2. Company Information (1)
Board of Directors Senior Management
Robert R. Fanning, Jr. Harold M. Messmer, Jr. James F. Flaherty III Thomas D. Kirby
Managing Director (Retired), Chairman and Chief Executive Officer Chairman and Executive Vice President
The Huron Consulting Group Robert Half International, Inc. Chief Executive Officer Acquisitions and Valuations
James F. Flaherty III Peter L. Rhein Paul F. Gallagher Thomas M. Klaritch
Chairman and Chief Executive Officer Partner, Sarlot & Rhein Executive Vice President Executive Vice President
HCP, Inc. Chief Investment Officer Medical Office Properties
Kenneth B. Roath
Christine N. Garvey Chairman Emeritus, HCP, Inc. Edward J. Henning Timothy M. Schoen
Former Global Head of Corporate Executive Vice President Executive Vice President
Real Estate Services, Deutsche Bank AG Richard M. Rosenberg General Counsel, Chief Administrative Life Science and Investment Management
Chairman and Chief Executive Officer Officer and Corporate Secretary
David B. Henry (Retired), BankAmerica Corporation Susan M. Tate
Vice Chairman, President and Chief Thomas M. Herzog Executive Vice President
Investment Officer, Kimco Realty Corporation Joseph P. Sullivan Executive Vice President Asset Management and Senior Housing
Chairman of the Board of Advisors Chief Financial Officer and Treasurer
Lauralee E. Martin RAND Health
Chief Operating and Financial Officer
Jones Lang LaSalle Incorporated
Michael D. McKee
Chief Executive Officer and Vice Chairman
(Retired), The Irvine Company
Other Information
Corporate Headquarters Nashville Office Trading Symbol Senior Debt Ratings
3760 Kilroy Airport Way, Suite 300 3100 West End Avenue, Suite 800 HCP Common Stock Moody's Baa3
Long Beach, CA 90806-2473 Nashville, TN 37203 HCP_pe Series E Preferred Stock Standard & Poor's BBB
(562) 733-5100 HCP_pf Series F Preferred Stock Fitch BBB
Chicago Office San Francisco Office Stock Exchange Listing
444 North Michigan Avenue, Suite 3230 400 Oyster Point Boulevard, Suite 409 NYSE
Chicago, IL 60611 South San Francisco, CA 94080
(1)
As of April 28, 2009.
See Reporting Definitions and Supplemental Financial Measures Disclosures
2
3. Highlights
Dollars in thousands, except per share data
Three Months Ended March 31,
2009 2008
Revenues $ 251,615 $ 244,793
NOI 202,501 195,105
Adjusted EBITDA 221,291 237,306
Net income applicable to common shares 43,285 44,579
FFO applicable to common shares 128,019 121,483
Per diluted common share:
EPS $ 0.17 $ 0.21
FFO 0.50 0.56
FFO payout ratio per diluted common share 92% 81%
Adjusted fixed charge coverage 2.4x 2.0x
Financial leverage 48% 58%
Recent Developments(1) Total Assets Under Management: $13.2 billion(2)
Skilled nursing
Diluted FFO per share of $0.50(3) 9%
Hospital
8%
Completed sale of Los Gatos, California hospital for $45 million
Senior housing
Thomas M. Herzog named as Executive Vice President - Chief 40%
Financial Officer and Treasurer
M edical off ice
21%
Life science
22%
(1)
As of April 28, 2009.
(2)
Represents the historical cost of real estate owned by HCP, the carrying amount of debt investments and 100% of the cost of real estate owned by the Company’s Investment Management Platform, excluding assets under development and land held for future
development, at March 31, 2009.
(3)
As of and for the quarter ended March 31, 2009.
