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USD ($) / shares

USD ($)

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   &lt;div align="center" style="font-size: 10pt; margin-top: 0pt"&gt;&lt;b&gt;&lt;/b&gt;
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   &lt;div align="center" style="font-size: 10pt; margin-top: 0pt"&gt;&lt;b&gt;
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   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt"&gt;&lt;b&gt;1. Organization&lt;/b&gt;
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"&gt;Nationwide Health Properties, Inc., a Maryland corporation, is a real estate investment trust
   (&amp;#8220;REIT&amp;#8221;) that invests in healthcare related real estate, primarily senior housing, long-term care
   properties and medical office buildings. Whenever we refer herein to &amp;#8220;NHP&amp;#8221; or to &amp;#8220;us&amp;#8221; or use the
   terms &amp;#8220;we&amp;#8221; or &amp;#8220;our,&amp;#8221; we are referring to Nationwide Health Properties, Inc. and its subsidiaries,
   unless the context otherwise requires.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"&gt;We primarily make our investments by acquiring an ownership interest in senior housing and
   long-term care facilities and leasing them to unaffiliated tenants under &amp;#8220;triple-net&amp;#8221; &amp;#8220;master&amp;#8221;
   leases that transfer the obligation for all facility operating costs (including maintenance,
   repairs, taxes, insurance and capital expenditures) to the tenant. We also invest in medical office
   buildings which are not generally subject to &amp;#8220;triple-net&amp;#8221; leases and generally have multiple
   tenants under separate leases in each building, thus requiring active management and responsibility
   for many of the associated operating expenses (although many of these are, or can effectively be,
   passed through to the tenants). Some of the medical office buildings are subject to &amp;#8220;triple-net&amp;#8221;
   leases. In addition, but to a much lesser extent because we view the risks of this activity to be
   greater due to less favorable bankruptcy treatment and other factors, from time to time, we extend
   mortgage loans and other financing to operators.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"&gt;We believe we have operated in such a manner as to qualify as a REIT under Sections&amp;#160;856
   through 860 of the Internal Revenue Code of 1986, as amended (the &amp;#8220;Code&amp;#8221;). We intend to continue to
   qualify as such and therefore distribute at least 90% of our REIT taxable income (computed without
   regard to the dividends paid deduction and excluding capital gain) to our stockholders. If we
   qualify for taxation as a REIT, and we distribute 100% of our taxable income to our stockholders,
   we will generally not be subject to U.S. federal income taxes on our income that is distributed to
   stockholders. Accordingly, no provision has been made for federal income taxes.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"&gt;As of March&amp;#160;31, 2011, we had investments in 665 healthcare facilities, one land parcel, three
   development projects and one asset held for sale located in 42 states.
   &lt;/div&gt;
   &lt;div align="justify" style="font-size: 10pt; margin-top: 10pt; text-indent: 8%"&gt;At March&amp;#160;31, 2011, one of our triple-net lease tenants accounted for more than 10% of our
   revenues, Brookdale Senior Living, Inc. (&amp;#8220;Brookdale&amp;#8221;), which accounted for 11.2% of our revenues.
   &lt;/div&gt;
   &lt;/div&gt;
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 -Publisher AICPA
 -Name Statement of Position (SOP)
 -Number 94-6
 -Paragraph 10

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