10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2013.

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission file number 001-08895

HCP, INC.

(Exact name of registrant as specified in its charter)

Maryland	33-0091377
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3760 Kilroy Airport Way, Suite 300

Long Beach, CA 90806

(Address of principal executive offices)

(562) 733-5100

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES x  NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).  YES x  NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer x	Accelerated Filer o
Non-accelerated Filer o	Smaller Reporting Company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)  YES o  NO x

As of October 25, 2013, there were 456,271,507 shares of the registrant’s $1.00 par value common stock outstanding.

HCP, INC.

INDEX

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	43
PART II. OTHER INFORMATION
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 5.	Other Information	44
Item 6.	Exhibits	45
Signatures		47

2

HCP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

	September 30,			December 31,
	2013			2012
ASSETS
Real estate:
Buildings and improvements	$	10,530,094		$	10,330,668
Development costs and construction in progress	247,268			236,864
Land	1,841,333			1,833,607
Accumulated depreciation and amortization	(1,918,842		)	(1,661,572		)
Net real estate	10,699,853			10,739,567
Net investment in direct financing leases	6,993,352			6,881,393
Loans receivable, net	390,803			276,030
Investments in and advances to unconsolidated joint ventures	206,004			212,213
Accounts receivable, net of allowance of $1,843 and $1,668, respectively	27,343			34,150
Cash and cash equivalents	49,414			247,673
Restricted cash	48,224			37,848
Intangible assets, net	507,754			552,540
Real estate and intangible assets held for sale, net	130,765			145,621
Other assets, net	835,997			788,520
Total assets(1)	$	19,889,509		$	19,915,555
LIABILITIES AND EQUITY
Bank line of credit	$	285,000		$	—
Term loan	221,748			222,694
Senior unsecured notes	6,565,934			6,712,624
Mortgage debt	1,410,407			1,676,544
Intangible liabilities on assets held for sale	—			1,729
Other debt	77,503			81,958
Intangible liabilities, net	103,059			104,180
Accounts payable and accrued liabilities	303,966			293,994
Deferred revenue	71,655			68,055
Total liabilities(2)	9,039,272			9,161,778
Commitments and contingencies
Common stock, $1.00 par value: 750,000,000 shares authorized; 455,873,953 and 453,191,321 shares issued and outstanding, respectively	455,874			453,191
Additional paid-in capital	11,306,717			11,180,066
Cumulative dividends in excess of earnings	(1,106,494		)	(1,067,367		)
Accumulated other comprehensive loss	(15,879		)	(14,653		)
Total stockholders’ equity	10,640,218			10,551,237
Joint venture partners	25,228			14,752
Non-managing member unitholders	184,791			187,788
Total noncontrolling interests	210,019			202,540
Total equity	10,850,237			10,753,777
Total liabilities and equity	$	19,889,509		$	19,915,555

(1)The Company’s consolidated total assets at September 30, 2013 and December 31, 2012 include assets of certain variable interest entities (“VIEs”) that can only be used to settle the liabilities of those VIEs. At September 30, 2013: other assets, net, $2 million. At December 31, 2012: accounts receivable, net, $2 million; cash and cash equivalents, $10 million; and other assets, net, $2 million. See Note 16 to the Condensed Consolidated Financial Statements for additional information.

(2)The Company’s consolidated total liabilities at September 30, 2013 and December 31, 2012 include liabilities of certain VIEs for which the VIE creditors do not have recourse to HCP, Inc. At September 30, 2013: accounts payable and accrued liabilities, $10 million. At December 31, 2012: other debt, $0.2 million; accounts payable and accrued liabilities, $14 million; and deferred revenue, $2 million. See Note 16 to the Condensed Consolidated Financial Statements for additional information.

See accompanying Notes to the Condensed Consolidated Financial Statements.

3

HCP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues:
Rental and related revenues	$	280,588		$	241,993		$	833,461		$	714,438
Tenant recoveries	25,986			23,425			75,335			69,656
Resident fees and services	37,589			36,076			112,070			107,824
Income from direct financing leases	157,253			155,834			472,409			465,345
Interest income	42,078			10,278			68,611			12,313
Investment management fee income	464			460			1,406			1,423
Total revenues	543,958			468,066			1,563,292			1,370,999
Costs and expenses:
Interest expense	108,088			103,355			326,094			309,399
Depreciation and amortization	104,859			87,170			317,430			254,463
Operating	76,569			72,653			224,982			210,034
General and administrative	45,423			19,415			90,080			54,299
Impairments	—			7,878			—			7,878
Total costs and expenses	334,939			290,471			958,586			836,073
Other income, net	1,584			770			16,887			2,232
Income before income taxes and equity income from unconsolidated joint ventures	210,603			178,365			621,593			537,158
Income taxes	(1,033		)	602			(3,563		)	1,145
Equity income from unconsolidated joint ventures	13,892			13,396			44,278			42,803
Income from continuing operations	223,462			192,363			662,308			581,106
Discontinued operations:
Income before gain on sales of real estate	5,098			6,680			15,874			16,620
Gain on sales of real estate	8,298			—			9,185			2,856
Total discontinued operations	13,396			6,680			25,059			19,476
Net income	236,858			199,043			687,367			600,582
Noncontrolling interests’ share in earnings	(3,102		)	(2,935		)	(9,625		)	(9,070		)
Net income attributable to HCP, Inc.	233,756			196,108			677,742			591,512
Preferred stock dividends	—			—			—			(17,006		)
Participating securities’ share in earnings	(474		)	(479		)	(1,330		)	(2,154		)
Net income applicable to common shares	$	233,282		$	195,629		$	676,412		$	572,352
Basic earnings per common share:
Continuing operations	$	0.48		$	0.44		$	1.43		$	1.32
Discontinued operations	0.03			0.02			0.06			0.04
Net income applicable to common shares	$	0.51		$	0.46		$	1.49		$	1.36
Diluted earnings per common share:
Continuing operations	$	0.48		$	0.44		$	1.43		$	1.32
Discontinued operations	0.03			0.01			0.06			0.04
Net income applicable to common shares	$	0.51		$	0.45		$	1.49		$	1.36
Weighted average shares used to calculate earnings per common share:
Basic	455,345			429,557			454,553			420,049
Diluted	456,078			430,778			455,388			421,404
Dividends declared per common share	$	0.525		$	0.50		$	1.575		1.50

See accompanying Notes to the Condensed Consolidated Financial Statements.

4

HCP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Net income	$	236,858		$	199,043		$	687,367		$	600,582
Other comprehensive income (loss):
Change in net unrealized gains on securities:
Unrealized gains	—			5,374			1,355			5,716
Reclassification adjustment realized in net income	—			—			(9,131		)	—
Change in net unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses)	(3,710		)	(2,734		)	5,635			(3,513		)
Reclassification adjustment realized in net income	191			129			751			308
Change in Supplemental Executive Retirement Plan obligation	56			46			167			136
Foreign currency translation adjustment	(56		)	243			(3		)	289
Total other comprehensive income (loss)	(3,519		)	3,058			(1,226		)	2,936
Total comprehensive income	233,339			202,101			686,141			603,518
Total comprehensive income attributable to noncontrolling interests	(3,102		)	(2,935		)	(9,625		)	(9,070		)
Total comprehensive income attributable to HCP, Inc.	$	230,237		$	199,166		$	676,516		$	594,448

See accompanying Notes to the Condensed Consolidated Financial Statements.

