			935,036
	Total assets acquired			268,568			1,014,361
Secured debt				-			(86,186)
Accrued expenses and other liabilities				-			(3,340)
	Total liabilities assumed			-			(89,526)
Capital in excess of par				-			1,024
Noncontrolling interests				-			(16,826)
Non-cash acquisition related activity				-			(310)
	Cash disbursed for acquisitions			268,568			908,723
Construction in progress additions				103,951			131,579
Less:	Capitalized interest			(3,337)			(4,228)
Cash disbursed for construction in progress				100,614			127,351
Capital improvements to existing properties				27,819			48,450
	Total cash invested in real property, net of cash acquired		$	397,001		$	1,084,524
(1) Includes acquisitions with an aggregate purchase price of $268,568,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

Seniors Housing Operating Activity

Acquisitions of seniors housing operating properties are structured under RIDEA, which is described in Note 18. This structure results in the inclusion of all resident revenues and related property operating expenses from the operation of these qualified health care properties in our consolidated statements of comprehensive income. Certain of our subsidiaries’ functional currencies are the local currencies of their respective countries. See Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013,for information regarding our foreign currency policies.

		Nine Months Ended
(In thousands)		September 30, 2013(1)			September 30, 2012
Land and land improvements			$	437,046		$	46,391
Building and improvements				4,214,254			450,255
Acquired lease intangibles				377,929			39,875
Restricted cash				41,524			-
Receivables and other assets				81,546			2,247
	Total assets acquired(2)			5,152,299			538,768
Secured debt				(1,261,093)			(8,684)
Accrued expenses and other liabilities				(86,412)			(5,480)
	Total liabilities assumed			(1,347,505)			(14,164)
Noncontrolling interests				(230,441)			(2,054)
Non-cash acquisition related activity(3)				(856,103)			-
	Cash disbursed for acquisitions			2,718,250			522,550
Construction in progress additions				1,521			-
Less:	Capitalized interest			(18)			-
Cash disbursed for construction in progress				1,503			-
Capital improvements to existing properties				36,813			13,325
	Total cash invested in real property, net of cash acquired		$	2,756,566		$	535,875
(1) Includes acquisitions with an aggregate purchase price of $5,152,299,000 for which the allocation of the purchase price consideration is preliminary and subject to change.
(2) Excludes $87,406,000 and $4,369,000 of cash acquired during the nine months ended September 30, 2013 and 2012, respectively.
(3) Represents Sunrise loan and noncontrolling interests acquisitions.

Sunrise Merger

In August 2012, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Sunrise Senior Living, Inc. (“Sunrise”), pursuant to which we agreed to acquire Sunrise in an all-cash merger (the “Merger”) in which Sunrise stockholders would receive $14.50 in cash for each share of Sunrise common stock. On January 9, 2013, we completed our acquisition of the Sunrise property portfolio. The Sunrise Merger advances our strategic vision to own higher-end, private pay properties located in major metropolitan markets. On July 1, 2013, we acquired the remaining interests in 49 previously unconsolidated properties. As of September 30, 2013, 120 properties are wholly owned and 5 properties are held in unconsolidated entities (see Note 7 for additional information). The total estimated purchase price of approximately $4,155,052,000, including approximately $2,456,011,000 of cash consideration, has been allocated on a preliminary basis to the tangible and identifiable intangible assets and liabilities in the table above based on respective fair values in accordance with our accounting policies. We funded the cash consideration and other associated costs of the acquisition from cash on-hand as well as draws on our primary unsecured line of credit and unsecured term loan (see Notes 9 and 10 for additional information).

We recognized $201,941,000 and $443,221,000 of revenues and $65,942,000 and $145,264,000 of net operating income from continuing operations related to the consolidated Sunrise portfolio during the three and nine month periods ended September 30, 2013, respectively. In addition, we incurred $72,337,000 of transaction costs, which include advisory fees, due diligence costs, severances, and fees for legal and valuation services during the nine month period ended September 30, 2013. These amounts are included in the seniors housing operating results reflected in Note 17.

The following unaudited pro forma consolidated results of operation have been prepared as if the Sunrise Merger had occurred as of January 1, 2012 based on the preliminary purchase price allocations discussed above. Amounts are in thousands, except per share data:

		Nine Months Ended
		September 30,		September 30,
		2013		2012
Revenues		$	2,268,062	$	1,828,395
Income (loss) from continuing operations attributable to common stockholders		$	(2,079)	$	(59,769)
Income (loss) from continuing operations attributable to common stockholders per share:
	Basic	$	(0.01)	$	(0.28)
	Diluted	$	(0.01)	$	(0.28)

Medical Facilities Activity

		Nine Months Ended
(In thousands)		September 30, 2013(1)			September 30, 2012
Land and land improvements			$	-	$	53,493
Buildings and improvements				144,708		487,255
Acquired lease intangibles				-		93,392
Restricted cash				505		975
Receivables and other assets				151		4,311
	Total assets acquired			145,364		639,426
Secured debt				(26,300)		(238,589)
Accrued expenses and other liabilities				(479)		(18,075)
	Total liabilities assumed			(26,779)		(256,664)
Non-cash acquisition activity				(12,056)(2)		(880)
	Cash disbursed for acquisitions			106,529		381,882
Construction in progress additions				87,882		94,462
Less:	Capitalized interest			(1,343)		(2,885)
	Accruals(3)			(9,806)		(4,567)
Cash disbursed for construction in progress				76,733		87,010
Capital improvements to existing properties				17,887		30,505
	Total cash invested in real property		$	201,149	$	499,397
(1) Includes acquisitions with an aggregate purchase price of $145,364,000 for which the allocation of purchase price consideration is preliminary and subject to change.
(2) Represents non-cash consideration exchanged in an asset swap transaction. Please see Note 5 for additional information.
(3) Represents non-cash accruals for amounts to be paid in future periods relating to properties that converted in the periods noted above.

Construction Activity

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

			Nine Months Ended
			September 30, 2013			September 30, 2012
	Development projects:
		Seniors housing triple-net		$	105,265		$	84,271
		Medical facilities			78,839			111,327
		Total development projects			184,104			195,598
	Expansion projects				14,229			240
Total construction in progress conversions				$	198,333		$	195,838

XML

Real Property Acquisitions and Development (Details) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Pro forma consolidated results of operations
Revenues	$ 2,268,062,000	$ 1,828,395,000
Income from continuing operations attributable to common stockholders	$ (2,079,000)	$ (59,769,000)
Income from continuing operations attributable to common stockholders per share:
Basic	$ (0.01)	$ (0.28)
Diluted	$ (0.01)	$ (0.28)

XML

Real Estate Intangibles (Tables)

9 Months Ended

Sep. 30, 2013

Real Estate Intangibles (Tables) [Abstract]

Summary of real estate intangibles excluding those classified as held for sale

		September 30, 2013		December 31, 2012
Assets:
	In place lease intangibles	$	918,507	$	541,729
	Above market tenant leases		54,091		56,086
	Below market ground leases		61,461		61,450
	Lease commissions		16,483		14,419
	Gross historical cost		1,050,542		673,684
	Accumulated amortization		(472,389)		(257,242)
	Net book value	$	578,153	$	416,442
	Weighted-average amortization period in years		17.1		16.4
Liabilities:
	Below market tenant leases	$	76,239	$	77,036
	Above market ground leases		9,490		9,490
	Gross historical cost		85,729		86,526
	Accumulated amortization		(32,894)		(27,753)
	Net book value	$	52,835	$	58,773
	Weighted-average amortization period in years		14.3		14.3

Schedule of Real Estate Intangible Amortization

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Rental income related to above/below market tenant leases, net	$	235	$	(972)	$	596	$	452
Property operating expenses related to above/below market ground leases, net		(303)		(555)		(909)		(1,219)
Depreciation and amortization related to in place lease intangibles and lease commissions		(78,782)		(22,271)		(168,441)		(78,114)

Schedule of the future estimated aggregate amortization of intangible assets and liabilities

		Assets		Liabilities
2013	$	93,415	$	1,730
2014		207,606		6,583
2015		58,816		5,623
2016		25,985		5,185
2017		26,825		4,894
Thereafter		165,506		28,820
Totals	$	578,153	$	52,835

XML

Credit Concentration (Tables)

9 Months Ended

Sep. 30, 2013

Customer Concentration (Tables) [Abstract]

Summary of credit concentration

		Number of	Total		Percent of
Concentration by investment:(1)		Properties(2)	Investment(2)		Investment(3)
	Sunrise Senior Living	120	$	4,060,818	19%
	Genesis HealthCare	177		2,662,196	12%
	Revera	47		1,221,148	6%
	Belmont Village	19		859,797	4%
	Benchmark	37		852,960	4%
	Remaining portfolio	740		11,949,624	55%
	Totals	1,140	$	21,606,543	100%

• Genesis is in our seniors housing triple-net segment. Sunrise, Revera, and Belmont Village are in our seniors housing operating segment. Benchmark is in both our seniors housing triple-net and seniors housing operating segments.
• Excludes our share of investments in unconsolidated entities. Please see Note 7 for additional information.
• Investments with our top five relationships comprised 37% of total investments at December 31, 2012.

XML

Income Taxes and Distributions (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Income Taxes And Distributions (Textuals) [Abstract]
Percentage of taxable income to be distributed to stockholders for federal tax purposes	90.00%
Percentage of net capital gains on taxable income distributed to stockholders	100.00%
Percentage of federal excise tax on real estate investment trusts that do not distribute income	4.00%
Income tax provision	$ 3,077,000	$ 836,000	$ 7,055,000	$ 3,754,000
Deferred Tax Liabilities	10,388,000		10,388,000		1,419,000
Additional Income Taxes and Distributions (Textuals) [Abstract]
Unrecognized Tax Benefits	6,327,000		6,327,000		6,098,000
Expensed tax interest and penalties	154,000		366,000
Genesis Acquisition [Member]
Additional Income Taxes and Distributions (Textuals) [Abstract]
Unrecognized Tax Benefits	$ 5,916,000		$ 5,916,000

XML

Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share (Tables) [Abstract]

Computation of basic and diluted earnings per share

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2013		2012		2013		2012
Numerator for basic and diluted earnings
	per share - net income (loss) attributable
	to common stockholders	$	20,691	$	37,269	$	67,245	$	131,308
Denominator for basic earnings per
	share - weighted average shares		286,020		224,391		273,148		212,592
Effect of dilutive securities:
	Employee stock options		196		238		235		240
	Non-vested restricted shares		567		301		417		293
	Convertible senior unsecured notes		1,246		1,328		1,447		950
Dilutive potential common shares			2,009		1,867		2,099		1,483
Denominator for diluted earnings per
	share - adjusted weighted average shares		288,029		226,258		275,247		214,075
Basic earnings per share		$	0.07	$	0.17	$	0.25	$	0.62
Diluted earnings per share		$	0.07	$	0.16	$	0.24	$	0.61

