8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

February 10, 2009

Date of Report (Date of earliest event reported)

HCP, Inc.

(Exact name of registrant as specified in its charter)

Maryland	1-08895	33-0091377
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

3760 Kilroy Airport Way

Suite 300

Long Beach, California 90806

(Address of principal executive offices) (Zip Code)

(562) 733-5100

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On February 10, 2009, HCP, Inc. (“HCP”) issued a press release setting forth its financial results for the quarter and year ended December 31, 2008.  The press release referred to a supplemental information package that is available on HCP’s website, free of charge, at www.hcpi.com.  The text of the press release and the supplemental information package are furnished herewith as Exhibits 99.1 and 99.2, respectively, and are specifically incorporated by reference herein.

The information in this Form 8-K and the related information in the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any filing of HCP under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in any such filing.

Item 9.01.	Financial Statements and Exhibits.
(d)	Exhibits.

99.1	Press Release of HCP, Inc., dated February 10, 2009.
99.2	HCP, Inc. Supplemental Information Package for the quarter ended December 31, 2008.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HCP, Inc.
	(Registrant)
Date: February 10, 2009	By:	/s/ Edward J. Henning
	Name:	Edward J. Henning
	Title:	Executive Vice President, General Counsel,
		Chief Administrative Officer and Corporate Secretary

3

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
99.1	Press Release of HCP, Inc., dated February 10, 2009.
99.2	HCP, Inc. Supplemental Information Package for the quarter ended December 31, 2008.

4

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

HCP ANNOUNCES RESULTS FOR QUARTER AND YEAR ENDED DECEMBER 31, 2008

FOURTH QUARTER HIGHLIGHTS

    --  Diluted FFO per share of $0.48, including merger-related charges and impairments of $0.06 per share, of which $0.05 relates to the previously announced portfolio transition to Emeritus; diluted EPS of $0.14 per share

    --  Completed $200 million unsecured term loan

    --  Negotiated early repayment of $120 million of mortgage debt at a discount

FULL YEAR HIGHLIGHTS

    --  Diluted FFO per share of $2.25, representing year-over-year growth of 5%; diluted EPS of $1.79 per share

    --  Raised over $2.4 billion during 2008:

--   $1.0 billion from equity issuances

--   $763 million from debt financings

--   $656 million from asset dispositions

    --  Active asset management program:

--   Repositioned Tenet hospital portfolio

--   Repositioned Lusk life science campus achieving mark-to-market rent improvement

--   Transitioned 11-property senior housing portfolio to Emeritus

    --  HCP added to the S&P 500 Index

LONG BEACH, CA, February 10, 2009 – HCP (the “Company” or “we”) (NYSE:HCP) announced results for the quarter ended December 31, 2008.  Funds from operations (“FFO”) applicable to common shares was $121.5 million, or $0.48 per diluted share, for the quarter ended December 31, 2008, compared to FFO applicable to common shares of $117.2 million, or $0.54 per diluted share, in the year-ago period. FFO applicable to common shares was $538.3 million, or $2.25 per diluted share, for the year ended December 31, 2008, compared to FFO applicable to common shares of $449.1 million, or $2.14 per diluted share, in the year-ago period.

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FFO applicable to common shares for the quarter ended December 31, 2008 includes the impact of $0.07 per diluted share of the following: (i) impairments of $0.06 per share ($0.05 per share relates to the previously announced portfolio transition to Emeritus); (ii) recognized losses on marketable securities and charges related to hedge ineffectiveness of $0.02 per share; and (iii) a gain of $0.01 per share related to the early repayment of $120 million of mortgage debt at a discount. FFO applicable to common shares for the quarter ended December 31, 2007 includes the impact of merger-related charges of $0.01 per diluted share.

FFO applicable to common shares for the year ended December 31, 2008 includes the impact of $0.02 per diluted share of the following: (i) impairments and merger-related charges of $0.13 per share; (ii) recognized losses on marketable securities and charges related to hedge ineffectiveness of $0.04 per share; (iii) lease termination income of $0.07 per share resulting from the early termination of three leases in our life science segment; (iv) a gain of $0.01 per share related to the early repayment of $120 million of mortgage debt at a discount; and (v) income of $0.11 per share related to the settlement of various disputes with Tenet Healthcare Corporation. FFO applicable to common shares for the year ended December 31, 2007 includes the impact of $0.01 per diluted share of the following: (i) merger-related charges of $0.10 per share; (ii) straight-line rental income of $0.07 per share, resulting from our change in estimate related to the collectibility of straight-line rental income; and (iii) income of $0.02 per share related to the exercise of purchase options by two direct financing lease tenants. FFO is a supplemental non-GAAP financial measure that the Company believes is helpful in evaluating the operating performance of real estate investment trusts.

Net income applicable to common shares for the quarter ended December 31, 2008 was $35.1 million, or $0.14 per diluted share, compared to net income applicable to common shares of $45.0 million, or $0.21 per diluted share, in the year-ago period. Net income applicable to common shares for the year ended December 31, 2008 was $427.4 million, or $1.79 per diluted share, compared to net income applicable to common shares of $567.9 million, or $2.71 per diluted share, in the year-ago period. Net income applicable to common shares for the year ended December 31, 2008 includes gain on sales of real estate of $228.6 million, compared to gain on sales of real estate and real estate interest of $413.7 million in the year-ago period.

INVESTMENT TRANSACTIONS

During the quarter ended December 31, 2008, we made investments aggregating $35 million through the purchase of debt securities and funding of construction and other capital projects, and we sold four properties with an aggregate value of $13 million.

During the year ended December 31, 2008, we made investments aggregating $228 million though the acquisition of a senior housing facility for $11 million, purchase of debt securities for $30 million, purchase of a joint venture interest valued at $29 million and funding of $158 million for construction and other capital projects primarily in our life science segment. During the year ended December 31, 2008, we sold $656 million of investments from the following segments: (i) $438 million of hospitals; (ii) $97 million of skilled nursing; (iii) $94 million of medical office; and (iv) $27 million of senior housing.

FINANCING TRANSACTIONS

During the quarter ended December 31, 2008, we completed the following financing transactions:

On October 24, 2008, we entered into a credit agreement with a syndicate of banks for a $200 million unsecured term loan. The term loan accrues interest at a rate of LIBOR plus 2.00%, based on our current debt ratings, and matures in August 2011. The net proceeds of $197 million from the term loan were used to repay a portion of our outstanding indebtedness under our bridge loan facility.

On December 19, 2008, we recognized a gain of $2.4 million, or $0.01 per diluted share, related to the negotiated early repayment of $120 million of mortgage debt, at a discount. The mortgage debt, with an original maturity of January 27, 2009, was repaid with funds available under our revolving line of credit facility.

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OTHER EVENTS

On December 1, 2008, we completed the transfer of an 11-property senior housing portfolio to Emeritus Corporation (“Emeritus”). As previously announced, in connection with the transfer, we recognized impairments of lease related intangible assets of $12 million, or $0.05 per diluted share.

DIVIDEND

On February 2, 2009, we announced that our Board of Directors declared a quarterly cash dividend on our common stock of $0.46 per share, compared with $0.455 per share in the previous quarter. The dividend will be paid on February 23, 2009 to stockholders of record as of the close of business on February 9, 2009.

FUTURE OPERATIONS

For the full year 2009, we presently expect net income applicable to common shares to range between $1.03 and $1.09 per diluted share and FFO applicable to common shares to range between $2.15 and $2.21 per diluted share.

COMPANY INFORMATION

HCP has scheduled a conference call and webcast for Tuesday, February 10, 2009 at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) in order to present the Company’s performance and operating results for the quarter and year ended December 31, 2008. The conference call is accessible by dialing (866) 383-8119 (U.S.) or (617) 597-5344 (International). The participant passcode is 74871230. The webcast is accessible via the Company’s website at www.hcpi.com. The link can be found on the “Event Calendar” page, which is under the “Investor Relations” tab. A webcast replay of the conference call will be available after 11:00 a.m. Pacific Time (2:00 p.m. Eastern Time) on February 10, 2009 through February 24, 2009 on the Company’s website and a telephonic replay can be accessed by calling (888) 286-8010 (U.S.) or (617) 801-6888 (International) and entering passcode 80648513. The Company’s supplemental information package for the current period will also be available on the Company’s website in the “Presentations” section of the “Investor Relations” tab.

ABOUT HCP

HCP, Inc., an S&P 500 company, is a real estate investment trust (REIT) that, together with its consolidated subsidiaries, invests primarily in real estate serving the healthcare industry in the United States. As of December 31, 2008, the Company’s portfolio of properties, excluding assets held for sale but including properties owned by our Investment Management Platform, totaled 694 properties among the following segments: 264 senior housing, 104 life science, 251 medical office, 24 hospital and 51 skilled nursing. For more information, visit the Company’s website at www.hcpi.com.

###

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FORWARD-LOOKING STATEMENTS

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include among other things net income applicable to common shares on a diluted basis, FFO applicable to common shares on a diluted basis, gain on sales of real estate, real estate depreciation and amortization, and joint venture adjustments for the full year of 2009. These statements are made as of the date hereof and are subject to known and unknown risks, uncertainties, assumptions and other factors—many of which are out of the Company’s control and difficult to forecast—that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include but are not limited to: national and local economic conditions, including the possibility of a prolonged recession; continued volatility in the capital markets, including changes in interest rates and the availability and cost of capital, which changes and volatility affect opportunities for profitable investment; the Company’s ability to access external sources of capital when desired and on reasonable terms; the Company’s ability to manage its indebtedness levels; changes in the terms of the Company’s indebtedness; the Company’s ability to maintain its credit ratings; the Company’s ability to achieve its expected benefits from acquisitions, including integrating and preserving the goodwill of those companies; competition for lessees and mortgagors (including new leases and mortgages and the renewal or rollover of existing leases); continuing reimbursement uncertainty in the skilled nursing segment; competition in the senior housing segment specifically and in the healthcare industry in general; the Company’s ability to acquire, sell or lease facilities and the timing of acquisitions, sales and leasings; the Company’s ability to realize the benefits of its mezzanine investments; the ability of the Company’s lessees and  mortgagors to maintain the financial strength and liquidity necessary to satisfy their respective obligations to the Company and other third parties, including without limitation obligations to their lenders or other obligees under their financing arrangements; the bankruptcy or insolvency of our operators, lessees, borrowers or other obligors; the effect of any restructuring of the Company’s contractual relationships with such entities; changes in healthcare laws and regulations and other changes in the healthcare industry which affect the operations of the Company’s lessees or obligors; changes in the Company’s management; litigation claims and developments; costs of compliance with building regulations; changes in tax laws and regulations; changes in rules governing financial reporting, including new accounting pronouncements; and other risks described from time to time in the Company’s Securities and Exchange Commission filings. The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements as a result of new information or new or future developments, except as otherwise required by law.

Contact:

HCP

Mark A. Wallace

Executive Vice President – Chief Financial Officer and Treasurer

(562) 733-5100

Page 4 of 9

HCP, Inc.

Summary of Information

In thousands, except per share data

(Unaudited)

	Three Months Ended December 31,				Year Ended  December 31,
	2008		2007		2008		2007
Total revenues	$	263,265	$	254,281	$	1,025,818	$	907,361
Net income applicable to common shares	$	35,089	$	45,013	$	427,365	$	567,885
Basic earnings per common share	$	0.14	$	0.21	$	1.80	$	2.73
Diluted earnings per common share	$	0.14	$	0.21	$	1.79	$	2.71
Weighted average shares used to calculate diluted earnings per common share	252,904		216,917		238,296		209,254
Funds from operations applicable to common shares (1)	$	121,493	$	117,241	$	538,276	$	449,091
Diluted funds from operations applicable to common shares (1)	$	123,312	$	122,087	$	551,250	$	464,024
Basic funds from operations per common share (1)	$	0.48	$	0.54	$	2.27	$	2.16
Diluted funds from operations per common share (1)	$	0.48	$	0.54	$	2.25	$	2.14
Weighted average shares used to calculate diluted funds from operations per common share (1)	256,847		227,014		244,974		217,240
Impact of merger-related charges and impairments:
Merger-related charges (2)	$	724	$	3,789	$	3,897	$	21,846
Impairments (3)	14,426		–		27,851		–
	$	15,150	$	3,789	$	31,748	$	21,846
Per common share impact of merger-related charges and impairments on diluted funds from operations	$	0.06	$	0.01	$	0.13	$	0.10

(1) The Company believes that funds from operations applicable to common shares, diluted funds from operations applicable to common shares and basic and diluted funds from operations per common share are important supplemental measures of operating performance for a real estate investment trust. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative. The term funds from operations (“FFO”) was designed by the real estate investment trust industry to address this issue.

FFO is defined as net income applicable to common shares (computed in accordance with U.S. generally accepted accounting principles), excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization, with adjustments for joint ventures. Adjustments for joint ventures are calculated to reflect FFO on the same basis. FFO does not represent cash generated from operating activities in accordance with U.S. generally accepted accounting principles, is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income. The Company’s computation of FFO may not be comparable to FFO reported by other real estate investment trusts that do not define the term in accordance with the current National Association of Real Estate Investment Trusts’ (“NAREIT”) definition or that have a different interpretation of the current NAREIT definition from the Company. A reconciliation of net income applicable to common shares to FFO applicable to common shares is provided herein.

(2) Merger-related charges in the periods ended December 31, 2008 and 2007 include the amortization of fees associated with our acquisition financing for Slough Estates USA Inc. (“SEUSA”), as well as other SEUSA integration costs. Merger-related charges in the periods ended December 31, 2007 also include the amortization and write-off of fees associated with our acquisition financing for CNL Retirement Properties, Inc. (“CRP”), severance and retention-related compensation, as well as other CRP integration costs.

(3) In the three months and year ended December 31, 2008, included in interest and other income, net, are impairments of $0.4 million related to two of the Company’s investments in unconsolidated joint ventures.

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HCP, Inc.

Consolidated Statements of Income

In thousands, except per share data

	Three Months Ended  December 31,						Year Ended  December 31,
	2008			2007			2008			2007
	(Unaudited)
Revenues:
Rental and related revenues	$	226,295		$	216,002		$	878,899		$	765,074
Tenant recoveries	20,992			21,945			82,847			64,854
Income from direct financing leases	14,503			14,815			58,149			63,852
Investment management fee income	1,475			1,519			5,923			13,581
Total revenues	263,265			254,281			1,025,818			907,361
Costs and expenses:
Depreciation and amortization	81,292			75,414			314,632			258,947
Operating	48,500			50,041			192,632			175,256
General and administrative	19,042			14,804			75,686			68,401
Impairments	14,026			—			24,660			—
Total costs and expenses	162,860			140,259			607,610			502,604
Other income (expense):
Gain on sale of real estate interest	—			—			—			10,141
Interest and other income, net	28,373			20,855			156,752			75,580
Interest expense	(83,902		)	(101,045		)	(348,402		)	(355,479		)
Total other income (expense)	(55,529		)	(80,190		)	(191,650		)	(269,758		)
Income before income taxes, equity income (loss) from unconsolidated joint ventures and minority interests’ share in earnings	44,876			33,832			226,558			134,999
Income taxes	512			(2,465		)	(4,292		)	(1,460		)
Equity income (loss) from unconsolidated joint ventures	(410		)	1,887			3,326			5,645
Minority interests’ share in earnings	(4,848		)	(6,194		)	(21,263		)	(23,536		)
Income from continuing operations	40,130			27,060			204,329			115,648
Discontinued operations:
Income (loss) before impairments and gain on sales of real estate, net of income taxes	(553		)	11,920			18,353			69,783
Impairments	—			—			(2,791		)	—
Gain on sales of real estate, net of income taxes	794			11,315			228,604			403,584
Total discontinued operations	241			23,235			244,166			473,367
Net income	40,371			50,295			448,495			589,015
Preferred stock dividends	(5,282		)	(5,282		)	(21,130		)	(21,130		)
Net income applicable to common shares	$	35,089		$	45,013		$	427,365		$	567,885
Basic earnings per common share:
Continuing operations	$	0.14		$	0.10		$	0.77		$	0.45
Discontinued operations	—			0.11			1.03			2.28
Net income applicable to common shares	$	0.14		$	0.21		$	1.80		$	2.73
Diluted earnings per common share:
Continuing operations	$	0.14		$	0.10		$	0.77		$	0.45
Discontinued operations	—			0.11			1.02			2.26
Net income applicable to common shares	$	0.14		$	0.21		$	1.79		$	2.71
Weighted average shares used to calculate earnings per common share:
Basic	252,497			215,645			237,301			207,924
Diluted	252,904			216,917			238,296			209,254

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HCP, Inc.