5

HCP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands, except per share data)

(Unaudited)

									Cumulative			Accumulated
						Additional			Dividends			Other			Total			Total
	Common Stock					Paid-In			In Excess			Comprehensive			Stockholders’			Noncontrolling			Total
	Shares		Amount			Capital			Of Earnings			Income (Loss)			Equity			Interests			Equity
January 1, 2013	453,191		$	453,191		$	11,180,066		$	(1,067,367	)	$	(14,653	)	$	10,551,237		$	202,540		$	10,753,777
Net income	—		—			—			677,742			—			677,742			9,625			687,367
Other comprehensive loss	—		—			—			—			(1,226		)	(1,226		)	—			(1,226		)
Issuance of common stock, net	1,859		1,859			78,647			—			—			80,506			(2,997		)	77,509
Repurchase of common stock	(51	)	(51		)	(2,451		)	—			—			(2,502		)	—			(2,502		)
Exercise of stock options	875		875			16,622			—			—			17,497			—			17,497
Amortization of deferred compensation	—		—			33,833			—			—			33,833			—			33,833
Common dividends ($1.575 per share)	—		—			—			(716,869		)	—			(716,869		)	—			(716,869		)
Distributions to noncontrolling interests	—		—			—			—			—			—			(11,536		)	(11,536		)
Issuance of noncontrolling interests	—		—			—			—			—			—			12,387			12,387
September 30, 2013	455,874		$	455,874		$	11,306,717		$	(1,106,494	)	$	(15,879	)	$	10,640,218		$	210,019		$	10,850,237

														Cumulative			Accumulated
											Additional			Dividends			Other			Total			Total
	Preferred Stock					Common Stock					Paid-In			In Excess			Comprehensive			Stockholders’			Noncontrolling			Total
	Shares		Amount			Shares		Amount			Capital			Of Earnings			Income (Loss)			Equity			Interests			Equity
January 1, 2012	11,820		$	285,173		408,629		$	408,629		$	9,383,536		$	(1,024,274	)	$	(19,582	)	$	9,033,482		$	187,140		$	9,220,622
Net income	—		—			—		—			—			591,512			—			591,512			9,070			600,582
Other comprehensive income	—		—			—		—			—			—			2,936			2,936			—			2,936
Preferred stock redemption	(11,820	)	(285,173		)	—		—			—			(10,327		)	—			(295,500		)	—			(295,500		)
Issuance of common stock, net	—		—			19,096		19,096			744,412			—			—			763,508			(2,438		)	761,070
Repurchase of common stock	—		—			(196	)	(196		)	(7,971		)	—			—			(8,167		)	—			(8,167		)
Exercise of stock options	—		—			2,451		2,451			49,058			—			—			51,509			—			51,509
Amortization of deferred compensation	—		—			—		—			16,947			—			—			16,947			—			16,947
Preferred dividends	—		—			—		—			—			(6,679		)	—			(6,679		)	—			(6,679		)
Common dividends ($1.50 per share)	—		—			—		—			—			(631,549		)	—			(631,549		)	—			(631,549		)
Distributions to noncontrolling interests	—		—			—		—			—			—			—			—			(11,759		)	(11,759		)
Noncontrolling interests in acquisitions	—		—			—		—			—			—			—			—			27,432			27,432
Issuance of noncontrolling interests	—		—			—		—			—			—			—			—			826			826
Purchase of noncontrolling interests	—		—			—		—			—			—			—			—			(417		)	(417		)
September 30, 2012	—		$	—		429,980		$	429,980		$	10,185,982		$	(1,081,317	)	$	(16,646	)	$	9,517,999		$	209,854		$	9,727,853

See accompanying Notes to the Condensed Consolidated Financial Statements.

6

HCP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2013			2012
Cash flows from operating activities:
Net income	$	687,367		$	600,582
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	317,430			254,463
Discontinued operations	4,346			11,876
Amortization of above and below market lease intangibles, net	(6,414		)	(1,855		)
Amortization of deferred compensation	33,833			16,947
Amortization of deferred financing costs, net	13,922			12,415
Straight-line rents	(28,559		)	(33,608		)
Loan and direct financing lease interest accretion	(65,296		)	(71,923		)
Deferred rental revenues	73			1,101
Equity income from unconsolidated joint ventures	(44,278		)	(42,803		)
Distributions of earnings from unconsolidated joint ventures	2,724			2,775
Gain on sales of real estate	(9,185		)	(2,856		)
Gain on sales of marketable securities, net	(11,350		)	—
Foreign currency and derivative losses, net	386			43
Impairments	—			7,878
Changes in:
Accounts receivable, net	6,389			(5,082		)
Other assets	(43,939		)	(7,303		)
Accounts payable and accrued liabilities	(13,769		)	(21,697		)
Net cash provided by operating activities	843,680			720,953
Cash flows from investing activities:
Acquisitions of real estate	(63,878		)	(172,380		)
Development of real estate	(96,914		)	(87,119		)
Leasing costs and tenant and capital improvements	(33,964		)	(42,817		)
Proceeds from sales of real estate, net	3,777			7,238
Distributions in excess of earnings from unconsolidated joint ventures	1,194			2,051
Purchases of marketable debt securities	(16,706		)	(214,859		)
Proceeds from the sale of marketable securities	28,403			—
Principal repayments on loans receivable	231,004			4,660
Investments in loans receivable	(316,494		)	(145,597		)
Increase in restricted cash	(10,376		)	(1,875		)
Net cash used in investing activities	(273,954		)	(650,698		)
Cash flows from financing activities:
Net borrowings (repayments) under bank line of credit	283,082			(454,000		)
Borrowings under term loan	—			214,789
Issuance of senior unsecured notes	—			750,000
Repayments of senior unsecured notes	(150,000		)	(250,000		)
Repayments of mortgage debt	(285,005		)	(109,569		)
Issuance of mortgage and other debt	6,798			—
Deferred financing costs	—			(18,256		)
Preferred stock redemption	—			(295,500		)
Net proceeds from the issuance of common stock and exercise of options	92,504			804,412
Dividends paid on common and preferred stock	(716,869		)	(638,228		)
Issuance of noncontrolling interests	12,387			826
Distributions to noncontrolling interests	(11,536		)	(11,759		)
Net cash used in financing activities	(768,639		)	(7,285		)
Effect of foreign exchange on cash and cash equivalents	654			—
Net increase (decrease) in cash and cash equivalents	(198,259		)	62,970
Cash and cash equivalents, beginning of period	247,673			33,506
Cash and cash equivalents, end of period	$	49,414		$	96,476

See accompanying Notes to the Condensed Consolidated Financial Statements.

