Slide 1: First Quarter 2014 Supplemental Report
1 1 supplemental Strategy. Execution. Results. report 2014 First Quarter Parker Medical Office Building Parker, Colorado THE FIRST HEALTHCARE REIT THE ONLY REIT IN THE S&P 500® S&P 500 DIVIDEND ARISTOCRATS® IN THE INDEX
Slide 2: Table of Contents
2 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 14 Senior Housing 20 Post-Acute/Skilled 23 Life Science 26 Medical Office 29 Hospital 31 Investment Management Platform 32
Slide 3: This Quarter: Sustainability
THIS QUARTER Sustainability Inline image 1Efficiency HCP’s Skyline Medical Plaza in Nashville, Tennessee received The Outstanding Building of the Year (TOBY) Award in the MOB category at the local level. Received 4 ENERGY STAR certifications this quarter for a total of 134 ENERGY STAR certifications
Slide 4: The Numbers: Summary
THE NUMBERS Summary PORTFOLIO INCOME FROM ASSETS UNDER MANAGEMENT (1) Dollars in thousands, except per share data Hospital5% Post-Acute/Skilled31% SeniorHousing37% MedicalO ice13% LifeScience14% Three Months Ended March 31, 2014 2013 Revenues $ 529,992 $ 511,186 NOI 437,140 425,671 Cash NOI 400,993
Slide 5: Heat Map: Triple-Net Master Lease Profile
HEAT MAP Triple-Net Master Lease Profile(1) 0.4% 0.4% 0.8% 0.7%0.1%0.1%0.4% 1.9% 1.1% 1.5% 0.7% 0.5% 0.9% 1.6% 0.4% 0.7% 0.4%1.5% 1.3% 0.4% 1.0% 0.7%0.9% 0.7% 0.6% 0.2% 0.1% 0.6% 0.4% 0.1% 0.2% 0.4% 6.1% 0.50x0.75x1.00x1.25x1.50x02468101214161820TERM(YEARS TO EXPIRATION) 0.1% 0.8% 0.2% 28.6% (3) 10.
Slide 6: Credit Profile
CREDIT Profile Financial Leverage Adjusted Fixed Charge Coverage 2.9x 2.3x 2.1x 2.3x 2.6x 2.9x 3.1x 3.6x 4.0x 4.1x 0.0x1.0x2.0x3.0x4.0x5.0xPre-CNLAcquisition200620072008200920102011201220131Q 2014 48.7% 58.7% 57.4% 47.6% 43.4% 38.2% 41.0% 40.2% 39.2% 38.5% 0% 20% 40% 60% 80% Pre-CNLAcquisition200620
Slide 7: Credit Profile: Same Property NOI Growth, Assets, Payout, Liquidity
CREDIT Profile Same Property NOI Growth Total Gross Assets (in billions) 2.1% 2.6% 2.0% 1.6% 3.2% 4.8% 4.0% 4.2% 3.1% 4.2% 2.4% 4.6% 4.6% 2.1% (2.8%) (0.6%) 2.7% 3.7% 3.8% (4%) (2%) 0% 2% 4% 6% HCPMajor Property Sectors(1) 2005200620072008200920102011201220131Q 2014(2) $4.7 $10.6 $13.7 $13.2 $13.8 $
Slide 8: Capitalization
Capitalization Dollars and shares in thousands, except price data TOTAL DEBT March 31, 2014 December 31, 2013 March 31, 2013 Bank line of credit $ — $ — $ 14,000 Term loan(1) 228,269 226,858 208,213 Senior unsecured notes 6,912,812 6,963,375 6,563,749 Mortgage debt 1,235,169 1,396,485 1,669,505 Mort
Slide 9: Capitalization: Common Stock and Equivalents
Capitalization In thousands COMMON STOCK AND EQUIVALENTS Shares Outstanding March 31, 2014 Weighted Average Shares Three Months Ended March 31, 2014 Diluted EPS Diluted FFO Diluted FAD Common stock 458,044 457,294 457,294 457,294 Common stock equivalent securities: Restricted stock and units 1,457 1
Slide 10: Indebtedness and Ratios: Debt Maturities
Indebtedness and Ratios As of March 31, 2014, 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) Consolidat
Slide 11: Indebtedness and Ratios
Indebtedness and Ratios March 31, 2014 December 31, 2013 Consolidated Debt/Consolidated Gross Assets 38.4% 39.1% Financial Leverage (Total Debt/Total Gross Assets) 38.5% 39.2% Consolidated Secured Debt/Consolidated Gross Assets 5.6% 6.3% Secured Debt Ratio (Total Secured Debt/Total Gross Assets) 6.2
Slide 12: Investments
Investments For the quarter ended March 31, 2014, dollars and square feet in thousands INVESTMENTS Description Investment in medical office building $ 32,000 Investment in senior housing development(1) 6,655 Total fundings for development, tenant and capital improvements 49,068 Construction loan com
Slide 13: Investments: Development
Investments Development As of March 31, 2014, dollars and square feet in thousands DEVELOPMENT PROJECTS IN PROCESS Name of Project Location Segment Estimated Completion Date Capacity Investment to Date Estimated Total Investment Development: Ridgeview Poway, CA Life science 2Q 2014 115 Sq. Ft. $ 16,