See Reporting Definitions and Supplemental Financial Measures Disclosures
3
4. Consolidated Balance Sheets
In thousands
March 31, December 31,
2009 2008
ASSETS
Real estate:
Buildings and improvements $ 7,758,432 $ 7,752,714
Development costs and construction in progress 240,690 224,337
Land 1,550,286 1,550,219
Less accumulated depreciation and amortization 880,881 820,441
Net real estate 8,668,527 8,706,829
Net investment in direct financing leases 648,411 648,234
Loans receivable, net 1,074,874 1,076,392
Investments in and advances to unconsolidated joint ventures 267,350 272,929
Accounts receivable, net 29,046 34,211
Cash and cash equivalents 66,376 57,562
Restricted cash 32,973 35,078
Intangible assets, net 482,329 505,986
Real estate held for sale, net 15,120 19,799
Other assets, net 516,283 492,806
Total assets $ 11,801,289 $ 11,849,826
LIABILITIES AND EQUITY
Bank line of credit $ 235,000 $ 150,000
Bridge and term loans 520,000 520,000
Senior unsecured notes 3,524,338 3,523,513
Mortgage debt 1,603,838 1,641,734
Other debt 101,047 102,209
Intangible liabilities, net 223,749 232,654
Accounts payable and accrued liabilities 190,100 211,691
Deferred revenue 72,305 60,185
Total liabilities 6,470,377 6,441,986
Commitments and contingencies
Preferred stock 285,173 285,173
Common stock 253,975 253,601
Additional paid-in capital 4,870,942 4,873,727
Cumulative dividends in excess of earnings (203,359 ) (130,068 )
Accumulated other comprehensive loss (77,469 ) (81,162 )
Total stockholders’ equity 5,129,262 5,201,271
Joint venture partners 8,245 12,912
Non-managing member unitholders 193,405 193,657
Total noncontrolling interests 201,650 206,569
Total equity 5,330,912 5,407,840
Total liabilities and equity $ 11,801,289 $ 11,849,826
See Reporting Definitions and Supplemental Financial Measures Disclosures
4
5. Consolidated Statements of Income
In thousands, except per share data Three Months Ended March 31,
2009 2008
Revenues:
Rental and related revenues $ 213,588 $ 206,905
Tenant recoveries 23,664 21,447
Income from direct financing leases 12,925 14,974
Investment management fee income 1,438 1,467
Total revenues 251,615 244,793
Costs and expenses:
Depreciation and amortization 80,537 77,632
Operating 47,676 48,221
General and administrative 18,991 20,445
Total costs and expenses 147,204 146,298
Other income (expense):
Interest and other income, net 24,333 35,322
Interest expense (76,674 ) (96,263 )
Total other income (expense) (52,341 ) (60,941 )
Income before income taxes and equity income (loss) from unconsolidated joint ventures 52,070 37,554
Income taxes (915 ) (2,241 )
Equity income (loss) from unconsolidated joint ventures (462 ) 1,288
Income from continuing operations 50,693 36,601
Discontinued operations:
Income before gain on sales of real estate, net of income taxes 659 9,389
Gain on sales of real estate, net of income taxes 1,357 10,138
Total discontinued operations 2,016 19,527
Net income 52,709 56,128
Noncontrolling interests’ and participating securities’ share in earnings (4,141 ) (6,266 )
Preferred stock dividends (5,283 ) (5,283 )
Net income applicable to common shares $ 43,285 $ 44,579
Basic earnings per common share:
Continuing operations $ 0.16 $ 0.12
Discontinued operations 0.01 0.09
Net income applicable to common shares $ 0.17 $ 0.21
Diluted earnings per common share:
Continuing operations $ 0.16 $ 0.12
Discontinued operations 0.01 0.09
Net income applicable to common shares $ 0.17 $ 0.21
Weighted average shares used to calculate earnings per common share:
Basic 253,335 216,773
Diluted 253,423 217,391
Dividends declared per common share $ 0.460 $ 0.455
See Reporting Definitions and Supplemental Financial Measures Disclosures
5
6. Consolidated Statements of Cash Flows
In thousands
Three Months Ended March 31,
2009 2008
Cash flows from operating activities:
Net income $ 52,709 $ 56,128
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of real estate, in-place lease and other intangibles:
Continuing operations 80,537 77,632
Discontinued operations 61 4,726
Amortization of above and below market lease intangibles, net (2,660 ) (2,152 )
Stock-based compensation 3,546 3,526
Amortization of debt premiums, discounts and issuance costs, net 2,768 3,039
Straight-line rents (11,422 ) (9,782 )
Interest accretion (6,121 ) (6,292 )