7

HCP, INC.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1)Business

HCP, Inc., an S&P 500 company, together with its consolidated entities (collectively, “HCP” or the “Company”), invests primarily in real estate serving the healthcare industry in the United States (“U.S.”). The Company is a Maryland corporation and was organized to qualify as a self-administered real estate investment trust (“REIT”) in 1985. The Company is headquartered in Long Beach, California, with offices in Nashville, Tennessee and San Francisco, California. The Company acquires, develops, leases, manages and disposes of healthcare real estate, and provides financing to healthcare providers. The Company’s portfolio is comprised of investments in the following five healthcare segments: (i) senior housing, (ii) post-acute/skilled nursing, (iii) life science, (iv) medical office and (v) hospital. The Company makes investments within the healthcare segments using the following five investment products: (i) properties under lease, (ii) debt investments, (iii) developments and redevelopments, (iv) investment management and (v) investments in senior housing operations utilizing the structure permitted by the Housing and Economic Recovery Act of 2008, which is commonly referred to as “RIDEA.”

(2)Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Management is required to make estimates and assumptions in the preparation of financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management’s estimates.

The condensed consolidated financial statements include the accounts of HCP, Inc., its wholly-owned subsidiaries and joint ventures or variable interest entities (“VIEs”) that it controls through voting rights or other means. Intercompany transactions and balances have been eliminated upon consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been included. Operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The accompanying unaudited interim financial information should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2012 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”).

Certain amounts in the Company’s condensed consolidated financial statements have been reclassified for prior periods to conform to the current period presentation. Assets sold or held for sale and associated liabilities have been reclassified on the condensed consolidated balance sheets and the related operating results reclassified from continuing to discontinued operations on the condensed consolidated statements of income (see Note 4).

Acquisition Costs

Transaction costs related to acquisitions of businesses, including properties, are expensed as incurred.

Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2013-10, Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes (a consensus of the FASB Emerging Issues Task Force) (“ASU 2013-10”). This update permits the Fed Funds Effective Swap Rate (“OIS”) to be used as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to the interest rates on direct Treasury obligations of the U.S. government (“UST”) and the London Interbank Offered Rate (“LIBOR”). The amendments are effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The adoption of ASU 2013-10 on July 17, 2013 did not have a material impact on the Company’s consolidated financial position or results of operations.

In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). This update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The adoption of ASU 2013-02 on January 1, 2013 did not have a material impact on the Company’s consolidated financial position or results of operations.

8

In July 2012, the FASB issued Accounting Standards Update No. 2012-01, Continuing Care Retirement Communities—Refundable Advance Fees (“ASU 2012-01”). This update clarifies the situations in which recognition of deferred revenue for refundable advance fees is appropriate. The adoption of ASU 2012-01 on January 1, 2013 did not have a material impact on the Company’s consolidated financial position or results of operations.

(3)Real Estate Property Investments

$1.73 Billion Senior Housing Portfolio Acquisition (the “Blackstone JV Acquisition”)

During the fourth quarter of 2012 and first quarter of 2013, the Company acquired 133 senior housing communities for $1.73 billion from a joint venture between Emeritus Corporation (“Emeritus”) and Blackstone Real Estate Partners VI, an affiliate of the Blackstone Group (the “Blackstone JV”). Located in 29 states, the portfolio encompasses a diversified care mix of 61% assisted living, 25% independent living, 13% memory care and 1% skilled nursing based on units. Based on operating performance at closing, the 133 communities consisted of 99 that were stabilized and 34 that were in lease-up. The transaction closed in two stages: (i) 129 senior housing facilities during the fourth quarter of 2012 for $1.7 billion; and (ii) four senior housing facilities during the first quarter of 2013 for $38 million. The Company paid $1.73 billion in cash consideration and assumed $13 million of mortgage debt to acquire: (i) real estate with a fair value of $1.57 billion, (ii) intangible assets with a fair value of $174 million; and (iii) assumed intangible liabilities with a fair value of $4 million.

Emeritus operates the communities pursuant to a new triple-net master lease for 128 properties (the “Master Lease”) and five individual leases, all guaranteed by Emeritus (together, the “Leases”). The Leases provide aggregate contractual rent in the first year of $105.8 million. The contractual rent will increase annually by the greater of the percentage increase in the Consumer Price Index (“CPI”) or 3.7% on average over the initial five years, and thereafter by the greater of CPI or 3.0% for the remaining initial lease term. At the beginning of the sixth lease year, rent on the 34 lease-up properties will increase to the greater of the percentage increase in CPI or fair market, subject to a floor of 103% and a cap of 130% of the prior year’s rent.

The Master Lease properties are grouped into three pools that share comparable characteristics. The Leases have initial terms of 14 to 16 years. Emeritus has two extension options, which, if exercised, will provide for lease terms of 30 to 35 years.

Concurrent with the acquisition in 2012, Emeritus purchased nine communities from the Blackstone JV, for which the Company provided secured debt financing of $52 million with a four-year term. The loan is secured by the underlying real estate and is prepayable at Emeritus’ option. The interest rate on the loan was initially 6.1% and will gradually increase during its four year term to 6.8%.

Pro Forma Results of Operations

The following unaudited pro forma consolidated results of operations assume that the Blackstone JV Acquisition was completed as of January 1, 2012 (in thousands, except per share amounts):

	Three Months Ended September 30, 2012		Nine Months Ended September 30, 2012
Revenues	$	494,516	$	1,450,349
Net income	206,448		622,797
Net income applicable to HCP, Inc.	203,513		613,727
Basic earnings per common share	0.45		1.35
Diluted earnings per common share	0.45		1.34

Other Real Estate Acquisitions

In addition to the Blackstone JV Acquisition (discussed above), during the nine months ended September 30, 2013, the Company acquired a senior housing facility for $18 million, exercised its purchase option for a senior housing facility it previously leased for $16 million and acquired 38 acres of land in the post-acute/skilled nursing segment for $0.4 million.

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A summary of real estate acquisitions for the nine months ended September 30, 2012 follows (in thousands):

	Consideration							Assets Acquired
Segment	Cash Paid		Debt and Other Liabilities Assumed		Noncontrolling Interest			Real Estate		Net Intangibles
Medical office	$	157,556	$	35,120	$	27,346	(1)	$	170,443	$	49,579
Life science	7,964		—		86			7,580		470
Senior housing	3,860		—		—			3,541		319
Hospital	3,000		—		—			3,000		—
	$	172,380	$	35,120	$	27,432		$	184,564	$	50,368

(1)Represents non-managing member limited liability company units.

During the nine months ended September 30, 2013 and 2012, the Company funded an aggregate of $123 million and $126 million, respectively, for construction, tenant and other capital improvement projects, primarily in its senior housing, life science and medical office segments.

(4)   Dispositions of Real Estate and Discontinued Operations

During the nine months ended September 30, 2013, the Company sold a senior housing facility for $4 million. In addition, in September 2013, the Company sold a 62-bed hospital located in Greenfield, Wisconsin in exchange for a 60-bed hospital located in Webster, Texas and recognized a gain of $8 million based on the fair value of the hospital acquired. During the nine months ended September 30, 2012, the Company sold a medical office building for $7 million.

At September 30, 2013, four hospitals were classified as held for sale, with a carrying value of $131 million. At December 31, 2012, properties classified as held for sale included a senior housing facility and five hospitals with a combined aggregate carrying value of $146 million.

