2.2.0.25falsefalse0202 - Disclosure - Summary of Significant Accounting Policiestruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($) / shares
USD ($)
$Jan-01-2010_Dec-31-2010http://www.sec.gov/CIK0000780053duration2010-01-01T00:00:002010-12-31T00:00:00USDEPSDividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0USDStandardhttp://www.xbrl.org/2003/iso4217USDiso42170SharesStandardhttp://www.xbrl.org/2003/instancesharesxbrli0USDUSD$2true0nhp_SummaryOfSignificantAccountingPoliciesAbstractnhpfalsenadurationSummary of Significant Accounting Policies.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringSummary of Significant Accounting Policies.falsefalse3false0us-gaap_SignificantAccountingPoliciesTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalseverboselabel1falsefalsefalse00<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged Note 2 - us-gaap:SignificantAccountingPoliciesTextBlock-->
<div style="margin-left: 0%">
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent; text-align: left">
<tr>
<td width="3%"></td>
<td width="97%"></td>
</tr>
<tr valign="top">
<td>
<b><font style="font-family: 'Times New Roman', Times">2.  </font></b>
</td>
<td>
<b><font style="font-family: 'Times New Roman', Times">Summary
of Significant Accounting Policies</font></b>
</td>
</tr>
</table>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Basis
of Presentation</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Certain items in prior period financial statements have been
reclassified to conform to current year presentation, including
those required by the provisions of Financial Accounting
Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) Topic 360, <i>Property, Plant and
Equipment </i>(“ASC 360”), which require the operating
results of any assets with their own identifiable cash flows
that are disposed of or held for sale and in which we have no
continuing interest to be removed from income from continuing
operations and reported as discontinued operations for all
periods presented.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We have evaluated events subsequent to December 31, 2010
for their impact on our consolidated financial statements (see
Note 24).
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Principles
of Consolidation</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The consolidated financial statements include our accounts, the
accounts of our wholly owned subsidiaries and the accounts of
our joint ventures that are controlled through voting rights or
other means. We apply the provisions of ASC Topic 810,
<i>Consolidation </i>(“ASC 810”), for arrangements
with variable interest entities (“VIEs”) and would
consolidate those VIEs where we are the primary beneficiary. All
material intercompany accounts and transactions have been
eliminated.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Our judgment with respect to our level of influence or control
of an entity and whether we are the primary beneficiary of a VIE
involves the consideration of various factors including, but not
limited to, the form of our ownership interest, our
representation on the entity’s governing body, the size of
our investment, estimates of future cash flows, our ability to
participate in policy-making decisions and the rights of the
other investors to participate in the decision-making process
and to replace us as manager
<font style="white-space: nowrap">and/or</font>
liquidate the venture, if applicable. Our ability to correctly
assess our influence or control over an entity or determine the
primary beneficiary of a VIE affects the presentation of these
entities in our consolidated financial statements.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
As of December 31, 2010, we leased ten facilities under
<font style="white-space: nowrap">triple-net</font>
leases with fixed price purchase options through eight wholly
owned, consolidated subsidiaries that have been identified as
VIEs and for which we have been identified as the primary
beneficiary. The carrying value of the facilities was
$108.5 million as of December 31, 2010, and the
purchase options are exercisable between 2011 and 2021.
</div>
<!-- XBRL Pagebreak Begin -->
</div>
<!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<div style="margin-left: 0%">
<!-- BEGIN PAGE WIDTH -->
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
</div>
<div style="margin-top: 0pt; font-size: 1pt">
</div>
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
</div>
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
</div>
<!-- XBRL Pagebreak End -->
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We apply the provisions of ASC Topic 323,
<i>Investments — Equity Method and Joint Ventures
</i>(“ASC 323”), to investments in joint ventures.
Investments in entities that we do not consolidate but for which
we have the ability to exercise significant influence over
operating and financial policies are reported under the equity
method. Under the equity method of accounting, our share of the
entity’s earnings or losses is included in our operating
results.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Use of
Estimates</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
(“GAAP”) requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting periods. Actual
results could differ materially from those estimates.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Segment
Reporting</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We report our consolidated financial statements in accordance
with the provisions of ASC Topic 280, <i>Segment Reporting</i>.
We operate in two segments based on our investment and leasing
activities:
<font style="white-space: nowrap">triple-net</font>
leases and multi-tenant leases (see Note 20).