Deferred rental revenue 6,914 8,605
Equity (income) loss from unconsolidated joint ventures 462 (1,288 )
Distributions of earnings from unconsolidated joint ventures 1,468 1,191
Gain on sales of real estate (1,357 ) (10,138 )
Marketable securities losses, net 309 113
Derivative losses, net 439 —
Changes in:
Accounts receivable 5,165 12,043
Other assets (1,050 ) 10,480
Accounts payable and accrued liabilities (14,756 ) (16,156 )
Net cash provided by operating activities 117,012 131,675
Cash flows from investing activities:
Cash used in other acquisitions and development of real estate (20,269 ) (42,962 )
Lease commissions and tenant and capital improvements (9,642 ) (18,107 )
Proceeds from sales of real estate, net 5,764 29,590
Contributions to unconsolidated joint ventures (472 )
—
Distributions in excess of earnings from unconsolidated joint ventures 1,714 2,316
Principal repayments on loans receivable and direct financing leases 2,485 2,155
Investments in loans receivable (16 ) (602 )
Decrease in restricted cash 2,105 6,763
Net cash used in investing activities (17,859 ) (21,319 )
See Reporting Definitions and Supplemental Financial Measures Disclosures
6
7. Consolidated Statements of Cash Flows (continued)
In thousands
Three Months Ended March 31,
2009 2008
Cash flows from financing activities:
Net borrowings under bank line of credit 85,000 66,900
Repayments of mortgage debt (38,463 ) (12,071 )
Issuance of common stock and exercise of options 665 6,265
Repurchase of common stock (2,143 ) (2,022 )
Dividends paid on common and preferred stock and participating securities (122,174 ) (104,370 )
Purchase of noncontrolling interests (9,097 ) —
Distributions to noncontrolling interests (4,127 ) (7,327 )
Net cash used in financing activities (90,339 ) (52,625 )
Net increase in cash and cash equivalents 8,814 57,731
Cash and cash equivalents, beginning of period 57,562 96,269
Cash and cash equivalents, end of period $ 66,376 $ 154,000
See Reporting Definitions and Supplemental Financial Measures Disclosures
7
8. Consolidated Funds From Operations
Dollars in thousands, except per share data
Three Months Ended March 31,
2009 2008
Net income applicable to common shares $ 43,285 $ 44,579
Depreciation and amortization of real estate, in-place lease and other intangibles:
Continuing operations 80,537 77,632
Discontinued operations 61 4,726
Gain on sales of real estate (1,357 ) (10,138 )
Equity (income) loss from unconsolidated joint ventures 462 (1,288 )
FFO from unconsolidated joint ventures 5,631 6,620
Noncontrolling interests’ share in earnings 3,826 5,716
Noncontrolling interests’ share in FFO (4,426 ) (6,364 )
FFO applicable to common shares $ 128,019 $ 121,483
Distributions on convertible units $ 1,620 $ 4,767
Diluted FFO applicable to common shares $ 129,639 $ 126,250
Basic FFO per common share $ 0.51 $ 0.56
Diluted FFO per common share $ 0.50 $ 0.56
Weighted average shares used to calculate diluted FFO per common share 256,949 226,910
Dividends declared per common share $ 0.460 $ 0.455
FFO payout ratio per common share 92.0% 81.3%
Impact of merger-related charges $ $ 1,189
—
Per common share impact of merger-related charges on diluted FFO $ $
— —
FFO payout ratio per common share prior to merger-related charges 92.0% 81.3%
Consolidated selected supplemental cash flow information:
Amortization of net below market lease intangibles $ 2,660 $ 2,152
Stock-based compensation 3,546 3,526
Amortization of debt premiums, discounts and issuance costs, net 2,768 3,039
Straight-line rents 11,422 9,782
Interest accretion 6,121 6,292
Increase in deferred revenues – tenant improvement related 3,942 4,585
Increase in SAB 104 deferred revenue 2,972 4,020
Lease commissions and tenant and capital improvements 9,642 18,107
Capitalized interest 6,020 9,362
HCP’s share of selected supplemental cash flow information from the Investment Management Platform
Amortization of net above market lease intangibles $ 1,442 $ 269
Amortization of debt premiums, discounts and issuance costs, net 106 105
Straight-line rents 1,039 1,208
Lease commissions and tenant and capital improvements 561 292
See Reporting Definitions and Supplemental Financial Measures Disclosures
8
9. Capitalization
Dollars in thousands
Debt Maturities and Scheduled Principal Repayments
March 31, 2009
Senior HCP’s Share of
