Slide 1: Fourth Quarter 2013 Supplemental Report
1 supplementalStrategy. Execution. Results. report2013Fourth Quarter INDEX DIVIDEND ARISTOCRATSTHE ONLY REIT IN THE S&P 500S&P 500THE FIRST HEALTHCARE REIT IN THE Soledad Life Science Building San Diego, California
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 Consolidated 15 Senior Housing 21 Post-Acute/Skilled 24 Life Science 27 Medical Office 30 Hospital 32 Investment Management Platform 33 Defini
Slide 3: Sustainability
THIS QUARTER Sustainability Leadership Efficiency Received the Healthcare Leader in the Light Award by NAREIT for demonstrating superior and sustainable energy use practices for the second consecutive year. HCP has received NAREIT’s Leader in the Light Award six of the past seven years. Received 19
Slide 4: Summary
THE NUMBERS Summary PORTFOLIO INCOME FROM ASSETS UNDER MANAGEMENT (1) Dollars in thousands, except per share data Hospital5% Post-Acute/Skilled31% SeniorHousing37% MedicalOffice13% LifeScience14% Three Months Ended December 31, 2013 2012 Revenues $ 530,297 $ 503,233 NOI 436,016 417,252 Cash NOI 404,
Slide 5: Heat Map - Triple-Net Master Lease Profile
HEAT MAP Triple-Net Master Lease Profile(1) 0.4% 0.4% 0.9% 0.7%0.1%0.1%0.1%0.4% 1.9% 1.1% 1.6% 0.7% 0.5% 0.9% 1.6% 0.4% 0.7% 0.5% 1.4% 1.3% 0.4% 0.9% 0.7% 0.8%0.7% 0.6% 0.2% 0.1% 0.6% 0.4% 0.2% 0.4% 6.2% 0.50x0.75x1.00x1.25x1.50x02468101214161820TERM(YEARS TO EXPIRATION) 0.1% 0.8% 0.2% 29.0% (3) 10.
Slide 6: Credit Profile
CREDIT Profile Adjusted Fixed Charge Coverage Financial Leverage 48.7% 58.7%57.4% 47.6% 43.4% 38.2%41.0%40.2%39.2% 0% 20% 40% 60% 80% Pre-CNLAcquisition20062007200820092010201120122013(1) 2.9x 2.3x 2.1x 2.3x 2.6x 2.9x 3.1x 3.6x 4.0x 0.0x1.0x2.0x3.0x4.0x5.0xPre-CNLAcquisition2006200720082009201020112
Slide 7: Credit Profile
CREDIT Profile Same Property NOI Growth Total Gross Assets (in billions) $4.7$10.6$13.7$13.2$13.8$14.2$19.2$22.0$22.5$0$5$10$15$20$25Pre-CNLAcquisition20062007200820092010201120122013(3) 2.1% 2.6% 2.0% 1.6% 3.2% 4.8% 4.0%4.2% 3.1% 2.4% 4.6%4.6% 2.1% (2.8%) (0.6%) 2.7% 3.7% (4%) (2%) 0% 2% 4% 6% HCPM
Slide 8: Capitalization
Capitalization Dollars and shares in thousands, except price data TOTAL DEBT December 31, 2013 December 31, 2012 Term loan(1) $ 226,858 $ 222,694 Senior unsecured notes 6,963,375 6,712,624 Mortgage debt 1,396,485 1,665,210 Mortgage debt on assets held for sale — 11,334 Other debt 74,909 81,958 Conso
Slide 9: Capitalization
Capitalization In thousands COMMON STOCK AND EQUIVALENTS Shares Outstanding December 31, 2013 Weighted Average Shares Three Months Ended December 31, 2013 Weighted Average Shares Year Ended December 31, 2013 Diluted EPS Diluted FFO Diluted FAD Diluted EPS Diluted FFO Diluted FAD Common stock 456,961
Slide 10: Indebtedness and Ratios
Indebtedness and Ratios As of December 31, 2013, dollars in thousands DEBT MATURITIES AND SCHEDULED PRINCIPAL REPAYMENTS (AMORTIZATION) Senior Unsecured Notes Mortgage Debt HCP’s Share of Unconsolidated Debt Total Debt Bank Line of Credit Term Loan(1) Amounts Rates %(2) Amounts(3) Rates %(2) Consoli
Slide 11: Indebtedness and Ratios
Indebtedness and Ratios RATIOS December 31, 2013 December 31, 2012 Consolidated Debt/Consolidated Gross Assets 39.1% 40.1% Financial Leverage (Total Debt/Total Gross Assets) 39.2% 40.2% Consolidated Secured Debt/Consolidated Gross Assets 6.3% 7.7% Secured Debt Ratio (Total Secured Debt/Total Gross A
Slide 12: Investments
Investments Dollars in thousands INVESTMENTS December 31, 2013 Description Three Months Ended Year Ended Acquisitions of real estate and land $ — $ 87,681 Loan investments(1) — 279,500 Total fundings for development, tenant and capital improvements 50,558 173,280 Marketable debt securities — 16,706