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Revenue
Recognition</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We derive the majority of our revenue from leases related to our
real estate investments and a much smaller portion of our
revenue from mortgage loans, other financing activities and
other miscellaneous income. Revenue is recognized when it is
realized or is realizable and earned.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Rental income from operating leases is recognized in accordance
with the provisions of ASC Topic 840, <i>Leases, </i>and ASC
Topic 605, <i>Revenue Recognition</i>. Our leases generally
contain annual rent escalators. Many of our leases contain
non-contingent rent escalators for which we recognize income on
a straight-line basis over the lease term. Recognizing income on
a straight-line basis requires us to calculate the total
non-contingent rent to be paid over the life of a lease and to
recognize the revenue evenly over that life. This method results
in rental income in the early years of a lease being higher than
actual cash received, creating a straight-line rent receivable
asset included in the caption “Other assets” on our
consolidated balance sheets. At some point during the lease,
depending on its terms, the cash rent payments eventually exceed
the straight-line rent which results in the straight-line rent
receivable asset decreasing to zero over the remainder of the
lease term. Certain leases contain rent escalators contingent on
revenues or other factors, including increases based on changes
in the Consumer Price Index. Such revenue increases are
recognized as the related contingencies are met.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We assess the collectability of straight-line rent in accordance
with the applicable accounting standards and our reserve policy
and defer recognition of straight-line rent if its
collectability is not reasonably assured. Our assessment of the
collectability of straight-line rent is based on several
factors, including the financial strength of the tenant and any
guarantors, the historical operations and operating trends of
the facility, the historical payment pattern of the tenant and
the type of facility, among others. If our evaluation of these
factors indicates we may not receive the rent payments due in
the future, we defer recognition of the straight-line rental
income and, depending on the circumstances, we will provide a
reserve against the previously recognized straight-line rent
receivable asset for a portion, up to its full value, that we
estimate may not be recoverable. If we change our assumptions or
estimates regarding the collectability of future rent payments
required by a lease, we may adjust our reserve to increase or
reduce the rental revenue recognized,
<font style="white-space: nowrap">and/or</font> to
increase or reduce the reserve against the existing
straight-line rent receivable balance.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We recorded $12.3 million of revenues in excess of cash
received during 2010, $6.4 million of revenues in excess of
cash received during 2009 and $10.3 million of revenues in
excess of cash received during 2008. We had
straight-line rent receivables, net of reserves, recorded under
the caption “Other assets” on our consolidated balance
sheets of $39.3 million as of December 31, 2010 and
$27.5 million as of December 31, 2009, net of reserves
of $114.7 million and $108.3 million, respectively. We
evaluate the collectability of the straight-line rent receivable
balances on an ongoing basis and provide reserves against
receivables we believe may not be fully recoverable. The
ultimate amount of straight-line rent we realize could vary from
the amounts currently recorded.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Interest income from loans, including discounts and premiums, is
recognized using the effective interest method when
collectability is reasonably assured. The effective interest
method is applied on a
<font style="white-space: nowrap">loan-by-loan</font>
basis, and discounts and premiums are recognized as yield
adjustments over the term of the related loans. We recognize
interest income on impaired loans to the extent our estimate of
the fair value of the collateral is sufficient to support the
balance of the loans, other receivables and all related accrued
interest. Once the total of the loans, other receivables and all
related accrued interest is equal to our estimate of the fair
value of the collateral, we recognize interest income on a cash
basis. We provide reserves against impaired loans to the extent
our total investment exceeds our estimate of the fair value of
the loan collateral.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We recognize sales of facilities upon closing. Payments received
from purchasers prior to closing are recorded as deposits. Gains
on facilities sold are recognized using the full accrual method
upon closing when the requirements of gain recognition on sale
of real estate under the provisions of ASC 360 are met,
including: the collectability of the sales price is reasonably
assured; we have received adequate initial investment from the
buyer; we are not obligated to perform significant activities
after the sale to earn the gain; and other profit recognition
criteria have been satisfied. Gains may be deferred in whole or
in part until the sales satisfy these requirements. We had
$20.3 million and $19.3 million of deferred gains
included in the caption “Mortgage loans receivable,
net” on our consolidated balance sheets as of
December 31, 2010 and December 31, 2009, respectively.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Gains on facilities sold to unconsolidated joint ventures in
which we maintain an ownership interest are included in income
from continuing operations, and the portion of the gain
representing our retained ownership interest in the joint
venture is deferred and included in the caption “Accounts
payable and accrued liabilities” on our consolidated
balance sheets. We had $15.3 million of such deferred gains
as of December 31, 2010 and December 31, 2009. All
other gains are included in discontinued operations.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Investments
in Real Estate</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We record properties at cost and use the straight-line method of
depreciation for buildings and improvements over their estimated
remaining useful lives of up to 40 years, generally 20 to
40 years depending on factors including building type, age,
quality and location. We review and adjust useful lives
periodically. Depreciation expense from continuing operations
was $117.2 million in 2010, $105.7 million in 2009 and
$100.9 million in 2008.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We allocate purchase prices of properties in accordance with the
provisions of ASC Topic 805, <i>Business Combinations
</i>(“ASC 805”), which require that the acquisition
method of accounting be used for all business combinations and
for an acquirer to be identified for each business combination.
