Slide 1: Supplemental Report Second Quarter 2015
supplemental report Strategy. Execution. Results. report second quarter 2015 1 Freedom Pointe at The Villages The Villages, FL THE ONLY REIT IN THE S&P 500 ® DIVIDEND ARISTOCRATS® I NDE X THE FIRST HEALTHC ARE REIT S&P 500 IN THE FTSE4Good CDP CLIMATE DISCLOSURE LEADER 2014 MEMBER OF DOW JONES Susta
Slide 2: Table of Contents
Sustainability 3 Summary 4 Heat Map - Triple-Net Master Lease Profile 5 Credit Profile 6 Capitalization 8 Indebtedness and Ratios 10 Investments 12 Portfolio Portfolio Summary 15 2 Senior Housing 20 Post-Acute/Skilled 25 Life Science 28 Medical Office 32 Hospital 34 Unconsolidated Joint Ventures 35
Slide 3: This Quarter: Sustainability
THIS QUAR TER Sustainability 3 2015 HCP Iron Team Challenge Photo courtesy of Firefly Events Teamwork is an important pillar of HCP’s culture and was on display at the Company’s summer team building event 2nd Ranked 2nd in the REIT Industry and 51st overall by the Newsweek Green Rankings, which rank
Slide 4: The Numbers: Summary
THE NUMBER S Summary Dollars in thousands, except per share data INCOME FROM INVESTMENT PORTFOLIO (1) Three Months Ended June 30, 4% Hospital 14% Medical Office NOI 434,787 439,873 Year-Over-Year SPP Cash NOI % Growth (0.7%) 2.4% 39% Senior Housing Adjusted EBITDA $ 482,472 $ 455,669 14% Life Scienc
Slide 5: Heat Map: Triple-Net Master Lease Profile
HEAT MAP Triple-Net Master Lease Profile(1) 0.8% 0.4% 0.4% 0.1% 0.7% 0.7% 0.5% 0.1% 0.4% 0.2% 0.4% 0.2% 0.6% 1.3% 0.8% 0.9% 0.4% 0.2% 0.7% 8.3% 0.5% 0.1% 1.4% 0.7% 4% 5 0 2 4 6 8 10 12 14 16 18 2205 TERM (YEARS TO EXPIRATION) 95% INVESTMENT TYPE: Senior Housing Post-Acute/Skilled Hospital No Corpora
Slide 6: Credit Profile
CREDIT Profile Financial Leverage Adjusted Fixed Charge Coverage 5.0x 80% 4.0x 60% 3.0x 43.4% 2.4x 40% 2.3x 2.2x 2.0x 20% 1.0x 0% 0.0x 2010 (1) Pre-CNL 2006 2007 Acquisition 2008 2009 2011 2012 2013 2014 2Q 2015 Pre-CNL 2006 2007 2008 2009 Acquisition 2010 2011 2012 2013 2014 2Q 2015 Secured Debt Ra
Slide 7: Credit Profile
CREDIT Profile Same Property NOI Growth Total Gross Assets (in billions) 6% $30 $25 4% 3.3% 3.2% 3.1% $20 2.1% 2.1% 2.0% 2% $15 0% $10 (2%) $5 (4%) $0 2010 (4) Pre-CNL 2006 2007 Acquisition 2008 2009 2011 2012 2013 2014 2Q 2015 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2Q 2015 Major Property
Slide 8: Capitalization
Capitalization Dollars and shares in thousands, except price per share data TOTAL DEBT June 30, 2015 December 31, 2014 June 30, 2014 Term loans(2) 561,525 213,610 234,352 Mortgage debt 967,072 984,431 1,229,773 Consolidated Debt $ 11,213,358 $ 9,759,773 $ 8,674,029 HCP’s share of unconsolidated othe
Slide 9: Capitalization: Common Stock and Equivalents
Capitalization Common Stock and Equivalents In thousands Common stock equivalent securities: Dilutive impact of options 140 140 140 140 — 188 188 Total common stock and equivalents 469,588 462,106 468,115 468,115 461,380 461,649 467,675 9 Clearwater Senior Housing Clearwater, FL Convertible partners
Slide 10: Indebtedness and Ratios: Debt Maturities
Indebtedness and Ratios As of June 30, 2015, dollars in thousands DEBT MATURITIES AND SCHEDULED PRINCIPAL REPAYMENTS (AMORTIZATION) Senior Unsecured Notes HCP’s Share of Unconsolidated Debt Mortgage Debt Total Debt 2016 — 215,487 900,000 5.10 292,222 6.87 1,407,709 61,984 5.99 1,469,693 5.03 2018 1,
Slide 11: Indebtedness and Ratios
