Slide 1: First Quarter 2015 Supplemental Report
1 1 supplemental Strategy. Execution. Results. report 2015 first quarter Rendering of The Cove at Oyster Point Development South San Francisco, CA THE ONLY REIT IN THE S&P 500® THE FIRST HEALTHCARE REIT DIVIDEND ARISTOCRATS® S&P 500 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 15 Senior Housing 20 Post-Acute/Skilled 24 Life Science 27 Medical Office 30 Hospital 32 Unconsolidated Joint Ventures 33
Slide 3: Sustainability
THIS QUARTER Sustainability 30 Our Oyster Point life science campus located in South San Francisco was named one of the Best Workplaces for Commuters for the 3rd consecutive year for providing commuter benefits that promote energy conservation. YEARS STRONG Oyster Point Life Science Campus South San
Slide 4: Summary
THE NUMBERS Summary INCOME FROM INVESTMENT PORTFOLIO (1) Dollars in thousands, except per share data Hospital5% Post-Acute/Skilled31% SeniorHousing37% MedicalO ice13% LifeScience14% Three Months Ended March 31, 2015 2014 Revenues $ 610,791 $ 529,992 NOI 445,038 437,140 Cash NOI 415,853 400,993 Year-
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%0.5% 8.7% 0.5% 0.5% 1.2% 0.4% 0.7% 0.4% 1.5% 1.3% 0.4% 1.0% 0.7% 0.9% 0.7% 0.6% 0.2% 0.4% 0.1% 0.6% 0.3% 0.1% 0.2% 0.4% 0.50x0.75x1.00x1.25x1.50x02468101214161820TERM(YEARS TO EXPIRATION) 0.8% 0.2% 0.1% 25.8% (3) 12.00x25EBITDAR
Slide 6: Credit Profile
6 48.7% 58.7% 57.4% 47.6% 43.4% 38.2% 41.0% 40.2% 39.2% 41.5% 43.0% 0% 20% 40% 60% 80% Pre-CNL Acquisition 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q 2015 11.5% 21.2% 11.8% 15.1% 15.8% 14.1% 10.0% 8.3% 6.8% 5.0% 5.3% 0% 5% 10% 15% 20% 25% Pre-CNL Acquisition 2006 2007 2008 2009 2010 2011 2012 2
Slide 7: Credit Profile
7 83% 87% 80% 77% 86% 83% 71% 72% 70% 72% 72% 50% 60% 70% 80% 90% Pre-CNL Acquisition 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q 2015 $4.7 $10.6 $13.7 $13.2 $13.8 $14.2 $19.2 $22.0 $22.5 $24.5 $24.3 $0 $5 $10 $15 $20 $25 $30 Pre-CNL Acquisition 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q 20
Slide 8: Capitalization
Capitalization Dollars and shares in thousands, except price data TOTAL DEBT March 31, 2015 December 31, 2014 March 31, 2014 Bank line of credit(1) $ 358,555 $ 838,516 $ — Term loans(2) 530,038 213,610 228,269 Senior unsecured notes 8,022,533 7,626,194 6,912,812 Mortgage debt 979,890 984,431 1,235,1
Slide 9: Capitalization: Common Stock and Equivalents
Capitalization Common Stock and Equivalents In thousands Shares Outstanding March 31, 2015 Weighted Average Shares Three Months Ended March 31, 2015 Diluted EPS Diluted FFO Diluted FAD Common stock 461,584 460,880 460,880 460,880 Common stock equivalent securities: Restricted stock and units 1,043 —
Slide 10: Indebtedness and Ratios: Debt Maturities
Indebtedness and Ratios As of March 31, 2015, 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 (1) Term Loan(2) Amounts Rates %(3) Amounts(4) Rates %(3) Consol
Slide 11: Indebtedness and Ratios
Indebtedness and Ratios March 31, 2015 December 31, 2014 Consolidated Debt/Consolidated Gross Assets 43.3% 41.8% Financial Leverage (Total Debt/Total Gross Assets) 43.0% 41.5% Consolidated Secured Debt/Consolidated Gross Assets 4.2% 4.2% Secured Debt Ratio (Total Secured Debt/Total Gross Assets) 5.3
Slide 12: Investments
Investments For the quarter ended March 31, 2015, dollars in thousands INVESTMENTS Description Investment in MBK joint venture(1) $ 63,200 United Kingdom debt investment(2) 164,272 Investment in other real estate assets 18,086 Total fundings for development, tenant and capital improvements 64,793 Co
Slide 13: Investments: Real Estate
Investments Real Estate For the quarter ended March 31, 2015, dollars and square feet in thousands INVESTMENTS AND DISPOSITIONS Location Date Capacity Property Count Segment Investment/ Net Sales Price Investment: Houston, TX(1) March 19, 2015 87 Units 1 Senior housing $ 17,906 Investment in Unconso
Slide 14: Investments: Development
Investments Development As of March 31, 2015, 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: Deer Park Deer Park, IL Senior housing 4Q 2015 180 Units $
Slide 15: Portfolio Summary