ASC 805 also establishes principles and requirements for how the
acquirer recognizes and measures in its financial statements the
identifiable assets acquired, the liabilities assumed and any
noncontrolling interest in the acquiree. Certain transaction
costs that have historically been capitalized as acquisition
costs are expensed for business combinations completed on or
after January 1, 2009, which may have a significant impact
on our future results of operations and financial position based
on historical acquisition costs and activity levels. We incurred
$5.1 million and $0.8 million of acquisition costs
during 2010 and 2009, respectively, that are included on our
consolidated income statements.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The allocation of the cost between land, building and, if
applicable, equipment and intangible assets and liabilities, and
the determination of the useful life of a property are based on
management’s estimates, which are based in part on
independent appraisals or other consultants’ reports. For
our
<font style="white-space: nowrap">triple-net</font>
leased facilities, the allocation is made as if the property was
vacant, and a significant portion of the cost of each property
is allocated to
buildings. This amount generally approximates 90% of the total
property value. Historically, we have generally acquired
properties and simultaneously entered into a new market rate
lease for the entire property with one tenant. For our
multi-tenant medical office buildings, the percentage allocated
to buildings may be substantially lower as allocations are made
to assets such as
<font style="white-space: nowrap">lease-up</font>
intangible assets, above market tenant and ground lease
intangible assets and in-place lease intangible assets
(collectively, “Intangible assets”) included on our
consolidated balance sheets
<font style="white-space: nowrap">and/or</font> below
market tenant and ground lease intangible liabilities included
in the caption “Accounts payable and accrued
liabilities” on our consolidated balance sheets.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We calculate depreciation and amortization on equipment and
lease costs using the straight-line method based on estimated
useful lives of up to five years or the lease term, whichever is
appropriate. We amortize intangible assets and liabilities over
the remaining lease terms of the respective leases to real
estate amortization expense or medical office building operating
rent, as appropriate. We review and adjust useful lives
periodically.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We capitalize direct costs, including interest costs, associated
with the development and construction of real estate assets
while substantive activities are ongoing to prepare the assets
for their intended use.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Asset
Impairment</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We review our long-lived assets individually on a quarterly
basis to determine if there are indicators of impairment in
accordance with the provisions of ASC 360. Indicators may
include, among others, a tenant’s inability to make rent
payments, operating losses or negative operating trends at the
facility level, notification by a tenant that it will not renew
its lease, or a decision to dispose of an asset or adverse
changes in the fair value of any of our properties. For
operating assets, if indicators of impairment exist, we compare
the undiscounted cash flows from the expected use of the
property to its net book value to determine if impairment
exists. The evaluation of the undiscounted cash flows from the
related lease agreement and expected use of the property is
highly subjective and is based in part on various factors and
assumptions, including, but not limited to, historical operating
results, available market information and known trends and
market/economic conditions that may affect the property, as well
as estimates of future operating income, occupancy, rental
rates, leasing demand and competition. If the sum of the future
estimated undiscounted cash flows is higher than the current net
book value, we conclude no impairment exists. If the sum of the
future estimated undiscounted cash flows is lower than its
current net book value, we recognize an impairment loss for the
difference between the net book value of the asset and its
estimated fair value. To the extent we decide to sell an asset,
we recognize an impairment loss if the current net book value of
the asset exceeds its fair value less selling costs.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We evaluate our equity method investments for impairment
whenever events or changes in circumstances indicate that the
carrying value of our investment in an unconsolidated joint
venture may exceed the fair value. If it is determined that a
decline in the fair value of our investment in an unconsolidated
joint venture is
<font style="white-space: nowrap">other-than-temporary,</font>
and if such reduced fair value is below its carrying value, an
impairment is recorded. The determination of the fair value of
investments in unconsolidated joint ventures involves
significant judgment. Our estimates consider all available
evidence including, as appropriate, the present value of the
expected future cash flows discounted at market rates, general
economic conditions and trends and other relevant factors.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The above analyses require us to determine whether there are
indicators of impairment for individual assets or investments in
unconsolidated joint ventures, to estimate the most likely
stream of cash flows from operating assets and to determine the
fair value of assets that are impaired or held for sale. If our
assumptions, projections or estimates regarding an asset change
in the future, we may have to record an impairment charge to
reduce or further reduce the net book value of such individual
asset or investment in unconsolidated joint venture.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We recognized an impairment charge of $15.0 million related
to one asset held for sale during 2010 (see Note 7). No
impairments were recognized during 2009 or 2008.