Slide 14: Portfolio Summary
Portfolio Summary As of and for the quarter ended March 31, 2014, 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 $ 6,894,411 $ 136,011 17 4
Slide 15: Portfolio Summary: NOI, Cash NOI and Interest Income
Briargate Medical Office Building Colorado Springs, Colorado Portfolio Summary 15 For the quarter ended March 31, 2014, 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 S
Slide 16: Portfolio Diversification
Portfolio Diversification As of and for the quarter ended March 31, 2014, dollars in thousands CASH NOI BY STATE State Properties Senior Housing Post-Acute/ Skilled Life Science Medical Office Hospital Total % of Total CA 158 $ 14,454 $ 4,688 $ 54,452 $ 3,020 $ 4,775 $ 81,389 20 TX 108 18,283 1,922
Slide 17: Senior Housing
17 Senior Housing Facility Willistown, Pennsylvania
Slide 18: Same Property Portfolio
Same Property Portfolio As of March 31, 2014, 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 1Q14 1Q13 1Q14 4Q13 Senior housing 438 $ 7,590,293 99% 86.8% 86.7% 4.7% 86.8% 86.7%
Slide 19: Portfolio Lease Expirations and Debt Investment Maturities
Portfolio Lease Expirations and Debt Investment Maturities(1) Annualized Revenues at March 31, 2014, dollars in thousands LEASE EXPIRATIONS Year Total % of Total Senior Housing(3) Post-Acute/ Skilled Life Science Medical Office Hospital 2014(2) $ 54,105 3 $ — $ — $ 5,265 $ 48,840 $ — 2015 61,892 4 2
Slide 20: Senior Housing
Senior Housing As of and for the quarter ended March 31, 2014, dollars in thousands INVESTMENTS Property Portfolio Property Count Investment Cash NOI Units Occupancy % EBITDARM CFC EBITDAR CFC Operating Leases: Assisted living 270 $ 3,853,805 $ 77,791 22,599 86.6 1.26x 1.06x Independent living 47 85
Slide 21: Senior Housing: Operator Concentration
Senior Housing As of and for the quarter ended March 31, 2014, 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(2) $ 2,946,148 $ 65,
Slide 22: Senior Housing: Same Property Portfolio
Senior Housing Dollars in thousands SAME PROPERTY PORTFOLIO 1Q13 2Q13 3Q13 4Q13 1Q14 Property count 438 438 438 438 438 Investment $ 7,540,161 $ 7,553,210 $ 7,565,185 $ 7,578,871 $ 7,590,293 Units 44,955 44,968 44,972 45,005 45,002 3-month occupancy % 86.7 86.0 85.5 86.7 86.8 EBITDARM CFC 1.35x 1.34
Slide 23: Post-Acute/Skilled
Post-Acute/Skilled As of and for the quarter ended March 31, 2014, dollars in thousands INVESTMENTS Leased Properties Property Count Investment Cash NOI Beds Occupancy % EBITDARM CFC EBITDAR CFC Operating leases 34 $ 212,088 $ 6,939 3,590 86.6 2.17x 1.70x HCR DFLs 268 5,585,831 111,160 34,929 84.6 N
Slide 24: Post-Acute/Skilled: Same Property Portfolio
Post-Acute/Skilled Dollars in thousands SAME PROPERTY PORTFOLIO 1Q13 2Q13 3Q13 4Q13 1Q14 Property count 302 302 302 302 302 Investment $ 5,661,676 $ 5,693,256 $ 5,724,132 $ 5,755,824 $ 5,789,464 Beds 38,442 38,354 38,503 38,538 38,519 3-month occupancy % 85.6 86.8 84.6 83.9 83.9 NOI: Total revenues
Slide 25: HCR ManorCare Portfolio Summary
HCR ManorCare Portfolio Summary Post-Acute/Skilled As of and for the quarter ended March 31, 2014, dollars in thousands HCP INVESTMENT IN HCR MANORCARE Property Count Investment(1) NOI(2) Cash NOI Occupancy % Assisted living 66 $ 867,229 $ 18,338 $ 15,379 82.4 Post-acute/skilled 268 5,585,831 130,02
Slide 26: Life Science
Life Science As of and for the quarter ended March 31, 2014, dollars and square feet in thousands INVESTMENTS Leased Properties Property Count Investment Cash NOI Square Feet Occupancy % San Francisco 76 $ 2,679,922 $ 43,945 4,686 90.4 San Diego 22 605,857 10,507 1,580 91.5 Other 13 186,639 4,377 80
Slide 27: Life Science: Lease Expiration 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 Year Square Feet % Annualized Revenues % Square Feet Annualized Revenues Square Feet Annualized Revenues Square Feet Annualized Revenues
Slide 28: Life Science: Tenant Concentration