Bank Line Bridge and Unsecured Mortgage Other Consolidated Unconsolidated
Debt(1) Mortgage Debt(2)
of Credit Term Loans Notes Debt Debt Total Debt
2009 (9 months) $ $ 320,000 $ $ 117,811 $ 101,047 $ 538,858 $ 3,886 $ 542,744
—
—
2010 206,421 298,503 504,924 5,546 510,470
— —
—
2011 235,000 200,000 300,000 137,573 872,573 6,224 878,797
—
2012 250,000 60,922 310,922 13,560 324,482
— — —
2013 550,000 233,293 783,293 44,508 827,801
— — —
2014 87,000 174,490 261,490 4,364 265,854
— — —
2015 400,000 279,536 679,536 15,070 694,606
— — —
2016 400,000 237,114 637,114 50,975 688,089
— — —
2017 750,000 3,203 753,203 201,648 954,851
— — —
2018 600,000 3,389 603,389 603,389
— — — —
Thereafter 53,576 53,576 53,576
— — —
— —
Subtotal 235,000 520,000 3,543,421 1,599,410 101,047 5,998,878 345,781 6,344,659
(Discounts) and
premiums, net (19,083 ) 4,428 (14,655 ) (599 ) (15,254 )
— —
—
Total $ 235,000 $ 520,000 $ 3,524,338 $ 1,603,838 $ 101,047 $ 5,984,223 $ 345,182 $ 6,329,405
Weighted average
interest rate 1.50% 1.90% 6.24% 6.00% N/A 5.60% 5.70% 5.61%
Weighted average
maturity in years 2.40 1.12 6.04 4.62 N/A 5.07 7.66 5.22
Capitalization Ratios Variable Rate Debt
March 31, December 31, March 31, December 31,
2009 2008 2009 2008
Total Debt/Total Book Capitalization 54.3% 53.7% Fixed and variable rate ratios
Total Debt/Total Undepreciated Book Capitalization 49.5% 49.3% Fixed rate 84.6% 85.8%
Variable rate 15.4% 14.2%
Consolidated Debt/Consolidated Gross Assets 47.4% 47.1% 100.0% 100.0%
Financial Leverage (Total Debt/Total Gross Assets) 47.9% 47.6%
Consolidated Secured Debt/Consolidated Gross Assets 12.7% 13.0%
Total Secured Debt/Total Gross Assets 14.7% 15.1%
Consolidated Debt/Consolidated Market Capitalization 55.2% 44.5%
Total Debt/Total Market Capitalization 56.6% 45.9%
(1)
Other debt represents non-interest bearing Life Care Bonds and occupancy fee deposits at three of the Company’s senior housing facilities, which are payable on-demand, under certain conditions.
(2)
Includes pro-rata share of the Company’s Investment Management Platform.
See Reporting Definitions and Supplemental Financial Measures Disclosures
9
10. Investments and Dispositions
As of and for the three months ended March 31, 2009, dollars and square feet in thousands
Investments
Description Capacity Property Count Segment Investment
Acquisition of joint venture interests $ 14,250
Total fundings for development, tenant and capital improvements $ 24,655
Total investments $ 38,905
Dispositions
Sales Price,
Description Capacity Property Count Segment Net of Costs
Property dispositions:
First quarter
Texas 40 beds 1 Hospital $ 839
Louisiana N/A 4 MOB 384
Kansas 110 units 1 Senior housing 480
Washington 40 sq. ft. 1 MOB 4,312
Total property dispositions $ 6,015
See Reporting Definitions and Supplemental Financial Measures Disclosures
10
11. Development
As of March 31, 2009, dollars and square feet in thousands
Development Projects in Process
Estimated
Estimated Rent Rentable
Completion Commencement Square
Name of Project Location Segment Date Date Feet
Oyster Point II (Building A) So. San Francisco, CA Life science 4Q 2008 4Q 2008 122
Oyster Point II (Building B) So. San Francisco, CA Life science 4Q 2008 1Q 2009 129
Oyster Point II (Building C) So. San Francisco, CA Life science 4Q 2008 N/A 78
329
Redevelopment
500/600 Saginaw Redwood City, CA Life science 4Q 2009 N/A 89
Modular Labs IV So. San Francisco, CA Life science 3Q 2010 N/A 97
Innovation Drive San Diego, CA MOB 3Q 2010 N/A 84
Folsom Blvd Sacramento, CA MOB 3Q 2010 N/A 92
362
Estimated total investment $ 416,322
Investment-to-date(1) $ 314,831
Percentage pre-leased 36%
Land Held for Future Development
Estimated
Rentable
Gross Site Square
Name of Project Location Segment Acreage Feet
Forbes Research Center So. San Francisco, CA Life science 7 326
Sierra Point So. San Francisco, CA Life science 23 540
Bressi I Carlsbad, CA Life science 23 397
Bressi II Carlsbad, CA Life science 18 300
Poway I Poway, CA Life science 41 676
Poway II Poway, CA Life science 31 585
Torrey Pines Science Center Torrey Pines, CA Life science 6 93
149 2,917
(1)
Investment-to-date includes $67 million of land, $65 million of buildings and $13 million of net intangible assets, which are not included in development costs and construction in progress on the Company’s consolidated balance sheet.