Funds From Operations Information

In thousands, except per share data

(Unaudited)

	Three Months Ended  December 31,						Year Ended  December 31,
	2008			2007			2008			2007
Net income applicable to common shares	$	35,089		$	45,013		$	427,365		$	567,885
Depreciation and amortization of real estate, in-place lease and other intangibles:
Continuing operations	81,292			75,414			314,632			258,947
Discontinued operations	192			3,885			6,604			22,232
Gain on sales of real estate and real estate interest	(794		)	(11,315		)	(228,604		)	(413,725		)
Equity (income) loss from unconsolidated joint ventures	410			(1,887		)	(3,326		)	(5,645		)
FFO from unconsolidated joint ventures	5,909			6,981			24,125			22,800
Minority interests’ share in earnings (1)	4,848			6,364			21,903			24,356
Minority interests’ share in FFO	(5,453		)	(7,214		)	(24,423		)	(27,759		)
Funds from operations applicable to common shares (2)	$	121,493		$	117,241		$	538,276		$	449,091
Distributions on convertible units	$	1,819		$	4,846		$	12,974		$	14,933
Diluted funds from operations applicable to common shares (2)	$	123,312		$	122,087		$	551,250		$	464,024
Basic funds from operations per common share (2)	$	0.48		$	0.54		$	2.27		$	2.16
Diluted funds from operations per common share (2)	$	0.48		$	0.54		$	2.25		$	2.14
Weighted average shares used to calculate diluted funds from operations per common share	256,847			227,014			244,974			217,240
Impact of merger-related charges and impairments:
Merger-related charges (3)	$	724		$	3,789		$	3,897		$	21,846
Impairments (4)	14,426			–			27,851			–
	$	15,150		$	3,789		$	31,748		$	21,846
Per common share impact of merger-related charges and impairments on diluted funds from operations	$	0.06		$	0.01		$	0.13		$	0.10

(1) In the three months ended December 31, 2007 and the years ended December 31, 2008 and 2007, included in discontinued operations, are minority interests’ share in earnings of $170,000, $640,000 and $820,000, respectively.

(2) The Company believes that funds from operations applicable to common shares, diluted funds from operations applicable to common shares and basic and diluted funds from operations per common share are important supplemental measures of operating performance for a real estate investment trust. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative. The term funds from operations was designed by the real estate investment trust industry to address this issue.

FFO is defined as net income applicable to common shares (computed in accordance with U.S. generally accepted accounting principles), excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization, with adjustments for joint ventures. Adjustments for joint ventures are calculated to reflect FFO on the same basis. FFO does not represent cash generated from operating activities in accordance with U.S. generally accepted accounting principles, is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income. The Company’s computation of FFO may not be comparable to FFO reported by other real estate investment trusts that do not define the term in accordance with the current NAREIT definition or that have a different interpretation of the current NAREIT definition from the Company.

(3) Merger-related charges in the periods ended December 31, 2008 and 2007 include the amortization of fees associated with our acquisition financing for SEUSA, as well as other SEUSA integration costs. Merger-related charges in the periods ended December 31, 2007 also include the amortization and write-off of fees associated with our acquisition financing for CRP, severance and retention-related compensation, as well as other CRP integration costs.

(4)In the three months and year ended December 31, 2008, included in interest and other income, net, are impairments of $0.4 million related to two of the Company’s investments in unconsolidated joint ventures.

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HCP, Inc.

Consolidated Balance Sheets

In thousands, except share and per share data

	December 31,
	2008			2007
Assets
Real estate:
Buildings and improvements	$	7,762,217		$	7,493,944
Development costs and construction in progress	224,361			372,527
Land	1,551,168			1,564,820
Less accumulated depreciation and amortization	827,655			605,881
Net real estate	8,710,091			8,825,410
Net investment in direct financing leases	648,234			640,052
Loans receivable, net	1,076,392			1,065,485
Investments in and advances to unconsolidated joint ventures	272,929			248,894
Accounts receivable, net of allowance of $18,413 and $23,109, respectively	34,211			44,892
Cash and cash equivalents	57,562			96,269
Restricted cash	35,078			36,427
Intangible assets, net	507,100			623,073
Real estate held for sale, net	15,423			425,137
Other assets, net	492,806			516,133
Total assets	$	11,849,826		$	12,521,772
Liabilities and Stockholders’ Equity
Bank line of credit	$	150,000		$	951,700
Bridge and term loans	520,000			1,350,000
Senior unsecured notes	3,523,513			3,819,950
Mortgage debt	1,641,734			1,277,291
Mortgage debt on assets held for sale	–			3,470
Other debt	102,209			108,496
Intangible liabilities, net	232,654			278,143
Accounts payable and accrued liabilities	211,691			238,093
Deferred revenue	60,185			51,649
Total liabilities	6,441,986			8,078,792
Minority interests:
Joint venture partners	12,912			33,436
Non-managing member unitholders	193,657			305,835
Total minority interests	206,569			339,271
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $1.00 par value: 50,000,000 shares authorized; 11,820,000 shares issued and outstanding, liquidation preference of $25.00 per share	285,173			285,173
Common stock, $1.00 par value: 750,000,000 shares authorized 253,601,454 and 216,818,780 shares issued and outstanding, respectively	253,601			216,819
Additional paid-in capital	4,873,727			3,724,739
Cumulative dividends in excess of earnings	(130,068		)	(120,920		)
Accumulated other comprehensive loss	(81,162		)	(2,102		)
Total stockholders’ equity	5,201,271			4,103,709
Total liabilities and stockholders’ equity	$	11,849,826		$	12,521,772

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HCP, Inc.

Projected Funds From Operations (1)

(Unaudited)

PROJECTED FUTURE OPERATIONS (Full Year 2009):	2009
	Low		High
Diluted earnings per common share	$  1.03		$  1.09
Gain on sales of real estate	(0.14	)	(0.14	)
Real estate depreciation and amortization	1.18		1.18
Joint venture adjustments	0.08		0.08
Diluted funds from operations per common share (2)	$  2.15		$  2.21

(1)Except as otherwise noted above, the foregoing projections reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, development activities, property dispositions and the earnings impact of the events referenced in this release. Expect as otherwise noted, these estimates do not reflect the potential impact of future property acquisitions, impairments, the bankruptcy or insolvency of the Company’s operators, lessees, borrowers or other obligors, the effect of any restructuring of the Company’s contractual relationships with such entities, realized gains or losses on marketable securities, ineffectiveness related to our cash flow hedges, offerings of debt or equity securities or existing and future litigation matters. By definition, FFO does not include real estate-related depreciation and amortization or gains and losses associated with real estate disposition activities, but does include impairments. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth above. The aforementioned ranges represent management’s best estimate of results based upon the underlying assumptions as of the date of this press release. Except as otherwise required by law, management assumes no, and hereby disclaims any, obligation to update any of the foregoing projections as a result of new information or new or future developments.

(2) The Company believes that diluted funds from operations per common share is an important supplemental measure of operating performance for a real estate investment trust. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative. The term FFO was designed by the real estate investment trust industry to address this issue.

FFO is defined as net income (computed in accordance with U.S. generally accepted accounting principles), excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization, with adjustments for joint ventures. Adjustments for joint ventures are calculated to reflect FFO on the same basis. FFO does not represent cash generated from operating activities in accordance with U.S. generally accepted accounting principles, is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income. The Company’s computation of FFO may not be comparable to FFO reported by other real estate investment trusts that do not define the term in accordance with the current NAREIT definition or that have a different interpretation of the current NAREIT definition from the Company.

Page 9 of 9

EX-99.2

Exhibit 99.2

Supplemental Information

December 31, 2008

(Unaudited)

Sugar Land, TX	South San Francisco, CA	Dallas, TX	Walnut Creek, CA

Company Information (1)

Board of Directors

Robert R. Fanning, Jr.
Managing Director (Retired),
The Huron Consulting Group James F. Flaherty III
Chairman and Chief Executive Officer
HCP, Inc. Christine N. Garvey
Former Global Head of Corporate
Real Estate Services, Deutsche Bank AG David B. Henry
Vice Chairman, President and Chief
Investment Officer, Kimco Realty Corporation Lauralee E. Martin
Chief Operating and Financial Officer
Jones Lang LaSalle Incorporated Michael D. McKee
Chief Executive Officer and Vice Chairman
(Retired), The Irvine Company Harold M. Messmer, Jr.
Chairman and Chief Executive Officer
Robert Half International, Inc. Peter L. Rhein
Partner, Sarlot & Rhein Kenneth B. Roath
Chairman Emeritus, HCP, Inc. Richard M. Rosenberg
Chairman and Chief Executive Officer
(Retired), BankAmerica Corporation Joseph P. Sullivan
Chairman of the Board of Advisors
RAND Health

Senior Management

Jon M. Bergschneider
Senior Vice President
Life Science Estates George P. Doyle
Senior Vice President
Chief Accounting Officer James F. Flaherty III
Chairman and
Chief Executive Officer Paul F. Gallagher
Executive Vice President
Chief Investment Officer Edward J. Henning
Executive Vice President
General Counsel, Chief Administrative
Officer and Corporate Secretary Thomas D. Kirby
Senior Vice President
Acquisitions and Valuations Thomas M. Klaritch
Executive Vice President
Medical Office Properties Brian J. Maas
Senior Vice President
Associate General Counsel and
Assistant Corporate Secretary Dennis J. Martin
Senior Vice President
Financial Planning and Analysis Randall W. Rohner
Senior Vice President
Life Science Estates Timothy M. Schoen
Senior Vice President
Investment Management/Life Science Estates Susan M. Tate
Senior Vice President
Asset Management Mark A. Wallace
Executive Vice President
Chief Financial Officer and Treasurer

Other Information

Corporate Headquarters

3760 Kilroy Airport Way, Suite 300
Long Beach, CA 90806-2473
(562) 733-5100

Chicago Office
444 North Michigan Avenue, Suite 3230
Chicago, IL 60611

Nashville Office
3100 West End Avenue, Suite 800
Nashville, TN 37203

San Francisco Office
400 Oyster Point Boulevard, Suite 409
South San Francisco, CA 94080

Trading Symbol

HCP	Common Stock
HCP_pe	Series E Preferred Stock
HCP_pf	Series F Preferred Stock

Stock Exchange Listing

NYSE

Senior Debt Ratings

Moody’s	Baa3
Standard & Poor’s	BBB
Fitch	BBB

(1)As of February 2, 2009.

See Reporting Definitions and Supplemental Financial Measures Disclosures

2

Highlights

Dollars in thousands, except per share data

	Three Months Ended December 31,				Year Ended December 31,
	2008		2007		2008		2007
Revenues	$	263,265	$	254,281	$	1,025,818	$	907,361
NOI	213,290		202,721		827,263		718,524
Adjusted EBITDA	232,475		238,450		983,291		877,671
Net income applicable to common shares	35,089		45,013		427,365		567,885
FFO applicable to common shares	121,493		117,241		538,276		449,091
Per diluted common share:
EPS	$	0.14	$	0.21	$	1.79	$	2.71
FFO	0.48		0.54		2.25		2.14
FFO payout ratio per diluted common share	95%		82%		81%		83%
Adjusted fixed charge coverage	2.3x		2.0x		2.3x		2.1x
Financial leverage	47.6%		57.4%		47.6%		57.4%

Fourth Quarter Highlights(1)		Total Assets Under Management: $13.2 billion(2)
·	Diluted FFO per share of $0.48, including merger-related charges and impairments of $0.06 per share
·	Completed $200 million unsecured term loan
·	Negotiated early repayment of $120 million of mortgage debt at a discount
·	Transitioned 11-property senior housing portfolio to Emeritus Corporation

(1)       As of and for the quarter ended December 31, 2008.

(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 December 31, 2008.

See Reporting Definitions and Supplemental Financial Measures Disclosures

3

Consolidated Balance Sheets

In thousands

	December 31,
	2008			2007
ASSETS
Real estate:
Buildings and improvements	$	7,762,217		$	7,493,944
Development costs and construction in progress	224,361			372,527
Land	1,551,168			1,564,820
Less accumulated depreciation and amortization	827,655			605,881
Net real estate	8,710,091			8,825,410
Net investment in direct financing leases	648,234			640,052
Loans receivable, net	1,076,392			1,065,485
Investments in and advances to unconsolidated joint ventures	272,929			248,894
Accounts receivable, net	34,211			44,892
Cash and cash equivalents	57,562			96,269
Restricted cash	35,078			36,427
Intangible assets, net	507,100			623,073
Real estate held for sale, net	15,423			425,137
Other assets, net	492,806			516,133
Total assets	$	11,849,826		$	12,521,772
LIABILITIES AND STOCKHOLDERS’ EQUITY
Bank line of credit	$	150,000		$	951,700
Bridge and term loans	520,000			1,350,000
Senior unsecured notes	3,523,513			3,819,950
Mortgage debt	1,641,734			1,277,291
Mortgage debt on assets held for sale	—			3,470
Other debt	102,209			108,496
Intangible liabilities, net	232,654			278,143
Accounts payable and accrued liabilities	211,691			238,093
Deferred revenue	60,185			51,649
Total liabilities	6,441,986			8,078,792
Minority interests:
Joint venture partners	12,912			33,436
Non-managing member unitholders	193,657			305,835
Total minority interests	206,569			339,271
Commitments and contingencies
Stockholders’ equity:
Preferred stock	285,173			285,173
Common stock	253,601			216,819
Additional paid-in capital	4,873,727			3,724,739
Cumulative dividends in excess of earnings	(130,068		)	(120,920		)
Accumulated other comprehensive loss	(81,162		)	(2,102		)
Total stockholders’ equity	5,201,271			4,103,709
Total liabilities and stockholders’ equity	$	11,849,826		$	12,521,772

See Reporting Definitions and Supplemental Financial Measures Disclosures

4

Consolidated Statements of Income

In thousands, except per share data

	Three Months Ended December 31,						Year Ended December 31,
	2008			2007			2008			2007
Revenues:
Rental and related revenues	$	226,295		$	216,002		$	878,899		$	765,074
Tenant recoveries	20,992			21,945			82,847			64,854
Income from direct financing leases	14,503			14,815			58,149			63,852
Investment management fee income	1,475			1,519			5,923			13,581
Total revenues	263,265			254,281			1,025,818			907,361
Costs and expenses:
Depreciation and amortization	81,292			75,414			314,632			258,947
Operating	48,500			50,041			192,632			175,256
General and administrative	19,042			14,804			75,686			68,401
Impairments	14,026			—			24,660			—
Total costs and expenses	162,860			140,259			607,610			502,604
Other income (expense):
Gain on sale of real estate interest	—			—			—			10,141
Interest and other income, net	28,373			20,855			156,752			75,580
Interest expense	(83,902		)	(101,045		)	(348,402		)	(355,479		)
Total other income (expense)	(55,529		)	(80,190		)	(191,650		)	(269,758		)
Income before income taxes, equity income (loss) from unconsolidated joint ventures and minority interests’ share in earnings	44,876			33,832			226,558			134,999
Income taxes	512			(2,465		)	(4,292		)	(1,460		)
Equity income (loss) from unconsolidated joint ventures	(410		)	1,887			3,326			5,645
Minority interests’ share in earnings	(4,848		)	(6,194		)	(21,263		)	(23,536		)
Income from continuing operations	40,130			27,060			204,329			115,648
Discontinued operations:
Income (loss) before impairments and gain on sales of real estate, net of income taxes	(553		)	11,920			18,353			69,783
Impairments	—			—			(2,791		)	—
Gain on sales of real estate, net of income taxes	794			11,315			228,604			403,584
Total discontinued operations	241			23,235			244,166			473,367
Net income	40,371			50,295			448,495			589,015
Preferred stock dividends	(5,282		)	(5,282		)	(21,130		)	(21,130		)
Net income applicable to common shares	$	35,089		$	45,013		$	427,365		$	567,885
Basic earnings per common share:
Continuing operations	$	0.14		$	0.10		$	0.77		$	0.45
Discontinued operations	—			0.11			1.03			2.28
Net income applicable to common shares	$	0.14		$	0.21		$	1.80		$	2.73
Diluted earnings per common share:
Continuing operations	$	0.14		$	0.10		$	0.77		$	0.45
Discontinued operations	—			0.11			1.02			2.26
Net income applicable to common shares	$	0.14		$	0.21		$	1.79		$	2.71
Weighted average shares used to calculate earnings per common share:
Basic	252,497			215,645			237,301			207,924
Diluted	252,904			216,917			238,296			209,254
Dividends declared per common share	$	0.455		$	0.445		$	1.82		$	1.78

See Reporting Definitions and Supplemental Financial Measures Disclosures

5

Consolidated Statements of Cash Flows

In thousands

	Year Ended December 31,
	2008			2007
Cash flows from operating activities:
Net income	$	448,495		$	589,015
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	314,632			258,947
Discontinued operations	6,604			22,232
Amortization of above and below market lease intangibles, net	(8,440		)	(6,056		)
Stock-based compensation	13,765			11,408
Amortization of debt premiums, discounts and issuance costs, net	12,267			20,413
Recovery of loan losses	—			(386		)
Straight-line rents	(39,463		)	(49,725		)
Interest accretion	(27,019		)	(8,739		)
Deferred rental revenue	13,931			9,027
Equity income from unconsolidated joint ventures	(3,326		)	(5,645		)
Distributions of earnings from unconsolidated joint ventures	6,745			5,264
Minority interests’ share in earnings	21,903			24,356
Gain on sales of real estate and real estate interest	(228,604		)	(413,725		)
Gain on early repayment of debt	(2,396		)	—
Marketable securities (gains) losses, net	7,230			(2,233		)
Derivative losses, net	4,577			—
Impairments of real estate and intangible assets, net	27,451			—
Impairments of investments in unconsolidated joint ventures	400			—
Changes in:
Accounts receivable	10,681			(13,115		)
Other assets	(3,713		)	(14,621		)
Accounts payable and accrued liabilities	(7,023		)	26,634
Net cash provided by operating activities	568,697			453,051
Cash flows from investing activities:
Cash used in other acquisitions and development of real estate	(155,531		)	(425,464		)
Lease commissions and tenant and capital improvements	(59,991		)	(49,669		)
Proceeds from sales of real estate	639,585			887,218
Cash used in SEUSA acquisition, net of cash acquired	—			(2,982,689		)
Contributions to unconsolidated joint ventures	(3,579		)	(3,641		)
Distributions in excess of earnings from unconsolidated joint ventures	8,400			478,293
Purchase of marketable securities	(30,089		)	(26,647		)
Proceeds from sales of marketable securities	10,700			53,817
Proceeds from sales of interests in unconsolidated joint ventures	2,855			—
Principal repayments on loans receivable and direct financing leases	16,790			104,009
Investments in loans receivable and direct financing leases	(3,162		)	(923,534		)
Decrease in restricted cash	1,349			192
Net cash provided by (used in) investing activities	427,327			(2,888,115		)