Slide 13: Investments: Acquisitions and Dispositions
Investments Acquisitions and Dispositions Dollars and square feet in thousands ACQUISITIONS OF REAL ESTATE AND LAND FOR THE YEAR ENDED DECEMBER 31, 2013 Location Date Capacity Property Count Segment Investment Anderson, IN March 8, 2013 N/A Post-acute/skilled $ 408 Klamath Falls, OR March 14, 2013 1
Slide 14: Investments: Development
Investments Development As of December 31, 2013, dollars and square feet in thousands DEVELOPMENT PROJECTS IN PROCESS Name of Project Location Segment Estimated Completion Date Estimated Rentable Sq. Ft. Investment to Date Estimated Total Investment Development: Ridgeview Poway, CA Life science 2Q 2
Slide 15: Portfolio Summary
Portfolio Summary As of and for the quarter ended December 31, 2013, dollars and square feet in thousands PORTFOLIO SUMMARY BY INVESTMENT PRODUCT Property Portfolio Property Count Investment Cash NOI Age (Years) Capacity Occupancy % EBITDARM CFC EBITDAR CFC Senior housing 424 $ 6,886,537 $ 141,752 1
Slide 16: Portfolio Summary
Shoreline Recent Development Mountain View, California Portfolio Summary 16 For the quarter ended December 31, 2013, dollars in thousands PORTFOLIO NOI, CASH NOI AND INTEREST INCOME Segment Rental and RIDEA Revenues Operating Expenses NOI(2) Cash NOI Interest Income Cash NOI and Interest Income Seni
Slide 17: Portfolio Diversification
Portfolio Diversification As of and for the quarter ended December 31, 2013, dollars in thousands CASH NOI BY STATE State Properties Senior Housing Post-Acute/ Skilled Life Science Medical Office Hospital Total % of Total CA 160 $ 18,976 $ 4,646 $ 53,772 $ 3,338 $ 4,413 $ 85,145 21 TX 108 18,664 1,9
Slide 18: Oyster Point I Life Science Building
18 Oyster Point I Life Science Building South San Francisco, California
Slide 19: Same Property Portfolio
Same Property Portfolio Dollars in thousands THREE-MONTH SPP Year-Over-Year Sequential Property Count Investment Percent of Property Portfolio Occupancy Cash NOI Growth Occupancy Cash NOI Growth 4Q13 4Q12 4Q13 3Q13 Senior housing 310 $ 5,880,765 76.8% 86.2% 86.2% 4.9% 86.2% 85.5% 4.3% Post-acute/ski
Slide 20: Portfolio Lease Expirations and Debt Investment Maturities
Portfolio Lease Expirations and Debt Investment Maturities(1) Annualized Revenues at December 31, 2013, dollars in thousands LEASE EXPIRATIONS Year Total % of Total Senior Housing Post-Acute/ Skilled Life Science Medical Office Hospital (3) 2014(2) $ 66,406 4 $ — $ — $ 9,489 $ 56,917 $ — 2015 63,042
Slide 21: Senior Housing
Senior Housing As of and for the quarter ended December 31, 2013, dollars in thousands INVESTMENTS Property Portfolio Property Count Investment Cash NOI Units Occupancy % EBITDARM CFC EBITDAR CFC Operating Leases: Assisted living 270 $ 3,852,277 $ 81,232 22,600 86.8 1.27x 1.07x Independent living 47
Slide 22: Senior Housing: Operator Concentration
Senior Housing As of and for the quarter ended December 31, 2013, dollars in thousands OPERATOR CONCENTRATION Property Portfolio(1) Operator Investment NOI and Interest Income Cash NOI and Interest Income Properties Occupancy % EBITDARM CFC EBITDAR CFC Count % Pooled Units Emeritus Corporation $ 2,9
Slide 23: Senior Housing: Same Property Portfolio
Senior Housing Dollars in thousands SAME PROPERTY PORTFOLIO 4Q12 1Q13 2Q13 3Q13 4Q13 Property count 310 310 310 310 310 Investment 5,821,114 5,842,054 5,855,104 5,867,079 5,880,765 Units 35,018 35,023 35,051 35,040 35,077 3-Month occupancy % 86.2 86.7 86.0 85.5 86.2 EBITDARM CFC 1.34x 1.35x 1.34x 1.