Indebtedness and Ratios June 30, 2015 December 31, 2014 Financial Leverage (Total Debt/Total Gross Assets) 45.4% 41.5% Secured Debt Ratio (Total Secured Debt/Total Gross Assets) 4.9% 5.0% Fixed Rate Total Debt 90.3% 90.8% 100% 100% 11 FINANCIAL COVENANTS AS OF JUNE 30, 2015(2) Bank Line of Credit Se
Slide 12: Investments
Investments Dollars in thousands INVESTMENTS(1) June 30, 2015 (1) Represents consolidated investments (including related non-controlling interests) and the Company’s pro rata share of investments in unconsolidated joint ventures. (2) Includes debt investments that were converted into sale-leasebacks
Slide 13: Investments and Dispositions
Investments For the six months ended June 30, 2015, dollars and square feet in thousands INVESTMENTS AND DISPOSITIONS Property Count Investment (1)/ Net Sales Price Location/Portfolio Date Capacity Segment Houston, TX(2) March 19, 2015 87 Units 1 Senior housing (RIDEA) $ 22,190 Germantown, TN(2) Jun
Slide 14: Portfolio Summary
Portfolio Summary As of and for the quarter ended June 30, 2015, dollars and square feet in thousands Property Count Cash NOI Age (Years) Occupancy % EBITDARM CFC EBITDAR CFC Property Portfolio Investment Capacity Senior housing - operating 106 2,593,843 31,621 21 15,253 Units 86.0 N/A N/A Life scie
Slide 15: Portfolio Summary: NOI, Cash NOI and Interest Income
Treemont Dallas Dallas, TX Portfolio Summary For the quarter ended June 30, 2015, dollars in thousands NOI, CASH NOI AND INTEREST INCOME 16 Rental and RIDEA Revenues Operating Expenses Cash NOI Interest Income Cash NOI and Interest Income Segment NOI(2) Post-acute/skilled 130,895 538 130,357 111,280
Slide 16: Portfolio Diversification
Portfolio Diversification As of and for the quarter ended June 30, 2015, dollars in thousands CASH NOI BY STATE Senior Housing Post-Acute/ Skilled Life Science Medical Office % of Total State Properties Hospital Total TX 130 20,419 1,873 — 14,482 6,773 43,547 11 FL 105 18,653 8,293 — 3,702 1,940 32,
Slide 17: Same Property Portfolio
Same Property Portfolio As of June 30, 2015, dollars in thousands THREE-MONTH SPP Post-acute/skilled 301 5,388,157 97 85.2% 85.7% (7.7%) (11.0%) 85.2% 83.5% (9.3%) (11.1%) Medical office 205 2,701,687 79 89.8% 91.3% 0.5% 1.2% 89.8% 90.5% (0.5%) 1.2% Total Portfolio 1,010 $ 18,921,346 86 (1.0%) (0.7%
Slide 18: Expirations and Maturities
Expirations and Maturities As of June 30, 2015, dollars in thousands ANNUALIZED REVENUES - LEASE EXPIRATIONS(1) Senior Housing (3) Post-Acute/ Skilled Life Science Medical Office Year Total % of Total Hospital 2016 62,049 4 13,140 — 10,221 38,688 — 2018 136,513 8 49,975 1,168 37,904 47,466 — 2020 14
Slide 19: Senior Housing
Senior Housing As of and for the quarter ended June 30, 2015, dollars in thousands INVESTMENTS Property Count Cash NOI Occupancy % EBITDARM CFC EBITDAR CFC Property Portfolio Investment Units Assisted living 252 $ 3,282,761 $ 65,289 18,565 88.4 1.29x 1.09x CCRCs 11 521,978 12,032 3,091 86.6 1.27x 1.
Slide 20: Senior Housing Leased and Debt Investment Relationships
Senior Housing Leased and Debt Investment Relationships As of and for the quarter ended June 30, 2015, dollars in thousands Leased Portfolio(1) Properties Cash NOI Sunrise Senior Living 1,333,158 22,266 22,530 48 98 5,557 88.4 1.44x 1.16x Harbor Retirement Associates 211,699 4,548 4,421 14 100 1,346
Slide 21: Senior Housing Operating Portfolio
Senior Housing Operating Portfolio As of and for the quarter ended June 30, 2015, dollars in thousands, except REVPOR OPERATING PORTFOLIO METRICS(1) % of total NOI 3-Month Occupancy % Market Investment Cash NOI IL Units AL Units REVPOR Denver, CO 282,872 48 0.2 586 283 — — Miami, FL 185,472 2,595 8.