XML

Segment Reporting (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Summary of information for reportable segments
Rental income	$ 311,731,000	$ 277,919,000	$ 909,659,000	$ 789,748,000
Resident fees and services	466,127,000	174,464,000	1,164,446,000	498,295,000
Interest income	7,629,000	8,111,000	24,325,000	24,131,000
Other income	1,443,000	1,339,000	3,168,000	4,505,000
Revenues	786,930,000	461,833,000	2,101,598,000	1,316,679,000
Property operating expenses	342,730,000	144,417,000	874,960,000	409,236,000
Net Operating Income from Continuing Operations	444,200,000	317,416,000	1,226,638,000	907,443,000
Interest expense	116,530,000	91,915,000	336,585,000	271,223,000
Loss (gain) on derivatives, net	4,872,000	409,000	4,465,000	(1,712,000)
Depreciation and amortization	242,668,000	127,844,000	628,700,000	373,344,000
General and administrative	28,718,000	23,679,000	79,799,000	77,302,000
Transaction costs	23,591,000	8,264,000	117,707,000	42,535,000
Loss (gain) on extinguishment of debt, net	4,068,000	(215,000)	4,376,000	(791,000)
Provision for loan losses	0	27,008,000	0	27,008,000
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	31,889,000	38,082,000	63,758,000	116,952,000
Total assets	23,049,805,000		23,049,805,000		19,549,109,000
Percent Of Assets	1		1		1
Percent Of Revenues	1	1	1	1
Senior housing - triple net [Member]
Summary of information for reportable segments
Rental income	199,408,000	178,193,000	573,112,000	508,004,000
Resident fees and services	0	0	0	0
Interest income	5,035,000	6,116,000	16,311,000	17,977,000
Other income	778,000	662,000	1,183,000	2,268,000
Revenues	205,221,000	184,971,000	590,606,000	528,249,000
Property operating expenses	0	0	0	0
Net Operating Income from Continuing Operations	205,221,000	184,971,000	590,606,000	528,249,000
Interest expense	(5,968,000)	(347,000)	(15,841,000)	(602,000)
Loss (gain) on derivatives, net	(4,872,000)	0	(4,872,000)	(96,000)
Depreciation and amortization	(58,148,000)	(52,294,000)	(169,603,000)	(147,074,000)
General and administrative	0	0	0	0
Transaction costs	(4,026,000)	(5,590,000)	(15,730,000)	(30,796,000)
Loss (gain) on extinguishment of debt, net	0	(126,000)	0	(2,363,000)
Provision for loan losses	0	(27,008,000)	0	(27,008,000)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	132,207,000	99,606,000	384,560,000	320,310,000
Total assets	9,222,731,000		9,222,731,000
Senior housing - operating [Member]
Summary of information for reportable segments
Rental income	0	0	0	0
Resident fees and services	466,127,000	174,464,000	1,164,446,000	498,295,000
Interest income	0	0	757,000	0
Other income	167,000	0	169,000	0
Revenues	466,294,000	174,464,000	1,165,372,000	498,295,000
Property operating expenses	(311,575,000)	(118,369,000)	(785,050,000)	(336,952,000)
Net Operating Income from Continuing Operations	154,719,000	56,095,000	380,322,000	161,343,000
Interest expense	(24,693,000)	(17,474,000)	(63,175,000)	(49,537,000)
Loss (gain) on derivatives, net	0	(409,000)	407,000	1,808,000
Depreciation and amortization	(144,578,000)	(39,591,000)	(338,099,000)	(123,820,000)
General and administrative	0	0	0	0
Transaction costs	(18,882,000)	(1,966,000)	(101,006,000)	(6,365,000)
Loss (gain) on extinguishment of debt, net	5,252,000	(89,000)	5,560,000	1,089,000
Provision for loan losses	0	0	0	0
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	(28,182,000)	(3,434,000)	(115,991,000)	(15,482,000)
Total assets	9,031,224,000		9,031,224,000
Medical facilities [Member]
Summary of information for reportable segments
Rental income	112,323,000	99,726,000	336,547,000	281,744,000
Resident fees and services	0	0	0	0
Interest income	2,594,000	1,995,000	7,257,000	6,154,000
Other income	466,000	400,000	1,539,000	1,482,000
Revenues	115,383,000	102,121,000	345,343,000	289,380,000
Property operating expenses	(31,155,000)	(26,048,000)	(89,910,000)	(72,284,000)
Net Operating Income from Continuing Operations	84,228,000	76,073,000	255,433,000	217,096,000
Interest expense	(9,143,000)	(7,940,000)	(28,441,000)	(22,338,000)
Loss (gain) on derivatives, net	0	0	0	0
Depreciation and amortization	(39,942,000)	(35,959,000)	(120,998,000)	(102,450,000)
General and administrative	0	0	0	0
Transaction costs	(683,000)	(708,000)	(971,000)	(5,374,000)
Loss (gain) on extinguishment of debt, net	0	0	0	483,000
Provision for loan losses	0	0	0	0
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	34,460,000	31,466,000	105,023,000	87,417,000
Total assets	4,645,540,000		4,645,540,000
Non Segment Corporate [Member]
Summary of information for reportable segments
Rental income	0	0	0	0
Resident fees and services	0	0	0	0
Interest income	0	0	0	0
Other income	32,000	277,000	277,000	755,000
Revenues	32,000	277,000	277,000	755,000
Property operating expenses	0	0	0	0
Net Operating Income from Continuing Operations	32,000	277,000	277,000	755,000
Interest expense	(76,726,000)	(66,154,000)	(229,128,000)	(198,746,000)
Loss (gain) on derivatives, net	0	0	0	0
Depreciation and amortization	0	0	0	0
General and administrative	(28,718,000)	(23,679,000)	(79,799,000)	(77,302,000)
Transaction costs	0	0	0	0
Loss (gain) on extinguishment of debt, net	(1,184,000)	0	(1,184,000)	0
Provision for loan losses	0	0	0	0
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	(106,596,000)	(89,556,000)	(309,834,000)	(275,293,000)
Total assets	150,310,000		150,310,000
International [Member]
Summary of information for reportable segments
Revenues	116,962,000	7,091,000	264,530,000	9,146,000
Total assets	3,427,229,000		3,427,229,000		856,895,000
Percent Of Assets	0.149		0.149		0.044
Percent Of Revenues	0.149	0.015	0.126	0.007
United States [Member]
Summary of information for reportable segments
Revenues	669,968,000	454,742,000	1,837,068,000	1,307,533,000
Total assets	$ 19,622,576,000		$ 19,622,576,000		$ 18,692,214,000
Percent Of Assets	0.851		0.851		0.956
Percent Of Revenues	0.851	0.985	0.874	0.993

XML

Senior Unsecured Notes and Secured Debt (Details 1) (USD $)	9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Dec. 31, 2011
Unsecured note issuances
Senior unsecured debt issued	$ 497,862,000	$ 842,323,000
Senior unsecured debt redeemed	217,615,000	370,524,000
Excluding Fair Value Adjustments [Member]
Unsecured note issuances
Senior unsecured debt balance	6,175,118,000	4,694,403,000	5,894,403,000	4,464,927,000
Senior unsecured debt issued	500,000,000	600,000,000
Senior unsecured debt extinguished	0	(76,853,000)
Senior unsecured debt redeemed	$ (219,285,000)	$ (293,671,000)
Senior unsecured debt balance average rate	0.0448	0.0503	0.04675	0.05133
Senior unsecured debt issued average rate	0.01552	0.04125
Senior unsecured debt extinguished average rate	0	0.08
Senior unsecured debt redeemed average rate	0.03	0.0475

XML

Investments in Unconsolidated Entities (Details) (USD $)	3 Months Ended		9 Months Ended			9 Months Ended					9 Months Ended			9 Months Ended													7 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012	Sep. 30, 2013 Senior housing - triple net [Member] properties		Sep. 30, 2012 Senior housing - triple net [Member]	Dec. 31, 2012 Senior housing - triple net [Member]		Sep. 30, 2013 Senior housing - operating [Member] properties	Sep. 30, 2012 Senior housing - operating [Member]	Dec. 31, 2012 Senior housing - operating [Member]	Sep. 30, 2013 Medical facilities [Member] properties	Sep. 30, 2012 Medical facilities [Member]	Dec. 31, 2012 Medical facilities [Member]	Dec. 31, 2010 Strategic Medical Office Partnership [Member] properties	Dec. 31, 2010 Strategic Medical Office Partnership [Member] Controlling [Member] properties	Dec. 31, 2010 Strategic Medical Office Partnership [Member] Non Controlling [Member] properties	Sep. 30, 2013 Chartwell [Member]	Jun. 30, 2012 Chartwell [Member] properties	Jun. 30, 2012 Chartwell [Member] Controlling [Member] properties	Sep. 30, 2013 Chartwell [Member] Non Controlling [Member] properties	Jun. 30, 2012 Chartwell [Member] Non Controlling [Member] properties	Dec. 31, 2010 Forest City [Member] properties	Sep. 30, 2013 Sunrise [Member]	Jul. 31, 2013 Sunrise [Member] Controlling [Member] properties	Sep. 30, 2013 Sunrise [Member] Non Controlling [Member] properties	Sep. 30, 2013 Management Buyer [Member]
Schedule of Equity Method Investments [Line Items]
Income from unconsolidated entities	$ (331,000)	$ (739,000)	$ (3,529,000)	$ 2,250,000		$ 3,680,000		$ 26,000			$ (13,946,000)	$ (4,090,000)		$ 6,737,000	$ 6,314,000
Equity Investments	475,574,000		475,574,000		438,936,000	29,107,000	[1]		34,618,000	[1]	257,232,000		217,701,000	189,235,000		186,617,000										49,759,000
Investment Percentage Range						10% to 49%					33% to 50%			36% to 49%
Number of properties in portfolio						0					44			13			17	11	6		42	3	39	39	7			54
Percentage of partnership owned	20.00%		20.00%																		50.00%				49.00%				20.00%
Unamortized investment																				$ 9,488,000
Number of Real Property Acquisitions																											49

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

XML

Real Estate Intangibles (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Assets:
Gross historical cost	$ 1,050,542,000	$ 673,684,000
Accumulated amortization	(472,389,000)	(257,242,000)
Net book value	578,153,000	416,442,000
Weighted-average amortization period in years	17 years 1 month	16 years 4 months
Liabilities:
Gross historical cost	85,729,000	86,526,000
Accumulated amortization	(32,894,000)	(27,753,000)
Net book value	52,835,000	58,773,000
Weighted-average amortization period in years	14 years 3 months	14 years 3 months
Intangible Liability [Member]
Estimated Aggregate Amortization Expense For Acquired Lease Intangibles Expected To Be Recognized [Line Items]
2013	1,730,000
2014	6,583,000
2015	5,623,000
2016	5,185,000
2017	4,894,000
Thereafter	28,820,000
Totals	52,835,000
Intangible Asset [Member]
Estimated Aggregate Amortization Expense For Acquired Lease Intangibles Expected To Be Recognized [Line Items]
2013	93,415,000
2014	207,606,000
2015	58,816,000
2016	25,985,000
2017	26,825,000
Thereafter	165,506,000
Totals	578,153,000
In place lease intangibles [Member]
Assets:
Gross historical cost	918,507,000	541,729,000
Above market tenant leases [Member]
Assets:
Gross historical cost	54,091,000	56,086,000
Below market ground leases [Member]
Assets:
Gross historical cost	61,461,000	61,450,000
Lease commissions [Member]
Assets:
Gross historical cost	16,483,000	14,419,000
Below market tenant leases [Member]
Liabilities:
Gross historical cost	76,239,000	77,036,000
Above market ground leases [Member]
Liabilities:
Gross historical cost	$ 9,490,000	$ 9,490,000