See Reporting Definitions and Supplemental Financial Measures Disclosures

6

Consolidated Statements of Cash Flows (continued)

In thousands

	Year Ended December 31,
	2008			2007
Cash flows from financing activities:
Net borrowings (repayments) under bank line of credit	(801,700		)	327,200
Repayments of term and bridge loans	(1,030,000		)	(1,904,593		)
Borrowings under term and bridge loans	200,000			2,750,000
Repayments of mortgage debt	(225,316		)	(97,882		)
Issuance of mortgage debt	579,557			143,421
Repayments of senior unsecured notes	(300,000		)	(20,000		)
Issuance of senior unsecured notes	—			1,100,000
Settlement of cash flow hedges, net	(9,658		)	—
Debt issuance costs	(12,657		)	(27,044		)
Net proceeds from the issuance of common stock and exercise of options	1,060,538			618,854
Dividends paid on common and preferred stock	(457,643		)	(393,566		)
Distributions to minority interests	(37,852		)	(23,462		)
Net cash provided by (used in) financing activities	(1,034,731		)	2,472,928
Net increase (decrease) in cash and cash equivalents	(38,707		)	37,864
Cash and cash equivalents, beginning of year	96,269			58,405
Cash and cash equivalents, end of year	$	57,562		$	96,269

See Reporting Definitions and Supplemental Financial Measures Disclosures

7

Consolidated Funds From Operations

Dollars in thousands, except per share data

	Three Months Ended December 31,						Year Ended December 31,
	2008			2007			2008			2007
Net income applicable to common shares	$	35,089		$	45,013		$	427,365		$	567,885
Depreciation and amortization of real estate, in-place lease and other intangibles:
Continuing operations	81,292			75,414			314,632			258,947
Discontinued operations	192			3,885			6,604			22,232
Gain on sales of real estate and real estate interest	(794		)	(11,315		)	(228,604		)	(413,725		)
Equity (income) loss from unconsolidated joint ventures	410			(1,887		)	(3,326		)	(5,645		)
FFO from unconsolidated joint ventures	5,909			6,981			24,125			22,800
Minority interests’ share in earnings(1)	4,848			6,364			21,903			24,356
Minority interests’ share in FFO	(5,453		)	(7,214		)	(24,423		)	(27,759		)
FFO applicable to common shares	$	121,493		$	117,241		$	538,276		$	449,091
Distributions on convertible units	$	1,819		$	4,846		$	12,974		$	14,933
Diluted FFO applicable to common shares	$	123,312		$	122,087		$	551,250		$	464,024
Basic FFO per common share	$	0.48		$	0.54		$	2.27		$	2.16
Diluted FFO per common share	$	0.48		$	0.54		$	2.25		$	2.14
Weighted average shares used to calculate diluted FFO per common share	256,847			227,014			244,974			217,240
Dividends declared per common share	$	0.455		$	0.445		$	1.82		$	1.78
FFO payout ratio per common share	94.8%			82.4%			80.9%			83.2%
Impact of merger-related charges and impairments	$	15,150		$	3,789		$	31,748		$	21,846
Per common share impact of merger-related charges and impairments on diluted FFO	$	0.06		$	0.01		$	0.13		$	0.10
FFO payout ratio per common share prior to merger-related charges and impairments	84.3%			80.9%			76.5%			79.5%
Consolidated selected supplemental cash flow information:
Impairments of real estate and intangible assets, net	$	14,026		$	—		$	27,451		$	—
Impairments of investments in unconsolidated joint ventures	400			—			400			—
Amortization of net below market lease intangibles	2,420			2,871			8,440			6,056
Stock-based compensation	3,128			2,892			13,765			11,408
Amortization of debt premiums, discounts and issuance costs, net	3,041			5,139			12,267			20,413
Straight-line rents	10,818			10,258			39,463			49,725
Interest accretion	6,885			2,311			27,019			8,739
Increase in deferred revenues – tenant improvement related	1,646			3,294			14,240			8,216
Increase (decrease) in SAB 104 deferred revenue	(3,942		)	(3,204		)	(309		)	811
Lease commissions and tenant and capital improvements	15,257			22,640			59,991			49,669
Capitalized interest	5,011			8,322			27,490			12,346
HCP’s share of selected supplemental cash flow information from the Investment Management Platform
Amortization of net above market lease intangibles	$	1,425		$	288		$	2,206		$	1,016
Amortization of debt premiums, discounts and issuance costs, net	199			135			451			346
Straight-line rents	1,282			1,318			4,949			5,763
Lease commissions and tenant and capital improvements	938			429			2,241			820

(1)       In the three months ended December 31, 2007 and the years ended December 31, 2008 and 2007, included in discontinued operations, are minority interests’ share in earnings of $170,000, $640,000 and $820,000, respectively.

See Reporting Definitions and Supplemental Financial Measures Disclosures

8

Capitalization

Dollars in thousands

Debt Maturities and Scheduled Principal Repayments
December 31, 2008
	Bank Line of Credit(1)		Bridge and Term Loan		Senior Unsecured Notes			Mortgage Debt		Other Debt(2)		Consolidated Debt			HCP’s Share of Unconsolidated Mortgage Debt(3)			Total Debt
2009	$	—	$	320,000	$	—		$	155,347	$	102,209	$	577,556		$	5,205		$	582,761
2010	—		—		206,421			298,499		—		504,920			5,546			510,466
2011	150,000		200,000		300,000			137,570		—		787,570			6,224			793,794
2012	—		—		250,000			60,919		—		310,919			13,560			324,479
2013	—		—		550,000			233,068		—		783,068			44,508			827,576
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	150,000		520,000		3,543,421			1,636,711		102,209		5,952,341			347,100			6,299,441
(Discounts) and premiums, net	—		—		(19,908		)	5,023		—		(14,885		)	(630		)	(15,515		)
Total	$	150,000	$	520,000	$	3,523,513		$	1,641,734	$	102,209	$	5,937,456		$	346,470		$	6,283,926
Weighted average interest rate	1.36%		2.76%		6.25%			6.10%		N/A		5.77		%	5.70%			5.73%
Weighted average maturity in years	2.65		1.37		6.29			4.77		N/A		5.33			7.90			5.47

Capitalization Ratios
	December 31,
	2008	2007
Total Debt/Total Book Capitalization	53.7%	63.9%
Total Debt/Total Undepreciated Book Capitalization	49.3%	59.8%
Consolidated Debt/Consolidated Gross Assets	47.1%	57.3%
Financial Leverage (Total Debt/Total Gross Assets)	47.6%	57.4%
Consolidated Secured Debt/Consolidated Gross Assets	13.0%	9.7%
Total Secured Debt/Total Gross Assets	15.1%	11.8%
Consolidated Debt/Consolidated Market Capitalization	44.5%	48.0%
Total Debt/Total Market Capitalization	45.9%	49.2%
Variable Rate Debt
	December 31,
	2008	2007
Fixed and variable rate ratios
Fixed rate	85.8%	64.1%
Variable rate	14.2%	35.9%
	100.0%	100.0%

(1)       Funds from the bank line of credit were drawn for the early repayment of $120 million of mortgage debt with an original maturity date in January 2009.

(2)       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.

(3)       Includes pro-rata share of the Company’s Investment Management Platform.

See Reporting Definitions and Supplemental Financial Measures Disclosures

9

Investments and Dispositions

As of and for the year ended December 31, 2008, dollars and square feet in thousands

Investments
Description	Capacity	Property Count	Segment	Investment
Property acquisition:
First quarter
California	104 units	1	Senior housing	$	10,878
Weighted average yield on property acquisition				8.5%
Joint venture interest acquisition			Hospital/Skilled nursing	$	29,137
Total fundings for development, tenant and capital improvements				$	157,547
Total marketable securities purchased				$	30,089
Total investments				$	227,651
Dispositions
Description	Capacity	Property Count	Segment	Sales Price, Net of Costs
Property dispositions:
First quarter
Texas	450 beds	3	Skilled nursing	$	26,775
Texas	80 units	1	Senior housing	2,875
				29,650
Second quarter
Various	1,103 beds	12	Hospital	310,518
Connecticut/Massachusetts/Rhode Island	N/A	6	Senior housing	15,301
Indiana	689 Sq. Ft.	13	MOB	86,970
California/Indiana	937 beds	9	Skilled nursing	70,444
				483,233
Third quarter
Arkansas/California/Virginia	345 beds	3	Hospital	116,521
Fourth quarter
Tennessee/Texas	101 Sq. Ft.	2	MOB	7,461
Alabama/Tennessee	150 units	2	Senior housing	5,920
				13,381
Total property dispositions				$	642,785
Joint venture interest dispositions:
Indiana	104 units	2	Senior housing	$	2,855
Total marketable securities sold				$	10,700
Total dispositions				$	656,340

See Reporting Definitions and Supplemental Financial Measures Disclosures

10

Development

As of December 31, 2008, 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)				$	292,526
	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
Projects Placed in Service
			Date	Rentable
			Placed in	Square
Name of Project	Location	Segment	Service	Feet
East Grand (Building 8)	So. San Francisco, CA	Life science	2Q 2008	82
East Grand (Building 7)	So. San Francisco, CA	Life science	3Q 2008	93
East Grand (Building 9)	So. San Francisco, CA	Life science	3Q 2008	54

(1)       Investment-to-date includes $54 million of land, $63 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

Investment Management Platform

As of and for the year ended December 31, 2008, dollars in thousands

Unconsolidated Institutional Joint Ventures	Primary Segment	Date Established/ Acquired	HCP’s Ownership Percentage	Joint Venture’s Investment		HCP’s Net Equity Investment		HCP’s Investment Management Fee Income		Initial Term (in years)
HCP Ventures II	Senior housing	January-07	35%	$	1,100,085	$	141,632	$	3,273	Indefinite
HCP Ventures III	Medical office	October-06	30%(1)	141,079		11,502		444		10
HCP Ventures IV	Medical office	April-07	20%	654,801		45,567		2,201		10
HCP Life Science	Life science	August-07	50%-63%	80,327		66,124		5		97-98
				$	1,976,292	$	264,825	$	5,923

(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

Investment Management Platform

In thousands

Funds From Operations
	Three Months Ended December 31, 2008												Three Months Ended December 31, 2007
	HCP Ventures II			HCP Ventures III			HCP Ventures IV			HCP Life Science(1)			HCP Ventures II			HCP Ventures III			HCP Ventures IV			HCP Life Science
Net income (loss)	$	2,671		$	(76	)	$	(3,834	)	$	(5,604	)	$	2,599		$	(314	)	$	(983	)	$	950
Depreciation and amortization of real estate and in-place lease intangibles	7,030			1,274			8,164			2,361			7,141			1,439			6,733			564
FFO	$	9,701		$	1,198		$	4,330		$	(3,243	)	$	9,740		$	1,125		$	5,750		$	1,514
HCP’s pro rata share of FFO	$	3,395		$	359		$	866		$	(2,120	)	$	3,409		$	338		$	1,150		$	872
Selected supplemental cash flow information:
Amortization of above (below) market lease intangibles, net	$	762		$	(141	)	$	266		$	—		$	746		$	(141	)	$	349		$	—
Amortization of debt premiums, discounts and issuance costs, net	249			38			476			8			169			38			300			9
Straight-line rents	(3,129		)	(99		)	(294		)	(169		)	(3,825		)	(155		)	(432		)	244
Lease commissions and tenant and capital improvements	1,238			129			2,416			—			—			27			2,102			—
	Year Ended December 31, 2008												Year Ended December 31, 2007
	HCP Ventures II			HCP Ventures III			HCP Ventures IV			HCP Life Science(1)			HCP Ventures II			HCP Ventures III			HCP Ventures IV(2)			HCP Life Science(3)
Net income (loss)	$	9,937		$	318		$	(10,240	)	$	(2,066	)	$	10,175		$	268		$	(4,415	)	$	1,555
Depreciation and amortization of real estate and in-place lease intangibles	28,454			5,057			27,481			4,069			28,544			4,891			17,066			940
FFO	$	38,391		$	5,375		$	17,241		$	2,003		$	38,719		$	5,159		$	12,651		$	2,495
HCP’s pro rata share of FFO	$	13,437		$	1,613		$	3,448		$	893		$	13,552		$	1,548		$	2,530		$	1,448
Selected supplemental cash flow information:
Amortization of above (below) market lease intangibles, net	$	2,853		$	(567	)	$	1,153		$	—		$	2,837		$	(567	)	$	967		$	—
Amortization of debt premiums, discounts and issuance costs, net	747			152			606			39			619			152			394			9
Straight-line rents	(12,513		)	(364		)	(2,409		)	(24		)	(15,298		)	(719		)	(1,768		)	253
Lease commissions and tenant and capital improvements	1,238			156			7,114			677			—			178			3,832			—

(1)For the three months ended December 31, 2008, HCP Life Science ventures experienced a loss of $5.6 million primarily related to an allowance for straight line rent receivables and accelerated amortization of other assets.  At the date that we acquired this venture, straight-line rent receivables and other assets were 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.

(2)At April 30, 2007, HCP Ventures IV’s assets were wholly owned by the Company; therefore amounts reflected represent the results of eight months of operations.

(3)Acquired as part of the Company’s purchase of Slough Estates USA Inc. on August 1, 2007; therefore amounts reflected represent the results of five months of operations.

See Reporting Definitions and Supplemental Financial Measures Disclosures

13

Investment Management Platform

In thousands

Balance Sheets
	December 31, 2008								December 31, 2007
	HCP Ventures II		HCP Ventures III		HCP Ventures IV		HCP Life Science		HCP Ventures II		HCP Ventures III		HCP Ventures IV		HCP Life Science
ASSETS
Real estate:
Buildings and improvements	$	935,211	$	129,838	$	523,750	$	43,124	$	936,095	$	129,144	$	515,520	$	44,203
Development costs and construction in progress	2,819		367		2,599		513		—		551		4,709		—
Land	108,907		1,780		65,996		8,271		108,907		1,780		65,697		7,186
Less accumulated depreciation and amortization	60,143		9,412		38,184		26,398		33,965		6,092		19,384		22,761
Net real estate	986,794		122,573		554,161		25,510		1,011,037		125,383		566,542		28,628
Cash and cash equivalents and restricted cash	9,142		1,489		10,746		1,269		6,998		850		13,937		1,342
Other assets, net	36,914		4,045		13,326		3,145		25,434		4,346		8,265		8,551
Intangible assets, net	44,033		10,578		51,914		—		48,321		12,397		62,755		—
Total assets	$	1,076,883	$	138,685	$	630,147	$	29,924	$	1,091,790	$	142,976	$	651,499	$	38,521
LIABILITIES AND MEMBERS’ CAPITAL
Mortgage debt	$	668,938	$	91,730	$	378,448	$	15,844	$	677,764	$	91,730	$	378,842	$	19,019
Intangible liabilities, net	1,176		4,926		11,462		—		1,282		5,581		12,925		—
Accounts payable, accrued liabilities and deferred revenue	7,662		3,285		12,512		879		7,083		2,063		15,139		1,296
Total liabilities	677,776		99,941		402,422		16,723		686,129		99,374		406,906		20,315
HCP’s capital	136,927		9,880		35,404		6,953		139,248		11,468		38,778		10,558
Members’ capital	262,180		28,864		192,321		6,248		266,413		32,134		205,815		7,648
Total liabilities and members’ capital	$	1,076,883	$	138,685	$	630,147	$	29,924	$	1,091,790	$	142,976	$	651,499	$	38,521

See Reporting Definitions and Supplemental Financial Measures Disclosures

14

Investment Management Platform

In thousands

Statements of Operations
	Three Months Ended December 31, 2008												Three Months Ended December 31, 2007
	HCP Ventures II			HCP Ventures III			HCP Ventures IV			HCP Life Science			HCP Ventures II			HCP Ventures III			HCP Ventures IV			HCP Life Science
Revenues:
Rental and related revenues	$	20,839		$	3,316		$	14,494		$	2,152		$	20,901		$	2,890		$	14,974		$	1,690
Tenant recoveries	—			1,179			3,018			277			—			1,020			3,221			549
Total revenues	20,839			4,495			17,512			2,429			20,901			3,910			18,195			2,239
Costs and expenses:
Depreciation and amortization	7,030			1,274			8,164			2,361			7,141			1,439			6,733			564
Operating	—			1,538			6,678			316			(1		)	1,305			6,006			367
General and administrative	1,278			309			970			5,066			1,199			300			920			16
Total costs and expenses	8,308			3,121			15,812			7,743			8,339			3,044			13,659			947
Other income (expense):
Interest and other income, net	—			—			17			1			32			237			24			11
Interest expense	(9,860		)	(1,450		)	(5,551		)	(291		)	(9,995		)	(1,417		)	(5,543		)	(353		)
Net income (loss)	$	2,671		$	(76	)	$	(3,834	)	$	(5,604	)	$	2,599		$	(314	)	$	(983	)	$	950
	Year Ended December 31, 2008												Year Ended December 31, 2007
	HCP Ventures II			HCP Ventures III			HCP Ventures IV			HCP Life Science			HCP Ventures II			HCP Ventures III			HCP Ventures IV(1)			HCP Life Science(2)
Revenues:
Rental and related revenues	$	83,421		$	13,492		$	58,061		$	8,518		$	83,311		$	12,967		$	37,751		$	2,951
Tenant recoveries	—			4,631			11,909			1,557			—			4,462			7,542			699
Total revenues	83,421			18,123			69,970			10,075			83,311			17,429			45,293			3,650
Costs and expenses:
Depreciation and amortization	28,454			5,057			27,481			4,069			28,544			4,891			17,066			940
Operating	4			6,092			27,238			1,714			7			5,890			16,555			565
General and administrative	5,595			917			3,496			5,119			4,863			848			2,011			18
Total costs and expenses	34,053			12,066			58,215			10,902			33,414			11,629			35,632			1,523
Other income (expense):
Interest and other income, net	58			28			165			12			34			237			24			19
Interest expense	(39,489		)	(5,767		)	(22,160		)	(1,251		)	(39,756		)	(5,769		)	(14,100		)	(591		)
Net income (loss)	$	9,937		$	318		$	(10,240	)	$	(2,066	)	$	10,175		$	268		$	(4,415	)	$	1,555

(1)At April 30, 2007, HCP Ventures IV’s assets were wholly owned by the Company; therefore amounts reflected represent the results of eight months of operations.