</div>
<!-- XBRL Pagebreak Begin -->
</div>
<!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<div style="margin-left: 0%">
<!-- BEGIN PAGE WIDTH -->
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
</div>
<div style="margin-top: 0pt; font-size: 1pt">
</div>
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
</div>
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
</div>
<!-- XBRL Pagebreak End -->
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Collectability
of Receivables</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We evaluate the collectability of our rent, mortgage and other
loans and other receivables on a regular basis based on factors
including, among others, payment history, the financial strength
of the borrower and any guarantors, the value of the underlying
collateral, the operations and operating trends of the
underlying collateral, if any, the asset type and current
economic conditions. If our evaluation of these factors
indicates we may not recover the full value of the receivable,
we provide a reserve against the portion of the receivable that
we estimate may not be recovered. This analysis requires us to
determine whether there are factors indicating a receivable may
not be fully collectible and to estimate the amount of the
receivable that may not be collected. We had reserves related to
rent receivables included in the caption “Receivables,
net” on our consolidated balance sheets of
$14.9 million as of December 31, 2010 and
$12.7 million as of December 31, 2009.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
For our mortgage loans, the evaluation emphasizes the
operations, operating trends, financial performance and value of
the underlying collateral, and for our other loans, the
evaluation emphasizes the financial strength of the borrower and
any guarantors. Our year-end evaluation was performed using
operating and financial information as of November 30,
2010, and based on this evaluation, our mortgage and other loans
are grouped into three classes — good standing, watch
list and special monitoring. For loans classified as good
standing, the likelihood of loss is remote, and while borrowers
may be current on all required payments for loans classified as
watch list or special monitoring, there are other factors
considered in our evaluation which cause the likelihood of loss
to be reasonably possible. Our analysis did not identify any
mortgage loans for which we believe we may not recover the full
value of the receivable, and as such, no reserves for mortgage
loans receivable have been recorded as of December 31,
2010. Our analysis identified certain other loans for which we
believe we may not recover the full value of the receivable, and
we have recorded $6.1 million of reserves for other loans
receivable as of December 31, 2010. The balances of
mortgage and other loans by class as of December 31, 2010
were as follow:
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">
<!-- Table Width Row BEGIN -->
<tr style="font-size: 1pt" valign="bottom">
<td width="54%"> </td><!-- colindex=01 type=maindata -->
<td width="2%"> </td><!-- colindex=02 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=02 type=lead -->
<td width="6%" align="right"> </td><!-- colindex=02 type=body -->
<td width="1%" align="left"> </td><!-- colindex=02 type=hang1 -->
<td width="3%"> </td><!-- colindex=03 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=03 type=lead -->
<td width="10%" align="right"> </td><!-- colindex=03 type=body -->
<td width="1%" align="left"> </td><!-- colindex=03 type=hang1 -->
<td width="3%"> </td><!-- colindex=04 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=04 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=04 type=body -->
<td width="1%" align="left"> </td><!-- colindex=04 type=hang1 -->
<td width="3%"> </td><!-- colindex=05 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=05 type=lead -->
<td width="6%" align="right"> </td><!-- colindex=05 type=body -->
<td width="1%" align="left"> </td><!-- colindex=05 type=hang1 -->
</tr>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b>Deferred Gains<br />
</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b>Carrying<br />
</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Principal</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>and Discounts</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Reserves</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Amount</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="14" align="center" valign="bottom">
<b>(In thousands)</b>
</td>
<td>
 
</td>
</tr>
<tr style="line-height: 3pt; font-size: 1pt">
<td> 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Mortgage loans receivable:
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Good standing
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
298,387
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(20,042
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
278,345
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Watch list
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
5,229
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(992
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
4,237
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Special monitoring
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
6,605
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
6,605
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
310,221
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(21,034
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
289,187
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">
<!-- Table Width Row BEGIN -->
<tr style="font-size: 1pt" valign="bottom">
<td width="71%"> </td><!-- colindex=01 type=maindata -->
<td width="2%"> </td><!-- colindex=02 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=02 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=02 type=body -->
<td width="1%" align="left"> </td><!-- colindex=02 type=hang1 -->
<td width="3%"> </td><!-- colindex=03 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=03 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=03 type=body -->
<td width="1%" align="left"> </td><!-- colindex=03 type=hang1 -->
<td width="3%"> </td><!-- colindex=04 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=04 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=04 type=body -->
<td width="1%" align="left"> </td><!-- colindex=04 type=hang1 -->
</tr>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b>Carrying<br />
</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Principal</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Reserves</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Amount</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="10" align="center" valign="bottom">
<b>(In thousands)</b>
</td>
<td>
 
</td>
</tr>
<tr style="line-height: 3pt; font-size: 1pt">
<td> 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Other loans receivable:
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Good standing
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
64,209
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
64,209
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Watch list
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
4,821
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(1,411
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3,410
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Special monitoring
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
5,227
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(4,646
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
581
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
74,257
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(6,057
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
68,200
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Cash
and Cash Equivalents</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Cash and cash equivalents include short-term investments with
original maturities of three months or less when purchased.