See Reporting Definitions and Supplemental Financial Measures Disclosures
11
12. Investment Management Platform
As of and for the three months ended March 31, 2009, dollars in thousands
HCP’s
Date HCP’s Joint HCP’s Net Investment
Primary Established/ Ownership Venture’s Equity Management Initial
Unconsolidated Institutional Joint Ventures Segment Acquired Percentage Investment Investment Fee Income Term (in years)
HCP Ventures II Senior housing January-07 35% $ 1,097,267 $ 140,750 $ 783 Indefinite
30%(1)
HCP Ventures III Medical office October-06 141,089 11,577 117 10
HCP Ventures IV Medical office April-07 20% 655,804 44,408 537 10
HCP Life Science Life science August-07 50%-63% 80,484 63,953 1 97-98
$ 1,974,644 $ 260,688 $ 1,438
(1)
The Company owns an 85% interest in HCP Birmingham Portfolio LLC, which owns a 30% interest in HCP Ventures III.
See Reporting Definitions and Supplemental Financial Measures Disclosures
12
13. Investment Management Platform
In thousands
Funds From Operations
Three Months Ended March 31, 2009 Three Months Ended March 31, 2008
HCP HCP HCP HCP HCP HCP HCP HCP
Life Science(1)
Ventures II Ventures III Ventures IV Ventures II Ventures III Ventures IV Life Science
Net income (loss) $ 2,877 $ 250 $ (3,581 ) $ (958 ) $ 2,734 $ 93 $ (2,008 ) $ 1,152
Depreciation and amortization of real estate and
in-place lease intangibles 7,031 1,302 8,199 2,361 7,141 1,249 6,538 566
FFO $ 9,908 $ 1,552 $ 4,618 $ 1,403 $ 9,875 $ 1,342 $ 4,530 $ 1,718
HCP’s pro rata share of FFO $ 3,468 $ 466 $ 924 $ 796 $ 3,456 $ 403 $ 906 $ 990
Selected supplemental cash flow information:
Amortization of above (below) market lease
intangibles, net $ 823 $ (141 ) $ 248 $ $ 713 $ (141 ) $ 311 $
— —
Amortization of debt premiums, discounts and
issuance costs, net 171 38 152 8 156 38 152 15
Straight-line rents (2,512 ) (90 ) (535 ) (48 ) (3,128 ) 30 (555 ) (38 )
Lease commissions and tenant and capital
improvements 616 78 1,215 157 10 497 379
—
(1)
For the three months ended March 31, 2009, HCP Life Science ventures experienced a loss of $1.8 million primarily related to accelerated amortization of real estate and other assets. At the date that we acquired this venture, other assets was not attributed any
value relative to the Company’s investment in the venture; as such, the related allowance and accelerated amortization do not have an impact on the Company’s earnings or FFO.
See Reporting Definitions and Supplemental Financial Measures Disclosures
13
14. Investment Management Platform
In thousands
Balance Sheets
March 31, 2009 December 31, 2008
HCP HCP HCP HCP HCP HCP HCP HCP
Ventures II Ventures III Ventures IV Life Science Ventures II Ventures III Ventures IV Life Science
ASSETS
Real estate:
Buildings and improvements $ 935,211 $ 129,838 $ 524,978 $ 43,137 $ 935,211 $ 129,838 $ 523,750 $ 43,124
Development costs and construction in
progress 418 2,381 656 367 2,599 513
— —
Land 108,907 1,780 66,029 8,271 108,907 1,780 65,996 8,271
Less accumulated depreciation and
amortization 66,826 10,251 44,296 28,436 60,143 9,412 38,184 26,398
Net real estate 977,292 121,785 549,092 23,628 983,975 122,573 554,161 25,510