(2)Acquired as part of the Company’s purchase of Slough Estates USA Inc. on August 1, 2007; therefore amounts reflected represent the results of five months of operations.

See Reporting Definitions and Supplemental Financial Measures Disclosures

15

Investment Management Platform

In thousands

Net Operating Income
	Three Months Ended December 31, 2008												Three Months Ended December 31, 2007
	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)	$	2,671		$	(76	)	$	(3,834	)	$	(5,604	)	$	2,599		$	(314	)	$	(983	)	$	950
Depreciation and amortization	7,030			1,274			8,164			2,361			7,141			1,439			6,733			564
General and administrative	1,278			309			970			5,066			1,199			300			920			16
Interest and other income, net	—			—			(17		)	(1		)	(32		)	(237		)	(24		)	(11		)
Interest expense	9,860			1,450			5,551			291			9,995			1,417			5,543			353
NOI	$	20,839		$	2,957		$	10,834		$	2,113		$	20,902		$	2,605		$	12,189		$	1,872
HCP’s pro rata share of NOI	$	7,294		$	887		$	2,167		$	1,211		$	7,316		$	782		$	2,438		$	1,082
	Year Ended December 31, 2008												Year Ended December 31, 2007
	HCP			HCP			HCP			HCP			HCP			HCP			HCP			HCP
	Ventures II			Ventures III			Ventures IV			Life Science			Ventures II			Ventures III			Ventures IV(1)			Life Science(2)
Net income (loss)	$	9,937		$	318		$	(10,240	)	$	(2,066	)	$	10,175		$	268		$	(4,415	)	$	1,555
Depreciation and amortization	28,454			5,057			27,481			4,069			28,544			4,891			17,066			940
General and administrative	5,595			917			3,496			5,119			4,863			848			2,011			18
Interest and other income, net	(58		)	(28		)	(165		)	(12		)	(34		)	(237		)	(24		)	(19		)
Interest expense	39,489			5,767			22,160			1,251			39,756			5,769			14,100			591
NOI	$	83,417		$	12,031		$	42,732		$	8,361		$	83,304		$	11,539		$	28,738		$	3,085
HCP’s pro rata share of NOI	$	29,196		$	3,609		$	8,546		$	4,800		$	29,156		$	3,462		$	5,748		$	1,793

(1)       At April 30, 2007, HCP Ventures IV’s assets were wholly owned by the Company; therefore amounts reflected represent the results of eight months of operations.

(2)       Acquired as part of the Company’s purchase of Slough Estates USA inc. on August 1, 2007; therefore amounts reflected represent the results of five months of operations.

See Reporting Definitions and Supplemental Financial Measures Disclosures

16

Investment Management Platform

In thousands

EBITDA
	Three Months Ended December 31, 2008											Three Months Ended December 31, 2007
	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)	$	2,671	$	(76	)	$	(3,834	)	$	(5,604	)	$	2,599	$	(314	)	$	(983	)	$	950
Depreciation and amortization	7,030		1,274			8,164			2,361			7,141		1,439			6,733			564
Interest expense	9,860		1,450			5,551			291			9,995		1,417			5,543			353
EBITDA	$	19,561	$	2,648		$	9,881		$	(2,952	)	$	19,735	$	2,542		$	11,293		$	1,867
HCP’s pro rata share of EBITDA	$	6,846	$	794		$	1,976		$	(1,950	)	$	6,907	$	763		$	2,259		$	1,077
	Year Ended December 31, 2008											Year Ended December 31, 2007
	HCP		HCP			HCP			HCP			HCP		HCP			HCP			HCP
	Ventures II		Ventures III			Ventures IV			Life Science			Ventures II		Ventures III			Ventures IV(1)			Life Science(2)
Net income (loss)	$	9,937	$	318		$	(10,240	)	$	(2,066	)	$	10,175	$	268		$	(4,415	)	$	1,555
Depreciation and amortization	28,454		5,057			27,481			4,069			28,544		4,891			17,066			940
Interest expense	39,489		5,767			22,160			1,251			39,756		5,769			14,100			591
EBITDA	$	77,880	$	11,142		$	39,401		$	3,254		$	78,475	$	10,928		$	26,751		$	3,086
HCP’s pro rata share of EBITDA	$	27,258	$	3,343		$	7,880		$	1,615		$	27,466	$	3,278		$	5,350		$	1,794

(1)       At April 30, 2007, HCP Ventures IV’s assets were wholly owned by the Company; therefore amounts reflected represent the results of eight months of operations.

(2)       Acquired as part of the Company’s purchase of Slough Estates US Inc. on August 1, 2007; therefore amounts reflected represent the results of five months of operations.

See Reporting Definitions and Supplemental Financial Measures Disclosures

17

Investment Management Platform

In thousands

Mortgage Debt Maturities and Scheduled Principal Repayments
December 31, 2008
														HCP’s Share of
	HCP			HCP		HCP			HCP					Unconsolidated
	Ventures II			Ventures III		Ventures IV			Life Science		Total			Mortgage Debt
2009	$	9,567		$	—	$	936		$	2,877	$	13,380		$	5,205
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			2,629		129,204			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	669,434			91,730		380,729			15,844		1,157,737			347,100
Discounts, net	(496		)	—		(2,281		)	—		(2,777		)	(630		)
Total debt	$	668,938		$	91,730	$	378,448		$	15,844	$	1,154,960		$	346,470
HCP’s share of total debt	$	234,128		$	27,519	$	75,690		$	9,133	$	346,470
Weighted average interest rate(1)	5.66%			6.02%		5.56%			6.99%		5.67%			5.70%
Weighted average maturity in years	8.25			7.53		7.34			4.78		7.85			7.90

(1)       Mortgage debt is 100% fixed rate debt.

See Reporting Definitions and Supplemental Financial Measures Disclosures

18

Owned Portfolio

As of and for the year ended December 31, 2008, 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	$	4,145,965	12	25,822 Units	89.3	1.17 x	1.42 x
Life science	96	2,810,577		15	6,126 Sq. Ft.	91.1	N/A	N/A
Medical office	188	2,125,280		17	12,952 Sq. Ft.	90.3	N/A	N/A
Hospital	20	1,008,506		22	2,620 Beds	58.5	2.58 x	3.01 x
Skilled nursing	51	1,172,212		24	6,123 Beds	86.0	1.51 x	2.07 x
	594	$	11,262,540	15

Portfolio Diversification

Relationship Concentration				Geographic Concentration(1)
	Annualized Revenues				Investment			Rental Revenues &		Interest		Operating
Company	Amount		%	State	Amount		%	DFL Income		Income		Expenses
Sunrise Senior Living	$	126,839	13	CA	$	3,665,607	36	$	324,991	$	300	$	60,596
HCR ManorCare	82,622		9	TX	1,277,744		12	152,681		3,565		48,486
HCA	65,205		7	FL	683,870		7	74,981		—		13,975
Brookdale	59,660		6	CO	394,170		4	40,908		1,517		11,087
Emeritus Corporation	42,136		4	VA	383,628		4	31,425		—		1,696
Genentech	33,846		4	WA	308,396		3	35,734		—		10,737
Tenet Healthcare Corporation	30,096		3	NJ	280,589		3	20,291		—		—
Amgen	25,224		3	UT	253,662		3	31,860		—		5,661
Aegis Senior Living	19,980		2	MD	211,060		2	20,194		—		1,602
Cirrus Health	18,136		2	Other	2,605,828		26	286,830		490		38,792
Kindred	15,683		2		$	10,064,554	100	$	1,019,895	$	5,872	$	192,632
Other	440,551		45
	$	959,978	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

Owned Portfolio

In thousands

Portfolio NOI and Interest Income

	Three Months Ended December 31, 2008
	Rental Revenues		Operating				Interest
Segment	& DFL Income		Expenses		NOI		Income
Senior housing	$	93,566	$	2,561	$	91,005	$	269
Life science	61,622		12,102		49,520		—
Medical office	76,330		33,322		43,008		—
Hospital	21,259		515		20,744		11,172
Skilled nursing	9,013		—		9,013		21,061
	$	261,790	$	48,500	$	213,290	$	32,502
	Year Ended December 31, 2008
	Rental Revenues		Operating				Interest
Segment	& DFL Income		Expenses		NOI		Income
Senior housing	$	348,025	$	10,492	$	337,533	$	1,184
Life science	242,329		43,541		198,788		—
Medical office	308,747		135,305		173,442		—
Hospital	84,812		3,294		81,518		44,515
Skilled nursing	35,982		—		35,982		85,858
	$	1,019,895	$	192,632	$	827,263	$	131,557

See Reporting Definitions and Supplemental Financial Measures Disclosures

20

Owned Portfolio

As of and for the year ended December 31, 2008, 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	205	$	3,496,653	$	289,876	$	10,492	12	22,458	Units	88.9	$	311,080	1.16 x	$	375,856	1.40 x
Life science	96	2,810,577		242,329		43,541		15	6,126	Sq. Ft.	91.1	N/A		N/A	N/A		N/A
Medical office	188	2,125,280		308,747		135,305		17	12,952	Sq. Ft.	90.3	N/A		N/A	N/A		N/A
Hospital	19	677,829		84,812		3,294		23	2,562	Beds	58.5	156,361		2.54 x	182,580		2.96 x
Skilled nursing	48	254,783		35,982		—		24	5,681	Beds	86.1	52,017		1.47 x	71,810		2.02 x
	556	$	9,365,122	$	961,746	$	192,632	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	$	628,428	$	58,149			11	3,141	Units	91.7	$	46,036	1.20 x	$	57,171	1.49 x
Secured Loan Portfolio
	Property			Interest				Average				EBITDAR			EBITDARM
Segment	Count	Investment		Income				Age (Years)	Capacity		Occupancy%	Amount		DSC	Amount		DSC
Senior housing	4	$	20,884	$	1,184			15	223	Units	83.7	$	758	1.73 x	$	927	2.11 x
Hospital	1	35,308		3,001				10	58	Beds	58.7	8,512		3.78 x	9,834		4.37 x
Skilled nursing	3	14,812		1,687				30	442	Beds	84.5	5,463		2.21 x	6,848		2.77 x
	8	$	71,004	$	5,872			20				$	14,733		$	17,609
Mezzanine Loans and Other Debt Investments
				Interest
Segment		Investment		Income
Hospital		$	295,369	$	41,514
Skilled nursing		902,617		84,171
		$	1,197,986	$	125,685
Total	594	$	11,262,540

See Reporting Definitions and Supplemental Financial Measures Disclosures

21

Owned Portfolio

As of December 31, 2008, except NOI data, dollars and square feet in thousands

Same Property Portfolio

			Senior			Life			Medical						Skilled
	Total		Housing			Science			Office			Hospital			Nursing
Property count	459		201			13			184			13			48
Investment	$	6,184,521	$	3,454,509		$	168,116		$	1,869,903		$	437,210		$	254,783
Percent of operating lease portfolio (by investment)	66.0		98.8			6.0			88.0			64.5			100.0
Capacity			22,142 Units			897 Sq. Ft.			11,977 Sq. Ft.			1,605 Beds			5,681 Beds
NOI for the three months ended:
December 31, 2008	$	144,491	$	75,497		$	5,438		$	41,250		$	13,293		$	9,013
September 30, 2008	$	133,431	$	67,030		$	4,437		$	39,867		$	12,936		$	9,161
Same property % change in NOI	8.3		12.6			22.6			3.5			2.8			(1.6		)
Adjusted NOI for the three months ended:
December 31, 2008	$	137,772	$	71,932		$	3,357		$	40,307		$	13,262		$	8,914
September 30, 2008	$	128,184	$	64,052		$	3,611		$	38,564		$	12,905		$	9,052
Same property % change in Adjusted NOI	7.5		12.3			(7.0		)	4.5			2.8			(1.5		)
NOI for the year ended:
December 31, 2008	$	544,528	$	276,180		$	16,724		$	163,702		$	51,940		$	35,982
December 31, 2007	$	544,689	$	281,010		$	11,450		$	164,408		$	52,649		$	35,172
Same property % change in NOI	—		(1.7		)	46.1			(0.4		)	(1.3		)	2.3
Adjusted NOI for the Year ended:
December 31, 2008	$	522,226	$	262,942		$	13,100		$	158,838		$	51,817		$	35,529
December 31, 2007	$	514,141	$	259,096		$	11,004		$	156,817		$	52,633		$	34,591
Same property % change in Adjusted NOI	1.6		1.5			19.0			1.3			(1.6		)	2.7

See Reporting Definitions and Supplemental Financial Measures Disclosures

22

Owned Portfolio

As of and for the year ended December 31, 2008, dollars and square feet in thousands

Lease Expirations and Secured Loan Maturities

			Expiration Year
Segment	Total		2009(1)		2010		2011		2012		2013		2014		2015		2016		2017		2018		Thereafter
Senior housing:
Properties	239		4		4		4		4		6		8		2		24		26		67		90
Annualized revenues	$	310,053	$	395	$	659	$	1,100	$	1,075	$	24,866	$	15,600	$	3,174	$	26,860	$	31,061	$	101,335	$	103,928
Life science:
Square feet	5,579		464		560		415		212		216		249		595		197		733		411		1,527
Annualized revenues	$	188,505	$	10,378	$	12,340	$	13,821	$	4,665	$	7,034	$	5,605	$	17,955	$	5,748	$	23,474	$	22,183	$	65,302
Medical office:
Square feet	11,699		2,109		1,850		1,333		1,477		1,167		725		617		399		467		678		877
Annualized revenues	$	235,392	$	43,282	$	38,042	$	28,490	$	30,066	$	20,897	$	17,216	$	12,073	$	8,303	$	10,209	$	12,491	$	14,323
Hospital(2):
Properties	19		3		1		—		—		1		3		1		1		2		—		7
Annualized revenues	$	65,052	$	14,630	$	2,973	$	—	$	—	$	2,400	$	16,018	$	369	$	3,001	$	4,413	$	—	$	21,248
Skilled nursing:
Properties	51		4		2		—		—		10		9		5		5		9		4		3
Annualized revenues	$	37,046	$	1,402	$	1,501	$	—	$	—	$	6,914	$	6,672	$	3,249	$	4,869	$	7,953	$	2,168	$	2,318
Total:
Annualized revenues	$	836,048	$	70,087	$	55,515	$	43,411	$	35,806	$	62,111	$	61,111	$	36,820	$	48,781	$	77,110	$	138,177	$	207,119

(1)       Includes month-to-month and holdover leases.

(2)       Lease expirations exclude one facility in Plaquemine, LA where the lease has been terminated.

See Reporting Definitions and Supplemental Financial Measures Disclosures

23

Owned Senior Housing Portfolio

As of and for the year ended December 31, 2008, dollars in thousands

	Property			Rental		Operating		Average			EBITDAR			EBITDARM
Operating Lease Portfolio	Count	Investment		Revenues		Expenses		Age (Years)	Units	Occupancy %	Amount		CFC	Amount		CFC
Assisted living	168	$	2,274,649	$	180,683	$	10,492	11	14,345	88.0	$	191,184	1.15 x	$	234,330	1.40 x
Independent living	28	682,030		58,511		—		15	4,581	88.6	57,131		1.06 x	65,967		1.23 x
CCRCs	9	539,974		50,682		—		20	3,532	93.3	62,765		1.33 x	75,559		1.60 x
	205	$	3,496,653	$	289,876	$	10,492	12	22,458	88.9	$	311,080	1.16 x	$	375,856	1.40 x
Direct Financing Lease	Property							Average			EBITDAR			EBITDARM
Portfolio	Count	Investment		DFL Income				Age (Years)	Units	Occupancy%	Amount		CFC	Amount		CFC
Assisted living	27	$	570,450	$	50,184			11	3,141	91.7	$	46,036	1.20 x	$	57,171	1.49 x
CCRCs(1)	3	57,978		7,965
	30	$	628,428	$	58,149
	Property			Interest				Average			EBITDAR			EBITDARM
Secured Loan Portfolio	Count	Investment		Income				Age (Years)	Units	Occupancy%	Amount		DSC	Amount		DSC
Assisted living	3	$	8,000	$	300			11	123	N/A	$	—	N/A	$	—	N/A
Independent living	1	3,028		320				25	100	83.7	758		1.73 x	927		2.11 x
CCRCs(2)	N/A	9,856		564					N/A
	4	$	20,884	$	1,184			15	223
Total	239	$	4,145,965					12	25,822	89.3

(1)       Represents ground leases on CCRCs.