</div>
<!-- XBRL Pagebreak Begin -->
</div>
<!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<div style="margin-left: 0%">
<!-- BEGIN PAGE WIDTH -->
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
</div>
<div style="margin-top: 0pt; font-size: 1pt">
</div>
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
</div>
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
</div>
<!-- XBRL Pagebreak End -->
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Capital
Raising Costs</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Deferred financing costs are included in the caption “Other
assets” on our consolidated balance sheets and are
amortized as a component of interest expense over the terms of
the related borrowings using a method that approximates a level
yield. Deferred financing cost amortization is included in the
caption “Interest expense” on our consolidated income
statements. Costs incurred in connection with the issuance of
common stock are recorded as a reduction of capital in excess of
par value.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Derivatives</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In the normal course of business, we are exposed to financial
market risks, including interest rate risk on our
interest-bearing liabilities. We endeavor to limit these risks
by following established risk management policies, procedures
and strategies, including, on occasion, the use of derivative
instruments. We do not use derivative instruments for trading or
speculative purposes.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Derivative instruments are recorded on our consolidated balance
sheets as assets or liabilities based on each instrument’s
fair value. Changes in the fair value of derivative instruments
are recognized currently in earnings, unless the derivative
instrument meets the criteria for hedge accounting contained in
ASC Topic 815, <i>Derivatives and Hedging </i>(“ASC
815”). If the derivative instruments meet the criteria for
a cash flow hedge, the gains and losses recognized upon changes
in the fair value of the derivative instrument are recorded in
other comprehensive income. Gains and losses on a cash flow
hedge are reclassified into earnings when the forecasted
transaction affects earnings. A contract that is designated as a
hedge of an anticipated transaction which is no longer likely to
occur is immediately recognized in earnings.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
For investments in entities reported under the equity method of
accounting, we record our pro rata share of the entity’s
derivative instruments’ fair value, other comprehensive
income or loss and gains and losses determined in accordance
with ASC 323 and ASC 815 as applicable.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Redeemable
Limited Partnership Unitholder Interests</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
NHP/PMB L.P. (“NHP/PMB”) is a limited partnership that
we formed in February 2008 to acquire properties from entities
affiliated with Pacific Medical Buildings LLC (see Note 5).
We consolidate NHP/PMB consistent with the provisions of
ASC 810, as our wholly owned subsidiary is the general
partner and exercises control. As of December 31, 2010 and
December 31, 2009, third party investors owned 2,176,700
and 1,629,752 Class A limited partnership units in NHP/PMB
(“OP Units”), respectively, which represented
32.0% and 52.4% of the total units outstanding as of
December 31, 2010 and December 31, 2009, respectively.
As of December 31, 2010 and December 31, 2009,
4,619,330 and 1,482,713 Class B limited partnership units
in NHP/PMB were outstanding, respectively, all of which were
held by our subsidiaries. During 2010, 577,114 OP Units
were issued by NHP/PMB in connection with acquisitions and under
terms of an agreement with Pacific Medical Buildings and certain
of its affiliates (see Note 5). After a one year holding
period, the OP Units are exchangeable for cash or, at our
option, shares of our common stock equal to the “REIT
Shares Amount” per OP Unit. As of
December 31, 2010, the REIT Shares Amount was 1.000.
We have entered into a registration rights agreement with the
holders of the OP Units which, subject to the terms and
conditions set forth therein, obligates us to register the
shares of common stock that we may issue in exchange for such
OP Units. As registration rights are outside of our
control, the redeemable OP unitholder interests are classified
outside of permanent equity on our consolidated balance sheets.
During 2010, 30,166 OP Units were converted into
30,166 shares of our common stock. During 2009, 202,361
OP Units were exchanged for 202,361 shares of our
common stock. We applied the provisions of ASC Topic 480,
<i>Distinguishing Liabilities from Equity</i>, to reflect the
redeemable OP unitholder interests at the greater of cost or
fair value. As of December 31, 2010, the fair value of the
OP Units exceeded the cost basis by $16.8 million, and
the adjustment was recorded through capital in excess of par
value. The value of the OP Units held by redeemable OP
unitholder interests was $79.2 million and
$57.3 million as of December 31, 2010 and
December 31, 2009, respectively.