Slide 24: Post-Acute/Skilled
Post-Acute/Skilled As of and for the quarter ended December 31, 2013, dollars in thousands INVESTMENTS Leased Properties Property Count Investment Cash NOI Beds Occupancy % EBITDARM CFC EBITDAR CFC Operating leases 34 $ 202,523 $ 6,755 3,618 86.3 2.22x 1.72x HCR DFLs 268 5,553,301 111,163 34,948 85.
Slide 25: Post-Acute/Skilled: Same Property Portfolio
Post-Acute/Skilled Dollars in thousands SAME PROPERTY PORTFOLIO 4Q12 1Q13 2Q13 3Q13 4Q13 Property count 302 302 302 302 302 Investment 5,627,622 5,661,676 5,693,256 5,724,132 5,755,824 Beds 38,417 38,464 38,382 38,531 38,566 3-Month occupancy % 85.6 85.5 86.7 84.5 83.8 NOI: Total revenues 133,644 13
Slide 26: HCR ManorCare Portfolio Summary
Post-Acute/Skilled HCR ManorCare Portfolio Summary As of and for the quarter ended December 31, 2013, dollars in thousands HCP INVESTMENT IN HCR MANORCARE Property Count Investment(1) NOI(2) Cash NOI Occupancy % Assisted living 66 $ 862,307 $ 18,240 $ 15,386 82.9 Post-acute/skilled 268 5,553,301 129
Slide 27: Life Science
Life Science As of and for the quarter ended December 31, 2013, dollars and square feet in thousands INVESTMENTS Leased Properties Property Count Investment Cash NOI Square Feet Occupancy % San Francisco 78 $ 2,674,377 $ 43,638 4,745 91.0 San Diego 22 604,632 10,134 1,581 93.5 Other 11 160,310 3,746
Slide 28: Life Science: Lease Expirations and Leasing Activity
Life Science Dollars and square feet in thousands, except dollars per square foot SELECTED LEASE EXPIRATIONS DATA (NEXT 3 YEARS) Total San Francisco San Diego Other Year Square Feet % Annualized Revenues % Square Feet Annualized Revenues Square Feet Annualized Revenues Square Feet Annualized Revenue
Slide 29: Life Science: Tenant Concentration
East Grand LIfe Science Building South San Francisco, California Life Science As of December 31, 2013, dollars and square feet in thousands TENANT CONCENTRATION 29 Square Feet Annualized Revenues Amount % of Total Amount % of Total Amgen 684 10 $ 43,130 18 Genentech 794 12 40,198 17 Rigel Pharmaceut
Slide 30: Medical Office
Medical Office As of and for the quarter ended December 31, 2013, dollars and square feet in thousands INVESTMENTS Leased Properties Property Count Investment Cash NOI Square Feet Occupancy % Healthcare System Affiliated % On-Campus 159 $ 2,159,180 $ 44,140 11,806 92.3 100.0 Off-Campus 47 503,921 9,
Slide 31: Medical Office: Lease Expirations and Leasing Activity
Medical Office Dollars and square feet in thousands, except dollars per square foot SELECTED LEASE EXPIRATIONS DATA (NEXT 3 YEARS) Total On-Campus Off-Campus Year Square Feet % Annualized Revenues % Square Feet Annualized Revenues Square Feet Annualized Revenues 2014(1) 2,516 19 $ 56,917 20 2,204 $
Slide 32: Hospital
Hospital As of and for the quarter ended December 31, 2013, dollars in thousands INVESTMENTS (1) (1) (1) Leased Properties Property Count Investment Cash NOI Beds Occupancy % EBITDARM CFC EBITDAR CFC Acute care 5 $ 379,860 $ 14,323 1,508 49.1 6.72x 6.26x Other 11 212,500 5,765 713 64.1 2.99x 2.53x 1
Slide 33: Investment Management Platform
Investment Management Platform As of and for the quarter ended December 31, 2013, dollars and square feet in thousands INVESTMENTS Total Medical Office Life Science (1) HCP’s Ownership Percentage 20% - 30% 50% - 63% Joint Venture’s Investment 962,513 817,103 145,410 Joint Venture’s Mortgage Debt 467
Slide 34: Definitions: Adjusted Fixed Charge Coverage
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. The Company’s various debt agre
Slide 35: Definitions: EBITDA and Adjusted EBITDA
