EX-99.1 2 a09-5022_1ex99d1.htm 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.

 

 

 

Page 1 of 9


 

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.

 

 

Page 2 of 9


 

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.

 

###

 

 

Page 3 of 9


 

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.

 

 

Page 5 of 9


 

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

 

 

 

Page 6 of 9


 

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.

 

 

Page 7 of 9


 

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

 

 

 

Page 8 of 9


 

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