Cash and cash equivalents and restricted cash 6,586 1,734 11,893 2,505 9,142 1,489 10,746 1,269
Other assets, net 42,635 3,833 13,949 2,629 39,733 4,045 13,326 3,145
Intangible assets, net 42,961 10,095 49,353 44,033 10,578 51,914
— —
Total assets $ 1,069,474 $ 137,447 $ 624,287 $ 28,762 $ 1,076,883 $ 138,685 $ 630,147 $ 29,924
LIABILITIES AND MEMBERS’ CAPITAL
Mortgage debt $ 666,494 $ 91,730 $ 378,326 $ 15,141 $ 668,938 $ 91,730 $ 378,448 $ 15,844
Intangible liabilities, net 1,149 4,762 11,099 1,176 4,926 11,462
— —
Accounts payable, accrued liabilities and
deferred revenue 5,118 1,961 12,821 1,702 7,662 3,285 12,512 1,093
Total liabilities 672,761 98,453 402,246 16,843 677,776 99,941 402,422 16,937
HCP’s capital 136,097 9,955 34,267 6,029 136,927 9,880 35,404 6,755
Partners’ capital 260,616 29,039 187,774 5,890 262,180 28,864 192,321 6,232
Total liabilities and members’ capital $ 1,069,474 $ 137,447 $ 624,287 $ 28,762 $ 1,076,883 $ 138,685 $ 630,147 $ 29,924
See Reporting Definitions and Supplemental Financial Measures Disclosures
14
15. Investment Management Platform
In thousands
Statements of Operations
Three Months Ended March 31, 2009 Three Months Ended March 31, 2008
HCP HCP HCP HCP HCP HCP HCP HCP
Ventures II Ventures III Ventures IV Life Science Ventures II Ventures III Ventures IV Life Science
Revenues:
Rental and related revenues $ 20,851 $ 3,495 $ 14,443 $ 1,960 $ 20,921 $ 3,315 $ 14,425 $ 2,060
Tenant recoveries 1,266 3,459 170 1,177 3,140 346
— —
Total revenues 20,851 4,761 17,902 2,130 20,921 4,492 17,565 2,406
Costs and expenses:
Depreciation and amortization 7,031 1,302 8,199 2,361 7,141 1,249 6,538 566
Operating 1,591 6,938 437 1,562 6,816 345
— —
General and administrative 1,326 237 912 15 1,247 164 716 14
Total costs and expenses 8,357 3,130 16,049 2,813 8,388 2,975 14,070 925
Other income (expense):
Interest and other income, net 3 7 36 10 3 12
— —
Interest expense (9,617 ) (1,384 ) (5,441 ) (275 ) (9,835 ) (1,434 ) (5,506 ) (341 )
Net income (loss) $ 2,877 $ 250 $ (3,581 ) $ (958 ) $ 2,734 $ 93 $ (2,008 ) $ 1,152
See Reporting Definitions and Supplemental Financial Measures Disclosures
15
16. Investment Management Platform
In thousands
Net Operating Income
Three Months Ended March 31, 2009 Three Months Ended March 31, 2008
HCP HCP HCP HCP HCP HCP HCP HCP
Ventures II Ventures III Ventures IV Life Science Ventures II Ventures III Ventures IV Life Science
Net income (loss) $ 2,877 $ 250 $ (3,581 ) $ (958 ) $ 2,734 $ 93 $ (2,008 ) $ 1,152
Depreciation and amortization 7,031 1,302 8,199 2,361 7,141 1,249 6,538 566
General and administrative 1,326 237 912 15 1,247 164 716 14
Interest and other income, net (3 ) (7 ) (36 ) (10 ) (3 ) (12 )
— —
Interest expense 9,617 1,384 5,441 275 9,835 1,434 5,506 341
NOI $ 20,851 $ 3,170 $ 10,964 $ 1,693 $ 20,921 $ 2,930 $ 10,749 $ 2,061
HCP’s pro rata share of NOI $ 7,298 $ 951 $ 2,193 $ 963 $ 7,322 $ 879 $ 2,150 $ 1,190
See Reporting Definitions and Supplemental Financial Measures Disclosures
16
17. Investment Management Platform
In thousands
EBITDA
Three Months Ended March 31, 2009 Three Months Ended March 31, 2008
HCP HCP HCP HCP HCP HCP HCP HCP
Ventures II Ventures III Ventures IV Life Science Ventures II Ventures III Ventures IV Life Science