XML

Consolidated Statements of Income (Unaudited) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012
Revenues:
Rental income	$ 311,731,000		$ 277,919,000		$ 909,659,000		$ 789,748,000
Resident fees and services	466,127,000		174,464,000		1,164,446,000		498,295,000
Interest income	7,629,000		8,111,000		24,325,000		24,131,000
Other income	1,443,000		1,339,000		3,168,000		4,505,000
Total revenues	786,930,000		461,833,000		2,101,598,000		1,316,679,000
Expenses:
Interest expense	116,530,000		91,915,000		336,585,000		271,223,000
Property operating expenses	342,730,000		144,417,000		874,960,000		409,236,000
Depreciation and amortization	242,668,000		127,844,000		628,700,000		373,344,000
General and administrative	28,718,000		23,679,000		79,799,000		77,302,000
Transaction costs	23,591,000		8,264,000		117,707,000		42,535,000
Loss (gain) on derivatives, net	4,872,000		409,000		4,465,000		(1,712,000)
Loss (gain) on extinguishment of debt, net	(4,068,000)		215,000		(4,376,000)		791,000
Provision for loan losses	0		27,008,000		0		27,008,000
Total expenses	755,041,000		423,751,000		2,037,840,000		1,199,727,000
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	31,889,000		38,082,000		63,758,000		116,952,000
Income tax (expense) benefit	(3,077,000)		(836,000)		(7,055,000)		(3,754,000)
Income from unconsolidated entities	(331,000)		(739,000)		(3,529,000)		2,250,000
Income (loss) from continuing operations	28,481,000		36,507,000		53,174,000		115,448,000
Discontinued operations:
Gain (loss) on sales of properties, net	4,707,000		12,827,000		57,202,000		46,046,000
Impairment of assets	0		6,952,000		0		6,952,000
Income (loss) from discontinued operations, net	417,000		11,124,000		2,212,000		33,294,000
Discontinued operations, net	5,124,000		16,999,000		59,414,000		72,388,000
Net income	33,605,000		53,506,000		112,588,000		187,836,000
Less: Preferred stock dividends	16,602,000		16,602,000		49,805,000		52,527,000
Less: Preferred stock redemption charge	0		0		0		6,242,000
Less: Net income (loss) attributable to noncontrolling interests	(3,688,000)	[1]	(365,000)	[1]	(4,462,000)	[1]	(2,241,000)	[1]
Net income (loss) attributable to common stockholders	$ 20,691,000		$ 37,269,000		$ 67,245,000		$ 131,308,000
Average number of common shares outstanding:
Basic	286,020,000		224,391,000		273,148,000		212,592,000
Diluted	288,029,000		226,258,000		275,247,000		214,075,000
Basic:
Income (loss ) from continuing operations attributable to common stockholders	$ 0.05		$ 0.09		$ 0.03		$ 0.28
Discontinued operations, net	$ 0.02		$ 0.08		$ 0.22		$ 0.34
Net income (loss) attributable to common stockholders	$ 0.07		$ 0.17		$ 0.25		$ 0.62
Diluted:
Income (loss) from continuing operations attributable to common stockholders	$ 0.05		$ 0.09		$ 0.03		$ 0.28
Discontinued operations, net	$ 0.02		$ 0.08		$ 0.22		$ 0.34
Net income (loss) attributable to common stockholders	$ 0.07		$ 0.16		$ 0.24		$ 0.61
Dividends declared and paid per common share	$ 0.765		$ 0.74		$ 2.295		$ 2.22

[1] (1) Includes amounts attributable to redeemable noncontrolling interests.

XML

Credit Concentration

9 Months Ended

Sep. 30, 2013

Customer Concentration [Abstract]

Credit Concentration

8. Credit Concentration

     The following table summarizes certain information about our credit concentration as of September 30, 2013 (dollars in thousands):

		Number of	Total		Percent of
Concentration by investment:(1)		Properties(2)	Investment(2)		Investment(3)
	Sunrise Senior Living	120	$	4,060,818	19%
	Genesis HealthCare	177		2,662,196	12%
	Revera	47		1,221,148	6%
	Belmont Village	19		859,797	4%
	Benchmark	37		852,960	4%
	Remaining portfolio	740		11,949,624	55%
	Totals	1,140	$	21,606,543	100%

• Genesis is in our seniors housing triple-net segment. Sunrise, Revera, and Belmont Village are in our seniors housing operating segment. Benchmark is in both our seniors housing triple-net and seniors housing operating segments.
• Excludes our share of investments in unconsolidated entities. Please see Note 7 for additional information.
• Investments with our top five relationships comprised 37% of total investments at December 31, 2012.

XML

Consolidated Statements of Equity (Unaudited) (USD $)	Total	Preferred Stock	Common Stock	Capital in Excess of Par Value	Treasury Stock	Cumulative Net Income	Cumulative Dividends	Accumulated Other Comprehensive Income (Loss)	Other Equity	Noncontrolling Interests
Balances at beginning of period at Dec. 31, 2011	$ 7,278,647,000	$ 1,010,417,000	$ 192,299,000	$ 7,019,714,000	$ (13,535,000)	$ 1,893,806,000	$ (2,972,129,000)	$ (11,928,000)	$ 6,120,000	$ 153,883,000
Comprehensive income:
Net income (loss)	188,805,000					190,077,000				(1,272,000)
Other comprehensive income	1,496,000							1,496,000
Total comprehensive income	190,301,000
Net change in noncontrolling interests	12,238,000			(1,529,000)						13,767,000
Amounts related to issuance of common stock from dividend reinvestment and stock incentive plans, net of forfeitures	98,980,000		1,784,000	102,238,000	(3,996,000)				(1,046,000)
Proceeds from issuance of common stock	3,447,408,000		64,400,000	3,383,008,000
Net proceeds from the issuance of preferred stock	277,687,000	287,500,000		(9,813,000)
Preferred stock redeemed, amount	(275,040,000)	(275,000,000)		6,202,000		(6,242,000)
Equity component of convertible debt	3,276,000		1,039,000	2,237,000
Option compensation expense	2,371,000								2,371,000
Cash dividends paid:
Common stock cash dividends	(460,936,000)						(460,936,000)
Preferred stock cash dividends	(52,527,000)						(52,527,000)
Balances at end of period at Sep. 30, 2012	10,522,405,000	1,022,917,000	259,522,000	10,502,057,000	(17,531,000)	2,077,641,000	(3,485,592,000)	(10,432,000)	7,445,000	166,378,000
Balances at beginning of period at Dec. 31, 2012	10,520,519,000	1,022,917,000	260,396,000	10,543,690,000	(17,875,000)	2,184,819,000	(3,694,579,000)	(11,028,000)	6,461,000	225,718,000
Comprehensive income:
Net income (loss)	114,705,000					117,050,000				(2,345,000)
Other comprehensive income	(17,094,000)							(12,447,000)		(4,647,000)
Total comprehensive income	97,611,000
Net change in noncontrolling interests	159,749,000		1,109,000	23,410,000						135,230,000
Amounts related to issuance of common stock from dividend reinvestment and stock incentive plans, net of forfeitures	174,760,000		2,756,000	176,840,000	(3,388,000)				(1,448,000)
Proceeds from issuance of common stock	1,630,281,000		23,000,000	1,607,281,000
Net proceeds from the issuance of preferred stock	0
Equity component of convertible debt	(555,000)		988,000	(1,543,000)
Option compensation expense	851,000								851,000
Cash dividends paid:
Common stock cash dividends	(618,992,000)						(618,992,000)
Preferred stock cash dividends	(49,805,000)						(49,805,000)
Balances at end of period at Sep. 30, 2013	$ 11,914,419,000	$ 1,022,917,000	$ 288,249,000	$ 12,349,678,000	$ (21,263,000)	$ 2,301,869,000	$ (4,363,376,000)	$ (23,475,000)	$ 5,864,000	$ 353,956,000

XML

Derivative Instruments (Details Textual)	3 Months Ended		4 Months Ended	5 Months Ended	6 Months Ended	7 Months Ended	9 Months Ended
	Mar. 22, 2013 USD ($)	Mar. 30, 2013 USD ($)	May 03, 2012 USD ($)	May 22, 2013 USD ($)	Jul. 12, 2013 USD ($)	Jul. 31, 2013 USD ($)	Sep. 30, 2013 USD ($) Number	Jul. 31, 2013 GBP (£) Number	Jul. 12, 2013 GBP (£) Number	May 22, 2013 CAD Number	Apr. 04, 2013 CAD Number	Jan. 15, 2013 GBP (£) Number	Sep. 17, 2012 CAD Number	Sep. 17, 2012 GBP (£)	Aug. 30, 2012 GBP (£)	Jul. 30, 2012 CAD	May 03, 2012 CAD	Feb. 15, 2012 CAD
Derivative Instruments (Textual) [Abstract]
Number of foreign currency derivatives held								2	3	3	3	3	2	2
Number of interest rate derivatives held							1
Notional amount of foreign currency derivatives								£ 144,411,000	£ 675,000,000	600,000,000	600,000,000	£ 675,000,000	14,000,000	£ 23,000,000	£ 125,000,000	250,000,000	250,000,000	250,000,000
Notional amount of interest rate swap							11,692,000
Reclassification period of cash flow hedges							0 years 12 months
Swap Maturity Date			Jul. 31, 2012		Dec. 31, 2013
Hedging losses included in accumulated other comprehensive income	$ (2,309,000)	$ 13,071,000	$ 2,772,000	$ (10,355,000)	$ 63,514,000	$ (4,872,000)	$ (1,910,000)

XML

Consolidated Balance Sheets (Unaudited) (USD $)	Sep. 30, 2013		Dec. 31, 2012
Real property owned:
Land and land improvements	$ 1,869,234,000		$ 1,365,391,000
Buildings and improvements	20,387,577,000		15,635,127,000
Acquired lease intangibles	1,050,542,000		673,684,000
Real property held for sale, net of accumulated depreciation	2,141,000		245,213,000
Construction in progress	158,006,000		162,984,000
Gross real property owned	23,467,500,000		18,082,399,000
Less accumulated depreciation and amortization	(2,168,334,000)		(1,555,055,000)
Net real property owned	21,299,166,000		16,527,344,000
Real estate loans receivable:
Real estate loans receivable	307,377,000		895,665,000
Net real estate investments	21,606,543,000	[1],[2]	17,423,009,000
Other assets:
Equity Investments	475,574,000		438,936,000
Goodwill	68,321,000		68,321,000
Deferred loan expenses	68,569,000		66,327,000
Cash and cash equivalents	164,838,000		1,033,764,000
Restricted cash	80,890,000		107,657,000
Receivables and other assets	585,070,000		411,095,000
Total other assets	1,443,262,000		2,126,100,000
Total assets	23,049,805,000		19,549,109,000
Liabilities:
Borrowings under unsecured line of credit arrangement	847,670,000		0
Senior unsecured notes	6,395,638,000		6,114,151,000
Secured debt	3,115,862,000		2,336,196,000
Capital lease obligations	84,069,000		81,552,000
Accrued expenses and other liabilities	660,441,000		462,099,000
Total liabilities	11,103,680,000		8,993,998,000
Redeemable noncontrolling interests	31,706,000		34,592,000
Equity:
Preferred stock	1,022,917,000		1,022,917,000
Common stock	288,249,000		260,396,000
Capital in excess of par value	12,349,678,000		10,543,690,000
Treasury stock	(21,263,000)		(17,875,000)
Cumulative net income	2,301,869,000		2,184,819,000
Cumulative dividends	(4,363,376,000)		(3,694,579,000)
Accumulated other comprehensive income (loss)	(23,475,000)		(11,028,000)
Other equity	5,864,000		6,461,000
Total Health Care REIT, Inc. stockholders' equity	11,560,463,000		10,294,801,000
Noncontrolling interests	353,956,000		225,718,000
Total equity	11,914,419,000		10,520,519,000
Total liabilities and equity	$ 23,049,805,000		$ 19,549,109,000

[1] Excludes our share of investments in unconsolidated entities. Please see Note 7 for additional information.

[2] Genesis is in our seniors housing triple-net segment. Sunrise, Revera, and Belmont Village are in our seniors housing operating segment. Benchmark is in both our seniors housing triple-net and seniors housing operating segments.

XML

Credit Concentration (Details) (USD $)	9 Months Ended
	Sep. 30, 2013 properties		Dec. 31, 2012
Concentration by investment:
Number of properties in diversified portfolio	1,140	[1],[2]
Net real estate investments	$ 21,606,543,000	[1],[2]	$ 17,423,009,000
Percent of Investment	100.00%	[2],[3]
Credit Concentration (Textual) [Abstract]
Percentage total investments with top five customers			37.00%
Genesis HealthCare [Member]
Concentration by investment:
Number of properties in diversified portfolio	177	[1],[2]
Net real estate investments	2,662,196,000	[1],[2]
Percent of Investment	12.00%	[2],[3]
Benchmark Senior Living [Member]
Concentration by investment:
Number of properties in diversified portfolio	37	[1],[2]
Net real estate investments	852,960,000	[1],[2]
Percent of Investment	4.00%	[2],[3]
Remaining Portfolio [Member]
Concentration by investment:
Number of properties in diversified portfolio	740	[1],[2]
Net real estate investments	11,949,624,000	[1],[2]
Percent of Investment	55.00%	[2],[3]
Belmont Village [Member]
Concentration by investment:
Number of properties in diversified portfolio	19	[1],[2]
Net real estate investments	859,797,000	[1],[2]
Percent of Investment	4.00%	[2],[3]
Sunrise Senior Living [Member]
Concentration by investment:
Number of properties in diversified portfolio	120	[1],[2]
Net real estate investments	4,060,818,000	[1],[2]
Percent of Investment	19.00%	[2],[3]
Revera [Member]
Concentration by investment:
Number of properties in diversified portfolio	47	[1],[2]
Net real estate investments	$ 1,221,148,000	[1],[2]
Percent of Investment	6.00%	[2],[3]

[1] Excludes our share of investments in unconsolidated entities. Please see Note 7 for additional information.