(2)       Represents a secured construction loan on one CCRC included in the direct financing lease portfolio.

See Reporting Definitions and Supplemental Financial Measures Disclosures

24

Owned Senior Housing Portfolio

As of and for the year ended December 31, 2008, dollars in thousands

Portfolio Diversification
Operator Concentration

	Properties			Investment				Rental Revenues & Interest Income				Occupancy	EBITAR	EBITARM
Operator	Count	% Pooled		Amount		%		Amount		%	Units	%	CFC/DSC	CFC/DSC
Sunrise Senior Living	90	99		$	1,941,334	47		$	138,200	40	10,267	90.3	1.18 x	1.44 x
Brookdale	24	92		675,054		16		67,938		19	4,826	92.7	1.28 x	1.52 x
Emeritus Corporation(1)	37	92		529,586		13		47,565		14	3,806	91.1	1.16 x	1.44 x
Aegis Senior Living	12	67		258,008		6		22,514		6	966	87.9	1.01 x	1.17 x
Capital Senior Living	15	73		176,517		4		14,661		4	1,530	84.6	1.13 x	1.28 x
Harbor Retirement Associates	10	90		160,679		4		10,443		3	1,069	80.4	1.05 x	1.38 x
Atria Senior Living Group	6	100		88,076		2		9,157		3	854	84.3	0.96 x	1.11 x
Other	45	51		316,711		8		38,731		11	2,504	81.8	1.07 x	1.33 x
	239	85		$	4,145,965	100		$	349,209	100	25,822	89.3	1.17 x	1.42 x
Geographic Concentration
	Property	Investment				Rntal Revenues & Interest Income					Occupancy	EBITAR	EBITARM
State	Count	Amount		%		Amount		%		Units	%	CFC/DSC	CFC/DSC
CA	29	$	586,155	14		$	44,991	13		3,233	85.5	1.10 x	1.36 x
FL	30	479,323		12		43,935		13		3,821	88.1	1.22 x	1.49 x
TX	30	383,420		9		36,501		10		3,256	87.3	1.15 x	1.36 x
NJ	13	280,589		7		20,291		6		1,223	94.0	1.16 x	1.38 x
VA	10	279,059		7		19,254		6		1,336	91.7	1.16 x	1.38 x
IL	11	187,218		5		15,173		4		912	90.6	1.28 x	1.51 x
MD	9	182,087		4		15,976		5		828	91.2	1.08 x	1.32 x
CO	5	168,931		4		13,464		4		893	91.4	1.29 x	1.58 x
MI	8	155,802		4		13,965		4		938	86.8	0.81 x	1.06 x
PA	2	137,400		3		13,411		4		542	95.1	1.50 x	1.82 x
AL	3	133,900		3		12,137		3		626	94.0	1.19 x	1.36 x
WA	8	132,609		3		8,081		2		573	85.4	0.74 x	0.95 x
Other	81	1,039,472		25		92,030		26		7,641	90.2	1.24 x	1.50 x
	239	$	4,145,965	100		$	349,209	100		25,822	89.3	1.17 x	1.42 x

(1)Includes data associated with eleven assets formerly operated by Sunrise Senior Living, that represent an investment of $284.1million which generated revenues of $19.9 million.

See Reporting Definitions and Supplemental Financial Measures Disclosures

25

Owned Senior Housing Portfolio

Dollars in thousands

Portfolio Trends

	Same Property Portfolio																Total Portfolio
	As of and for the Quarter Ended								As of and for the Year to Date Ended								As of and for the Twelve Months Ended
	12/31/08			09/30/08			Change %		12/31/08			12/31/07			Change %		12/31/08		09/30/08(1)		12/31/07(1)
Total senior housing:
Property count	201			201					201			201					239		240		246
Investment	$	3,454,509		$	3,454,995		—		$	3,454,509		$	3,449,451		0.1		$	4,145,965	$	4,151,621	$	4,158,129
Units	22,142			22,085			0.3		22,142			22,127			0.1		25,822		25,831		25,804
Occupancy %	88.9			89.6			(0.7	)	88.9			91.0			(2.1	)	89.3		89.7		90.8
EBITDAR	$	307,736		$	306,074		0.5		$	307,736		$	271,293		13.4		$	357,874	$	353,040	$	305,927
EBITDAR CFC/DSC	1.16 x			1.16 x			—		1.16 x			1.08 x			7.4		1.17 x		1.16 x		1.06 x
EBITDARM	$	371,851		$	368,622		0.9		$	371,851		$	329,169		13.0		$	433,954	$	427,826	$	374,239
EBITDARM CFC/DSC	1.40 x			1.40 x			—		1.40 x			1.31 x			6.9		1.42 x		1.40 x		1.30 x
NOI:
Rental revenues	$	77,998		$	69,717		11.9		$	286,231		$	291,861		(1.9	)
Operating expenses	(2,501		)	(2,687		)	(6.9	)	(10,051		)	(10,851		)	(7.4	)
	$	75,497		$	67,030		12.6		$	276,180		$	281,010		(1.7	)
Adjusted NOI:
Straight-line rents	(3,538		)	(3,015		)	17.3		(13,321		)	(22,061		)	(39.6	)
Above (below) market lease intangibles, net	(27		)	37			NM	(2)	83			147			(43.5	)
	$	71,932		$	64,052		12.3		$	262,942		$	259,096		1.5

(1)       Amounts are reflected as originally reported.

(2)       Percentage change not meaningful.

See Reporting Definitions and Supplemental Financial Measures Disclosures

26

Owned Senior Housing Portfolio

Dollars in thousands

Lease Expirations and Secured Loan Maturities

	Total				Assisted Living			Independent Living			CCRCs
		Annualized Revenues				Annualized			Annualized			Annualized
Year	Properties	Amount		%	Properties	Revenues		Properties	Revenues		Properties	Revenues
2009(1)	4	$	395	—	4	$	395	—	$	—	—	$	—
2010	4	659		—	4	659		—	—		—	—
2011	4	1,100		—	3	785		1	315		—	—
2012	4	1,075		—	4	1,075		—	—		—	—
2013	6	24,866		8	—	—		1	4,243		5	20,623
2014	8	15,600		5	5	1,948		—	—		3	13,652
2015	2	3,174		1	1	617		1	2,557		—	—
2016	24	26,860		9	14	13,237		10	13,623		—	—
2017	26	31,061		10	21	19,749		3	4,389		2	6,923
2018	67	101,335		33	59	70,979		6	16,464		2	13,892
Thereafter	90	103,928		34	83	92,392		7	11,536		—	—
	239	$	310,053	100	198	$	201,836	29	$	53,127	12	$	55,090

(1)       Includes month-to-month and holdover leases.

See Reporting Definitions and Supplemental Financial Measures Disclosures

27

Owned Life Science Portfolio

As of and for the year ended December 31, 2008, dollars and square feet in thousands

	Property			Rental		Operating		Average	Square
Operating Lease Portfolio	Count	Investment		Revenues(1)		Expenses		Age (Years)	Feet	Occupancy %
San Francisco	70	$	2,227,598	$	194,474	$	33,758	15	4,160	89.9
San Diego	17	492,712		35,870		8,443		17	1,382	90.9
Utah	9	90,267		11,985		1,340		9	584	100.0
	96	$	2,810,577	$	242,329	$	43,541	15	6,126	91.1

Portfolio Diversification

Tenant Concentration

	Square Feet		Annualized Revenues
Tenant	Amount	%	Amount		%
Genentech	794	14	$	33,846	18
Amgen	433	8	25,224		13
Rigel Pharmaceuticals	147	3	13,983		7
Takeda	283	5	13,922		7
Exelixis, Inc.	295	5	12,136		6
General Atomics	281	5	5,044		3
ARUP	324	6	4,885		3
Sequenom	83	1	4,583		2
Myriad Genetics	225	4	4,406		2
Fibrogen	106	2	4,119		2
Other	2,608	47	66,357		37
	5,579	100	$	188,505	100

(1)       Excludes $14.2 million of rent, $10.7 million from San Francisco and $3.5 million from San Diego, collected on leases where the respective tenant improvement build outs are not complete (deferred rent).  These leases are included in occupied square feet and annualized revenues when determining occupancy and tenant concentration.

See Reporting Definitions and Supplemental Financial Measures Disclosures

28

Owned Life Science Portfolio

Dollars and square feet in thousands

Portfolio Trends

	Same Property Portfolio																Total Portfolio
	As of and for the Quarter Ended								As of and for the Year to Date Ended								As of and for the Twelve Months Ended
	12/30/08			09/30/08			Change %		12/31/08			12/31/07			Change %		12/31/08		09/30/08(1)		12/31/07(1)
Total life science:
Property count	13			13					13			13					96		99		97
Investment	$	168,116		$	167,988		0.1		$	168,116		$	158,301		6.2		$	2,810,577	$	2,822,043	$	2,658,255
Square feet	897			894			0.3		897			898			(0.1	)	6,126		6,232		6,021
Occupancy %	100.0			100.0			—		100.0			83.3			16.7		91.1		89.1		82.4
NOI:
Rental revenues	$	6,257		$	5,825		7.4		$	21,314		$	16,910		26.0
Operating expenses	(819		)	(1,388		)	(41.0	)	(4,590		)	(5,460		)	(15.9	)
	$	5,438		$	4,437		22.6		$	16,724		$	11,450		46.1
Adjusted NOI:
Straight-line rents	(1,986		)	(731		)	NM	(2)	(3,246		)	(868		)	NM
Below market lease intangibles, net	(95		)	(95		)	—		(378		)	(378		)	—
Lease terminations	—			—			—		—			800			(100.0	)
	$	3,357		$	3,611		(7.0	)	$	13,100		$	11,004		19.0

(1)Amounts are reflected as originally reported, except for occupancy which was revised to conform to current presentation.

(2)Percentage change not meaningful.

See Reporting Definitions and Supplemental Financial Measures Disclosures

29

Owned Life Science Portfolio

Dollars and square feet in thousands

Lease Expirations

	Total					San Francisco			San Diego			Utah
	Square Feet		Annualized Revenues			Square	Annualized		Square	Annualized		Square	Annualized
Year	Amount	%	Amount		%	Feet	Revenues		Feet	Revenues		Feet	Revenues
2009(1)	464	8	$	10,378	6	230	$	5,739	159	$	3,625	75	$	1,014
2010	560	10	12,340		6	282	7,161		142	3,192		136	1,987
2011	415	8	13,821		7	385	12,866		30	955		—	—
2012	212	4	4,665		2	144	3,040		32	1,076		36	549
2013	216	4	7,034		4	216	7,034		—	—		—	—
2014	249	5	5,605		3	249	5,605		—	—		—	—
2015	595	10	17,955		10	213	8,017		311	8,742		71	1,196
2016	197	4	5,748		3	197	5,748		—	—		—	—
2017	733	13	23,474		12	226	10,127		353	10,522		154	2,825
2018	411	7	22,183		12	369	21,494		—	—		42	689
Thereafter	1,527	27	65,302		35	1,228	59,068		229	4,652		70	1,582
	5,579	100	$	188,505	100	3,739	$	145,899	1,256	$	32,764	584	$	9,842

(1)Includes month-to-month and holdover leases.

See Reporting Definitions and Supplemental Financial Measures Disclosures

30

Owned Life Science Portfolio

Square feet in thousands

Leasing Activity

			Annualized			Tenant	Leasing	Average
	Leased		Base Rent Per		% Change	Improvements	Costs Per	Lease Term	Renewal Rate
	Square Feet(1)		Square Foot		In Rents	Per Square Foot	Square Foot	(Months)	Year-to-Date(2)
Leased Square Feet as of December 31, 2007	5,623		$	29.62
Expirations	(17	)	12.28
Renewals, amendments and extensions	17		13.59		10.7	2.41	1.01	14	100.0
New leases	18		36.04			40.04	3.51	52
Terminations	(81	)	12.42
Leased Square Feet as of March 31, 2008	5,560		$	31.67
Developments placed in service	82		45.16
Expirations	(27	)	13.60
Renewals, amendments and extensions	7		14.00		3.0	—	0.42	12	54.5
New leases	60		29.77			31.68	9.56	79
Terminations	(7	)	12.00
Leased Square Feet as of June 30, 2008	5,675		$	32.51
Developments placed in service	147		45.16
Assets placed in redevelopment	(41	)	15.44
Expirations	(184	)	23.80
Renewals, amendments and extensions	140		28.74		11.7	3.26	4.11	40	71.9
Terminations	(149	)	19.82
Leased Square Feet as of September 30, 2008	5,588		$	33.53
Assets placed in redevelopment	(23	)	10.09
Expirations	(18	)	7.70
Renewals, amendments and extensions	18		10.20		32.5	—	—	60	75.7
New leases and expansions	14		27.08			32.05	3.81	30
Leased Square Feet as of December 31, 2008	5,579		33.79

(1)Represents square feet subject to executed lease agreements.

(2)Renewal rates were revised to conform to current presentation.

See Reporting Definitions and Supplemental Financial Measures Disclosures

31

Owned Medical Office Portfolio

As of and for the year ended December 31, 2008, dollars and square feet in thousands

	Property			Rental		Operating		Average
Operating Lease Portfolio	Count	Investment		Revenues		Expenses		Age (Years)	Square Feet	Occupancy %
On-Campus	144	$	1,712,352	$	247,052	$	109,390	17	10,795	89.5
Off-Campus	44	412,928		61,695		25,915		16	2,157	94.3
	188	$	2,125,280	$	308,747	$	135,305	17	12,952	90.3

Portfolio Diversification

Geographic Concentration

	Property	Investment			Square Feet			Rental Revenues			Operating Expenses
State	Count	Amount		%	Amount	%	Occupancy %	Amount		%	Amount		%
TX	45	$	631,422	30	4,074	31	90.1	$	93,083	30	$	47,017	35
CA	14	216,247		10	780	6	90.3	27,456		9	16,311		12
CO	16	187,998		9	1,031	8	84.6	24,570		8	11,087		8
WA	7	175,787		8	687	5	98.1	27,654		9	10,736		8
TN	17	142,498		7	1,500	12	90.8	26,085		8	10,425		8
FL	19	142,097		7	1,024	8	91.3	23,370		9	11,234		8
UT	22	130,661		6	939	7	92.2	17,624		6	4,322		3
KY	6	100,066		5	640	5	92.0	12,857		4	4,436		3
NV	8	84,857		4	541	4	83.6	13,426		4	5,070		4
Other	34	313,647		14	1,736	14	91.0	42,622		13	14,667		11
	188	$	2,125,280	100	12,952	100	90.3	$	308,747	100	$	135,305	100

See Reporting Definitions and Supplemental Financial Measures Disclosures

32

Owned Medical Office Portfolio

Dollars and square feet in thousands

Portfolio Trends

	Same Property Portfolio																Total Portfolio
	As of and for the Quarter Ended								As of and for the Year to Date Ended								As of and for the Twelve Months Ended
	12/31/08			09/30/08			Change %		12/31/08			12/31/07			Change %		12/31/08		09/30/08(1)		12/31/07(1)
Total medical office:
Property count	184			184					184			184					188		190		205
Investment	$	1,869,903		$	1,861,610		0.4		$	1,869,903		$	1,844,830		1.4		$	2,125,280	$	2,162,655	$	2,222,757
Square feet	11,977			11,990			(0.1	)	11,977			11,988			(0.1	)	12,952		13,145		13,912
Occupancy %	90.5			91.0			(0.5	)	90.5			90.9			(0.4	)	90.3		90.2		90.3
NOI:
Rental revenues	$	68,055		$	68,860		(1.2	)	$	272,992		$	272,534		0.2
Operating expenses	(26,805		)	(28,993		)	(7.5	)	(109,290		)	(108,126		)	1.1
	$	41,250		$	39,867		3.5		$	163,702		$	164,408		(0.4	)
Adjusted NOI:
Straight-line rents	(721		)	(1,025		)	(29.7	)	(3,902		)	(6,244		)	(37.5	)
Below market lease intangibles, net	(222		)	(238		)	(6.7	)	(922		)	(1,339		)	(31.1	)
Lease terminations	—			(40		)	(100.0	)	(40		)	(8		)	NM	(2)
	$	40,307		$	38,564		4.5		$	158,838		$	156,817		1.3

(1)       Amounts are reflected as originally reported, except occupancy which was revised to conform to current presentation.

(2)       Percentage change not meaningful.