</div>
<!-- XBRL Pagebreak Begin -->
</div>
<!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<div style="margin-left: 0%">
<!-- BEGIN PAGE WIDTH -->
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
</div>
<div style="margin-top: 0pt; font-size: 1pt">
</div>
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
</div>
<div align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b>
<font style="font-family: 'Times New Roman', Times">
</font>
</b>
</div>
<!-- XBRL Pagebreak End -->
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Noncontrolling
Interests</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We have four consolidated joint ventures in which we have equity
interests, ranging from 71% to 95%, in nine multi-tenant medical
office buildings and one development project (see Note 5).
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
NHP/PMB has equity interests, ranging from 50% to 69%, in three
joint ventures which each own one multi-tenant medical office
building (see Note 5). The joint ventures are consolidated
by NHP/PMB, and we consolidate NHP/PMB in our consolidated
financial statements.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We also have six partnerships in which we have equity interests,
ranging from 51% to 96%, in 11 skilled nursing facilities, five
assisted and independent living facilities, one continuing care
retirement community and one specialty hospital (see
Note 3). We consolidate the partnerships in our
consolidated financial statements.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Stock-Based
Compensation</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We account for stock-based compensation in accordance with the
provisions of ASC Topic 718, <i>Compensation-Stock Compensation,
</i>which require stock-based compensation awards to be valued
at the fair value on the date of grant and amortized as an
expense over the vesting period and require any dividend
equivalents earned to be treated as dividends for financial
reporting purposes. Net income reflects stock-based compensation
expense of $6.9 million in 2010, $7.0 million in 2009
and $5.8 million in 2008.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Income
Taxes</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We intend to continue to qualify as a REIT under
Sections 856 through 860 of the Code, and accordingly, no
provision has been made for federal income taxes. However, we
are subject to certain state and local taxes on our income
<font style="white-space: nowrap">and/or</font>
property, and these amounts are included in the expense caption
“General and administrative” on our consolidated
income statements.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
As part of the process of preparing our consolidated financial
statements, significant management judgment is required to
estimate our compliance with REIT requirements. Our
determinations are based on interpretation of tax laws, and our
conclusions may have an impact on the income tax expense
recognized. Adjustments to income tax expense may be required as
a result of (i) audits conducted by federal and state tax
authorities; (ii) our ability to qualify as a REIT;
(iii) the potential for
<font style="white-space: nowrap">built-in-gain</font>
recognized related to prior-tax-free acquisitions of C
corporations; and (iv) changes in tax laws. Adjustments
required in any given period are included in income, other than
adjustments to income tax liabilities acquired in business
combinations, which would be adjusted through goodwill.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Earnings
per Share (EPS)</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Basic EPS is computed by dividing income from continuing
operations available to common stockholders by the weighted
average common shares outstanding. Income from continuing
operations available to common stockholders is calculated by
deducting amounts attributable to noncontrolling interests,
amounts attributable to participating securities and dividends
declared on preferred stock from income from continuing
operations.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We apply the provisions of ASC Topic 260, <i>Earnings per
Share</i>, which require that the two-class method of computing
basic earnings per share be applied when there are unvested
share-based payment awards that contain rights to nonforfeitable
dividends outstanding during a reporting period. These
participating securities share in undistributed earnings with
common stockholders for purposes of calculating basic earnings
per share.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Diluted EPS includes the effect of any potential shares
outstanding, which for us is comprised of dilutive stock
options, other share-settled compensation plans and, if the
effect is dilutive, our 7.75% Series B Cumulative
Convertible Preferred Stock (“Series B Preferred
Stock”), which was redeemed on January 18, 2010 (see
Note 11) and/or OP Units. The dilutive effect of
stock options and other share-settled compensation plans that
do not contain rights to nonforfeitable dividends is calculated
using the treasury stock method with an offset from expected
proceeds upon exercise of the stock options and unrecognized
compensation expense.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Fair
Value</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
We apply the provisions of ASC Topic 820, <i>Fair Value
Measurements and Disclosures </i>(“ASC 820”) to our
financial assets and liabilities measured at fair value on a
recurring basis and to our nonfinancial assets and liabilities
that are not required or permitted to be measured at fair value
on a recurring basis.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
ASC 820 defines fair value as the price that would be received
to sell an asset or paid to transfer a liability in an orderly
transaction between market participants. ASC 820 also
specifies a three-level hierarchy of valuation techniques based
upon whether the inputs reflect assumptions other market
participants would use based upon market data obtained from
independent sources (observable inputs) or reflect our own
assumptions of market participant valuation (unobservable
inputs) and requires the use of observable inputs if such data
is available without undue cost and effort. The hierarchy is as
follows:
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="text-align: left">
<tr>
<td width="4%"></td>
<td width="2%"></td>
<td width="94%"></td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> </td>
<td> • 
</td>
<td align="left">
<i>Level 1 </i>— quoted prices for identical
instruments in active markets.