[2] Genesis is in our seniors housing triple-net segment. Sunrise, Revera, and Belmont Village are in our seniors housing operating segment. Benchmark is in both our seniors housing triple-net and seniors housing operating segments.

[3] Investments with our top five relationships comprised 37% of total investments at December 31, 2012.

XML

Dispositions, Assets Held for Sale and Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2013

Dispositions, Assets Held for Sale and Discontinued Operations (Tables) [Abstract]

Summary of real property disposition activity

		Nine Months Ended
		September 30, 2013			September 30, 2012
Real property dispositions:
	Seniors housing triple-net		$	138,650		$	149,984
	Medical facilities			201,845			106,347
	Total dispositions			340,495			256,331
Gain (loss) on sales of real property, net				57,202			46,046
Non-cash disposition activity(1)				(12,204)			0
Proceeds from real property sales			$	385,493		$	302,377
(1) Represents non-cash consideration surrendered in an asset swap transaction. Please see Note 3 for additional information.

Reclassification impact as result of classifying properties as discontinued operations

			Three Months Ended				Nine Months Ended
			September 30,				September 30,
		2013		2012		2013		2012
Revenues:
	Rental income	$	810	$	20,747	$	5,972	$	70,166
Expenses:
	Interest expense		12		4,328		1,535		15,504
	Property operating expenses		68		281		346		1,469
	Provision for depreciation		313		5,014		1,879		19,899
	Total expenses		393		9,623		3,760		36,872
Income (loss) from discontinued operations, net		$	417	$	11,124	$	2,212	$	33,294

XML

Segment Reporting

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Reporting

17. Segment Reporting

We invest in seniors housing and health care real estate. We evaluate our business and make resource allocations on our five operating segments: seniors housing triple-net, seniors housing operating, medical office buildings, hospitals and life science. Our seniors housing triple-net properties include skilled nursing/post-acute facilities, assisted living facilities, independent living/continuing care retirement communities and combinations thereof. Under the seniors housing triple-net segment, we invest in seniors housing and health care real estate through acquisition and financing of primarily single tenant properties. Properties acquired are primarily leased under triple-net leases and we are not involved in the management of the property. Our seniors housing operating properties include seniors housing communities that are owned and/or operated through RIDEA structures (see Notes 3 and 18).

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

The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013). The results of operations for all acquisitions described in Note 3 are included in our consolidated results of operations from the acquisition dates and are components of the appropriate segments. There are no intersegment sales or transfers.

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

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

     Summary information for the reportable segments for the three and ninemonths ended September 30, 2013 and 2012 is as follows (in thousands):

Three Months Ended September 30, 2013:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	199,408	$	-	$	112,323	$	-	$	311,731
Resident fees and services		-		466,127		-		-		466,127
Interest income		5,035		-		2,594		-		7,629
Other income		778		167		466		32		1,443
Total revenues		205,221		466,294		115,383		32		786,930
Property operating expenses		-		(311,575)		(31,155)		-		(342,730)
Net operating income from continuing operations		205,221		154,719		84,228		32		444,200
Reconciling items:
Interest expense		(5,968)		(24,693)		(9,143)		(76,726)		(116,530)
(Loss) gain on derivatives, net		(4,872)		-		-		-		(4,872)
Depreciation and amortization		(58,148)		(144,578)		(39,942)		-		(242,668)
General and administrative		-		-		-		(28,718)		(28,718)
Transaction costs		(4,026)		(18,882)		(683)		-		(23,591)
(Loss) gain on extinguishment of debt, net		-		5,252		-		(1,184)		4,068
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	132,207	$	(28,182)	$	34,460	$	(106,596)	$	31,889
Total assets	$	9,222,731	$	9,031,224	$	4,645,540	$	150,310	$	23,049,805

Three Months Ended September 30, 2012:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	178,193	$	-	$	99,726	$	-	$	277,919
Resident fees and services		-		174,464		-		-		174,464
Interest income		6,116		-		1,995		-		8,111
Other income		662		-		400		277		1,339
Total revenues		184,971		174,464		102,121		277		461,833
Property operating expenses		-		(118,369)		(26,048)		-		(144,417)
Net operating income from continuing operations		184,971		56,095		76,073		277		317,416
Reconciling items:
Interest expense		(347)		(17,474)		(7,940)		(66,154)		(91,915)
(Loss) gain on derivatives, net		-		(409)		-		-		(409)
Depreciation and amortization		(52,294)		(39,591)		(35,959)		-		(127,844)
General and administrative		-		-		-		(23,679)		(23,679)
Transaction costs		(5,590)		(1,966)		(708)		-		(8,264)
(Loss) gain on extinguishment of debt, net		(126)		(89)		-		-		(215)
Provision for loan losses		(27,008)		-		-		-		(27,008)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	99,606	$	(3,434)	$	31,466	$	(89,556)	$	38,082

Nine Months Ended September 30, 2013:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	573,112	$	-	$	336,547	$	-	$	909,659
Resident fees and services		-		1,164,446		-		-		1,164,446
Interest income		16,311		757		7,257		-		24,325
Other income		1,183		169		1,539		277		3,168
Total revenues		590,606		1,165,372		345,343		277		2,101,598
Property operating expenses		-		(785,050)		(89,910)		-		(874,960)
Net operating income from continuing operations		590,606		380,322		255,433		277		1,226,638
Reconciling items:
Interest expense		(15,841)		(63,175)		(28,441)		(229,128)		(336,585)
(Loss) gain on derivatives, net		(4,872)		407		-		-		(4,465)
Depreciation and amortization		(169,603)		(338,099)		(120,998)		-		(628,700)
General and administrative		-		-		-		(79,799)		(79,799)
Transaction costs		(15,730)		(101,006)		(971)		-		(117,707)
(Loss) gain on extinguishment of debt, net		-		5,560		-		(1,184)		4,376
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	384,560	$	(115,991)	$	105,023	$	(309,834)	$	63,758

Nine Months Ended September 30, 2012:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	508,004	$	-	$	281,744	$	-	$	789,748
Resident fees and services		-		498,295		-		-		498,295
Interest income		17,977		-		6,154		-		24,131
Other income		2,268		-		1,482		755		4,505
Total revenues		528,249		498,295		289,380		755		1,316,679
Property operating expenses		-		(336,952)		(72,284)		-		(409,236)
Net operating income from continuing operations		528,249		161,343		217,096		755		907,443
Reconciling items:
Interest expense		(602)		(49,537)		(22,338)		(198,746)		(271,223)
(Loss) gain on derivatives, net		(96)		1,808		-		-		1,712
Depreciation and amortization		(147,074)		(123,820)		(102,450)		-		(373,344)
General and administrative		-		-		-		(77,302)		(77,302)
Transaction costs		(30,796)		(6,365)		(5,374)		-		(42,535)
(Loss) gain on extinguishment of debt, net		(2,363)		1,089		483		-		(791)
Provision for loan losses		(27,008)		-		-		-		(27,008)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	320,310	$	(15,482)	$	87,417	$	(275,293)	$	116,952

Our portfolio of properties and other investments are located in the United States, the United Kingdom and Canada. Revenues and assets are attributed to the country in which the property is physically located. The following is a summary of geographic information for our operations for the periods presented (dollars in thousands):

		Three Months Ended						Nine Months Ended
		September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	669,968	85.1%	$	454,742	98.5%	$	1,837,068	87.4%	$	1,307,533	99.3%
International		116,962	14.9%		7,091	1.5%		264,530	12.6%		9,146	0.7%
Total	$	786,930	100.0%	$	461,833	100.0%	$	2,101,598	100.0%	$	1,316,679	100.0%
		As of
		September 30, 2013			December 31, 2012
Assets:		Amount	%		Amount	%
United States	$	19,622,576	85.1%	$	18,692,214	95.6%
International		3,427,229	14.9%		856,895	4.4%
Total	$	23,049,805	100.0%	$	19,549,109	100.0%

XML

Real Property Acquisitions and Development (Details Textual) (USD $)	3 Months Ended		9 Months Ended			3 Months Ended	9 Months Ended		3 Months Ended		7 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 Medical facilities [Member]	Sep. 30, 2013 Sunrise [Member]	Sep. 30, 2013 Sunrise [Member]	Aug. 30, 2012 Sunrise [Member]	Sep. 30, 2013 Sunrise [Member] Controlling [Member] properties	Sep. 30, 2013 Sunrise [Member] Non Controlling [Member] properties	Jul. 31, 2013 Sunrise [Member] Non Controlling [Member] properties
Real Property Acquisitions and Development (Textual) [Abstract]
Properties acquired									120	5	49
Total purchase price	$ 91,000,000		$ 91,000,000		$ 145,364,000	$ 4,155,052,000	$ 4,155,052,000
Cash paid for acquisition						2,456,011,000	2,456,011,000
Purchase price per share								$ 14.5
Revenues	786,930,000	461,833,000	2,101,598,000	1,316,679,000		201,941,000	443,221,000
Net Operating Income	444,200,000	317,416,000	1,226,638,000	907,443,000		65,942,000	145,264,000
Transaction costs	$ 23,591,000	$ 8,264,000	$ 117,707,000	$ 42,535,000			$ 72,337,000

XML

Senior Unsecured Notes and Secured Debt (Details)	9 Months Ended				9 Months Ended
	Sep. 30, 2013 USD ($)		Oct. 07, 2013 USD ($)	Dec. 31, 2012 USD ($)	Sep. 30, 2013 Senior Unsecured Notes [Member] USD ($)		Sep. 30, 2013 Secured Debt [Member] USD ($)		Sep. 30, 2013 Canadian Denominated Unsecured Term Loan [Member] USD ($)	Sep. 30, 2013 Canadian Denominated Unsecured Term Loan [Member] CAD	Sep. 30, 2013 Unsecured Line of Credit Term Loan [Member] USD ($)
Principal payments due on debt obligations
2013	$ 375,866,000				$ 300,000,000	[1],[2]	$ 75,866,000	[1],[3]
2014	326,307,000				0	[1],[2]	326,307,000	[1],[3]
2015	896,340,000	[4]			493,072,000	[1],[2],[4]	403,268,000	[1],[3],[4]
2016	1,584,127,000				1,200,000,000	[1],[2]	384,127,000	[1],[3]
2017	791,845,000				450,000,000	[1],[2]	341,845,000	[1],[3]
Thereafter	5,509,628,000				3,975,118,000	[1],[2]	1,534,510,000	[1],[3]
Totals	9,484,113,000				6,418,190,000	[1],[2]	3,065,923,000	[1],[3]
Senior Unsecured Notes and Secured Debt (Textual) [Abstract]
Notes, annual stated interest rates, Minimum					2.25%		1.00%
Notes, annual stated interest rates, Maximum					6.50%		9.10%
Interest rate			4.50%						2.67%	2.67%	1.53%
Senior unsecured notes issued amount			400,000,000
Senior unsecured notes	6,395,638,000			6,114,151,000					243,072,000	250,000,000	500,000,000
Secured debt	3,115,862,000			2,336,196,000
Carrying values of properties securing the debt	$ 6,336,955,000
Interest Rate margin	1.175%								1.45%	1.45%	1.35%
Debt instrument maturity date	Mar. 31, 2017								Jul. 27, 2015	Jul. 27, 2015	Mar. 31, 2016
Loan Extension Period	2 years 0 months

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

[2] (2) Annual interest rates range from 2.25% to 6.5%, excluding the Canadian denominated unsecured term loan discussed in footnote 4 and the $500,000,000 unsecured term loan discussed below.

[3] (3) Annual interest rates range from 1.0% to 9.1%. Carrying value of the properties securing the debt totaled $6,336,955,000 at September 30, 2013.