The following table summarizes operating loss from discontinued operations and gain on sales of real estate included in discontinued operations (dollars in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013		2012
Rental and related revenues	$	6,460		$	10,260	$	20,458	$	31,023
Depreciation and amortization expenses	1,433			2,969		4,346		11,876
Operating expenses	3			18		9		75
Other income (expense), net	(74		)	593		229		2,452
Income before gain on sales of real estate	$	5,098		$	6,680	$	15,874	$	16,620
Gain on sales of real estate, net of income taxes	$	8,298		$	—	$	9,185	$	2,856
Number of properties included in discontinued operations	5			9		6		10

(5)Net Investment in Direct Financing Leases

The components of net investment in direct financing leases (“DFLs”) consisted of the following (dollars in thousands):

	September 30,			December 31,
	2013			2012
Minimum lease payments receivable(1)	$	24,811,003		$	25,217,520
Estimated residual values	4,010,514			4,010,514
Less unearned income	(21,828,165		)	(22,346,641		)
Net investment in direct financing leases	$	6,993,352		$	6,881,393
Properties subject to direct financing leases	361			361

(1)The minimum lease payments receivable are primarily attributable to HCR ManorCare, Inc. (“HCR ManorCare”) ($23.7 billion and $24.0 billion at September 30, 2013 and December 31, 2012, respectively). The triple-net master lease with HCR ManorCare provides for annual rent of $506 million beginning April 1, 2013 (prior to April 1, 2013, annual rent was $489 million). The rent increases by 3.5% per year over the next three years and by 3% for the remaining portion of the initial lease term. The properties are grouped into four pools, and HCR ManorCare has a one-time extension option for each pool with rent increased for the first year of the extension option to the greater of fair market rent or a 3% increase over the rent for the prior year. Including the extension options, which the Company determined to be bargain renewal options, the four leased pools had total initial available terms ranging from 23 to 35 years.

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Certain leases contain provisions that allow the tenants to elect to purchase the properties during or at the end of the lease terms for the aggregate initial investment amount plus adjustments, if any, as defined in the lease agreements. Certain leases also permit the Company to require the tenants to purchase the properties at the end of the lease terms.

During the three months ended September 30, 2013, the Company placed a 14-property senior housing DFL (the “DFL Portfolio”) on non-accrual status. Based on the Company’s determination that the collection of all rental payments is no longer reasonably assured, rental revenue for the DFL Portfolio will be recognized on a cash basis. Furthermore, the Company assessed the DFL Portfolio for impairment. The Company determined that the DFL Portfolio was not impaired at September 30, 2013, based on its belief that: (i) it is not probable that it will not collect all of the rental payments under the terms of the lease; and (ii) the fair value of the underlying collateral exceeds the DFL Portfolio’s $376 million carrying amount. The fair value of the DFL Portfolio was estimated based on a discounted cash flow model, which inputs are considered to be a Level 3 measurement within the fair value hierarchy. Inputs to this valuation model include real estate capitalization rates, industry growth rates and operating margins, some of which influence the Company’s expectation of future cash flows from the DFL Portfolio and, accordingly, the fair value of its investment. During the three months ended September 30, 2013 and 2012, the Company recognized DFL income of $5.1 million and $7.0 million, respectively, and received cash payments of $6.1 million and $5.6 million, respectively, from the DFL Portfolio. During the nine months ended September 30, 2013 and 2012, the Company recognized DFL income of $19.1 million and $20.8 million, respectively, and received cash payments of $17.6 million and $17.3 million, respectively, from the DFL Portfolio.

(6)   Loans Receivable

The following table summarizes the Company’s loans receivable (in thousands):

	September 30, 2013								December 31, 2012
	Real Estate Secured		Other Secured			Total			Real Estate Secured		Other Secured			Total
Mezzanine	$	—	$	245,535		$	245,535		$	—	$	145,150		$	145,150
Other(1)	161,471		—			161,471			147,264		—			147,264
Unamortized discounts, fees and costs	—		(2,793		)	(2,793		)	—		(2,974		)	(2,974		)
Allowance for loan losses	—		(13,410		)	(13,410		)	—		(13,410		)	(13,410		)
	$	161,471	$	229,332		$	390,803		$	147,264	$	128,766		$	276,030

(1)Includes $110 million and $72 million at September 30, 2013 and December 31, 2012, respectively, of construction loans outstanding related to senior housing development projects.  At September 30, 2013, the Company had $37 million remaining in its commitments to fund development projects.

Other Secured Loans

Barchester Loan.  On May 2, 2013, the Company acquired £121 million ($188 million) of subordinated debt at a discount for £109 million ($170 million). The loan was secured by an interest in 160 facilities leased and operated by Barchester Healthcare (“Barchester”). On August 23, 2013, the Company acquired an additional investment in this loan of £9 million ($14 million) at a discount for £5 million ($8 million). This loan accrued interest on its face value at a floating rate LIBOR plus a weighted-average margin of 3.14%. This loan investment was financed by a GBP denominated draw on the Company’s revolving line of credit facility that is discussed in Note 10. On September 6, 2013, the Company received £129 million ($202 million) from the par payoff of its Barchester debt investments; as a result, the Company recognized interest income of $24 million representing primarily the debt investments’ unamortized discounts. A portion of the proceeds from the Barchester repayment were used to repay the total outstanding amount of the Company’s GBP denominated draw on its revolving line of credit facility.

Tandem Health Care Loan.  On July 31, 2012, the Company closed a mezzanine loan facility to lend up to $205 million to Tandem Health Care (“Tandem”), an affiliate of Formation Capital, as part of the recapitalization of a post-acute/skilled nursing portfolio. At closing, the loan was subordinate to $400 million in senior mortgage debt and $137 million in senior mezzanine debt. The Company funded $100 million (the “First Tranche”) at closing and funded an additional $102 million (the “Second Tranche”) in June 2013. The Second Tranche was used to repay the senior mezzanine debt. At September 30, 2013, the loan was subordinate to $443 million of senior mortgage debt. The loan bears interest at a fixed rate of 12% and 14% per annum for the First and Second Tranches, respectively. The facility has a total term of up to 63 months from the initial closing, is prepayable at the borrower’s option and is secured by real estate partnership interests. The loan is subject to a prepayment premium if repaid on or before the third anniversary from the initial closing date.

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Delphis Operations, L.P. Loan.  The Company holds a secured term loan made to Delphis Operations, L.P. (“Delphis” or the “Borrower”) that is collateralized by all of the assets of the Borrower. The Borrower’s collateral is comprised primarily of interests in partnerships operating surgical facilities, of which one partnership leases a property owned by the Company. In December 2009, the Company determined that the loan was impaired. Further, in January 2011 the Company placed the loan on cost-recovery status, whereby accrual of interest income was suspended, and any payments received from the Borrower are applied to reduce the recorded investment in the loan.

As part of a March 2012 agreement (the “2012 Agreement”) between Delphis, certain past and current principals of Delphis and the Cirrus Group, LLC (the “Guarantors”), and the Company, the Company agreed, among other things, to allow the distribution of $1.5 million to certain of the Guarantors from funds generated from sales of assets that were pledged as additional collateral for this loan. Further, the Company, as part of the 2012 Agreement, agreed to provide financial incentives to the Borrower regarding the liquidation of the primary collateral assets for this loan.