</td>
</tr>
<tr style="line-height: 6pt; font-size: 1pt">
<td> </td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> </td>
<td> • 
</td>
<td align="left">
<i>Level 2 </i>— observable inputs other than
Level 1 inputs, including quoted prices for similar
instruments in active markets, quoted prices for identical or
similar instruments in markets that are not active and other
derived valuations with significant inputs or value drivers that
are observable or can be corroborated by observable inputs in
active markets.
</td>
</tr>
<tr style="line-height: 6pt; font-size: 1pt">
<td> </td>
</tr>
<tr valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<td> </td>
<td> • 
</td>
<td align="left">
<i>Level 3 </i>— unobservable inputs or derived
valuations with significant inputs or value drivers that are
unobservable.
</td>
</tr>
</table>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Fair value measurements as of December 31, 2010 are as
follow:
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">
<!-- Table Width Row BEGIN -->
<tr style="font-size: 1pt" valign="bottom">
<td width="61%"> </td><!-- colindex=01 type=maindata -->
<td width="2%"> </td><!-- colindex=02 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=02 type=lead -->
<td width="6%" align="right"> </td><!-- colindex=02 type=body -->
<td width="1%" align="left"> </td><!-- colindex=02 type=hang1 -->
<td width="3%"> </td><!-- colindex=03 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=03 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=03 type=body -->
<td width="1%" align="left"> </td><!-- colindex=03 type=hang1 -->
<td width="3%"> </td><!-- colindex=04 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=04 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=04 type=body -->
<td width="1%" align="left"> </td><!-- colindex=04 type=hang1 -->
<td width="3%"> </td><!-- colindex=05 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=05 type=lead -->
<td width="4%" align="right"> </td><!-- colindex=05 type=body -->
<td width="1%" align="left"> </td><!-- colindex=05 type=hang1 -->
</tr>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Fair Value</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Level 1</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Level 2</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Level 3</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="14" align="center" valign="bottom">
<b>(In thousands)</b>
</td>
<td>
 
</td>
</tr>
<tr style="line-height: 3pt; font-size: 1pt">
<td> 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Financial assets
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
5,282
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
5,282
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Financial liabilities
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(5,282
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(5,282
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Interest rate swaps
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
11,157
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
11,157
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Redeemable OP unitholder interests
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
79,188
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
79,188
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
90,345
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
90,345
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Amounts related to our deferred compensation plan are invested
in various financial assets, and the fair value of the
corresponding assets and liabilities is based on market quotes.
Interest rate swaps are valued using standard derivative pricing
models that consider forward yield curves and discount rates.
OP Units are exchangeable for cash or, at our option,
shares of our common stock equal to the REIT Shares Amount.
As such, the fair value of OP Units outstanding as of
December 31, 2010 is based on the closing price of our
common stock on December 31, 2010, which was $36.38 per
share.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The provisions of ASC Topic 825, <i>Financial Instruments</i>,
provide companies with an option to report selected financial
assets and liabilities at fair value and establish presentation
and disclosure requirements designed to facilitate comparisons
between companies that choose different measurement attributes
for similar types of assets and liabilities. We have not elected
to apply the fair value option to any specific financial assets
or liabilities.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The carrying amount of cash and cash equivalents approximates
fair value because of the short maturities of these instruments.
The fair value of mortgage and other loans receivable are based
upon the estimates of management and on rates currently
prevailing for comparable loans. The fair value of long-term
debt is estimated
based on discounting future cash flows utilizing current rates
offered to us for debt of a similar type and remaining maturity.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The table below details the fair values and book values for
mortgage and other loans receivable and the components of
long-term debt as of December 31, 2010. These fair value
estimates are not necessarily indicative of the amounts that
would be realized upon disposition of these financial
instruments.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">
<!-- Table Width Row BEGIN -->
<tr style="font-size: 1pt" valign="bottom">
<td width="77%"> </td><!-- colindex=01 type=maindata -->
<td width="2%"> </td><!-- colindex=02 type=gutter -->
<td width="4%" align="right"> </td><!-- colindex=02 type=lead -->
<td width="1%" align="right"> </td><!-- colindex=02 type=body -->
<td width="4%" align="left"> </td><!-- colindex=02 type=hang1 -->
<td width="3%"> </td><!-- colindex=03 type=gutter -->
<td width="4%" align="right"> </td><!-- colindex=03 type=lead -->
<td width="1%" align="right"> </td><!-- colindex=03 type=body -->
<td width="4%" align="left"> </td><!-- colindex=03 type=hang1 -->
</tr>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="3" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Book Value</b>
</td>
<td>
 
</td>
<td colspan="3" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Fair Value</b>
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="7" align="center" valign="bottom">
<b>(In thousands)</b>
</td>
</tr>
<tr style="line-height: 3pt; font-size: 1pt">
<td> 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Mortgage loans receivable
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
310,221
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
314,534
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Other loans receivable
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
74,258
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
66,461
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Unsecured senior credit facility
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
175,000
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
175,000
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Senior notes
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
991,633
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,090,446
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Notes and bonds payable
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
362,624
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
353,144
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
During 2010, we acquired one mortgage loan (see
Note 4) and assumed secured debt as part of certain
acquisitions (see Note 10). The valuations were determined
using Level 2 inputs of rates prevailing for comparable
loans at the time of acquisition. During 2010, we recognized an
impairment charge related to one asset held for sale, the fair
value for which was determined using Level 2 and 3 inputs
(see Note 7).