[4] (4) On July 30, 2012, we completed funding on a $250,000,000 Canadian denominated unsecured term loan (approximately $243,072,000 USD at exchange rates on September 30, 2013). The loan matures July 27, 2015 (with an option to extend for an additional year at our discretion) and bears interest at the Canadian Dealer Offered Rate plus 145 basis points (2.67% at September 30, 2013).

XML

Stockholder's Equity (Details Textual) (USD $)	3 Months Ended
	Sep. 30, 2013
Stockholders' Equity (Details) [Abstract]
Transaction costs	$ 23,591,000
Acquisitions of noncontrolling interests	(23,247,000)
Equity issued in acquisition of noncontrolling interest	1,108,917
Percentage of partnership owned	20.00%
Total purchase price	91,000,000
Transaction Costs Existing Partnership	$ 2,732,000

XML

Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2013

Segment Reporting (Tables) [Abstract]

Summary of information for reportable segments

Three Months Ended September 30, 2013:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	199,408	$	-	$	112,323	$	-	$	311,731
Resident fees and services		-		466,127		-		-		466,127
Interest income		5,035		-		2,594		-		7,629
Other income		778		167		466		32		1,443
Total revenues		205,221		466,294		115,383		32		786,930
Property operating expenses		-		(311,575)		(31,155)		-		(342,730)
Net operating income from continuing operations		205,221		154,719		84,228		32		444,200
Reconciling items:
Interest expense		(5,968)		(24,693)		(9,143)		(76,726)		(116,530)
(Loss) gain on derivatives, net		(4,872)		-		-		-		(4,872)
Depreciation and amortization		(58,148)		(144,578)		(39,942)		-		(242,668)
General and administrative		-		-		-		(28,718)		(28,718)
Transaction costs		(4,026)		(18,882)		(683)		-		(23,591)
(Loss) gain on extinguishment of debt, net		-		5,252		-		(1,184)		4,068
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	132,207	$	(28,182)	$	34,460	$	(106,596)	$	31,889
Total assets	$	9,222,731	$	9,031,224	$	4,645,540	$	150,310	$	23,049,805

Three Months Ended September 30, 2012:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	178,193	$	-	$	99,726	$	-	$	277,919
Resident fees and services		-		174,464		-		-		174,464
Interest income		6,116		-		1,995		-		8,111
Other income		662		-		400		277		1,339
Total revenues		184,971		174,464		102,121		277		461,833
Property operating expenses		-		(118,369)		(26,048)		-		(144,417)
Net operating income from continuing operations		184,971		56,095		76,073		277		317,416
Reconciling items:
Interest expense		(347)		(17,474)		(7,940)		(66,154)		(91,915)
(Loss) gain on derivatives, net		-		(409)		-		-		(409)
Depreciation and amortization		(52,294)		(39,591)		(35,959)		-		(127,844)
General and administrative		-		-		-		(23,679)		(23,679)
Transaction costs		(5,590)		(1,966)		(708)		-		(8,264)
(Loss) gain on extinguishment of debt, net		(126)		(89)		-		-		(215)
Provision for loan losses		(27,008)		-		-		-		(27,008)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	99,606	$	(3,434)	$	31,466	$	(89,556)	$	38,082

Nine Months Ended September 30, 2013:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	573,112	$	-	$	336,547	$	-	$	909,659
Resident fees and services		-		1,164,446		-		-		1,164,446
Interest income		16,311		757		7,257		-		24,325
Other income		1,183		169		1,539		277		3,168
Total revenues		590,606		1,165,372		345,343		277		2,101,598
Property operating expenses		-		(785,050)		(89,910)		-		(874,960)
Net operating income from continuing operations		590,606		380,322		255,433		277		1,226,638
Reconciling items:
Interest expense		(15,841)		(63,175)		(28,441)		(229,128)		(336,585)
(Loss) gain on derivatives, net		(4,872)		407		-		-		(4,465)
Depreciation and amortization		(169,603)		(338,099)		(120,998)		-		(628,700)
General and administrative		-		-		-		(79,799)		(79,799)
Transaction costs		(15,730)		(101,006)		(971)		-		(117,707)
(Loss) gain on extinguishment of debt, net		-		5,560		-		(1,184)		4,376
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	384,560	$	(115,991)	$	105,023	$	(309,834)	$	63,758

Nine Months Ended September 30, 2012:		Seniors Housing Triple-net		Seniors Housing Operating		Medical Facilities		Non-segment / Corporate		Total
Rental income	$	508,004	$	-	$	281,744	$	-	$	789,748
Resident fees and services		-		498,295		-		-		498,295
Interest income		17,977		-		6,154		-		24,131
Other income		2,268		-		1,482		755		4,505
Total revenues		528,249		498,295		289,380		755		1,316,679
Property operating expenses		-		(336,952)		(72,284)		-		(409,236)
Net operating income from continuing operations		528,249		161,343		217,096		755		907,443
Reconciling items:
Interest expense		(602)		(49,537)		(22,338)		(198,746)		(271,223)
(Loss) gain on derivatives, net		(96)		1,808		-		-		1,712
Depreciation and amortization		(147,074)		(123,820)		(102,450)		-		(373,344)
General and administrative		-		-		-		(77,302)		(77,302)
Transaction costs		(30,796)		(6,365)		(5,374)		-		(42,535)
(Loss) gain on extinguishment of debt, net		(2,363)		1,089		483		-		(791)
Provision for loan losses		(27,008)		-		-		-		(27,008)
Income (loss) from continuing operations before income taxes and income from unconsolidated entities	$	320,310	$	(15,482)	$	87,417	$	(275,293)	$	116,952

		Three Months Ended						Nine Months Ended
		September 30, 2013			September 30, 2012			September 30, 2013			September 30, 2012
Revenues:		Amount	%		Amount	%		Amount	%		Amount	%
United States	$	669,968	85.1%	$	454,742	98.5%	$	1,837,068	87.4%	$	1,307,533	99.3%
International		116,962	14.9%		7,091	1.5%		264,530	12.6%		9,146	0.7%
Total	$	786,930	100.0%	$	461,833	100.0%	$	2,101,598	100.0%	$	1,316,679	100.0%
		As of
		September 30, 2013			December 31, 2012
Assets:		Amount	%		Amount	%
United States	$	19,622,576	85.1%	$	18,692,214	95.6%
International		3,427,229	14.9%		856,895	4.4%
Total	$	23,049,805	100.0%	$	19,549,109	100.0%

XML

Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Instruments (Tables) [Abstract]

Impact of derivative instruments on the statement of operations and OCI

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
	Location		2013		2012		2013		2012
Gain (loss) on interest rate swap recognized in OCI (effective portion)	OCI	$	(4)	$	797	$	(12)	$	2,342
Gain (loss) on interest rate swaps reclassified from AOCI into income (effective portion)	Interest expense		(477)		383		(1,428)		1,204
Gain (loss) on interest rate swaps recognized in income	Gain (loss) on derivatives, net		0		0		0		(96)
Gain (loss) on foreign exchange contracts recognized in income	Gain (loss) on derivatives, net		(4,872)		(409)		(4,465)		1,808
Gain (loss) on foreign exchange contracts and term loans designated as net investment hedge recognized in OCI	OCI		(110,404)		(12,663)		(19,867)		(5,747)

XML

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2013

Stockholders' Equity (Tables) [Abstract]

Summary of stockholder's equity capital accounts

	September 30, 2013	December 31, 2012
Preferred Stock:
Authorized shares	50,000,000	50,000,000
Issued shares	26,224,854	26,224,854
Outstanding shares	26,224,854	26,224,854
Common Stock, $1.00 par value:
Authorized shares	400,000,000	400,000,000
Issued shares	288,821,107	260,780,109
Outstanding shares	288,360,031	260,373,754

Summary of preferred stock activity

	Nine Months Ended
	September 30, 2013		September 30, 2012
		Weighted Avg.		Weighted Avg.
	Shares	Dividend Rate	Shares	Dividend Rate
Beginning balance	26,224,854	6.493%	25,724,854	7.013%
Shares issued	-	0.000%	11,500,000	6.500%
Shares redeemed	-	0.000%	(11,000,000)	7.716%
Ending balance	26,224,854	6.493%	26,224,854	6.493%

Summary of common stock issuances

	Shares Issued		Average Price		Gross Proceeds		Net Proceeds
February 2012 public issuance	20,700,000	$	53.50	$	1,107,450	$	1,062,256
August 2012 public issuance	13,800,000		58.75		810,750		778,011
September 2012 public issuance	29,900,000		56.00		1,674,400		1,607,140
2012 Dividend reinvestment plan issuances	1,485,598		55.65		82,678		82,678
2012 Option exercises	155,195		39.61		6,147		6,147
2012 Senior note conversions	1,039,721				0		0
2012 Totals	67,080,514			$	3,681,425	$	3,536,232
May 2013 public issuance	23,000,000	$	73.50	$	1,690,500	$	1,630,281
2013 Dividend reinvestment plan issuances	2,379,609		64.62		153,762		153,762
2013 Option exercises	200,467		42.45		8,509		8,509
2013 Senior note conversions	987,967				0		0
2013 Equity issued in acquisition of noncontrolling interest	1,108,917				0		0
2013 Totals	27,676,960			$	1,852,771	$	1,792,552

Summary of dividend payments

	Nine Months Ended
	September 30, 2013				September 30, 2012
	Per Share		Amount		Per Share		Amount
Common Stock	$	2.2950	$	618,992	$	2.2200	$	460,936
Series D Preferred Stock		-		0		0.5030		2,012
Series F Preferred Stock		-		0		0.4872		3,410
Series H Preferred Stock		2.1438		750		2.1438		750
Series I Preferred Stock		2.4375		35,039		2.4375		35,039
Series J Preferred Stock		1.2189		14,016		0.9841		11,316
Totals			$	668,797			$	513,463

Summary of accumulated other comprehensive income/(loss)

		Unrecognized gains (losses) related to:
		Foreign Currency Translation		Equity Investments		Actuarial losses		Cash Flow Hedges		Total
Balance at December 31, 2012	$	(881)	$	(216)	$	(2,974)	$	(6,957)	$	(11,028)
Other comprehensive income before reclassification adjustments		(13,517)		(346)		0		(12)		(13,875)
Reclassification amount to net income		0		0		0		1,428(1)		1,428
Net current-period other comprehensive income		(13,517)		(346)		0		1,416		(12,447)
Balance at September 30, 2013	$	(14,398)	$	(562)	$	(2,974)	$	(5,541)	$	(23,475)
Balance at December 31, 2011	$	0	$	(619)	$	(2,748)	$	(8,561)	$	(11,928)
Other comprehensive income before reclassification adjustments		166		192		0		2,342		2,700
Reclassification amount to net income		0		0		0		(1,204)(1)		(1,204)
Net current-period other comprehensive income		166		192		0		1,138		1,496
Balance at September 30, 2012	$	166	$	(427)	$	(2,748)	$	(7,423)	$	(10,432)
(1) Please see Note 11 for additional information.

XML

Investments in Unconsolidated Entities

9 Months Ended

Sep. 30, 2013

Investments in Unconsolidated Entities [Abstract]

Investments in Unconsolidated Entities

7. Investments in Unconsolidated Entities

During the year ended December 31, 2010, we entered into a joint venture investment with Forest City Enterprises Inc. (NYSE:FCE.A and FCE.B). We acquired a 49% interest in a seven-building life science campus located at University Park in Cambridge, Massachusetts, which is immediately adjacent to the campus of the Massachusetts Institute of Technology. This investment is recorded as an investment in unconsolidated entities on the balance sheet.

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

During the three months ended June 30, 2012, we entered into a joint venture (structured under RIDEA) with Chartwell Retirement Residences (TSX:CSH.UN). The portfolio contains 42 properties in Canada, 39 of which are owned 50% by us and Chartwell, and three of which we wholly own. All properties are managed by Chartwell. Our investment in the 39 properties is recorded as an investment in unconsolidated entities on the balance sheet. The aggregate remaining unamortized basis difference of our investment in this joint venture of $9,488,000 at September 30, 2013 is primarily attributable to transaction costs that will be amortized over the weighted-average useful life of the related properties and included in the reported amount of income from unconsolidated entities.