Shoreline Life Science Building Mountain View, California Life Science As of March 31, 2014, dollars and square feet in thousands TENANT CONCENTRATION 28 Square Feet Annualized Revenues Amount % of Total Amount % of Total Amgen 684 11 $ 43,434 18 Genentech 856 13 41,758 17 Rigel Pharmaceuticals 147
Slide 29: Medical Office
Medical Office As of and for the quarter ended March 31, 2014, dollars and square feet in thousands INVESTMENTS Leased Properties Property Count Investment Cash NOI Square Feet Occupancy % Healthcare System Affiliated % On-campus 160 $ 2,177,235 $ 43,827 11,858 91.4 100.0 Off-campus 47 505,883 9,202
Slide 30: Medical Office: Lease Expiration 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 Year Square Feet % Annualized Revenues % Square Feet Annualized Revenues Square Feet Annualized Revenues 2014(1) 2,096 16 $ 48,840 17 1,836 $ 4
Slide 31: Hospital
Hospital As of and for the quarter ended March 31, 2014, dollars in thousands INVESTMENTS Leased Properties Property Count Investment Cash NOI Beds Occupancy % (1) EBITDARM CFC (1) EBITDAR CFC (1) Acute care 5 $ 379,860 $ 14,475 1,508 48.0 6.51x 6.05x Other 11 212,500 6,186 713 60.0 4.09x 3.79x 16 $
Slide 32: Investment Management Platform
Investment Management Platform As of and for the quarter ended March 31, 2014, dollars and square feet in thousands INVESTMENTS Total Medical Office (1) Life Science HCP’s ownership percentage 20% - 30% 50% - 63% Joint venture’s investment $ 963,860 $ 818,014 $ 145,846 Joint venture’s mortgage debt
Slide 33: Definitions and Reconciliations
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 34: Definitions
analyze the Company’s ability to meet its interest payments on outstanding debt and to make preferred dividend payments. EBITDA and Adjusted EBITDA do not reflect the Company’s historical cash expenditures or future cash requirements for capital expenditures or contractual commitments. Facility EBIT
Slide 35: Definitions: Investment Management Platform, Net Debt
Investment Management Platform (“IMP”) Includes the following unconsolidated joint ventures: (i) four life science properties in three joint ventures in which the Company’s interests range from 50%-63%, (ii) HCP Ventures III, a medical office joint venture in which the Company owns an effective inte
Slide 36: Definitions: Stabilization, SPP, Secured Debt Ratio
developments, including redevelopments, are considered stabilized at the earlier of lease-up or 24 months from the date the property is placed in service. SPP NOI excludes certain non-property specific operating expenses that are allocated to each operating segment on a consolidated basis. Secured D
Slide 37: Reconciliations of Non-GAAP Measures: EBITDA
Reconciliations of Non-GAAP Measures Dollars in thousands EBITDA AND ADJUSTED EBITDA FROM NET INCOME Three Months Ended March 31, 2014 2013 Net income $ 263,623 $ 233,784 Interest expense: Continuing operations 106,638 109,110 Discontinued operations — 241 Income taxes: Continuing operations 1,446 9
Slide 38: Reconciliations of Non-GAAP Measures: Fixed Charge Coverage
Reconciliations of Non-GAAP Measures Dollars in thousands ADJUSTED FIXED CHARGE COVERAGE Three Months Ended March 31, 2014 2013 Adjusted EBITDA $ 455,914 $ 453,527 Interest expense: Continuing operations 106,638 109,110 Discontinued operations — 241 HCP’s share of IMP interest expense 1,563 1,583 Ca
Slide 39: 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. Brian G. Cartwright Senior Advisor at Patomak Global Partners LLC and Scholar In Residence at the Marshall School of Business USC Christine N. Garvey Forme
Slide 40: Forward Looking Statements & Risk Factors
Hyde Park Senior Housing Facility Tampa, Florida 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 withi
Slide 41: 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 42: Our Commitment: Strategy, Execution, Results
our commitment STRATEGY EXECUTION RESULTS We are relocating our Corporate Headquarters effective May 12, 2014 to: 1920 Main Street Suite 1200 Irvine, CA 92614 (949) 407-0700 Corporate Headquarters 3760 Kilroy Airport Way, Suite 300 Long Beach, CA 90806-2473 (562) 733-5100 San Francisco Office 400 Oy