Pursuant to the 2012 Agreement, the Company received the remaining cash ($4.8 million, after reducing this amount by $0.5 million for related legal expenses) and other consideration ($2.1 million) of $6.9 million from the Guarantors. In addition, during 2012, the Company received $38.1 million in net proceeds from the sales of two of the primary collateral assets, which proceeds, together with the cash payments and other consideration, were applied to reduce the carrying value of the loan. The carrying value of the loan was $29.2 million and $30.7 million at September 30, 2013 and December 31, 2012, respectively. During the nine months ended September 30, 2013, the Company received cash payments from the Borrower of $1.5 million. At September 30, 2013, the Company believes the fair value of the collateral supporting this loan is in excess of its carrying value.

(7)   Investments in and Advances to Unconsolidated Joint Ventures

The Company owns interests in the following entities that are accounted for under the equity method at September 30, 2013 (dollars in thousands):

Entity(1)	Properties/Segment	Investment(2)			Ownership%
HCR ManorCare	post-acute/skilled nursing operations	$	85,777		9.5
HCP Ventures III, LLC	13 medical office	7,251			30
HCP Ventures IV, LLC	54 medical office and 4 hospital	30,420			20
HCP Life Science(3)	4 life science	68,992			50-63
Horizon Bay Hyde Park, LLC	1 senior housing	6,725			72
Suburban Properties, LLC	1 medical office	6,666			67
Advances to unconsolidated joint ventures, net		173
		$	206,004
Edgewood Assisted Living Center, LLC	1 senior housing	$	(429	)	45
Seminole Shores Living Center, LLC	1 senior housing	(697		)	50
		$	(1,126	)

(1)These entities are not consolidated because the Company does not control, through voting rights or other means, the joint ventures.

(2)Represents the carrying value of the Company’s investment in the unconsolidated joint venture. Negative balances are recorded in accounts payable and accrued liabilities on the Company’s Condensed Consolidated Balance Sheets.

(3)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 (and the Company’s ownership percentage): (i) Torrey Pines Science Center, LP (50%); (ii) Britannia Biotech Gateway, LP (55%); and (iii) LASDK, LP (63%).

Summarized combined financial information for the Company’s unconsolidated joint ventures follows (in thousands):

	September 30,		December 31,
	2013		2012
Real estate, net	$	3,676,367	$	3,731,740
Goodwill and other assets, net	5,802,930		5,734,318
Total assets	$	9,479,297	$	9,466,058
Capital lease obligations and mortgage debt	$	6,782,574	$	6,875,932
Accounts payable	1,060,153		971,095
Other partners’ capital	1,452,308		1,435,885
HCP’s capital(1)	184,262		183,146
Total liabilities and partners’ capital	$	9,479,297	$	9,466,058

(1)The combined basis difference of the Company’s investments in these joint ventures of $20 million, as of September 30, 2013, is primarily attributable to goodwill, real estate, capital lease obligations, deferred tax assets and lease related net intangibles.

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	Three Months Ended September 30,					Nine Months Ended September 30,
	2013		2012			2013		2012
Total revenues	$	1,055,889	$	1,057,567		$	3,208,752	$	3,196,086
Net income (loss)	1,739		(8,851		)	22,232		8,416
HCP’s share in earnings (1)	13,892		13,396			44,278		42,803
Fees earned by HCP	464		460			1,406		1,423
Distributions received by HCP	1,390		1,419			3,918		4,826

(1)The Company’s joint venture interest in HCR ManorCare is accounted for using the equity method and results in an ongoing reduction of DFL income, proportional to HCP’s ownership in HCR ManorCare. The Company recorded a reduction of $15.4 million and $46.6 million for the three and nine months ended September 30, 2013, respectively. The Company recorded a reduction of $14.9 million and $44.4 million for the three and nine months ended September 30, 2012, respectively. Further, the Company’s share of earnings from HCR ManorCare (equity income) increases for the corresponding reduction of related lease expense recognized at the HCR ManorCare level.

(8)Intangibles

At September 30, 2013 and December 31, 2012, intangible lease assets, comprised of lease-up intangibles, above market tenant lease intangibles and below market ground lease intangibles, were $784 million and $794 million, respectively. At September 30, 2013 and December 31, 2012, the accumulated amortization of intangible assets was $276 million and $241 million, respectively.

At September 30, 2013 and December 31, 2012, intangible lease liabilities, comprised of below market lease intangibles and above market ground lease intangible liabilities were $208 million and $194 million, respectively. At September 30, 2013 and December 31, 2012, the accumulated amortization of intangible liabilities was $105 million and $90 million, respectively.

(9)Other Assets

The Company’s other assets consisted of the following (in thousands):

	September 30,		December 31,
	2013		2012
Straight-line rent assets, net of allowance of $34,123 and $33,521, respectively	$	358,514	$	306,294
Marketable debt securities, net(1)	238,834		222,809
Leasing costs, net	98,406		93,763
Deferred financing costs, net	37,379		45,490
Goodwill	50,346		50,346
Marketable equity securities	—		24,829
Other(2)	52,518		44,989
Total other assets	$	835,997	$	788,520

(1)Includes £137 million ($222 million and $223 million at September 30, 2013 and December 31, 2012, respectively) of Four Seasons senior unsecured notes translated into U.S. dollars (see below for additional information).

(2)Includes a $5.4 million allowance for losses related to accrued interest receivable on the Delphis loan, which accrued interest is included in other assets. At both September 30, 2013 and December 31, 2012, the carrying value of interest accrued related to the Delphis loan was zero. See Note 6 for additional information about the Delphis loan and the related impairment. At both September 30, 2013 and December 31, 2012, includes a loan receivable of $10 million from HCP Ventures IV, LLC, an unconsolidated joint venture (see Note 7 for additional information) with an interest rate of 12% which matures in May 2014. The loan is secured by HCP’s joint venture partner’s 80% partnership interest in the joint venture.

During the nine months ended September 30, 2013, the Company realized gains from the sale of marketable equity securities of $11 million, which were included in other income, net. At December 31, 2012, the fair value and adjusted cost basis of the marketable equity securities were $24.8 million and $17.1 million, respectively. The marketable equity securities were classified as available-for-sale.

Four Seasons Health Care Senior Unsecured Notes

On June 28, 2012, the Company purchased senior unsecured notes with an aggregate par value of £138.5 million at a discount for £136.8 million ($214.9 million). The notes were issued by Elli Investments Limited, a subsidiary of Terra Firma, a European private equity firm, as part of its financing for the acquisition of Four Seasons Health Care (“Four Seasons”), an elderly and specialist care provider in the United Kingdom. The notes mature in June 2020 and are non-callable through June 2016. The notes bear interest on their par value at a fixed rate of 12.25% per annum, with an original issue discount resulting in a yield to maturity of 12.5%. This investment was financed by a GBP denominated unsecured term loan that is discussed in Note 10. These senior unsecured notes are accounted for as marketable debt securities and classified as held-to-maturity.