permits investors to view income from the Company’s operations on an unleveraged basis before the effects of taxes, non-cash depreciation and amortization, impairments, impairment recoveries, and gains or losses from real estate dispositions. By excluding interest expense, EBITDA and Adjusted EBITDA
Slide 36: Definitions: FFO Payout Ratio and Others
REPORTING FFO Payout Ratio* Dividends declared per common share divided by diluted FFO per common share for a given period. The FFO Payout Ratio is a supplemental measure of the portion of FFO being declared as dividends to common stockholders. FFO Payout Ratio is subject to the same limitations and
Slide 37: Definitions: Redevelopment and Same Property Portfolio
Redevelopment Properties that require significant capital expenditures (generally more than 25% of acquisition cost or existing basis) to achieve stabilization or to change the use of the properties. Rental and RIDEA Revenues Rental and related revenues, tenant recoveries, resident fees and services
Slide 38: Non-GAAP Supplemental Measures
38 *Non-GAAP Supplemental Measures Adjusted Fixed Charge Coverage, CFC, DSC, EBITDA, Adjusted EBITDA, Facility EBITDA, Facility EBITDAR, Facility EBITDARM, Financial Leverage, Fixed Charges, FAD, FAD Payout Ratio, FFO, FFO Payout Ratio, NOI, cash NOI and Secured Debt Ratio are supplemental non- GAAP
Slide 39: Reconciliations of Non-GAAP Measures: Adjusted Fixed Charge Coverage
Reconciliations of Non-GAAP Measures Dollars in thousands ADJUSTED FIXED CHARGE COVERAGE Three Months Ended December 31, Year Ended December 31, 2013 2012 2013 2012 Adjusted EBITDA $ 456,690 $ 431,690 $ 1,800,454 $ 1,627,374 Interest expense: Continuing operations $ 109,603 $ 107,015 $ 435,252 $ 416
Slide 40: Reconciliations of Non-GAAP Measures: Total Gross Assets
Reconciliations of Non-GAAP Measures Dollars in thousands TOTAL GROSS ASSETS December 31, 2013 December 31, 2012 Consolidated total assets $ 20,075,870 $ 19,915,555 Investments in and advances to unconsolidated joint ventures (196,576 (212,213 Accumulated depreciation and amortization 2,257,187 1,93
Slide 41: Reconciliations of Non-GAAP Measures: NOI and Cash NOI
Reconciliations of Non-GAAP Measures Dollars in thousands NOI AND CASH NOI Three Months Ended December 31, Year Ended December 31, 2013 2012 2013 2012 Net income $ 297,639 $ 246,260 $ 985,006 $ 846,842 Interest income (17,548 (12,223 (86,159 (24,536 Investment management fee income (441 (472 (1,847
Slide 42: 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. Lauralee E. Martin President and Chief Executive Officer HCP, Inc. Brian G. Cartwright Senior Advisor at Patomak Global Partners LLC and Scholar In Residen
Slide 43: Forward Looking Statements & Risk Factors
Forward Looking Statements & Risk Factors “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this supplemental information which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Ac
Slide 44: Forward Looking Statements & Risk Factors (continued)
prices and the competition for the acquisition and financing of those properties; the financial, legal, regulatory and reputational difficulties of significant operators of the Company’s properties; the risk that the Company may not be able to achieve the benefits of investments within expected time
Slide 45: Corporate Headquarters and Offices
commitment our Corporate Headquarters3760 Kilroy Airport Way, Suite 300Long Beach, CA 90806 2473(562) 733 5100Nashville O ice 3000 Meridian Boulevard, Suite 200Franklin, TN 37067 6388San Francisco O ice400 Oyster Point Boulevard, Suite 409 South San Francisco, CA 94080 1920EXECUTIONSTRATEGYRESULTS