See Reporting Definitions and Supplemental Financial Measures Disclosures

33

Owned Medical Office Portfolio

Dollars and square feet in thousands

Lease Expirations

	Total					On-Campus			Off-Campus
	Square Feet		Annualized Revenues				Annualized			Annualized
	Amount	%	Amount		%	Square Feet	Revenues		Square Feet	Revenues
2009(1)	2,109	18	$	43,282	19	1,752	$	35,762	357	$	7,520
2010	1,850	16	38,042		16	1,687	33,793		163	4,249
2011	1,333	11	28,490		12	1,136	24,380		197	4,110
2012	1,477	13	30,066		13	1,277	26,112		200	3,954
2013	1,167	10	20,897		9	959	17,030		208	3,867
2014	725	6	17,216		7	634	14,956		91	2,260
2015	617	5	12,073		5	462	8,913		155	3,160
2016	399	3	8,303		4	324	6,737		75	1,566
2017	467	4	10,209		4	390	8,686		77	1,523
2018	678	6	12,491		5	436	7,617		242	4,874
Thereafter	877	8	14,323		6	607	8,753		270	5,570
	11,699	100	$	235,392	100	9,664	$	192,739	2,035	$	42,653

(1)Includes month-to-month and holdover leases.

See Reporting Definitions and Supplemental Financial Measures Disclosures

34

Owned Medical Office Portfolio

Square feet in thousands

Leasing Activity

			Annualized			Tenant		Leasing		Average
	Leased		Base Rent Per		% Change	Improvements		Costs Per		Lease Term	Renewal Rate
	Square Feet		Square Foot		In Rents	Per Square Foot		Square Foot		(Months)	Year-to-Date
Leased Square Feet as of December 31, 2007	12,605		$	20.28
Expirations	(711	)	20.21
Renewals, amendments and extensions	582		20.08		5.0	$	3.72	$	1.07	38	81.8
New leases	108		17.78			24.84		4.04		54
Terminations	(27	)	20.48
Leased Square Feet as of March 31, 2008	12,557		$	20.47
Dispositions	(619	)	16.80
Expirations	(499	)	21.40
Renewals, amendments and extensions	392		24.39		15.5	2.41		0.66		37	80.5
New leases	123		20.04			25.33		3.80		66
Terminations	(36	)	21.79
Leased Square Feet as of June 30, 2008	11,918		$	20.87
Dispositions	(41	)	15.77
Expirations	(618	)	25.12
Renewals, amendments, and extensions	470		21.10		3.7	5.59		2.17		37	78.9
New leases	153		18.18			27.39		3.14		50
Terminations	(29	)	16.86
Leased Square Feet as of September 30, 2008	11,853		$	20.82
Dispositions/Assets placed in redevelopment	(23	)	11.75
Expirations	(555	)	23.57
Renewals, amendments, and extensions	339		19.90		3.5	8.84		2.08		40	74.2
New leases	101		18.97			34.24		6.21		65
Terminations	(16	)	17.41
Leased Square Feet as of December 31, 2008	11,699		$	20.86

See Reporting Definitions and Supplemental Financial Measures Disclosures

35

Owned Hospital Portfolio

As of and for the year ended December 31, 2008, dollars in thousands

	Property			Rental		Operating		Average		Occupancy	EBITDAR(1)			EBITDARM(1)
Operating Lease Portfolio	Count	Investment		Revenues		Expenses		Age (Years)	Beds	%(1)	Amount		CFC	Amount		CFC
Acute care	7	$	483,574	$	60,770	$	3,055	30	1,794	56.6	$	103,499	2.62 x	$	118,697	3.00 x
Rehab	7	95,322		11,004		68		18	487	61.8	20,468		1.90 x	24,231		2.25 x
Specialty	2	63,728		5,024		171		25	37	—	18,367		3.92 x	21,061		4.49 x
LTACH	3	35,205		8,014		—		15	244	61.3	14,027		2.11 x	18,591		2.80 x
	19	$	677,829	$	84,812	$	3,294	23	2,562	58.5	$	156,361	2.54 x	$	182,580	2.96 x
	Property			Interest				Average		Occupancy	EBITDAR(1)			EBITDARM(1)
Secured Loan Portfolio	Count	Investment		Income				Age (Years)	Beds	%(1)	Amount		DSC	Amount		DSC
Acute care	1	$	35,308	$	3,001			10	58	58.7	$	8,512	3.78 x	$	9,834	4.37 x
				Interest
Other Debt Investments		Investment		Income
Acute care		$	216,060	$	24,931
Specialty		79,309		16,583
		$	295,369	$	41,514
Total	20	$	1,008,506					22	2,620	58.5

(1)Certain operators in HCP’s hospital portfolio are not required under their respective leases to provide operational data.

See Reporting Definitions and Supplemental Financial Measures Disclosures

36

Owned Hospital Portfolio

As of and for the year ended December 31, 2008, dollars in thousands

Portfolio Diversification

Operator Concentration

	Properties			Investment				Rental Revenues & Interest Income				Occupancy	EBITDAR	EBITDARM
Operator(1)	Count	% Pooled		Amount		%		Amount		%	Beds	%	CFC/DSC	CFC/DSC
HCA	1	—		$	382,133	38		$	47,079	36	598	N/A	N/A	N/A
Tenet Healthcare Corp	5	—		312,432		31		38,759		30	1,097	57.2	2.62 x	3.01 x
Cirrus Health	2	—		130,437		13		19,784		15	37	N/A	3.92 x	4.49 x
HealthSouth	5	80		55,981		6		8,302		6	372	59.3	2.69 x	3.07 x
Other	7	71		127,523		12		15,403		13	516	56.1	1.84 x	2.40 x
	20	45		$	1,008,506	100		$	129,327	100	2,620	58.5	2.58 x	3.01 x
Geographic Concentration(1)(2)
	Property	Investment				Rntal Revenues & Interest Income					Occupancy	EBITDAR	EBITDARM
State	Count	Amount		%		Amount		%		Beds	%	CFC/DSC	CFC/DSC
TX	5	$	260,084	36		$	31,808	36		947	56.6	1.60 x	2.03 x
CA	2	128,548		18		14,826		17		176	41.1	1.63 x	1.88 x
GA	2	76,735		11		11,420		14		274	65.7	4.02 x	4.54 x
LA	4	65,469		9		6,578		7		343	51.5	1.71 x	2.19 x
Other	7	182,301		26		23,181		26		880	62.4	3.17 x	3.66 x
	20	$	713,137	100		$	87,813	100		2,620	58.5	2.58 x	3.01 x

(1)Certain operators in HCP’s hospital portfolio are not required under their respective leases to provide operational data.

(2)       Geographic concentration excludes 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

37

Owned Hospital Portfolio

Dollars in thousands

Portfolio Trends

	Same Property Portfolio																Total Portfolio
	As of and for the Quarter Ended								As of and for the Year to Date Ended								As of and for the Twelve Months Ended
	12/31/08			09/30/08			Change %		12/31/08			12/31/07			Change %		12/31/08		09/30/08(1)		12/31/07(1)
Total hospital:
Property count	13			13					13			13					20		21		37
Investment	$	437,210		$	437,442		(0.1	)	$	437,210		$	437,901		(0.2	)	$	1,008,506	$	1,082,931	$	1,456,951
Beds	1,605			1,605			—		1,605			1,584			1.3		2,620		2,763		4,402
Occupancy %	57.3			57.2			0.1		57.3			55.9			1.4		58.5		56.0		55.4
EBITDAR	$	143,876		$	152,832		(5.9	)	$	143,876		$	141,672		1.6		$	164,873	$	173,945	$	250,028
EBITDAR CFC/DSC	2.74 x			2.89 x			(5.2	)	2.74 x			2.72 x			0.7		2.58 x		2.49 x		2.38 x
EBITDARM	$	164,900		$	174,023		(5.2	)	$	164,900		$	162,161		1.7		$	192,414	$	204,072	$	295,018
EBITDARM CFC/DSC	3.15 x			3.29 x			(4.3	)	3.15 x			3.12 x			1.0		3.01 x		2.92 x		2.81 x
NOI:
Rental revenues	$	13,331		$	12,955		2.9		$	52,033		$	52,652		(1.2	)
Operating expenses	(38		)	(19		)	100.0		(93		)	(3		)	NM	(2)
	$	13,293		$	12,936		2.8		$	51,940		$	52,649		(1.3	)
Adjusted NOI:
Straight-line rents	(6		)	(6		)	—		(23		)	84			NM
Below market lease intangibles, net	(25		)	(25		)	—		(100		)	(100		)	—
	$	13,262		$	12,905		2.8		$	51,817		$	52,633		(1.6	)
Lease Expirations and Secured Loan Maturities(3)
				Annualized Revenues
	Properties			Amount			%
2009(4)	3			$	14,630		22
2010	1			2,973			4
2011	—			—			—
2012	—			—			—
2013	1			2,400			4
2014	3			16,018			25
2015	1			369			1
2016	1			3,001			5
2017	2			4,413			7
2018	—			—			—
Thereafter	7			21,248			32
	19			$	65,052		100

(1)       Amounts are reflected as originally reported.

(2)Percentage change not meaningful.

(3)Lease expirations exclude one facility in Plaquemine, LA where the lease has been terminated.

(4)Includes month-to-month and holdover leases.

See Reporting Definitions and Supplemental Financial Measures Disclosures

38

Owned Skilled Nursing Portfolio

As of and for the year ended December 31, 2008, dollars in thousands

Operating Lease	Property			Rental		Operating		Average		Occupancy	EBITDAR			EBITDARM
Portfolio	Count	Investment		Revenues		Expenses		Age (Years)	Beds	%	Amount		CFC	Amount		CFC
Skilled nursing	48	$	254,783	$	35,982	$	—	24	5,681	86.1	$	52,017	1.47 x	$	71,810	2.02 x
Secured Loan	Property			Interest				Average		Occupancy	EBITDAR			EBITDARM
Portfolio	Count	Investment		Income				Age (Years)	Beds	%	Amount		DSC	Amount		DSC
Skilled nursing	3	$	14,812	$	1,687			30	442	84.5	$	5,463	2.21 x	$	6,848	2.77 x
Mezzanine Loans		Investment		Interest Income
Skilled nursing		$	902,617	$	84,171
Total	51	$	1,172,212					24	6,123	86.0

Portfolio Diversification

	Properties		Investment			Rental Revenues & Interest Income				Occupancy	EBITDAR	EBITDARM
Operator	Count	% Pooled	Amount		%	Amount		%	Beds	%	CFC/DSC	CFC/DSC
HCR ManorCare(1)	—	—	$	902,617	77	$	84,171	69	N/A	N/A	N/A	N/A
Formation Capital	9	100	63,100		6	6,800		6	934	95.2	1.74 x	2.24 x
Covenant Care	12	—	61,916		5	8,822		7	1,373	82.1	1.53 x	2.07 x
Sun Healthcare	6	67	38,657		3	4,453		4	841	84.3	2.24 x	2.78 x
Kindred	9	100	38,117		3	8,021		6	1,288	87.7	1.23 x	1.97 x
Trilogy Health Services	5	100	33,452		3	4,715		4	569	90.8	1.60 x	1.98 x
Other	10	—	34,353		3	4,858		4	1,118	79.3	0.80 x	1.38 x
	51	53	$	1,172,212	100	$	121,840	100	6,123	86.0	1.51 x	2.07 x

(1)For the Company’s HCR ManorCare investment, DSC is calculated as the quotient of i) Facility EBITDAR with an imputed management fee of 4% and EBITDARM for the most recent quarter(s) of available data since HCR ManorCare’s December 2007 recapitalization divided by ii) the borrower’s pro forma debt service calculated as the product of a) total outstanding senior and mezzanine debt for the relevant period(s) multiplied by b) HCR ManorCare’s hedged interest rate maximum exposure of 5.25%. Currently, the EBITDAR and EBITDARM DSC for this investment is 1.99 x and 2.50 x, respectively.

See Reporting Definitions and Supplemental Financial Measures Disclosures

39

Owned Skilled Nursing Portfolio

As of and for the year ended December 31, 2008, dollars in thousands

Geographic Concentration(1)

	Property			Investment					Rental Revenues & Interest Income										EBITDAR		EBITDARM
State	Count			Amount			%		Amount			%			Beds		Occupancy		CFC/DSC		CFC/DSC
VA	9			$	63,100		23		$	6,800		18			934		95.2		1.74 x		2.24 x
IN	8			46,090			17		6,657			18			870		85.9		1.54 x		1.98 x
OH	8			43,287			16		6,963			18			1,120		77.8		1.22 x		1.76 x
CO	4			28,212			10		3,065			8			602		90.9		2.46 x		3.04 x
CA	3			14,347			5		2,110			6			379		86.8		1.23 x		1.88 x
NV	2			13,100			5		2,007			5			267		89.8		1.78 x		2.41 x
Other	17			61,459			24		10,067			27			1,951		83.3		1.19 x		1.84 x
	51			$	269,595		100		$	37,669		100			6,123		86.0		1.51 x		2.07 x
Portfolio Trends
	Same Property Portfolio																Total Portfolio
	As of and for the Quarter Ended								As of and for the Year to Date Ended								As of and for the Twelve Months Ended
	12/31/08			09/30/08			Change%		12/31/08			12/31/07			Change%		12/31/08		09/30/08(2)		12/31/07(2)
Total skilled nursing:
Property count	48			48					48			48					51		51		63
Investment	$	254,783		$	254,759		—		$	254,783		$	241,091		5.7		$	1,172,212	$	1,172,497	$	1,221,972
Beds	5,681			5,681			—		5,681			5,608			1.3		6,123		6,123		7,437
Occupancy %	86.1			86.0			0.1		86.1			86.3			(0.2	)	86.0		85.9		86.1
EBITDAR	$	52,017		$	50,875		2.2		$	52,017		$	45,759		13.7		$	57,480	$	56,064	$	62,711
EBITAR CFC/DSC	1.47 x			1.47 x			—		1.47 x			1.48 x			(0.7	)	1.51 x		1.52 x		1.52 x
EBITDARM	$	71,810		$	70,270		2.2		$	71,810		$	63,878		12.4		$	78,658	$	76,822	$	86,186
EBITDARM CFC/DSC	2.02 x			2.03 x			(0.5	)	2.02 x			2.07 x			(2.4	)	2.07 x		2.08 x		2.09 x
NOI:
Rental revenues	$	9,013		$	9,161		(1.6	)	$	35,982		$	35,172		2.3
Adjusted NOI:
Straight-line rents	(99		)	(109		)	(9.2	)	(506		)	(697		)	(27.4	)
Above market lease intangibles, net	—			—			—		53			116			(54.3	)
	$	8,914		$	9,052		(1.5	)	$	35,529		$	34,591		2.7

(1)       Geographic concentration excludes Mezzanine Loans as the investment and revenues associated with these assets cannot be allocated to a particular geographic region.

(2)       Amounts are reflected as originally reported.

See Reporting Definitions and Supplemental Financial Measures Disclosures

40

Owned Skilled Nursing Portfolio

As of and for the year ended December 31, 2008, dollars in thousands

Lease Expirations and Secured Loan Maturities

		Annualized Revenues
	Properties	Amount		%
2009	4	$	1,402	4
2010	2	1,501		4
2011	—	—		—
2012	—	—		—
2013	10	6,914		19
2014	9	6,672		18
2015	5	3,249		9
2016	5	4,869		13
2017	9	7,953		21
2018	4	2,168		6
Thereafter	3	2,318		6
	51	$	37,046	100

See Reporting Definitions and Supplemental Financial Measures Disclosures

41

Investment Management Platform

As of and for the year ended December 31, 2008, dollars and square feet in thousands

	Property			Rental		Operating		Average			EBITDAR			EBITDARM
HCP Ventures II (35%)(1)	Count	Investment		Revenues		Expenses		Age (Years)	Units	Occupancy %	Amount		CFC	Amount		CFC
Assisted living	2	$	11,087	$	891	$	—	13	111	91.1	$	579	0.75 x	$	779	1.01 x
Independent living	20	981,284		74,111		3		19	5,074	94.0	65,020		1.00 x	72,645		1.12 x
CCRCs	3	107,714		8,419		1		14	444	90.8	6,853		0.93 x	7,880		1.07 x
	25	$	1,100,085	$	83,421	$	4	18	5,629	93.7	$	72,452	0.99 x	$	81,304	1.11 x
	Property			Rental		Operating		Average
HCP Ventures III (30%)	Count	Investment		Revenues		Expenses		Age (Years)	Square Feet	Occupancy %
On-Campus	9	$	108,597	$	13,744	$	4,437	8	606	100.0
Off-Campus	4	32,482		4,379		1,655		8	183	100.0
	13	$	141,079	$	18,123	$	6,092	8	789	100.0
	Property			Rental		Operating		Average
HCP Ventures IV (20%)	Count	Investment		Revenues		Expenses		Age (Years)	Square Feet	Occupancy %(2)
Medical office:
On-Campus	23	$	227,120	$	25,176	$	11,931	20	1,212	83.0
Off-Campus	27	322,453		34,927		14,166		18	1,368	89.2
Life science	4	23,855		1,947		279		12	111	100.0
Hospital:
LTACH	1	12,184		1,031		200		2	N/A	N/A
Rehab	1	13,965		1,358		7		3	N/A	N/A
Specialty	2	55,224		5,531		655		4	N/A	N/A
	58	$	654,801	$	69,970	$	27,238	17
	Property			Rental		Operating		Average
HCP Life Science (50%-63%)	Count	Investment		Revenues		Expenses		Age (Years)	Square Feet	Occupancy %
San Francisco	2	$	40,560	$	5,594	$	1,224	12	147	100.0
San Diego	2	39,767		4,481		490		13	131	96.8
	4	$	80,327	$	10,075	$	1,714	13	278	98.5

(1)       All facilities are operated by Horizon Bay Senior Communities.