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Impact
of New Accounting Pronouncements</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In June 2009, the FASB updated ASC 810 to require ongoing
analyses to determine whether an entity’s variable interest
gives it a controlling financial interest in a variable interest
entity (“VIE”), making it the primary beneficiary,
based on whether the entity (i) has the power to direct
activities of the VIE that most significantly impact its
economic performance, including whether it has an implicit
financial responsibility to ensure the VIE operates as designed,
and (ii) has the obligation to absorb losses or the right
to receive benefits of the VIE that could potentially be
significant to the VIE. Enhanced disclosures regarding an
entity’s involvement with VIEs are also required under the
provisions of ASC 810. These requirements became effective
January 1, 2010. The adoption of these requirements did not
have a material impact on our results of operations or financial
position.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In January 2010, the FASB issued Accounting Standards Update
(“ASU”)
<font style="white-space: nowrap">2010-06,</font>
<i>Improving Disclosures About Fair Value Measurements
</i>(“ASU
<font style="white-space: nowrap">2010-06”).</font>
ASU <font style="white-space: nowrap">2010-06</font>
adds new requirements for disclosures of significant transfers
into and out of Levels 1, 2 and 3 of the fair value
hierarchy, the reasons for the transfers and the policy for
determining when transfers are recognized. ASU
<font style="white-space: nowrap">2010-06</font> also
adds new requirements for disclosures about purchases, sales,
issuances and settlements on a gross rather than net basis
relating to the reconciliation of the beginning and ending
balances of Level 3 recurring fair value measurements. It
also clarifies the level of disaggregation to require
disclosures by “class” rather than by “major
category of assets and liabilities” and clarifies that a
description of inputs and valuation techniques used to measure
fair value is required for both recurring and nonrecurring fair
value measurements classified as Level 2 or 3. ASU
<font style="white-space: nowrap">2010-06</font>
became effective January 1, 2010 except for the
requirements to provide the Level 3 activity of purchases,
sales, issuances and settlements on a gross basis, which are
effective January 1, 2011. The adoption of ASU
<font style="white-space: nowrap">2010-06</font> has
not and is not expected to have a material impact on our results
of operations or financial position.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In February 2010, the FASB issued ASU
<font style="white-space: nowrap">2010-09,</font>
<i>Amendments to Certain Recognition and Disclosure Requirements
</i>(“ASU
<font style="white-space: nowrap">2010-09”).</font>
ASU <font style="white-space: nowrap">2010-09</font>
amends ASC Topic 855, <i>Subsequent Events</i>, to require SEC
registrants and conduit bond obligors to evaluate subsequent
events through the date that the financial statements are
issued, however, SEC registrants are exempt from disclosing the
date through which subsequent events have been evaluated. All
other entities are required to evaluate subsequent events
through the date that the financial statements are available to
be issued and must disclose the date through which subsequent
events have been
evaluated. ASU
<font style="white-space: nowrap">2010-09</font> was
effective upon issuance for all entities except conduit debt
obligors. The adoption of ASU
<font style="white-space: nowrap">2010-09</font> did
not have an impact on our results of operations or financial
position.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In July 2010, the FASB issued ASU
<font style="white-space: nowrap">2010-20,</font>
<i>Disclosures About the Credit Quality of Financing Receivables
and the Allowance for Credit Losses </i>(“ASU
<font style="white-space: nowrap">2010-20”).</font>
ASU <font style="white-space: nowrap">2010-20</font>
amends ASC Topic 310, <i>Receivables</i>, to require additional
disclosures regarding credit quality and the allowance for
credit losses related to financing receivables, including credit
quality indicators and past due and modification information.
Disclosures must be disaggregated by segment and class. The
disclosures as of the end of a reporting period became effective
December 31, 2010, and the disclosures about activity that
occurs during a reporting period are effective January 1,
2011. The adoption of these requirements did not have an impact
on our results of operations or financial position.
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis element may be used to describe all significant accounting policies of the reporting entity.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 22
-Paragraph 8
falsefalse12Summary of Significant Accounting PoliciesUnKnownUnKnownUnKnownUnKnownfalsetrue