Net income (loss) $ 2,877 $ 250 $ (3,581 ) $ (958 ) $ 2,734 $ 93 $ (2,008 ) $ 1,152
Depreciation and amortization 7,031 1,302 8,199 2,361 7,141 1,249 6,538 566
Interest expense 9,617 1,384 5,441 275 9,835 1,434 5,506 341
EBITDA $ 19,525 $ 2,936 $ 10,059 $ 1,678 $ 19,710 $ 2,776 $ 10,036 $ 2,059
HCP’s pro rata share of EBITDA $ 6,834 $ 881 $ 2,012 $ 955 $ 6,899 $ 833 $ 2,007 $ 1,189
See Reporting Definitions and Supplemental Financial Measures Disclosures
17
18. Investment Management Platform
In thousands
Mortgage Debt Maturities and Scheduled Principal Repayments
March 31, 2009
HCP’s Share of
HCP HCP HCP HCP Unconsolidated
Ventures II Ventures III Ventures IV Life Science Total Mortgage Debt
2009 (9 months) $ 7,097 $ $ 705 $ 2,173 $ 9,975 $ 3,886
—
2010 10,130 1,048 3,086 14,264 5,546
—
2011 10,726 2,743 3,309 16,778 6,224
—
2012 11,254 37,806 3,548 52,608 13,560
—
2013 118,124 8,451 2,630 129,205 44,508
—
2014 10,359 2,606 395 13,360 4,364
—
2015 10,969 56,156 67,125 15,070
— —
2016 11,539 91,730 97,085 200,354 50,975
—
2017 476,766 173,898 650,664 201,648
— —
Subtotal 666,964 91,730 380,498 15,141 1,154,333 345,781
Discounts, net (470 ) (2,172 ) (2,642 ) (599 )
—
—
Total debt $ 666,494 $ 91,730 $ 378,326 $ 15,141 $ 1,151,691 $ 345,182
HCP’s share of total debt $ 233,273 $ 27,519 $ 75,665 $ 8,725 $ 345,182
Weighted average interest rate(1) 5.66% 6.02% 5.56% 6.99% 5.67% 5.70%
Weighted average maturity in years 8.00 7.28 7.09 4.53 7.60 7.66
(1)
Mortgage debt is 100% fixed rate debt.
See Reporting Definitions and Supplemental Financial Measures Disclosures
18
19. Owned Portfolio
As of and for the three months ended March 31, 2009, dollars and square feet in thousands
Portfolio Summary
Property Average EBITDAR EBITDARM
Segment Count Investment Age (Years) Capacity Occupancy % CFC/DSC CFC/DSC
Senior housing 239 $ 4,143,028 12 25,790 Units 88.6 1.13 x 1.37 x
Life science 96 2,817,301 15 6,126 Sq. Ft. 91.4 N/A N/A
Medical office 187 2,124,046 17 12,912 Sq. Ft. 90.5 N/A N/A
Hospital 19 1,010,130 22 2,521 Beds 56.9 2.70 x 3.12 x
Skilled nursing 51 1,172,307 24 6,093 Beds 86.1 1.56 x 2.11 x
592 $ 11,266,812 15
Portfolio Diversification
Geographic Concentration(1)
Relationship Concentration
Annualized Revenues Investment Rental Revenues & Interest Operating
Company Amount % State Amount % DFL Income Income Expenses
Sunrise Senior Living $ 128,704 14 CA $ 3,669,699 36 $ 82,408 $ 72 $ 15,255
HCA 69,849 7 TX 1,276,901 13 37,893 851 11,739
HCR ManorCare 60,984 6 FL 684,141 7 18,322 — 3,183
Brookdale 59,780 6 CO 394,088 4 10,743 370 3,046
Emeritus Corporation 42,585 5 VA 383,145 4 8,399 — 474
Genentech 34,321 4 WA 303,688 3 7,971 — 2,441
Amgen 25,224 3 NJ 280,589 3 4,657 — —
Aegis Senior Living 19,980 2 UT 254,063 3 7,380 — 1,414
Tenet Healthcare Corporation 18,991 2 MD 211,082 2 4,926 — 403
Cirrus Health 16,157 2 Other 2,605,082 25 67,478 199 9,721
Kindred 15,704 2 $ 10,062,478 100 $ 250,177 $ 1,492 $ 47,676
Other 453,415 47
$ 945,694 100
(1)
Geographic concentration excludes Mezzanine Loans and Other Debt Investments as the investment and revenues associated with those assets cannot be allocated to a particular geographic region.