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(10) Debt

Bank Line of Credit and Term Loan

The Company’s $1.5 billion unsecured revolving line of credit facility (the “Facility”) matures in March 2016 and contains a one-year extension option. Borrowings under the Facility accrue interest at LIBOR plus a margin that depends on the Company’s debt ratings. The Company pays a facility fee on the entire revolving commitment that depends upon its debt ratings. Based on the Company’s debt ratings at September 30, 2013, the margin on the Facility was 1.075%, and the facility fee was 0.175%. The Facility also includes a feature that will allow the Company to increase the borrowing capacity by an aggregate amount of up to $500 million, subject to securing additional commitments from existing lenders or new lending institutions. At September 30, 2013, the Company had $285 million outstanding under the Facility.

On July 30, 2012, the Company entered into a credit agreement with a syndicate of banks for a £137 million ($222 million at September 30, 2013) four-year unsecured term loan (the “Term Loan”) that accrues interest at a rate of GBP LIBOR plus 1.20%, based on the Company’s current debt ratings. Concurrent with the closing of the Term Loan, the Company entered into a four-year interest rate swap contract that fixes the interest rate of the Term Loan at 1.81%, subject to adjustments based on the Company’s debt ratings. The Term Loan contains a one-year committed extension option.

The Facility and Term Loan contain certain financial restrictions and other customary requirements, including cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the agreements, (i) limit the ratio of Consolidated Total Indebtedness to Consolidated Total Asset Value to 60%, (ii) limit the ratio of Secured Debt to Consolidated Total Asset Value to 30%, (iii) limit the ratio of Unsecured Debt to Consolidated Unencumbered Asset Value to 60%, (iv) require a minimum Fixed Charge Coverage ratio of 1.5 times and (v) require a formula-determined Minimum Consolidated Tangible Net Worth of $9.2 billion at September 30, 2013. At September 30, 2013, the Company was in compliance with each of these restrictions and requirements of the Facility and Term Loan.

Senior Unsecured Notes

At September 30, 2013, the Company had senior unsecured notes outstanding with an aggregate principal balance of $6.6 billion. At September 30, 2013, interest rates on the notes ranged from 1.22% to 6.98% with a weighted average effective interest rate of 5.10% and a weighted average maturity of five years. Discounts and premiums are amortized to interest expense over the term of the related senior unsecured notes. The senior unsecured notes contain certain covenants including limitations on debt, maintenance of unencumbered assets, cross-acceleration provisions and other customary terms. The Company believes it was in compliance with these covenants at September 30, 2013.

On February 28, 2013, the Company repaid $150 million of maturing 5.625% senior unsecured notes.

On November 19, 2012, the Company issued $800 million of 2.625% senior unsecured notes due in 2020. The notes were priced at 99.7% of the principal amount with an effective yield to maturity of 2.7%; net proceeds from this offering were $793 million.

On July 23, 2012, the Company issued $300 million of 3.15% senior unsecured notes due in 2022. The notes were priced at 98.9% of the principal amount with an effective yield to maturity of 3.3%; net proceeds from the offering were $294 million.

On June 25, 2012, the Company repaid $250 million of maturing 6.45% senior unsecured notes. The notes were repaid with proceeds from the Company’s June 2012 common stock offering.

On January 23, 2012, the Company issued $450 million of 3.75% senior unsecured notes due in 2019. The notes were priced at 99.5% of the principal amount with an effective yield to maturity of 3.8%; net proceeds from the offering were $444 million.

Mortgage Debt

At September 30, 2013, the Company had $1.4 billion in aggregate principal amount of mortgage debt outstanding secured by 132 healthcare facilities (including redevelopment properties) with a carrying value of $2.0 billion. At September 30, 2013, interest rates on the mortgage debt ranged from 0.69% to 8.69% with a weighted average effective interest rate of 6.16% and a weighted average maturity of four years.

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Mortgage debt generally requires monthly principal and interest payments, is collateralized by real estate assets and is generally non-recourse. Mortgage debt typically restricts transfer of the encumbered assets, prohibits additional liens, restricts prepayment, requires payment of real estate taxes, requires maintenance of the assets in good condition, requires maintenance of insurance on the assets and includes conditions to obtain lender consent to enter into or terminate material leases. Some of the mortgage debt is also cross-collateralized by multiple assets and may require tenants or operators to maintain compliance with the applicable leases or operating agreements of such real estate assets.

Other Debt

At September 30, 2013, the Company had $78 million of non-interest bearing life care bonds at two of its continuing care retirement communities and non-interest bearing occupancy fee deposits at two of its senior housing facilities, all of which were payable to certain residents of the facilities (collectively, “Life Care Bonds”). The Life Care Bonds are generally refundable to the residents upon the termination of the contract or upon the successful resale of the unit.

Debt Maturities

The following table summarizes the Company’s stated debt maturities and scheduled principal repayments at September 30, 2013 (in thousands):

Year	Line of Credit		Term Loan(1)		Senior Unsecured Notes			Mortgage Debt			Total(2)
2013 (Three months)	$	—	$	—	$	400,000		$	14,003		$	414,003
2014	—		—		487,000			180,042			667,042
2015	—		—		400,000			308,421			708,421
2016	285,000		221,748		900,000			291,738			1,698,486
2017	—		—		750,000			550,477			1,300,477
Thereafter	—		—		3,650,000			71,825			3,721,825
	285,000		221,748		6,587,000			1,416,506			8,510,254
(Discounts) and premiums, net	—		—		(21,066		)	(6,099		)	(27,165		)
	$	285,000	$	221,748	$	6,565,934		$	1,410,407		$	8,483,089

(1)Represents £137 million translated into U.S. dollars.

(2)Excludes $78 million of other debt that represents Life Care Bonds that have no scheduled maturities.

(11) Commitments and Contingencies

Legal Proceedings

From time to time, the Company is a party to legal proceedings, lawsuits and other claims that arise in the ordinary course of the Company’s business. The Company is not aware of any legal proceedings or claims that it believes may have, individually or taken together, a material adverse effect on the Company’s business, prospects, financial condition, results of operations or cash flows. The Company’s policy is to expense legal costs as they are incurred.

Concentration of Credit Risk

Concentrations of credit risks arise when one or more operators, tenants or obligors related to the Company’s investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. The Company regularly monitors various segments of its portfolio to assess potential concentrations of risks. The Company does not have significant foreign operations.