Portfolio Summary As of and for the quarter ended March 31, 2015, dollars and square feet in thousands Property Portfolio Property Count Investment Cash NOI Age (Years) Capacity Occupancy % EBITDARM CFC EBITDAR CFC Senior housing 388 $ 6,149,174 $ 120,057 19 34,892 Units 87.5 1.32x 1.11x Senior hous
Slide 16: Portfolio Summary: NOI, Cash NOI and Interest Income
Freedom Village at Brandywine West Brandywine, PA Portfolio Summary 16 For the quarter ended March 31, 2015, dollars in thousands NOI, CASH NOI AND INTEREST INCOME Segment Rental and RIDEA Revenues Operating Expenses NOI(2) Cash NOI Interest Income Cash NOI and Interest Income Senior housing(1) $ 23
Slide 17: Portfolio Diversification
17 Portfolio Diversification State Properties Senior Housing Post-Acute/ Skilled Life Science Medical Office Hospital Total % of Total CA 159 $ 16,945 $ 4,924 $ 58,162 $ 2,704 $ 4,906 $ 87,641 21 TX 110 19,776 1,997 — 14,318 7,449 43,540 10 FL 94 17,852 11,340 — 3,814 1,931 34,937 8 PA 56 4,331 26,4
Slide 18: Same Property Portfolio
Same Property Portfolio As of March 31, 2015, dollars in thousands THREE-MONTH SPP Year-Over-Year Sequential Property Count Investment Percent of Property Portfolio Occupancy NOI Growth Occupancy NOI Growth 1Q15 1Q14 GAAP Cash 1Q15 4Q14 GAAP Cash Senior housing 383 $ 6,721,897 86 88.1% 87.8% 0.3% 4.
Slide 19: Senior Housing
Senior Housing As of and for the quarter ended March 31, 2015, dollars in thousands INVESTMENTS Property Portfolio Property Count Investment Cash NOI Units Occupancy % EBITDARM CFC EBITDAR CFC Operating Leases: Assisted living 240 $ 3,214,224 $ 64,624 18,140 88.5 1.31x 1.11x Independent living 44 83
Slide 20: Senior Housing Operator Concentration
Senior Housing Operator Concentration As of and for the quarter ended March 31, 2015, dollars in thousands Property Portfolio(1) Operator Investment NOI and Interest Income Cash NOI and Interest Income Properties Occupancy % EBITDARM CFC EBITDAR CFC Count % Pooled Units Brookdale $ 4,389,777 $ 91,08
Slide 21: Senior Housing Operating Portfolio
Senior Housing Operating Portfolio As of and for the quarter ended March 31, 2015, dollars in thousands, except REVPOR NOI DIVERSIFICATION Market Investment(1) Cash NOI(2) % of total NOI IL Units AL Units 3-Month Occupancy % REVPOR Houston, TX $ 298,180 $ 5,130 16.9 1,720 87 89.5 $ 2,327 Chicago, IL
Slide 22: Senior Housing Same Property Portfolio
Senior Housing Same Property Portfolio Dollars in thousands 1Q14 2Q14 3Q14 4Q14 1Q15 Property count 383 383 383 383 383 Investment $ 6,609,369 $ 6,618,765 $ 6,629,826 $ 6,648,376 $ 6,721,897 Units 38,414 38,379 38,374 38,338 38,333 3-month Occupancy % 87.8 87.5 87.3 88.0 88.1 EBITDARM CFC 1.36x 1.35
Slide 23: Post-Acute/Skilled
Post-Acute/Skilled As of and for the quarter ended March 31, 2015, dollars in thousands INVESTMENTS Leased Properties Property Count Investment Cash NOI Beds Occupancy % EBITDARM CFC EBITDAR CFC Operating leases 34 $ 212,240 $ 7,173 3,632 85.5 2.01x 1.54x HCR DFLs 267 5,144,808 114,787 34,457 84.0 N
Slide 24: Post-Acute/Skilled Same Property Portfolio
Post-Acute/Skilled Dollars in thousands SAME PROPERTY PORTFOLIO 1Q14 2Q14 3Q14 4Q14 1Q15 Property count 301 301 301 301 301 Investment $ 5,775,186 $5,804,540 $ 5,835,980 $5,866,919 $5,348,441 Beds 38,334 38,324 38,328 38,309 38,089 3-month Occupancy % 83.9 85.7 84.3 83.2 83.5 NOI: Total revenues $ 1
Slide 25: Post-Acute/Skilled Footnotes
26 Post-Acute/Skilled (1) Assisted living and post-acute/skilled NOI includes reductions of $1.9 million and $13.8 million, respectively, related to HCP’s equity interest in HCR. (2) Private-pay is 33.4% and Medicare is 33.2% of total revenues for the period ending December 31, 2014. Private pay is
Slide 26: Life Science
Life Science As of and for the quarter ended March 31, 2015, dollars and square feet in thousands INVESTMENTS Leased Properties Property Count Investment Cash NOI Square Feet Occupancy % San Francisco 75 $ 2,761,810 $ 47,033 4,677 96.7 San Diego 23 661,636 11,129 1,731 94.7 Other 13 240,045 5,615 91
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 Year Square Feet % Annualized Revenues % Square Feet Annualized Revenues Square Feet Annualized Revenues Square Feet Annualized Revenues
Slide 28: Life Science Tenant Concentration