Slide 22: Senior Housing Operating Portfolio Trend
Senior Housing Operating Portfolio Trend Dollars in thousands, except REVPOR TOTAL OPERATING PORTFOLIO 3Q14(1) 2Q15(2) 2Q14 4Q14 1Q15 Units 4,615 9,869 9,869 10,053 15,253 REVPOR $ 3,090 $ 4,038 $ 4,048 $ 4,058 $ 4,067 Total revenues $ 37,930 $ 62,182 $ 103,430 $ 105,013 $ 106,826 $ 14,053 $ 20,088
Slide 23: Senior Housing Same Property Portfolio
Senior Housing Same Property Portfolio Dollars in thousands 2Q14 3Q14 4Q14 1Q15 2Q15 Investment $ 6,594,707 $ 6,605,768 $ 6,624,318 $6,697,839 $ 6,711,757 3-month Occupancy % 87.5 87.4 88.0 88.1 87.3 EBITDAR CFC(1) 1.13x 1.12x 1.12x 1.10x 1.10x 24 Total revenues $ 162,444 $ 162,469 $ 166,735 $ 162,9
Slide 24: Post-Acute/Skilled
Post-Acute/Skilled Dollars in thousands SAME PROPERTY PORTFOLIO 2Q14 3Q14 4Q14 1Q15 2Q15 Investment $ 5,813,147 $ 5,844,587 $ 5,875,526 $ 5,357,048 $ 5,388,157 3-month Occupancy % 85.7 84.3 83.2 83.5 85.2 Total revenues $ 138,197 $ 139,087 $ 139,790 $ 140,576 $ 127,561 26 $ 138,122 $ 139,010 $ 139,8
Slide 25: HCR ManorCare Portfolio Summary
Post-Acute/Skilled HCR ManorCare Portfolio Summary As of and for the quarter ended June 30, 2015, dollars in thousands HCP INVESTMENT IN HCR MANORCARE Property Count Cash NOI Occupancy % NOI(1) Investment Capacity Post-acute/skilled 267 5,175,917 119,787 101,120 34,364 Beds 83.9 For the trailing twe
Slide 26: Life Science
Life Science As of and for the quarter ended June 30, 2015, dollars and square feet in thousands INVESTMENTS Property Count Cash NOI Square Feet Occupancy % Leased Properties Investment San Diego 24 676,288 10,825 1,789 95.2 112 $ 3,686,525 $ 65,430 7,379 97.8 SAME PROPERTY PORTFOLIO 28 2Q14 3Q14 4Q
Slide 27: Life Science: Lease Expirations and Leasing Activity
Life Science Dollars and square feet in thousands, except dollars per square foot SELECTED LEASE EXPIRATION DATA (NEXT 3 YEARS) Total San Francisco San Diego Other 2016 369 5 10,221 4 317 8,655 52 1,566 — — Thereafter 5,881 81 226,883 84 3,830 173,079 1,299 33,646 752 20,158 29 LEASING ACTIVITY Leas
Slide 28: Life Science: Tenant Concentration
Seaport Plaza Redwood City, CA Life Science As of June 30, 2015, dollars and square feet in thousands TENANT CONCENTRATION 30 Genentech 856 12 44,612 16 LinkedIn Corporation 373 5 13,932 5 Google 290 4 9,758 4 Takeda 166 2 7,460 3 ARUP 324 4 5,661 2 7,218 100 $ 271,063 100 Other 3,376 48 101,390 37
Slide 29: Lone Peak Emergency Center, Draper, UT
Lone Peak Emergency Center Draper, UT 31
Slide 30: Medical Office
Medical Office As of and for the quarter ended June 30, 2015, dollars and square feet in thousands INVESTMENTS Healthcare System Affiliated % Property Count Cash NOI Square Feet Occupancy % Leased Properties Investment Off-campus 52 741,020 12,772 3,170 85.6 67.3 32 SAME PROPERTY PORTFOLIO 2Q14 3Q14
Slide 31: Medical Office: Lease Expirations and Leasing Activity
Medical Office Dollars and square feet in thousands, except dollars per square foot SELECTED LEASE EXPIRATION DATA (NEXT 3 YEARS) Total On-Campus Off-Campus 2016 1,718 11 38,688 11 1,522 34,213 196 4,475 Thereafter 10,113 65 219,699 64 8,274 178,518 1,839 41,181 33 LEASING ACTIVITY Leased Square Fee
Slide 32: Hospital
Hospital As of and for the quarter ended June 30, 2015, dollars in thousands INVESTMENTS Occupancy % (1) Property Count Cash NOI EBITDARM CFC EBITDAR CFC Leased Properties Investment Beds Other 11 213,857 5,397 713 61.5 2.52x 2.26x Interest Income Debt Investments Investment Total $ 611,072 $ 20,447
Slide 33: Unconsolidated Joint Ventures
Unconsolidated Joint Ventures As of and for the quarter ended June 30, 2015, dollars and square feet in thousands INVESTMENTS Medical Office (1) Life Science Senior Housing Total Joint venture’s Investment $ 1,169,388 $ 852,615 $ 152,692 $ 164,081 HCP’s net equity investment(2) 133,384 36,952 69,293