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The following table provides information regarding the Company’s concentrations with respect to certain operators and tenants; the information provided is presented for the gross assets and revenues that are associated with certain operators and tenants as percentages of the respective segment’s and total Company’s assets and revenues:

Segment Concentrations:

	Percentage of Senior Housing Gross Assets							Percentage of Senior Housing Revenues					Percentage of Senior Housing Revenues
	September 30,			December 31,			Three Months Ended September 30,					Nine Months Ended September 30,
Operators	2013		2012			2013				2012		2013			2012
Emeritus	37.3	%	37.3		%	34.8			%	20.3	%	34.6		%	20.5	%
Sunrise Senior Living (“Sunrise”)(1)	17.2		17.5			11.5				15.6		12.2			15.7
HCR ManorCare	11.0		11.0			9.6				11.7		9.5			11.8
Brookdale Senior Living (“Brookdale”)(2)	10.6		10.7			11.7				14.4		11.6			14.2

	Percentage of Post-Acute/ Skilled Nursing Gross Assets							Percentage of Post-Acute/ Skilled Nursing Revenues					Percentage of Post-Acute/ Skilled Nursing Revenues
	September 30,			December 31,			Three Months Ended September 30,					Nine Months Ended September 30,
Operators	2013		2012			2013				2012		2013			2012
HCR ManorCare	88.1	%	89.3		%	72.7			%	87.2	%	81.3		%	90.9	%

Total Company Concentrations:

	Percentage of Total Company Assets							Percentage of Total Company Revenues					Percentage of Total Company Revenues
	September 30,			December 31,			Three Months Ended September 30,					Nine Months Ended September 30,
Operators	2013		2012			2013				2012		2013			2012
HCR ManorCare	32.1	%	31.5		%	27.0			%	30.7	%	28.0		%	31.2	%
Emeritus	14.6		14.3			12.2				6.6		12.6			6.7
Sunrise(1)	6.8		6.7			4.0				5.0		4.4			5.2
Brookdale(2)	4.2		4.1			4.1				4.7		4.2			4.7

(1)Certain of the Company’s properties are leased to tenants who have entered into management contracts with Sunrise to operate the respective property on their behalf. The Company’s concentration of gross assets includes properties directly leased to Sunrise and properties that are managed by Sunrise on behalf of third party tenants.

(2)At September 30, 2013 and December 31, 2012, Brookdale percentages exclude $778 million and $759 million, respectively, of senior housing assets related to 21 senior housing facilities that Brookdale operates on the Company’s behalf under a RIDEA structure. Assuming that these assets were attributable to Brookdale, the percentage of senior housing assets for Brookdale would be 21% at both September 30, 2013 and December 31, 2012. Assuming that these assets were attributable to Brookdale, the percentage of total assets for Brookdale would be 8% at both September 30, 2013 and December 31, 2012. For the three and nine months ended September 30, 2013, Brookdale percentages exclude $37.6 million and $112.0 million, respectively, of senior housing revenues related to these facilities. Assuming that these revenues were attributable to Brookdale, the percentage of senior housing revenues for Brookdale would be 31% for both the three and nine months ended September 30, 2013. Assuming that these revenues were attributable to Brookdale, the percentage of total revenues for Brookdale would be 11% for both the three and nine months ended September 30, 2013. For the three and nine months ended September 30, 2012, Brookdale percentages exclude $36.1 million and $106.8 million, respectively, of senior housing revenues related to these facilities. Assuming that these revenues were attributable to Brookdale, the percentage of senior housing revenues for Brookdale would be 38% for both the three and nine months ended September 30, 2012. Assuming that these revenues were attributable to Brookdale, the percentage of total revenues for Brookdale would be 12% for both the three and nine months ended September 30, 2012.

HCR ManorCare’s summarized condensed consolidated financial information follows (in millions):

	September 30,		December 31,
	2013		2012
Real estate and other property, net	$	3,008.7	$	3,046.6
Cash and cash equivalents	158.5		120.5
Goodwill, intangible and other assets, net	5,563.7		5,625.4
Total assets	$	8,730.9	$	8,792.5
Debt and financing obligations	$	6,289.0	$	6,374.6
Accounts payable, accrued liabilities and other	1,021.8		1,021.9
Total equity	1,420.1		1,396.0
Total liabilities and equity	$	8,730.9	$	8,792.5

16

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues	$	1,030.3		$	1,037.8		$	3,131.7		$	3,113.3
Operating, general and administrative expense	(888.1		)	(880.8		)	(2,677.4		)	(2,663.7		)
Depreciation and amortization expense	(36.3		)	(41.6		)	(110.0		)	(125.2		)
Interest expense	(103.8		)	(105.2		)	(312.3		)	(317.3		)
Other income, net	2.3			3.7			4.0			10.1
Income before income taxes	4.4			13.9			36.0			17.2
Income taxes	(1.8		)	(4.8		)	(11.6		)	(4.7		)
Net income	$	2.6		$	9.1		$	24.4		$	12.5

To mitigate the credit risk of leasing properties to certain senior housing and post-acute/skilled nursing operators, leases with operators are often combined into portfolios that contain cross-default terms, so that if a tenant of any of the properties in a portfolio defaults on its obligations under its lease, the Company may pursue its remedies under the lease with respect to any of the properties in the portfolio. Certain portfolios also contain terms whereby the net operating profits of the properties are combined for the purpose of securing the funding of rental payments due under each lease.

Credit Enhancement Guarantee

Certain of the Company’s senior housing facilities serve as collateral for $113 million of debt (maturing May 1, 2025) that is owed by a previous owner of the facilities. This indebtedness is guaranteed by the previous owner who has an investment grade credit rating. These senior housing facilities, which are classified as DFLs, had a carrying value of $376 million as of September 30, 2013.

(12) Equity

Preferred Stock

On April 23, 2012, the Company redeemed all of its outstanding preferred stock consisting of 4,000,000 shares of its 7.25% Series E preferred stock and 7,820,000 shares of its 7.10% Series F preferred stock. The shares of Series E and Series F preferred stock were redeemed at a price of $25 per share, or $295.5 million in aggregate, plus all accrued and unpaid dividends to the redemption date. As a result of the redemption, which was announced on March 22, 2012, the Company incurred a charge of $10.4 million during the three months ended March 31, 2012 related to the original issuance costs of the preferred stock (this charge is presented as an additional preferred stock dividend in the Company’s condensed consolidated statements of income).

Common Stock

The following table lists the common stock cash dividends declared by the Company in 2013:

Declaration Date	Record Date	Amount Per Share		Dividend Payable Date
January 24	February 4	$	0.525	February 19
April 25	May 6	0.525		May 21
July 25	August 5	0.525		August 20
October 24	November 4	0.525		November 19

In October 2012, the Company completed a $979 million offering of 22 million shares of common stock at a price of $44.50 per share, which proceeds were primarily used to fund the Blackstone JV Acquisition.

In June 2012, the Company completed a $376 million offering of 8.97 million shares of common stock at a price of $41.88 per share, which proceeds were primarily used to repay $250 million of maturing senior unsecured notes.

In March 2012, the Company completed a $359 million offering of 9.0 million shares of common stock at a price of $39.93 per share, which proceeds were primarily used to redeem all outstanding shares of the Company’s preferred stock.

17

The following is a summary of the Company’s other common stock issuances (shares in thousands):

	Nine Months Ended September 30,
	2013	2012
Dividend Reinvestment and Stock Purchase Plan	1,681	675
Conversion of DownREIT units(1)	85	72
Exercise of stock options	875	2,451
Vesting of restricted stock units(2)	110	385

(1)Non-managing member LLC units.

(2)Issued under the Company’s 2006 Performance Incentive Plan.

Accumulated Other Comprehensive Loss

The following is a summary of the Company’s accumulated other comprehensive loss (in thousands):

	September 30,			December 31,
	2013			2012
Unrealized gains on available for sale securities	$	—		$	7,776
Unrealized losses on cash flow hedges, net	(12,066		)	(18,452		)
Supplemental Executive Retirement Plan minimum liability	(2,983		)	(3,150		)
Cumulative foreign currency translation adjustment	(830		)	(827		)
Total accumulated other comprehensive loss	$	(15,879	)	$	(14,653	)

Noncontrolling Interests

At September 30, 2013, non-managing members hold an aggregate of 4 million units in four limited liability companies (“DownREITs”), for which the Company is the managing member. At September 30, 2013, the carrying and fair values of these DownREIT units were $185 million and $246 million, respectively.