Rendering of The Cove at Oyster Point Development South San Francisco, CA Life Science 29 As of March 31, 2015, dollars and square feet in thousands TENANT CONCENTRATION Square Feet Annualized Revenues Amount % of Total Amount % of Total Amgen 684 10 $ 44,863 17 Genentech 856 12 44,242 17 Rigel Phar
Slide 29: Medical Office
Medical Office As of and for the quarter ended March 31, 2015, dollars and square feet in thousands INVESTMENTS Leased Properties Property Count Investment Cash NOI Square Feet Occupancy % Healthcare System Affiliated % On-campus 164 $ 2,295,837 $ 45,106 12,104 90.6 100.0 Off-campus 51 734,742 13,08
Slide 30: 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 Year Square Feet % Annualized Revenues % Square Feet Annualized Revenues Square Feet Annualized Revenues 2015(1) 1,953 14 $ 46,605 15 1,594 $ 3
Slide 31: Hospital
Hospital As of and for the quarter ended March 31, 2015, dollars in thousands INVESTMENTS Leased Properties Property Count Investment Cash NOI Beds Occupancy % (1) EBITDARM CFC EBITDAR CFC Acute care 5 $ 380,228 $ 15,263 1,508 49.5 7.03x 6.57x Other 11 213,857 6,194 713 60.7 2.74x 2.48x 16 $ 594,085
Slide 32: Unconsolidated Joint Ventures
33 Unconsolidated Joint Ventures Total Medical Office (1) Life Science Senior Housing (2) HCP’s ownership percentage 20% - 67% 50% - 63% 45% - 72% Joint venture’s Investment $ 1,164,259 $ 848,060 $ 152,214 $ 163,985 Joint venture’s mortgage debt 584,534 463,147 — 121,387 HCP’s net equity investment(
Slide 33: Unconsolidated Joint Ventures: Entrance Fee CCRC Portfolio
Unconsolidated Joint Ventures Entrance Fee CCRC Portfolio As of and for the quarter ended March 31, 2015, dollars in thousands except REVPOR CAPITALIZATION Joint venture’s Investment $ 1,218,535 Joint venture’s mortgage debt (excludes Entrance Fees) $ 200,627 HCP’s equity ownership 49% HCP’s net equ
Slide 34: 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 applicable. The Company’s va
Slide 35: Definitions: Entrance Fees and Facility EBITDA
Entrance Fees Certain of the Company’s communities have residency agreements which require the resident to pay an upfront entrance fee prior to occupying the community. For GAAP NOI, net income and FFO, the non-refundable portion of the entrance fee is recorded as deferred entrance fee revenue and a
Slide 36: Definitions: Net Debt and NOI
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* Net Debt divided by A
Slide 37: Definitions: Secured Debt Ratio and Total Debt
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. The ratio of Consolidate
Slide 38: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Dollars in thousands EBITDA AND ADJUSTED EBITDA FROM NET INCOME Three Months Ended March 31, 2015 2014 Net income $ (237,503) $ 263,623 Interest expense 116,780 106,638 Income taxes: Continuing operations (77) 1,446 Discontinued operations — 5 Depreciation and am
Slide 39: Reconciliations of Non-GAAP Measures
Reconciliations of Non-GAAP Measures Dollars in thousands ADJUSTED FIXED CHARGE COVERAGE Three Months Ended March 31, 2015 2014 Adjusted EBITDA $ 484,517 $ 456,409 Interest expense 116,780 106,638 HCP’s share of unconsolidated JV interest expense(1) 2,557 1,563 Capitalized interest 1,698 3,125 Fixed
Slide 40: 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 Patomak Global Partners LLC Christine N. Garvey Former Global Head of Corporate Real Estate Services, Deutsche Bank AG D
Slide 41: Safe Harbor Statement
“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 of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the S
Slide 42: Forward Looking Statements and Risk Factors
costs, or otherwise affect the operations, of its tenants and operators; volatility or uncertainty in the capital markets, the availability and cost of capital as impacted by interest rates, changes in the Company’s credit ratings, and the value of its common stock, and other conditions that may adv
Slide 43: Our Commitment: Strategy, Execution, Results
our commitment STRATEGY EXECUTION RESULTS Corporate Headquarters 1920 Main Street, Suite 1200 Irvine, CA 92614 (949) 407-0700 Nashville Office 3000 Meridian Boulevard, Suite 200 Franklin, TN 37067 San Francisco Office 950 Tower Lane, Suite 1650 Foster City, CA 94404 Los Angeles Office 11150 Santa Mo