In conjunction with the Sunrise Merger, we acquired joint venture interests in 54 properties and a 20% interest in a newly formed Sunrise management company, which manages the entire property portfolio. On July 1, 2013, we acquired the remaining interests in 49 of the properties. Our original investment of $49,759,000 relating to the five remaining unconsolidated properties and the management company is recorded as an investment in unconsolidated entities on the balance sheet. See Note 3 for additional information.

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

	September 30, 2013		Nine Months Ended September 30,				Assets as of
	Percentage Ownership	Properties	2013 Income (loss)		2012 Income (loss)		September 30, 2013		December 31, 2012
Seniors housing triple-net(1)	10% to 49%	-	$	3,680	$	26	$	29,107	$	34,618
Seniors housing operating	33% to 50%	44		(13,946)		(4,090)		257,232		217,701
Medical facilities	36% to 49%	13		6,737		6,314		189,235		186,617
Total			$	(3,529)	$	2,250	$	475,574	$	438,936
(1) Asset amounts include an available-for-sale equity investment. See Note 16 for additional information.

XML

Stockholder's Equity (Details 2) (USD $)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012		Dec. 31, 2011
Accumulated Other Comprehensive Income Loss [Line Items]
Unrecognized losses on cash flow hedges	$ (5,541,000)	$ (6,957,000)	$ (7,423,000)		$ (8,561,000)
Unrecognized losses on equity investments	(562,000)	(216,000)	(427,000)		(619,000)
Unrecognized gains (losses) on foreign currency translation	(14,398,000)	(881,000)	166,000		0
Unrecognized actuarial losses	(2,974,000)	(2,974,000)	(2,748,000)		(2,748,000)
Totals	(23,475,000)	(11,028,000)	(10,432,000)		(11,928,000)
Other comprehensive income before reclassification adjustments
Accumulated Other Comprehensive Income Loss [Line Items]
Unrecognized losses on cash flow hedges	(12,000)		2,342,000
Unrecognized losses on equity investments	(346,000)		192,000
Unrecognized gains (losses) on foreign currency translation	(13,517,000)		166,000
Unrecognized actuarial losses	0		0
Totals	(13,875,000)		2,700,000
Reclassification amount to net income
Accumulated Other Comprehensive Income Loss [Line Items]
Unrecognized losses on cash flow hedges	1,428,000		(1,204,000)	[1]
Unrecognized losses on equity investments	0		0
Unrecognized gains (losses) on foreign currency translation	0		0
Unrecognized actuarial losses	0		0
Totals	1,428,000		(1,204,000)
Net current period other comprehensive income
Accumulated Other Comprehensive Income Loss [Line Items]
Unrecognized losses on cash flow hedges	1,416,000		1,138,000
Unrecognized losses on equity investments	(346,000)		192,000
Unrecognized gains (losses) on foreign currency translation	(13,517,000)		166,000
Unrecognized actuarial losses	0		0
Totals	$ (12,447,000)		$ 1,496,000

[1] (1) Please see Note 11 for additional information.

XML

Real Estate Loans Receivable (Tables)

9 Months Ended

Sep. 30, 2013

Real Estate Loans Receivable (Tables) [Abstract]

Summary of real estate loan activity

		Nine Months Ended
		September 30, 2013						September 30, 2012
		Seniors						Seniors
		Housing		Medical				Housing		Medical
		Triple-net		Facilities		Totals		Triple-net		Facilities		Totals
Advances on real estate loans receivable:
	Investments in new loans	$	27,392	$	4,095	$	31,487	$	1,154	$	0	$	1,154
	Draws on existing loans		42,772		3,077		45,849		33,710		1,030		34,740
	Net cash advances on real estate loans		70,164		7,172		77,336		34,864		1,030		35,894
Receipts on real estate loans receivable:
	Loan payoffs		65,768		646		66,414		450		0		450
	Principal payments on loans		16,972		2,169		19,141		14,204		1,923		16,127
	Total receipts on real estate loans		82,740		2,815		85,555		14,654		1,923		16,577
Net cash advances (receipts) on real estate loans			(12,576)		4,357		(8,219)		20,210		(893)		19,317
Change in balance due to foreign currency translation			765		0		765		0		0		0
Net change in real estate loans receivable		$	(11,811)	$	4,357	$	(7,454)	$	20,210	$	(893)	$	19,317

XML

Real Property Acquisitions and Development (Details 1) (USD $)	9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012
Estimated Fair Value of Allocated Purchase Price of Asset and Liabilities
Purchase price, preliminary	$ 91,000,000
Senior housing - triple net [Member]
Estimated Fair Value of Allocated Purchase Price of Asset and Liabilities
Land and land improvements	56,665,000	[1]	79,325,000
Buildings and improvements	211,903,000	[1]	935,036,000
Total assets acquired	268,568,000	[1]	1,014,361,000
Secured debt	0		(86,186,000)
Accrued expenses and other liabilities	0		(3,340,000)
Total liabilities assumed	0		(89,526,000)
Capital in excess of par	0		1,024,000
Noncontrolling interests	0		(16,826,000)
Non-cash acquisition related activity	0		(310,000)
Cash disbursed for acquisitions	268,568,000	[1]	908,723,000
Construction in progress additions	103,951,000		131,579,000
Less: Capitalized Interest	(3,337,000)	[1]	(4,228,000)
Cash disbursed for construction in progress	100,614,000	[1]	127,351,000
Capital improvements to existing properties	27,819,000	[1]	48,450,000
Total cash invested in real property	397,001,000	[1]	1,084,524,000
Purchase price, preliminary	268,568,000
Senior housing - operating [Member]
Estimated Fair Value of Allocated Purchase Price of Asset and Liabilities
Land and land improvements	437,046,000	[2]	46,391,000
Buildings and improvements	4,214,254,000	[2]	450,255,000
Acquired lease intangibles	377,929,000	[2]	39,875,000
Restricted cash	41,524,000	[2]	0
Receivables and other assets	81,546,000	[2]	2,247,000
Total assets acquired	5,152,299,000	[2],[3]	538,768,000	[3]
Secured debt	(1,261,093,000)	[2]	(8,684,000)
Accrued expenses and other liabilities	(86,412,000)	[2]	(5,480,000)
Total liabilities assumed	(1,347,505,000)	[2]	(14,164,000)
Noncontrolling interests	(230,441,000)	[2]	(2,054,000)
Non-cash acquisition related activity	(856,103,000)	[2],[4]	0
Cash disbursed for acquisitions	2,718,250,000	[2]	522,550,000
Construction in progress additions	1,521,000		0
Less: Capitalized Interest	(18,000)	[2]	0
Cash disbursed for construction in progress	1,503,000	[2]	0
Capital improvements to existing properties	36,813,000	[2]	13,325,000
Total cash invested in real property	2,756,566,000	[2]	535,875,000
Cash Acquired from Acquisition	87,406,000		4,369,000
Purchase price, preliminary	5,152,299,000
Medical facilities [Member]
Estimated Fair Value of Allocated Purchase Price of Asset and Liabilities
Land and land improvements	0	[5]	53,493,000
Buildings and improvements	144,708,000	[5]	487,255,000
Acquired lease intangibles	0	[5]	93,392,000
Restricted cash	505,000	[5]	975,000
Receivables and other assets	151,000	[5]	4,311,000
Total assets acquired	145,364,000	[5]	639,426,000
Secured debt	(26,300,000)	[5]	(238,589,000)
Accrued expenses and other liabilities	(479,000)	[5]	(18,075,000)
Total liabilities assumed	(26,779,000)	[5]	(256,664,000)
Non-cash acquisition related activity	(12,056,000)	[5],[6]	(880,000)
Cash disbursed for acquisitions	106,529,000	[5]	381,882,000
Construction in progress additions	87,882,000		94,462,000
Less: Capitalized Interest	(1,343,000)	[5]	(2,885,000)
Less: Accruals	(9,806,000)	[5],[7]	(4,567,000)	[7]
Cash disbursed for construction in progress	76,733,000	[5]	87,010,000
Capital improvements to existing properties	17,887,000	[5]	30,505,000
Total cash invested in real property	201,149,000	[5]	499,397,000
Purchase price, preliminary	$ 145,364,000

[1] (1) Includes acquisitions with an aggregate purchase price of $268,568,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

[2] (1) Includes acquisitions with an aggregate purchase price of $5,152,299,000 for which the allocation of the purchase price consideration is preliminary and subject to change.

[3] (2) Excludes $87,406,000 and $4,369,000 of cash acquired during the nine months ended September 30, 2013 and 2012, respectively.

[4] (3) Represents Sunrise loan and noncontrolling interests acquisitions.

[5] (1) Includes acquisitions with an aggregate purchase price of $145,364,000 for which the allocation of purchase price consideration is preliminary and subject to change.

[6] (2) Represents non-cash consideration exchanged in an asset swap transaction. Please see Note 5 for additional information.

[7] (3) Represents non-cash accruals for amounts to be paid in future periods relating to properties that converted in the periods noted above.

XML

Senior Unsecured Notes and Secured Debt

9 Months Ended

Sep. 30, 2013

Senior Unsecured Notes and Secured Debt [Abstract]

Senior Unsecured Notes and Secured Debt

10. Senior Unsecured Notes and Secured Debt

We may repurchase, redeem or refinance convertible and non-convertible senior unsecured notes from time to time, taking advantage of favorable market conditions when available. We may purchase senior notes for cash through open market purchases, privately negotiated transactions, a tender offer or, in some cases, through the early redemption of such securities pursuant to their terms. The non-convertible senior unsecured notes are redeemable at our option, at any time in whole or from time to time in part, at a redemption price equal to the sum of (1) the principal amount of the notes (or portion of such notes) being redeemed plus accrued and unpaid interest thereon up to the redemption date and (2) any “make-whole” amount due under the terms of the notes in connection with early redemptions. Redemptions and repurchases of debt, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.At September 30, 2013, the annual principal payments due on these debt obligations were as follows (in thousands):

	Senior		Secured
	Unsecured Notes(1,2)		Debt (1,3)		Totals
2013	$	300,000	$	75,866	$	375,866
2014		0		326,307		326,307
2015(4)		493,072		403,268		896,340
2016		1,200,000		384,127		1,584,127
2017		450,000		341,845		791,845
Thereafter		3,975,118		1,534,510		5,509,628
Totals	$	6,418,190	$	3,065,923	$	9,484,113
(1) Amounts represent principal amounts due and do not include unamortized premiums/discounts or other fair value adjustments as reflected on the balance sheet.
(2) Annual interest rates range from 2.25% to 6.5%, excluding the Canadian denominated unsecured term loan discussed in footnote 4 and the $500,000,000 unsecured term loan discussed below.
(3) Annual interest rates range from 1.0% to 9.1%. Carrying value of the properties securing the debt totaled $6,336,955,000 at September 30, 2013.
(4) On July 30, 2012, we completed funding on a $250,000,000 Canadian denominated unsecured term loan (approximately $243,072,000 USD at exchange rates on September 30, 2013). The loan matures July 27, 2015 (with an option to extend for an additional year at our discretion) and bears interest at the Canadian Dealer Offered Rate plus 145 basis points (2.67% at September 30, 2013).

During the nine months ended September 30, 2013, we borrowed on a $500,000,000 unsecured term loan entered into as part of our unsecured line of credit arrangement. The loan matures on March 31, 2016, but can be extended up to two years at our option and bears interest at LIBOR plus 1.35% (1.53% at September 30, 2013).