(2)       Certain operators in the Investment Management Platform hospital portfolio are not required under their respective leases to provide operational data.

See Reporting Definitions and Supplemental Financial Measures Disclosures

42

Investment Management Platform

As of and for the year ended December 31, 2008, dollars in thousands

Portfolio Diversification

Geographic Concentration

	Investment			Rental		Operating
State	Amount		%	Revenues		Expenses
TX	$	611,046	31	$	57,805	$	14,014
FL	436,004		22	36,872		5,286
IL	235,503		12	19,742		2,026
RI	201,036		10	16,652		1
CA	154,225		8	15,309		1,714
AZ	113,759		5	10,150		2,908
AL	58,394		3	6,866		2,032
TN	34,688		2	4,141		1,644
MO	33,326		2	3,183		1,300
NC	23,855		1	1,947		279
Other	74,456		4	8,922		3,844
	$	1,976,292	100	$	181,589	$	35,048

See Reporting Definitions and Supplemental Financial Measures Disclosures

43

Reporting Definitions

Acute Care Hospitals.  Acute care hospitals offer a wide range of services such as fully-equipped operating and recovery rooms, obstetrics, radiology, intensive care, open heart surgery and coronary care, neurosurgery, neonatal intensive care, magnetic resonance imaging, nursing units, oncology, clinical laboratories, respiratory therapy, physical therapy, nuclear medicine, rehabilitation services and outpatient services.

Annualized Debt Service.  The most recent monthly interest and principal amortization due to HCP as of period end annualized for twelve months.  The Company uses Annualized Debt Service for purposes of determining Debt Service Coverage.

Annualized Revenues.  The most recent monthly base rent, income from direct financing leases and/or interest income annualized for twelve months.  Annualized Revenues do not include tenant recoveries, additional rents and non-cash revenue adjustments (i.e., straight-line rents, amortization of above and below market lease intangibles, interest accretion and deferred revenues).  The Company uses Annualized Revenues for the purpose of determining Relationship Concentrations, Lease Expirations and Secured Loan Maturities.

Assets Held for Sale.  Assets of discontinued operations in accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

Assisted Living Facility (“ALF”).  A senior housing facility that predominantly consists of assisted living units is classified by the Company as an ALF.

Beds/Units/Square Feet.  Senior housing facilities are measured in units (e.g., studio, one or two bedroom units).  MOBs and life science facilities are measured in square feet. Hospitals and skilled nursing facilities are measured in licensed bed count.

Book Value.  The carrying amount as reported in the Company’s financial statements.

Cash Flow Coverage (“CFC”).  Facility EBITDAR or Facility EBITDARM for the most recent twelve months of available data divided by the Same Period Rent.  Cash Flow Coverage is a supplemental measure of a property’s ability to generate cash flows for the operator/tenant (not the Company) to meet the operator’s/tenant’s related rent and other obligations to the Company.  However, its usefulness is limited by, among other things, the same factors that limit the usefulness of Facility EBITDAR or Facility EBITDARM.  The coverages shown exclude newly completed facilities under start-up, vacant facilities and facilities for which data is not available or meaningful.

Consolidated Assets.  Total assets as reported in the Company’s consolidated financial statements.

Consolidated Book Capitalization.  The carrying amount of (i) Consolidated Debt, plus (ii) minority interests, plus (iii) stockholders’ equity, as reported in the Company’s consolidated financial statements.

Consolidated Debt.  The carrying amount of bank line of credit, bridge and term loans (if applicable), senior unsecured notes, mortgage debt and other debt as reported in the Company’s consolidated financial statements.

Consolidated Gross Assets.  The carrying amount of total assets, excluding investments in and advances to unconsolidated joint ventures, after adding back accumulated depreciation and amortization, as reported in the Company’s consolidated financial statements.

Consolidated Market Capitalization.  Consolidated Debt at Book Value plus Consolidated Market Equity.

Consolidated Market Equity.  The total number of outstanding shares of the Company’s common stock multiplied by the closing price per share of its common stock on the New York Stock Exchange as of period end, plus the total number of convertible partnership units multiplied by the closing price per share of its common stock on the New York Stock Exchange as of period end (adjusted for stock splits), plus the total number of outstanding shares of the Company’s preferred stock multiplied by the closing price of its preferred stock on the New York Stock Exchange as of period end.

Consolidated Secured Debt.  Mortgage debt secured by real estate excluding debt on assets held for sale as reported in the Company’s consolidated financial statements.

Consolidated Undepreciated Book Capitalization.  Consolidated Book Capitalization after adding back accumulated depreciation and amortization on the Company’s real estate assets, as reported in the Company’s consolidated financial statements.

Continuing Care Retirement Community (“CCRC”).  A senior housing facility which provides at least three levels of care (i.e., independent living, assisted living and skilled nursing) is classified by the Company as a CCRC.

Debt Service.  The periodic payment of interest expense and principal amortization on secured loans.

Debt Service Coverage (“DSC”).  Facility EBITDAR or Facility EBITDARM for the most recent twelve months of available data divided by Annualized Debt Service. Debt Service Coverage is a supplemental measure of the property’s ability to generate sufficient cash flows for the operator/tenant (not the Company) to meet the operator’s/tenant’s related obligations to the Company under loan agreements.  However, its usefulness is limited by the same factors that limit the usefulness of Facility EBITDAR or Facility EBITDARM.  The coverages shown exclude newly completed facilities under start-up, vacant facilities and facilities for which data is not available or meaningful.

Development.  Includes ground-up construction and redevelopments.

Direct Financing Lease (“DFL”).  The Company uses the direct finance method of accounting to record income from DFLs.  For leases accounted for as DFLs, future minimum lease payments are recorded as a receivable.  The difference between the future minimum lease payments and the estimated residual values less the cost of the properties is recorded as unearned income.  Unearned income is deferred and amortized to income over the lease terms to provide a constant yield.  Investments in DFLs are presented net of unamortized interest income.

Estimated Completion Date.  For development projects, management’s estimate of the date the core and shell structure improvements are expected to be or have been completed.  For redevelopment projects, management’s estimate of the time in which major construction activity in relation to the scope of the project has been substantially completed.

44

Reporting Definitions

Facility EBITDAR (“EBITDAR”).  Earnings before interest, taxes, depreciation, amortization and rent for a particular facility accruing to the operator/tenant of the property (not the Company).  The Company uses Facility EBITDAR in determining Cash Flow Coverage and Debt Service Coverage.  Facility EBITDAR has limitations as an analytical tool.  Facility EBITDAR does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments.  In addition, Facility EBITDAR does not represent a property’s net income or cash flow from operations and should not be considered an alternative to those indicators.  However, the Company receives periodic financial information from operators/tenants regarding the performance of the Company’s facilities under the operator’s/tenant’s management.  The Company utilizes Facility EBITDAR as a supplemental measure of the ability of those properties to generate sufficient liquidity to meet related obligations to the Company.  Facility EBITDAR includes the greater of (i) contractual management fees or (ii) an imputed management fee of 2% for acute care hospitals and 5% for skilled nursing facilities and senior housing facilities which the Company believes represents typical management fees in their respective industries.  All facility financial performance data was derived solely from information provided by operators/tenants and borrowers without independent verification by the Company.

Facility EBITDARM (“EBITDARM”).  Earnings before interest, taxes, depreciation, amortization, rent and management fees for a particular facility accruing to the operator/tenant of the property (not the Company).  The Company uses Facility EBITDARM in determining Cash Flow Coverage and Debt Service Coverage.  Facility EBITDARM has limitations as an analytical tool.  Facility EBITDARM does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments.  In addition, Facility EBITDARM does not represent a property’s net income or cash flow from operations and should not be considered an alternative to those indicators.  However, the Company receives periodic financial information from operators/tenants regarding the performance of the Company’s facilities under the operator’s/tenant’s management.  The Company utilizes Facility EBITDARM as a supplemental measure of the ability of those properties to generate sufficient liquidity to meet related obligations to the Company.  All facility financial performance data was derived solely from information provided by operators/tenants and borrowers without independent verification by the Company.

GAAP.  U.S. generally accepted accounting principles.

HCP Life Science.  Includes three unconsolidated joint ventures between the Company and an institutional capital partner for which the Company is the managing member.  HCP Life Science includes the following partnerships: (i) Torrey Pines Science Center LP (50%), (ii) Britannia Biotech Gateway LP (55%) and (iii) LASDK LP (63%).  The unconsolidated joint ventures were acquired as part of the Company’s purchase of Slough Estates USA Inc. on August 1, 2007.

HCP Ventures II.  An unconsolidated joint venture formed on January 5, 2007 between the Company and an institutional capital partner, for which the Company is the managing member and has a 35% interest.

HCP Ventures III.  An unconsolidated joint venture formed on October 27, 2006 between the Company and an institutional capital partner, for which the Company is the managing member and has an effective 25.5% interest.

HCP Ventures IV.  An unconsolidated joint venture formed on April 30, 2007 between the Company and an institutional capital partner, for which the Company is the managing member and has a 20% interest.

Independent Living Facility (“ILF”).  A senior housing facility that predominantly consists of independent living units.

Investment.  Represents (i) the carrying amount of real estate assets, including intangibles, after adding back accumulated depreciation and amortization, excluding assets held for sale and classified as discontinued operations and (ii) the carrying amount of direct financing leases and debt investments, excluding interest accretion.

Investment Management Platform.  Includes the following unconsolidated joint ventures: (i) HCP Life Science, (ii) HCP Ventures II, (iii) HCP Ventures III and (iv) HCP Ventures IV.

Life Science.  Laboratory and office space primarily for biotechnology and pharmaceutical companies, scientific research institutions, government agencies and other entities involved in the life science industry.

Long-Term Acute Care Hospitals (“LTACHs”).  LTACHs provide care for patients with complex medical conditions that require longer stays and more intensive care, monitoring or emergency back-up than that available in most skilled nursing-based programs.

Marketable Securities.  The Company classifies its existing marketable equity and debt securities as available-for-sale in accordance with provisions of Statement of Financial Accounting Standards No. 115. These securities are carried at fair market value, with unrealized gains and losses reported in stockholders’ equity as a component of accumulated other comprehensive income.

MOB.  Medical office building.

Occupancy.  For MOBs and life science facilities, occupancy represents the percentage of total rentable square feet leased where rental payments have commenced, including month-to-month leases, as of the date reported. For hospitals, skilled nursing facilities and senior housing facilities, occupancy represents the facilities’ operating occupancy for the trailing twelve months of the most recent quarter of available data.  The percentages are calculated based on licensed beds, available beds and units for hospitals, skilled nursing facilities and senior housing facilities, respectively.  The percentages shown exclude newly completed facilities under lease-up, vacant facilities and facilities for which data is not available or meaningful.  All facility financial performance data were derived solely from information provided by operators/tenants and borrowers without independent verification by the Company.

Other Debt Investments.  Marketable debt securities and loans not secured by real estate.

Owned Portfolio.  Represents owned properties, direct financing leases, loans and marketable debt securities, and excludes properties under and land held for future development.

Percentage Pre-leased.  Represents the percentage of a development project’s estimated square footage attributed to signed leases.

45

Reporting Definitions

Pooled Leases.  Two or more leases to the same operator/tenant or their subsidiaries under which their obligations are combined by virtue of a master lease, or multiple master leases, a pooling agreement, or multiple pooling agreements, or cross-guaranties. Sunrise Senior Living percentage pooled consists of 90 assets under 11 separate pools.

Redevelopment Projects.  Properties that require significant capital expenditures (generally more than 25% of acquired cost or existing basis) to achieve stabilization or to change the use of the properties.

Rehabilitation Hospitals (“Rehab”).  Rehabilitation hospitals provide inpatient and outpatient care for patients who have sustained traumatic injuries or illnesses, such as spinal cord injuries, strokes, head injuries, orthopedic problems, work-related disabilities and neurological diseases.

Renewal Rate.  The Company defines renewal rate as the ratio of total square feet expiring and available for lease to total renewed square feet, excluding the square feet for tenant leases terminated for default or buy-out prior to the expiration of their lease.

Rental Revenues.  Represents rental and related revenues, tenant recoveries and income from direct financing leases.

Same Period Rent.  The base rent plus additional rent due to the Company over the most recent trailing twelve-month period as of period end.  The Company uses Same Period Rent for purposes of determining property-level Cash Flow Coverage.

Same Property Portfolio (“SPP”).  An important component of the Company’s evaluation of the operating performance of its properties.  The Company defines its same property portfolio each quarter as those properties that have been in operation throughout the current year and the prior year and that were also in operation at January 1st of the prior year.  Newly acquired assets, developments and redevelopments in process and assets classified in discontinued operations are excluded from the same property portfolio.  Same property statistics allow management to evaluate the NOI of its real estate portfolio as a consistent population from period to period and eliminates the effects of changes in the composition of the properties on performance measures.

Senior Housing.  ALFs, ILFs and CCRCs.  For reporting purposes, the Company’s senior housing portfolio also includes a school formerly operated as an assisted living facility and six health and wellness centers.

Specialty Hospitals.  Specialty hospitals are licensed as acute care hospitals but focus on providing care in specific areas such as cardiac, orthopedic and women’s conditions, or specific procedures such as surgery and are less likely to provide emergency services.

Square Feet.  The square footage for properties, excluding square footage for development or redevelopment properties prior to completion.

Stabilization.  Assets are considered stabilized at the earlier of achieving 90% occupancy or one year from the completion of development or redevelopment activities.

Total Book Capitalization.  Total Debt plus the carrying amount of minority interests plus the carrying amount of stockholders’ equity.

Total Debt.  Consolidated Debt at Book Value plus the Company’s pro rata share of debt from the Investment Management Platform.

The following table details the calculation of Total Debt:

In thousands

	December 31,
	2008		2007
Bank line of credit	$	150,000	$	951,700
Bridge and term loans	520,000		1,350,000
Senior unsecured notes	3,523,513		3,819,950
Mortgage debt	1,641,734		1,277,291
Mortgage debt on assets held for sale	—		3,470
Other debt	102,209		108,496
Consolidated debt	5,937,456		7,510,907
HCP’s share of unconsolidated debt(1)	346,470		340,506
Total debt	$	6,283,926	$	7,851,413

Total Gross Assets.  Consolidated Gross Assets plus the Company’s pro rata share of total assets from the Investment Management Platform, after adding back accumulated depreciation and amortization.

The following table details the calculation of Total Gross Assets:

In thousands

	December 31,
	2008			2007
Consolidated total assets	$	11,849,826		$	12,521,772
Investments in and advances to unconsolidated joint ventures	(272,929		)	(248,894		)
Accumulated depreciation and amortization	1,002,632			707,419
Accumulated depreciation and amortization from assets held for sale	16,051			123,001
Consolidated gross assets	$	12,595,580		$	13,103,298
HCP’s share of unconsolidated total assets(1)	561,397			555,343
HCP’s share of unconsolidated accumulated depreciation and amortization(1)	46,629			17,593
Total gross assets	$	13,203,606		$	13,676,234

(1)        Reflects the Company’s pro rata share of amounts from the Investment Management Platform.

46

Reporting Definitions

Total Market Capitalization.  Total Debt plus Consolidated Market Equity.

The following table details the calculation of Total Market Capitalization:

In thousands, except price data

	December 31, 2008
	Shares/Units	Price		Value
Common stock	253,601	$	27.77	$	7,042,500
Convertible partnership units
2 for 1(1)	1,627	55.54		90,364
1 for 1(2)	3,185	27.77		88,447
				178,811
Preferred stock:
7.25% Series E	4,000	16.61		66,440
7.10% Series F	7,820	16.60		129,812
				196,252
Consolidated market equity				$	7,417,563
Consolidated debt				5,937,456
Consolidated market capitalization				$	13,355,019
HCP’s share of unconsolidated debt(3)				346,470
Total market capitalization				$	13,701,489

Total Secured Debt.  Consolidated secured debt plus the Company’s pro rata share of mortgage debt from the Investment Management Platform.

Total Undepreciated Book Capitalization.  Total Book Capitalization after adding back accumulated depreciation and amortization on the Company’s real estate assets and the Company’s pro rata share of accumulated depreciation and amortization on real estate assets in unconsolidated joint ventures.

The following table details the calculation of Total Undepreciated Book Capitalization at:

In thousands

	December 31,
	2008		2007
Total debt	$	6,283,926	$	7,851,413
Total minority interests	206,569		339,271
Total stockholders’ equity	5,201,271		4,103,709
Total book capitalization	11,691,766		12,294,393
Accumulated depreciation and amortization	1,002,632		707,419
Accumulated depreciation and amortization from assets held for sale	16,051		123,001
HCP’s share of unconsolidated accumulated depreciation and amortization(3)	46,629		17,593
Total undepreciated book capitalization	$	12,757,078	$	13,142,406

Yield.  Yield is calculated as Net Operating Income, as adjusted, divided by total investment.  For acquisitions, initial yields are calculated as projected Net Operating Income, twelve months forward, as adjusted, as of the closing date divided by total acquisition cost.  The total acquisition cost basis includes the initial purchase price, the effects of adjusting assumed debt to market, lease intangible adjustments and all transaction costs.

(1)	Each convertible partnership unit is exchangeable for an amount of cash approximating the then-current market value of two shares of the Company’s common stock at the time of conversion or, at the Company’s election, two shares of the Company’s common stock.
(2)	Each convertible partnership unit is exchangeable for an amount of cash approximating the then-current market value of one share of the Company’s common stock at the time of conversion or, at the Company’s election, one share of the Company’s common stock.
(3)	Excludes unconsolidated joint ventures outside of the Investment Management Platform.