See Reporting Definitions and Supplemental Financial Measures Disclosures
19
20. Owned Portfolio
In thousands
Portfolio NOI and Interest Income
Three Months Ended March 31, 2009
Rental
Operating Interest
Revenues
Segment & DFL Income Expenses NOI Income
Senior housing $ 81,937 $ 2,701 $ 79,236 $ 326
Life science 63,138 11,436 51,702 —
Medical office 77,387 32,786 44,601 —
Hospital 18,813 753 18,060 10,725
Skilled nursing 8,902 — 8,902 15,662
$ 250,177 $ 47,676 $ 202,501 $ 26,713
See Reporting Definitions and Supplemental Financial Measures Disclosures
20
21. Owned Portfolio
As of and for the three months ended March 31, 2009, dollars and square feet in thousands
Operating Lease Portfolio
Property Rental Operating Average EBITDAR EBITDARM
Segment Count Investment Revenues Expenses Age (Years) Capacity Occupancy % Amount CFC Amount CFC
Senior housing 204 $ 3,495,543 $ 69,012 $ 2,701 12 22,316 Units 88.3 $ 303,886 1.13 x $ 365,606 1.36 x
Life science 96 2,817,301 63,138 11,436 15 6,126 Sq. Ft. 91.4 N/A N/A N/A N/A
Medical office 187 2,124,046 77,387 32,786 17 12,912 Sq. Ft. 90.5 N/A N/A N/A N/A
Hospital 18 673,105 18,813 753 23 2,463 Beds 56.9 155,401 2.64 x 179,918 3.06 x
Skilled nursing 48 255,084 8,902 — 24 5,651 Beds 86.2 53,727 1.51 x 73,271 2.06 x
553 $ 9,365,079 $ 237,252 $ 47,676 16
Direct Financing Lease Portfolio
Property Average EBITDAR EBITDARM
Segment Count Investment DFL Income Age (Years) Capacity Occupancy % Amount CFC Amount CFC
Senior housing 30 $ 626,650 $ 12,925 12 3,141 Units 90.9 $ 42,956 1.15 x $ 54,125 1.44 x
Secured Loan Portfolio
Property Interest Average EBITDAR EBITDARM
Segment Count Investment Income Age (Years) Capacity Occupancy % Amount DSC Amount DSC
Senior housing 5$ 20,835 $ 326 16 333 Units 82.8 $ 713 1.62 x $ 830 1.89 x
Hospital 1 35,308 750 10 58 Beds 58.3 11,089 3.69 x 12,963 4.32 x
Skilled nursing 3 14,606 416 30 442 Beds 84.5 5,684 2.29 x 7,093 2.86 x
9$ 70,749 $ 1,492 20 $ 17,486 $ 20,886
Mezzanine Loans and Other Debt Investments
Interest
Segment Investment Income
Hospital $ 301,717 $ 9,975
Skilled nursing 902,617 15,246
$ 1,204,334 $ 25,221
Total 592 $ 11,266,812
See Reporting Definitions and Supplemental Financial Measures Disclosures
21
22. Owned Portfolio
As of March 31, 2009, except NOI data, dollars and square feet in thousands
Same Property Portfolio
Senior Life Medical Skilled
Total Housing Science Office Hospital Nursing
Property count 548 203 93 186 18 48
Investment $ 9,175,245 $ 3,484,625 $ 2,655,837 $ 2,106,594 $ 673,105 $ 255,084
Percent of operating lease portfolio (by investment) 98.0 99.7 94.3 99.2 100.0 100.0
Capacity 22,215 Units 5,896 Sq. Ft. 12,795 Sq. Ft. 2,463 Beds 5,651 Beds
NOI for the three months ended:
March 31, 2009 $ 187,794 $ 66,194 $ 48,529 $ 46,109 $ 18,060 $ 8,902
December 31, 2008 $ 196,522 $ 76,311 $ 46,916 $ 43,513 $ 20,782 $ 9,000
Same property % change in NOI (4.4 ) (13.3 ) 3.4 6.0 (13.1 ) (1.1 )
Adjusted NOI for the three months ended:
March 31, 2009 $ 174,613 $ 60,701 $ 44,105 $ 44,568 $ 16,327 $ 8,912
December 31, 2008 $ 184,151 $ 72,523 $ 40,251 $ 42,020 $ 20,456 $ 8,901
Same property % change in Adjusted NOI (5.2 ) (16.3 ) 9.6 6.1 (20.2 ) 0.1
NOI for the three months ended:
March 31, 2009 $ 187,794 $ 66,194 $ 48,529 $ 46,109 $ 18,060 $ 8,902
March 31, 2008 $ 181,438 $ 67,996 $ 41,785 $ 44,193 $ 18,685 $ 8,779
Same property % change in NOI 3.5 (2.7 ) 16.1 4.3 (3.3 ) 1.4
Adjusted NOI for the Three months ended:
March 31, 2009 $ 174,613 $ 60,701 $ 44,105 $ 44,568 $ 16,327 $ 8,912
March 31, 2008 $ 169,577 $ 64,414 $ 36,015 $ 42,165 $ 18,334 $ 8,649
Same property % change in Adjusted NOI 3.0 (5.8 ) 22.5 5.7 (10.9 ) 3.0
See Reporting Definitions and Supplemental Financial Measures Disclosures
22