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

	Nine Months Ended
	September 30, 2013			September 30, 2012
			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	5,894,403	4.675%	$	4,464,927	5.133%
Debt issued		500,000	1.552%		600,000	4.125%
Debt extinguished		-	0.000%		(76,853)	8.000%
Debt redeemed		(219,285)	3.000%		(293,671)	4.750%
Ending balance	$	6,175,118	4.480%	$	4,694,403	5.030%

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

	Nine Months Ended
		September 30, 2013		September 30, 2012
			Weighted Avg.			Weighted Avg.
	Amount		Interest Rate	Amount		Interest Rate
Beginning balance	$	2,311,586	5.14%	$	2,108,373	5.34%
Debt issued		85,140	5.05%		145,713	4.13%
Debt assumed		1,241,898	4.11%		311,653	5.71%
Debt extinguished		(535,367)	3.52%		(237,259)	4.29%
Principal payments		(40,006)	5.27%		(28,247)	5.35%
Foreign currency		2,672	4.04%		288	5.62%
Ending balance	$	3,065,923	5.08%	$	2,300,521	5.42%

Our debt agreements contain various covenants, restrictions and events of default. Certain agreements require us to maintaincertain financial ratios and minimum net worth and impose certain limits on our ability to incur indebtedness, create liens and make investments or acquisitions. As of September 30, 2013, we were in compliance with all of the covenants under our debt agreements.

XML

Real Estate Loans Receivable

9 Months Ended

Sep. 30, 2013

Real Estate Loans Receivable [Abstract]

Real Estate Loans Receivable

6. Real Estate Loans Receivable

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

		Nine Months Ended
		September 30, 2013						September 30, 2012
		Seniors						Seniors
		Housing		Medical				Housing		Medical
		Triple-net		Facilities		Totals		Triple-net		Facilities		Totals
Advances on real estate loans receivable:
	Investments in new loans	$	27,392	$	4,095	$	31,487	$	1,154	$	0	$	1,154
	Draws on existing loans		42,772		3,077		45,849		33,710		1,030		34,740
	Net cash advances on real estate loans		70,164		7,172		77,336		34,864		1,030		35,894
Receipts on real estate loans receivable:
	Loan payoffs		65,768		646		66,414		450		0		450
	Principal payments on loans		16,972		2,169		19,141		14,204		1,923		16,127
	Total receipts on real estate loans		82,740		2,815		85,555		14,654		1,923		16,577
Net cash advances (receipts) on real estate loans			(12,576)		4,357		(8,219)		20,210		(893)		19,317
Change in balance due to foreign currency translation			765		0		765		0		0		0
Net change in real estate loans receivable		$	(11,811)	$	4,357	$	(7,454)	$	20,210	$	(893)	$	19,317

We recorded no provision for loan losses during the nine months ended September 30, 2013. At September 30, 2013, we had real estate loans with outstanding balances of $2,650,000on non-accrual status with an allowance for loan losses of $0.

XML

Business

9 Months Ended

Sep. 30, 2013

Business [Abstract]

Business

1. Business

     Health Care REIT, Inc., an S&P 500 company with headquarters in Toledo, Ohio, is an equity real estate investment trust (“REIT”) that invests in seniors housing and health care real estate. Our full service platform offers property management and development services to our customers. As of September 30, 2013, our diversified portfolio consisted of 1,197 properties in 46 states, the United Kingdom, and Canada. Founded in 1970, we were the first real estate investment trust to invest exclusively in health care facilities.

XML

Borrowings Under Line of Credit Arrangements and Related Items (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Aggregate borrowings under the unsecured line of credit arrangements
Balance outstanding at quarter end	$ 847,670,000		$ 847,670,000		$ 0
Maximum amount outstanding at any month end	1,019,050,000	145,000,000	1,019,050,000	897,000,000
Average amount outstanding (total of daily principal balances divided by days in period)	$ 562,978,000	$ 165,000,000	$ 527,890,000	$ 255,639,000
Weighted average interest rate (actual interest expense divided by average borrowings outstanding)	1.51%	2.30%	1.43%	1.79%

XML

Dispositions, Assets Held for Sale and Discontinued Operations (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Real property dispositions:
Total dispositions			$ 340,495,000		$ 256,331,000
Gain (loss) on sales of properties, net	4,707,000	12,827,000	57,202,000		46,046,000
Noncash disposition activity			(12,204,000)	[1]	0
Proceeds from sales of real property			385,493,000		302,377,000
Revenues:
Rental income	810,000	20,747,000	5,972,000		70,166,000
Expenses:
Interest expense	12,000	4,328,000	1,535,000		15,504,000
Property operating expenses	68,000	281,000	346,000		1,469,000
Provision for depreciation	313,000	5,014,000	1,879,000		19,899,000
Expenses	393,000	9,623,000	3,760,000		36,872,000
Income (loss) from discontinued operations, net	417,000	11,124,000	2,212,000		33,294,000
Seniors Housing Facilities Triple Net [Member]
Real property dispositions:
Total dispositions			138,650,000		149,984,000
Medical facilities [Member]
Real property dispositions:
Total dispositions			$ 201,845,000		$ 106,347,000

[1] (1) Represents non-cash consideration surrendered in an asset swap transaction. Please see Note 3 for additional information.

XML

Borrowings Under Line of Credit Arrangements and Related Items (Tables)

9 Months Ended

Sep. 30, 2013

Borrowings Under Line of Credit Arrangement and Related Items (Tables) [Abstract]

Aggregate borrowings under the unsecured line of credit arrangements

		Three Months Ended September 30,				Nine Months Ended September 30,
		2013		2012		2013		2012
Balance outstanding at quarter end		$	847,670	$	0	$	847,670	$	0
Maximum amount outstanding at any month end		$	1,019,050	$	145,000	$	1,019,050	$	897,000
Average amount outstanding (total of daily
	principal balances divided by days in period)	$	562,978	$	165,000	$	527,890	$	255,639
Weighted average interest rate (actual interest
	expense divided by average borrowings outstanding)		1.51%		2.30%		1.43%		1.79%

XML

Stock Incentive Plans (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Stock Incentive Plans [Line Items]
Number of common stock authorized for Long-Term Incentive Plan	6,200,000		6,200,000
Stock-based compensation expense	$ 3,956,000	$ 2,592,000	$ 16,650,000	$ 16,229,000
Option expiration period	10 years
Director [Member]
Stock Incentive Plans [Line Items]
Vesting period	3 years
Officer [Member]
Stock Incentive Plans [Line Items]
Vesting period	5 years

XML

Commitments and Contingencies (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013 Number	Sep. 30, 2012	Sep. 30, 2013 Number	Sep. 30, 2012	Dec. 31, 2012
Commitments and Contingencies (Textual) [Abstract]
Number of outstanding letters of credit	6		6
Letter of credit obligation	$ 5,658,000		$ 5,658,000
Outstanding construction financings for leased properties	158,006,000		158,006,000		162,984,000
Additional financing to complete construction	261,625,000		261,625,000
Total contingent purchase obligations	59,561,000		59,561,000
Minimum part of economic life of the leased asset to be classified as capital lease			75.00%
Minimum net present value of the future minimum lease payments to be classified as capital lease.	90.00%		90.00%
Operating lease obligations relating to certain ground leases	882,088,000		882,088,000
Rental expense related to company office space	410,000	330,000	1,217,000	931,000
Operating Leases, Future Minimum Payments Due, Future Minimum Sublease Rentals	44,987,000		44,987,000
Capital Leases, Future Minimum Payments Due	$ 118,463,000		$ 118,463,000

XML

Stockholders' Equity

9 Months Ended

Sep. 30, 2013

Stockholders' Equity [Abstract]

Stockholders' Equity

13. Stockholders’ Equity

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

	September 30, 2013	December 31, 2012
Preferred Stock:
Authorized shares	50,000,000	50,000,000
Issued shares	26,224,854	26,224,854
Outstanding shares	26,224,854	26,224,854
Common Stock, $1.00 par value:
Authorized shares	400,000,000	400,000,000
Issued shares	288,821,107	260,780,109
Outstanding shares	288,360,031	260,373,754

Preferred Stock. The following is a summary of our preferred stock activity during the periods indicated:

	Nine Months Ended
	September 30, 2013		September 30, 2012
		Weighted Avg.		Weighted Avg.
	Shares	Dividend Rate	Shares	Dividend Rate
Beginning balance	26,224,854	6.493%	25,724,854	7.013%
Shares issued	-	0.000%	11,500,000	6.500%
Shares redeemed	-	0.000%	(11,000,000)	7.716%
Ending balance	26,224,854	6.493%	26,224,854	6.493%

Common Stock. The following is a summary of our common stock issuances during the nine months ended September 30, 2013 and 2012 (dollars in thousands, except per share amounts):

	Shares Issued		Average Price		Gross Proceeds		Net Proceeds
February 2012 public issuance	20,700,000	$	53.50	$	1,107,450	$	1,062,256
August 2012 public issuance	13,800,000		58.75		810,750		778,011
September 2012 public issuance	29,900,000		56.00		1,674,400		1,607,140
2012 Dividend reinvestment plan issuances	1,485,598		55.65		82,678		82,678
2012 Option exercises	155,195		39.61		6,147		6,147
2012 Senior note conversions	1,039,721				0		0
2012 Totals	67,080,514			$	3,681,425	$	3,536,232
May 2013 public issuance	23,000,000	$	73.50	$	1,690,500	$	1,630,281
2013 Dividend reinvestment plan issuances	2,379,609		64.62		153,762		153,762
2013 Option exercises	200,467		42.45		8,509		8,509
2013 Senior note conversions	987,967				0		0
2013 Equity issued in acquisition of noncontrolling interest	1,108,917				0		0
2013 Totals	27,676,960			$	1,852,771	$	1,792,552

During the three months ended September 30, 2013, we acquired the remaining20% noncontrolling interest in an existing partnership for $91,000,000 which consisted of $23,247,000 of cash and 1,108,917 shares of common stock. In connection with the acquisition, we incurred $2,732,000of transaction costs which we have included as a reduction to additional paid in capital.

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

	Nine Months Ended
	September 30, 2013				September 30, 2012
	Per Share		Amount		Per Share		Amount
Common Stock	$	2.2950	$	618,992	$	2.2200	$	460,936
Series D Preferred Stock		-		0		0.5030		2,012
Series F Preferred Stock		-		0		0.4872		3,410
Series H Preferred Stock		2.1438		750		2.1438		750
Series I Preferred Stock		2.4375		35,039		2.4375		35,039
Series J Preferred Stock		1.2189		14,016		0.9841		11,316
Totals			$	668,797			$	513,463

Accumulated Other Comprehensive Income. The following is a summary of accumulated other comprehensive income(loss) for the periods presented (in thousands):

		Unrecognized gains (losses) related to:
		Foreign Currency Translation		Equity Investments		Actuarial losses		Cash Flow Hedges		Total
Balance at December 31, 2012	$	(881)	$	(216)	$	(2,974)	$	(6,957)	$	(11,028)
Other comprehensive income before reclassification adjustments		(13,517)		(346)		0		(12)		(13,875)
Reclassification amount to net income		0		0		0		1,428(1)		1,428
Net current-period other comprehensive income		(13,517)		(346)		0		1,416		(12,447)
Balance at September 30, 2013	$	(14,398)	$	(562)	$	(2,974)	$	(5,541)	$	(23,475)
Balance at December 31, 2011	$	0	$	(619)	$	(2,748)	$	(8,561)	$	(11,928)
Other comprehensive income before reclassification adjustments		166		192		0		2,342		2,700
Reclassification amount to net income		0		0		0		(1,204)(1)		(1,204)
Net current-period other comprehensive income		166		192		0		1,138		1,496
Balance at September 30, 2012	$	166	$	(427)	$	(2,748)	$	(7,423)	$	(10,432)
(1) Please see Note 11 for additional information.