47

Supplemental Financial Measures Disclosures

Adjusted Fixed Charge Coverage.  Adjusted EBITDA divided by Fixed Charges.  The Company uses Adjusted Fixed Charge Coverage, a non-GAAP financial measure, as a measure of liquidity. The Company believes Adjusted Fixed Charge Coverage provides investors, particularly fixed income investors, relevant and useful information because it measures the Company’s ability to meet its interest payments on outstanding debt and pay dividends to its preferred stockholders. The Company’s various debt agreements contain covenants that require the Company to maintain ratios similar to Adjusted Fixed Charge Coverage and credit rating agencies utilize similar ratios in evaluating and determining the credit rating on certain debt instruments of the Company.  However, since this ratio is derived from Adjusted EBITDA and Fixed Charges, its usefulness is limited by the same factors that limit the usefulness of Adjusted EBITDA and Fixed Charges.  Further, the Company’s computation of Adjusted Fixed Charge Coverage may not be comparable to similar fixed charge coverage ratios reported by other companies.

The following table details the calculation of Adjusted Fixed Charge Coverage:

In thousands

	Three months ended						Year ended
	December 31,						December 31,
	2008			2007			2008			2007
Net income	$	40,371		$	50,295		$	448,495		$	589,015
Interest expense:
Continuing operations	83,902			101,045			348,402			355,479
Discontinued operations	191			514			911			3,355
Income taxes:
Continuing operations	(512		)	2,465			4,292			1,460
Discontinued operations	(127		)	22			(455		)	2,058
Depreciation and amortization of real estate, in-place lease and other intangibles:
Continuing operations	81,292			75,414			314,632			258,947
Discontinued operations	192			3,885			6,604			22,232
Equity (income) loss from unconsolidated joint ventures	410			(1,887		)	(3,326		)	(5,645		)
HCP’s share of EBITDA from the Investment Management Platform	7,666			11,006			40,096			37,888
Other joint venture adjustments	610			642			2,490			2,251
EBITDA	213,995			243,401			1,162,141			1,267,040
Minority interests’ share in earnings	4,848			6,364			21,903			24,356
Impairments of real estate and intangible assets, net	14,026			—			27,451			—
Impairments of investments in unconsolidated joint ventures	400			—			400			—
Gain on sales of real estate and real estate interest	(794		)	(11,315		)	(228,604		)	(413,725		)
Adjusted EBITDA	$	232,475		$	238,450		$	983,291		$	877,671
Interest expense:
Continuing operations	$	83,902		$	101,045		$	348,402		$	355,479
Discontinued operations	191			514			911			3,355
HCP’s share of interest expense from the Investment Management Platform	5,165			5,235			20,705			18,805
Capitalized interest	5,011			8,322			27,490			12,346
Preferred stock dividends	5,282			5,282			21,130			21,130
Fixed charges	$	99,551		$	120,398		$	418,638		$	411,115
Adjusted fixed charge coverage	2.3 x			2.0 x			2.3 x			2.1 x

48

Supplemental Financial Measures Disclosures

EBITDA and Adjusted EBITDA.  The real estate industry uses earnings before interest, taxes, depreciation and amortization (“EBITDA”), a non-GAAP financial measure, as a measure of both operating performance and liquidity.  Adjusted EBITDA is calculated as EBITDA excluding minority interests’ share in earnings, impairments and gains or losses from real estate dispositions. The Company uses EBITDA and Adjusted EBITDA to measure both its operating performance and liquidity.  The Company considers Adjusted EBITDA to provide investors relevant and useful information because it permits investors to view income from its operations on an unleveraged basis before the effects of taxes, non-cash depreciation and amortization, impairments and gains or losses from real estate dispositions.  By excluding interest expense, Adjusted EBITDA allows investors to measure the Company’s operating performance independent of its capital structure and indebtedness and, therefore, allows for a more meaningful comparison of its operating performance between quarters as well as annual periods and to compare its operating performance to that of other companies, both in the real estate industry and in other industries.  The Company considers Adjusted EBITDA to be a useful supplemental measure for reviewing its comparative performance with other companies because, by excluding non-cash depreciation expense, Adjusted EBITDA can help the investing public compare the performance of a real estate company to that of companies in other industries. As a liquidity measure, the Company believes that EBITDA and Adjusted EBITDA help investors analyze the Company’s ability to meet its interest payments on outstanding debt and to make preferred dividend payments.  The Company’s various debt agreements contain covenants that require the Company to maintain ratios similar to Adjusted Fixed Charge Coverage and credit rating agencies utilize similar ratios in evaluating and determining the credit rating on certain debt instruments of the Company.  The Company believes investors should consider EBITDA and Adjusted EBITDA, in conjunction with net income (the primary measure of the Company’s performance) and the other required GAAP measures of its performance and liquidity, to improve their understanding of the Company’s operating results and liquidity, and to make more meaningful comparisons of its performance between periods and as against other companies.  By excluding interest, taxes, depreciation and amortization, impairments and gains or losses from real estate dispositions when assessing the Company’s financial performance, an investor is assessing the earnings generated by the Company’s operations, but not taking into account the eliminated expenses or gains or losses from real estate dispositions incurred in connection with such operations.  As a result, EBITDA and Adjusted EBITDA have limitations as analytical tools and should be used in conjunction with the Company’s required GAAP presentations.  EBITDA and Adjusted EBITDA do not reflect the Company’s historical cash expenditures or future cash requirements for capital expenditures or contractual commitments.  Also, EBITDA and Adjusted EBITDA do not reflect the cash required to make interest and principal payments on the Company’s outstanding debt.  While Adjusted EBITDA is a relevant and widely used measure of operating performance and liquidity, it does not represent net income or cash flow from operations as defined by GAAP and it should not be considered as an alternative to those indicators in evaluating operating performance or liquidity.  Further, the Company’s computation of EBITDA and Adjusted EBITDA may not be comparable to similar measures reported by other companies.

The following table reconciles Adjusted EBITDA from net cash provided by operating activities:

In thousands

	Three Months Ended						Year Ended
	December 31,						December 31,
	2008			2007			2008			2007
Net cash provided by operating activities	$	113,314		$	143,230		$	568,697		$	453,051
Changes in:
Accounts receivable	4,200			10,489			(10,681		)	13,115
Other assets	(2,947		)	(3,763		)	3,713			14,621
Accounts payable and accrued liabilities	17,799			(29,762		)	7,023			(26,634		)
Impairments of investments in unconsolidated joint ventures	(400		)	—			(400		)	—
Impairments of real estate and intangible assets, net	(14,026		)	—			(27,451		)	—
Derivative losses, net	(2,774		)	—			(4,577		)	—
Marketable securities losses (gains), net	(4,484		)	(2,641		)	(7,230		)	2,233
Gain on early repayment of debt	2,396			—			2,396			—
Gain on sales of real estate and real estate interest	794			11,315			228,604			413,725
Minority interests’ share in earnings	(4,848		)	(6,364		)	(21,903		)	(24,356		)
Distributions of earnings from unconsolidated joint ventures	(3,009		)	(2,116		)	(6,745		)	(5,264		)
Equity income (loss) from unconsolidated joint ventures	(410		)	1,887			3,326			5,645
Deferred rental revenue	2,296			(90		)	(13,931		)	(9,027		)
Interest accretion	6,885			2,311			27,019			8,739
Straight-line rents	10,818			10,258			39,463			49,725
Recovery of loan losses	—			—			—			386
Amortization of debt premiums, discounts and issuance costs, net	(3,041		)	(5,139		)	(12,267		)	(20,413		)
Stock-based compensation	(3,128		)	(2,892		)	(13,765		)	(11,408		)
Amortization of above and below market lease intangibles, net	2,420			2,871			8,440			6,056
Depreciation and amortization of real estate, in-place lease and other intangibles:
Continuing operations	(81,292		)	(75,414		)	(314,632		)	(258,947		)
Discontinued operations	(192		)	(3,885		)	(6,604		)	(22,232		)
Net income	40,371			50,295			448,495			589,015
Interest expense:
Continuing operations	83,902			101,045			348,402			355,479
Discontinued operations	191			514			911			3,355
Income taxes:
Continuing operations	(512		)	2,465			4,292			1,460
Discontinued operations	(127		)	22			(455		)	2,058
Depreciation and amortization of real estate, in-place lease and other intangibles:
Continuing operations	81,292			75,414			314,632			258,947
Discontinued operations	192			3,885			6,604			22,232
Equity (income) loss from unconsolidated joint ventures	410			(1,887		)	(3,326		)	(5,645		)
HCP’s share of EBITDA from the Investment Management Platform	7,666			11,006			40,096			37,888
Other joint venture adjustments	610			642			2,490			2,251
EBITDA	213,995			243,401			1,162,141			1,267,040
Minority interests’ share in earnings	4,848			6,364			21,903			24,356
Impairments of real estate and intangible assets, net	14,026			—			27,451			—
Impairments of investments in unconsolidated joint ventures	400			—			400			—
Gain on sales of real estate and real estate interest	(794		)	(11,315		)	(228,604		)	(413,725		)
Adjusted EBITDA	$	232,475		$	238,450		$	983,291		$	877,671

49

Supplemental Financial Measures Disclosures

Financial Leverage.Total Debt divided by Total Gross Assets. The Company believes that its Financial Leverage is a meaningful supplemental measure of its financial position, which enables both management and investors to analyze its leverage and to compare its leverage to that of other companies. The Company believes that its Financial Leverage is a meaningful supplemental measure of its financial position, which enables both management and investors to analyze its leverage and to compare its leverage to that of other companies.  The Company believes that the ratio of consolidated debt to consolidated gross assets is the most directly comparable GAAP measure to Financial Leverage.  The Company’s computation of its Financial Leverage may not be identical to the computations of financial leverage reported by other companies.  The Company’s share of total debt is not intended to reflect its actual liability or ability to access assets should there be a default under any or all of such loans or a liquidation of the joint ventures.

Fixed Charges.  Total interest expense plus capitalized interest plus preferred stock dividends.  The Company uses Fixed Charges to measure its interest payments on outstanding debt and dividends to its preferred stockholders for purposes of presenting Fixed Charge Coverage and Adjusted Fixed Charge Coverage.  However, the usefulness of Fixed Charges is limited as, among other things, it does not include all contractual obligations.  The Company’s computation of Fixed Charges should not be considered an alternative to fixed charges as defined by Item 503(d) of Regulation S-K and may not be comparable to fixed charges reported by other companies.

Funds From Operations (“FFO”).  The Company believes that net income as defined by GAAP is the most appropriate earnings measure.  The Company also believes that Funds From Operations, or FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), FFO applicable to common shares, Diluted FFO applicable to common shares, and Basic and Diluted FFO per common share are important non-GAAP supplemental measures of operating performance for a real estate investment trust.  Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time.  However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a real estate investment trust that use historical cost accounting for depreciation could be less informative.  Thus, NAREIT created FFO as a supplemental measure of operating performance for real estate investment trusts that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization, with adjustments to derive the Company’s pro rata share of FFO from consolidated and unconsolidated joint ventures.  Adjustments for joint ventures are calculated to reflect FFO on the same basis.  The Company believes that the use of FFO, combined with the required GAAP presentations, improves the understanding of operating results of real estate investment trusts among investors and makes comparisons of operating results among such companies more meaningful.  The Company considers FFO to be a useful measure for reviewing comparative operating and financial performance because, by excluding gains or losses related to sales of previously depreciated operating real estate assets and real estate depreciation and amortization, FFO can help investors compare the operating performance of a real estate investment trust between periods or as compared to other companies. While FFO is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. FFO also does not consider the costs associated with capital expenditures related to the Company’s real estate assets nor is FFO necessarily indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of FFO may not be comparable to FFO reported by other real estate investment trusts that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently from the Company.For a reconciliation of FFO to net income, please refer to the slide in this supplemental information package captioned “Consolidated Funds From Operations.”

FFO Payout Ratio per Common Share.  Dividends declared per common share divided by Diluted FFO per common share for a given period.  The Company believes the FFO Payout Ratio per Common Share provides investors relevant and useful information because it measures the portion of FFO being declared as dividends to common stockholders.  FFO Payout Ratio per Common Share is subject to the same limitations noted in the definition of FFO above.

Net Operating Income from Continuing Operations (“NOI”).  A non-GAAP supplemental financial measure used to evaluate the operating performance of real estate properties and SPP.  The Company defines NOI as rental revenues, including tenant reimbursements and income from direct financing leases, less property level operating expenses. NOI excludes investment management fee income, depreciation and amortization, general and administrative expenses, impairments, gain on sale of real estate interest, interest and other income, net, interest expense, income taxes, equity income from unconsolidated joint ventures, minority interests’ share in earnings and discontinued operations.  The Company believes NOI provides investors relevant and useful information because it measures the operating performance of the Company’s real estate at the property level on an unleveraged basis.  NOI, as adjusted, is calculated as NOI eliminating the effects of straight-line rents, amortization of above and below market lease intangibles, and lease termination fees. NOI, as adjusted, is sometimes referred as “adjusted NOI” or “cash basis NOI.”  The Company uses NOI and NOI, as adjusted, to make decisions about resource allocations, to assess and compare property level performance, and evaluate SPP.  The Company believes that net income is the most directly comparable GAAP measure to NOI.  NOI should not be viewed as an alternative measure of operating performance to net income as defined by GAAP since it does not reflect the aforementioned excluded items.  Further, NOI may not be comparable to that of other real estate investment trusts, as they may use different methodologies for calculating NOI.

The following table reconciles NOI from net income:

In thousands

	Three Months Ended						Year Ended
	December 31,						December 31,
	2008			2007			2008			2007
Net income	$	40,371		$	50,295		$	448,495		$	589,015
Investment management fee income	(1,475		)	(1,519		)	(5,923		)	(13,581		)
Depreciation and amortization	81,292			75,414			314,632			258,947
General and administrative	19,042			14,804			75,686			68,401
Impairments	14,026			—			24,660			—
Gain on sale of real estate interest	—			—			—			(10,141		)
Interest and other income, net	(28,373		)	(20,855		)	(156,752		)	(75,580		)
Interest expense	83,902			101,045			348,402			355,479
Income taxes	(512		)	2,465			4,292			1,460
Equity (income) loss from unconsolidated joint ventures	410			(1,887		)	(3,326		)	(5,645		)
Minority interests’ share in earnings	4,848			6,194			21,263			23,536
Total discontinued operations, net of taxes	(241		)	(23,235		)	(244,166		)	(473,367		)
NOI	$	213,290		$	202,721		$	827,263		$	718,524

50

Company Information and Safe Harbor Statement

The information in this supplemental information package should be read in conjunction with the Company’s Annual Report on Form 10-K, as amended, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other information filed with the SEC.  The Reporting Definitions and Supplemental Financial Measures Disclosures are an integral part of the information presented herein.

On the Company’s  internet website, www.hcpi.com, you can access, free of charge, its Annual Report on Form 10-K, as amended, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.  The information contained on its website is not incorporated by reference into, and should not be considered a part of, this supplemental information package.  In addition, the SEC maintains an internet website that contains reports, proxy and information statements, and other information regarding issuers, including HCP, that file electronically with the SEC at www.sec.gov.

For more information, contact Mark A. Wallace, Executive Vice President, Chief Financial Officer and Treasurer at (562) 733-5100.

“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 Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include among other things the Company’s estimate of (i) yields, (ii) completion dates, stabilization dates, rentable square feet and total investment for development projects in progress, and (iii) rentable square feet for land held for future development. These statements are made as of the date hereof and are subject to known and unknown risks, uncertainties, assumptions and other factors—many of which are out of the Company’s control and difficult to forecast—that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include but are not limited to: national and local economic conditions, including the possibility of a prolonged recession; continued volatility in the capital markets, including changes in interest rates and the availability and cost of capital, which changes and volatility affect opportunities for profitable investment; the Company’s ability to access external sources of capital when desired and on reasonable terms; the Company’s ability to manage its indebtedness levels; changes in the terms of the Company’s indebtedness; the Company’s ability to maintain its credit ratings; the Company’s ability to achieve its expected benefits from acquisitions, including integrating and preserving the goodwill of those companies; competition for lessees and mortgagors (including new leases and mortgages and the renewal or rollover of existing leases); continuing reimbursement uncertainty in the skilled nursing segment; competition in the senior housing segment specifically and in the healthcare industry in general; the Company’s ability to acquire, sell or lease facilities and the timing of acquisitions, sales and leasings; the Company’s ability to realize the benefits of its mezzanine investments; the ability of the Company’s lessees and  mortgagors to maintain the financial strength and liquidity necessary to satisfy their respective obligations to the Company and other third parties, including without limitation obligations to their lenders or other obligees under their financing arrangements; the bankruptcy or insolvency of our operators, lessees, borrowers or other obligors; the effect of any restructuring of the Company’s contractual relationships with such entities; changes in healthcare laws and regulations and other changes in the healthcare industry which affect the operations of the Company’s lessees or obligors; changes in the Company’s management; litigation claims and developments; costs of compliance with building regulations; changes in tax laws and regulations; changes in rules governing financial reporting, including new accounting pronouncements; and other risks described from time to time in the Company’s Securities and Exchange Commission filings. The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements as a result of new information or new or future developments, except as otherwise required by law.

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