Slide 34: Unconsolidated Joint Ventures: Entrance Fee CCRC Portfolio
Unconsolidated Joint Ventures Entrance Fee CCRC Portfolio As of and for the quarter ended June 30, 2015, dollars in thousands except REVPOR CAPITALIZATION PORTFOLIO METRICS Joint venture’s mortgage debt (excludes Entrance Fees) $ 199,109 Units 6,849 HCP’s net equity investment(1) $ 452,283 REVPOR $
Slide 35: Definitions
REPORTING Definitions Adjusted Fixed Charge Coverage* Adjusted EBITDA divided by Fixed Charges. Adjusted Fixed Charge Coverage is a supplemental measure of liquidity and the Company’s ability to meet its interest payments on outstanding debt and pay dividends to its preferred stockholders, if applic
Slide 36: Definitions
REPORTING Definitions Entrance Fees Certain of the Company’s communities have residency agreements which require the resident to pay an upfront entrance fee prior to taking occupancy at the community. For GAAP NOI, net income and FFO, the non-refundable portion of the entrance fee is recorded as def
Slide 37: Definitions
REPORTING Definitions Net Debt* Total Debt less the carrying amount of cash and cash equivalents as reported in the Company’s consolidated financial statements and the Company’s pro rata share of cash and cash equivalents from the Company’s unconsolidated joint ventures. Net Debt to Adjusted EBITDA*
Slide 38: Definitions
REPORTING Definitions Secured Debt Ratio* Total Secured Debt divided by Total Gross Assets. Secured Debt Ratio is a supplemental measure of the Company’s financial position, which enables both management and investors to analyze its leverage and to compare its leverage to that of other companies. Th
Slide 39: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Dollars in thousands EBITDA AND ADJUSTED EBITDA FROM NET INCOME Three Months Ended June 30, 2015 2014 Interest expense 118,632 106,842 Depreciation and amortization of real estate, in-place lease and other intangibles 120,403 113,133 41 HCP’s share of unconsolida
Slide 40: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Dollars in thousands ADJUSTED FIXED CHARGE COVERAGE Three Months Ended June 30, 2015 2014 Interest expense 118,632 106,842 Capitalized interest 2,006 2,858 42 TOTAL GROSS ASSETS June 30, 2015 December 31, 2014 June 30, 2014 Investments in and advances to unconsol
Slide 41: Company Information
COMPANY Information Board of Directors Michael D. McKee Chairman of the Board, HCP, Inc. and Chief Executive Officer, Bentall Kennedy U.S., L.P. James P. Hoffmann Former Partner and Senior Vice President Wellington Management Company Brian G. Cartwright Senior Advisor Patomak Global Partners LLC Lau
Slide 42: Forward Looking Statements & Risk Factors
833 Chestnut St. (MOB) Philadelphia, PA Forward Looking Statements & Risk Factors “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this supplemental report which are not historical facts are forward-looking statements within the meaning
Slide 43: Forward Looking Statements & Risk Factors (Continued)
Physicians Park Nashville, TN Forward Looking Statements & Risk Factors (Continued) interest rates, changes in the Company’s credit ratings, and the value of its common stock, and other conditions that may adversely impact the Company’s ability to fund its obligations or consummate transactions, or
Slide 44: Our Commitment: Strategy, Execution, Results
our commitment 46 STRATEGY EXECUTION RESULTS Corporate Headquarters 1920 Main Street, Suite 1200 Irvine, CA 92614 (949) 407-0700 London Office 24 Berkeley Square London, WIJ 6HE Los Angeles Office 11150 Santa Monica Boulevard, Suite 1600 Los Angeles, CA 90025 Nashville Office 3000 Meridian Boulevard