XML

Borrowings Under Line of Credit Arrangements and Related Items

9 Months Ended

Sep. 30, 2013

Borrowings Under Line of Credit Arrangement and Related Items [Abstract]

Borrowings Under Line of Credit Arrangements and Related Items

9. Borrowings Under Line of Credit Arrangements and Related Items

     At September 30, 2013, we had a $2,250,000,000 unsecured line of credit arrangement with a consortium of 29 banks. We have an option to upsize the facility by up to an additional $1,000,000,000 through an accordion feature, allowing for the aggregate commitment of up to $3,250,000,000. The arrangement also allows us to borrow up to $500,000,000 in alternate currencies. At September 30, 2013, we had $595,000,000 outstanding at 1.36%, and the U.S. dollar equivalent of $242,670,000 outstanding in Pound Sterling at 1.67%. The revolving credit facility is scheduled to expire March 31, 2017, but can be extended for an additional year at our option.Borrowings under the revolver are subject to interest payable in periods no longer than three months at either the agent bank’s prime rate of interest or the applicable margin over LIBOR interest rate, at our option (1.35% at September 30, 2013). The applicable margin is based on certain of our debt ratings and was 1.175% at September 30, 2013.In addition, we pay a facility fee annually to each bank based on the bank’s commitment amount. The facility fee depends on certain of our debt ratings and was 0.225%at September 30, 2013. Principal is due upon expiration of the agreement. In addition, at September 30, 2013, we had $10,000,000 outstanding in unsecured revolving demand notes bearing interest at a blended rate of 1.11%.

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

		Three Months Ended September 30,				Nine Months Ended September 30,
		2013		2012		2013		2012
Balance outstanding at quarter end		$	847,670	$	0	$	847,670	$	0
Maximum amount outstanding at any month end		$	1,019,050	$	145,000	$	1,019,050	$	897,000
Average amount outstanding (total of daily
	principal balances divided by days in period)	$	562,978	$	165,000	$	527,890	$	255,639
Weighted average interest rate (actual interest
	expense divided by average borrowings outstanding)		1.51%		2.30%		1.43%		1.79%

XML

Disclosure about Fair Value of Financial Instruments (Details) (USD $)	Sep. 30, 2013		Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Financial Assets:
Loans receivable, Carrying Amount	$ 307,377,000		$ 895,665,000
Available-for-sale equity investments, Carrying Amount	1,037,000		1,384,000
Available-for-sale equity investments, Fair Value	1,037,000	[1]	1,384,000
Cash and cash equivalents, Carrying Amount	164,838,000		1,033,764,000	1,382,252,000	163,482,000
Cash and cash equivalents, Fair Value	164,838,000		1,033,764,000
Foreign currency forward contract, asset	7,669,000		0
Financial Liabilities:
Borrowings under unsecured line of credit arrangement	847,670,000		0
Borrowings under unsecured lines of credit arrangements, Fair Value	847,670,000		0
Senior unsecured notes, Carrying Amount	6,395,638,000		6,114,151,000
Senior unsecured notes, Fair Value	6,806,353,000		6,793,424,000
Secured debt, Carrying Amount	3,115,862,000		2,336,196,000
Secured debt, Fair Value	3,262,955,000		2,515,145,000
Interest rate swap agreements, Carrying Amount	68,000		264,000
Interest rate swap agreements, Fair Value	68,000		264,000
Foreign currency forward contact, liability	79,544,000		7,247,000
Mortgage Loans on Real Estate [Member]
Financial Assets:
Loans receivable, Carrying Amount	131,138,000		87,955,000
Loans receivable, Fair value	133,554,000		88,975,000
Other Real Estate Loans Receivable [Member]
Financial Assets:
Loans receivable, Carrying Amount	176,239,000		807,710,000
Loans receivable, Fair value	$ 182,153,000		$ 820,195,000

[1] (1) Unrealized gains or losses on equity investments are recorded in accumulated other comprehensive income (loss) at each measurement date.

XML

Disclosure about Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2013

Disclosure About Fair Value of Financial Instruments [Abstract]

Disclosure about Fair Value of Financial Instruments

16. Disclosure about Fair Value of Financial Instruments

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

Mortgage Loans and Other Real Estate Loans Receivable — The fair value of mortgage loans and other real estate loans receivable is generally estimated by using Level 2 and Level 3 inputs such as discounting the estimated future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

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

Available-for-sale Equity Investments — Available-for-sale equity investments are recorded at their fair valuebased on Level 1 publicly available trading prices.

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

Senior Unsecured Notes — The fair value of the senior unsecured notes payable was estimated based on Level 1 publicly available trading prices.

Secured Debt — The fair value of fixed rate secured debt is estimated using Level 2 inputs by discounting the estimated future cash flows using the current rates at which similar loans would be made with similar credit ratings and for the same remaining maturities. The carrying amount of variable rate secured debt approximates fair value because the borrowings are interest rate adjustable.

Interest Rate Swap Agreements — Interest rate swap agreementsare recorded in other assets or other liabilities on the balance sheet at fair market value. Fair market value is estimated using Level 2 inputs by utilizing pricing models that consider forward yield curves and discount rates.

Foreign Currency Forward Contracts— Foreign currency forward contracts are recorded in other assets or other liabilities on the balance sheet at fair market value. Fair market value is determined using Level 2 inputs by estimating the future value of the currency pair based on existing exchange rates, comprised of current spot and traded forward points, and calculating a present valueof the net amount using a discount factor based on observable traded interest rates.

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

		September 30, 2013				December 31, 2012
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
	Mortgage loans receivable	$	131,138	$	133,554	$	87,955	$	88,975
	Other real estate loans receivable		176,239		182,153		807,710		820,195
	Available-for-sale equity investments		1,037		1,037		1,384		1,384
	Cash and cash equivalents		164,838		164,838		1,033,764		1,033,764
	Foreign currency forward contracts		7,669		7,669		0		0
Financial liabilities:
	Borrowings under unsecured line of credit arrangements	$	847,670	$	847,670	$	0	$	0
	Senior unsecured notes		6,395,638		6,806,353		6,114,151		6,793,424
	Secured debt		3,115,862		3,262,955		2,336,196		2,515,145
	Interest rate swap agreements		68		68		264		264
	Foreign currency forward contracts		79,544		79,544		7,247		7,247

U.S. GAAP provides authoritative guidance for measuring and disclosing fair value measurements of assets and liabilities. The guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The guidance also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The guidance describes three levels of inputs that may be used to measure fair value:

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

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Please see Note 2 to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated by our Current Report on Form 8-K filed on August 6, 2013, for additional information.

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

Items Measured at Fair Value on a Recurring Basis

The market approach is utilized to measure fair value for our financial assets and liabilities reported at fair value on a recurring basis. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The following summarizes items measured at fair value on a recurring basis (in thousands):

	Fair Value Measurements as of September 30, 2013
	Total		Level 1		Level 2		Level 3
Available-for-sale equity investments(1)	$	1,037	$	1,037	$	0	$	0
Interest rate swap agreements(2)		(68)		0		(68)		0
Foreign currency forward contracts(2)		(71,875)		0		(71,875)		0
Totals	$	(70,906)	$	1,037	$	(71,943)	$	0
(1) Unrealized gains or losses on equity investments are recorded in accumulated other comprehensive income (loss) at each measurement date.
(2) Please see Note 11 for additional information.

Items Measured at Fair Value on a Nonrecurring Basis

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

XML

Stock Incentive Plans

9 Months Ended

Sep. 30, 2013

Stock Incentive Plans [Abstract]

Stock Incentive Plans

14. Stock Incentive Plans

Our Amended and Restated 2005 Long-Term Incentive Plan (“2005 Plan”) authorizes up to 6,200,000 shares of common stock to be issued at the discretion of the Compensation Committee of the Board of Directors. The 2005 Plan replaced the 1995 Stock Incentive Plan (“1995 Plan”) and the Stock Plan for Non-Employee Directors. The options granted to officers and key employees under the 1995 Plan vested through 2010 and expire ten years from the date of grant. Our non-employee directors, officers and key employees are eligible to participate in the 2005 Plan. The 2005 Plan allows for the issuance of, among other things, stock options, restricted stock, deferred stock units and dividend equivalent rights. Vesting periods for options, deferred stock units and restricted shares generally range from three years for non-employee directors to five years for officers and key employees. Options expire ten years from the date of grant. Stock-based compensation expense totaled $3,956,000 and $16,650,000 for the three and nine months ended September 30, 2013, respectively, and $2,592,000 and $16,229,000 for the same periods in 2012.

XML

Document and Entity Information (USD $)	3 Months Ended
	Sep. 30, 2013	Oct. 31, 2013	Jun. 30, 2013
Document And Entity Information [Abstract]
Entity Registrant Name	HEALTH CARE REIT INC /DE/
Entity Central Index Key	0000766704
Document Type	10-Q
Document Period End date	Sep. 30, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--12-31
Entity Well Known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 19,053,297,364
Entity Common Stock Shares Outstanding		288,670,688

XML

Earnings Per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

15. Earnings Per Share

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

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2013		2012		2013		2012
Numerator for basic and diluted earnings
	per share - net income (loss) attributable
	to common stockholders	$	20,691	$	37,269	$	67,245	$	131,308
Denominator for basic earnings per
	share - weighted average shares		286,020		224,391		273,148		212,592
Effect of dilutive securities:
	Employee stock options		196		238		235		240
	Non-vested restricted shares		567		301		417		293
	Convertible senior unsecured notes		1,246		1,328		1,447		950
Dilutive potential common shares			2,009		1,867		2,099		1,483
Denominator for diluted earnings per
	share - adjusted weighted average shares		288,029		226,258		275,247		214,075
Basic earnings per share		$	0.07	$	0.17	$	0.25	$	0.62
Diluted earnings per share		$	0.07	$	0.16	$	0.24	$	0.61

The diluted earnings per share calculationsexclude the dilutive effect of 0 and 237,000 common stock equivalents for the three months ended September 30, 2013 and 2012, respectively, and 0 common stock equivalents for the nine months ended September 30, 2013 and 2012,because the exercise prices were higher than the average market price. The Series H Cumulative Convertible and Redeemable Preferred Stock and Series I Cumulative Convertible Perpetual Preferred Stock were not included in the calculations as the effect of conversions into common stock was anti-dilutive.

XML

Stockholder's Equity (Details 1) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2012
Summary of common stock issuances
Dividend reinvestment plan issuances, Shares Issued		2,379,609	1,485,598
Dividend reinvestment plan issuances, Average Price		$ 64.62	$ 55.65
Dividend reinvestment plan issuances, Net Proceeds		153,762,000	82,678,000
Dividend reinvestment plan issuances, Gross Proceeds		153,762,000	82,678,000
Option exercises, Shares		200,467	155,195
Option exercises, Average Price		42.45	39.61
Option exercises, Gross Proceeds		8,509,000	6,147,000
Option exercises, Net Proceeds		8,509,000	6,147,000
Issuance of Common Stock, Shares		27,676,960	67,080,514
Senior note conversions		987,967	1,039,721
Equity issued in acquisition of noncontrolling interest	1,108,917	1,108,917
Gross Proceeds From Issuance of Common Stock		1,852,771,000	3,681,425,000
Net proceeds from the issuance of common stock		1,792,552,000	3,536,232,000
February 2012 Public Issuance [Member]
Summary of common stock issuances
Public issuance, Shares Issued			20,700,000
Public issuance, Average Price			53.5
Public issuance, Gross Proceeds			1,107,450,000
Public issuance, Net Proceeds			1,062,256,000
August 2012 Public Issuance [Member]
Summary of common stock issuances
Public issuance, Shares Issued			13,800,000
Public issuance, Average Price			58.75
Public issuance, Gross Proceeds			810,750,000
Public issuance, Net Proceeds			778,011,000
September 2012 Public Issuance [Member]
Summary of common stock issuances
Public issuance, Shares Issued			29,900,000
Public issuance, Average Price			56
Public issuance, Gross Proceeds			1,674,400,000
Public issuance, Net Proceeds			1,607,140,000
May 2013 Public Issuance [Member]
Summary of common stock issuances
Public issuance, Shares Issued		23,000,000
Public issuance, Average Price		73.5
Public issuance, Gross Proceeds		1,690,500,000
Public issuance, Net Proceeds		$ 1,630,281,000

XML

Stockholder's Equity (Details)	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011
Preferred Stock:
Authorized shares	50,000,000	50,000,000
Issued shares	26,224,854	26,224,854
Outstanding shares	26,224,854	26,224,854	26,224,854	25,724,854
Common Stock, $1.00 par value:
Authorized shares	400,000,000	400,000,000
Issued shares	288,821,107	260,780,109
Outstanding shares	288,360,031	260,373,754