(13) Segment Disclosures

The Company evaluates its business and makes resource allocations based on its five business segments: (i) senior housing, (ii) post-acute/skilled nursing, (iii) life science, (iv) medical office and (v) hospital. Under the senior housing, post-acute/skilled nursing, life science and hospital segments, the Company invests or co-invests primarily in single operator or tenant properties, through the acquisition and development of real estate, management of operations (RIDEA) and by debt issued by operators in these sectors. Under the medical office segment, the Company invests or co-invests through the acquisition and development of medical office buildings (“MOBs”) that are leased under gross, modified gross or triple-net leases, generally to multiple tenants, and which generally require a greater level of property management. The accounting policies of the segments are the same as those described in Note 2 to the Consolidated Financial Statements for the year ended December 31, 2012 in the Company’s Annual Report on Form 10-K filed with the SEC. There were no intersegment sales or transfers during the nine months ended September 30, 2013 and 2012. The Company evaluates performance based upon property net operating income from continuing operations (“NOI”), adjusted NOI and interest income of the combined investments in each segment.

Non-segment assets consist primarily of corporate assets including cash and cash equivalents, restricted cash, accounts receivable, net, marketable equity securities, deferred financing costs and, if any, real estate held-for-sale. Interest expense, depreciation and amortization and non-property specific revenues and expenses are not allocated to individual segments in determining the Company’s performance measure. See Note 11 for other information regarding concentrations of credit risk.

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Summary information for the reportable segments follows (in thousands):

For the three months ended September 30, 2013:

Segments	Rental Revenues(1)		Resident Fees and Services		Interest Income		Investment Management Fee Income		Total Revenues		NOI(2)		Adjusted NOI(2)(Cash NOI)
Senior housing	$	149,443	$	37,589	$	3,121	$	—	$	190,153	$	162,391	$	148,997
Post-acute/skilled	138,289		—		38,642		—		176,931		137,642		120,258
Life science	72,531		—		—		1		72,532		58,440		56,352
Medical office	88,473		—		—		463		88,936		52,255		52,214
Hospital	15,091		—		315		—		15,406		14,119		14,148
Total	$	463,827	$	37,589	$	42,078	$	464	$	543,958	$	424,847	$	391,969

For the three months ended September 30, 2012:

Segments	Rental Revenues(1)		Resident Fees and Services		Interest Income		Investment Management Fee Income		Total Revenues		NOI(2)		Adjusted NOI(2)(Cash NOI)
Senior housing	$	114,661	$	36,076	$	877	$	—	$	151,614	$	125,865	$	113,401
Post-acute/skilled	135,183		—		9,135		—		144,318		135,029		116,573
Life science	71,194		—		—		1		71,195		59,403		56,341
Medical office	85,800		—		—		459		86,259		50,852		49,669
Hospital	14,414		—		266		—		14,680		13,526		13,165
Total	$	421,252	$	36,076	$	10,278	$	460	$	468,066	$	384,675	$	349,149

For the nine months ended September 30, 2013:

Segments	Rental Revenues(1)		Resident Fees and Services		Interest Income		Investment Management Fee Income		Total Revenues		NOI(2)		Adjusted NOI(2)(Cash NOI)
Senior housing	$	448,600	$	112,070	$	8,328	$	—	$	568,998	$	487,501	$	440,395
Post-acute/skilled	411,912		—		59,656		—		471,568		409,965		356,544
Life science	221,088		—		—		3		221,091		179,775		170,957
Medical office	265,902		—		—		1,403		267,305		160,170		157,742
Hospital	33,703		—		627		—		34,330		30,882		42,369
Total	$	1,381,205	$	112,070	$	68,611	$	1,406	$	1,563,292	$	1,268,293	$	1,168,007

For the nine months ended September 30, 2012:

Segments	Rental Revenues(1)		Resident Fees and Services		Interest Income		Investment Management Fee Income		Total Revenues		NOI(2)		Adjusted NOI(2)(Cash NOI)
Senior housing	$	341,353	$	107,824	$	1,686	$	—	$	450,863	$	379,251	$	341,794
Post-acute/skilled	403,209		—		9,842		—		413,051		402,690		345,936
Life science	215,569		—		—		3		215,572		177,339		171,179
Medical office	246,661		—		—		1,420		248,081		148,030		144,272
Hospital	42,647		—		785		—		43,432		39,919		38,696
Total	$	1,249,439	$	107,824	$	12,313	$	1,423	$	1,370,999	$	1,147,229	$	1,041,877

(1)Represents rental and related revenues, tenant recoveries and income from DFLs.

(2)NOI is a non-GAAP supplemental financial measure used to evaluate the operating performance of real estate. The Company defines NOI as rental and related revenues, including tenant recoveries, resident fees and services, and income from DFLs, less property level operating expenses. NOI excludes interest income, investment management fee income, interest expense, depreciation and amortization, general and administrative expenses, litigation settlement, impairments, impairment recoveries, other income, net, income taxes, equity income from and impairments of investments in unconsolidated joint ventures, and discontinued operations. The Company believes NOI provides relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis. Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL accretion, amortization of above and below market lease intangibles, and lease termination fees. Adjusted NOI is sometimes referred to as “cash NOI.” The Company uses NOI and adjusted NOI to make decisions about resource allocations and to assess and compare property level performance. 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 because it does not reflect the aforementioned excluded items. Further, the Company’s definition of NOI may not be comparable to the definition used by other REITs or real estate companies, as those companies may use different methodologies for calculating NOI.

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The following is a reconciliation of reported net income to NOI and adjusted NOI (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Net income	$	236,858		$	199,043		$	687,367		$	600,582
Interest income	(42,078		)	(10,278		)	(68,611		)	(12,313		)
Investment management fee income	(464		)	(460		)	(1,406		)	(1,423		)
Interest expense	108,088			103,355			326,094			309,399
Depreciation and amortization	104,859			87,170			317,430			254,463
General and administrative	45,423			19,415			90,080			54,299
Impairments	—			7,878			—			7,878
Other income, net	(1,584		)	(770		)	(16,887		)	(2,232		)
Income taxes	1,033			(602		)	3,563			(1,145		)
Equity income from unconsolidated joint ventures	(13,892		)	(13,396		)	(44,278		)	(42,803		)
Total discontinued operations	(13,396		)	(6,680		)	(25,059		)	(19,476		)
NOI	424,847			384,675			1,268,293			1,147,229
Straight-line rents	(12,604		)	(11,821		)	(28,559		)	(33,608		)
DFL accretion	(19,822		)	(23,433		)	(65,386		)	(71,072		)
Amortization of above and below market lease intangibles, net	(346		)	(533		)	(6,414		)	(1,855		)
Lease termination fees	(205		)	(175		)	(220		)	(574		)
NOI adjustments related to discontinued operations	99			436			293			1,757
Adjusted NOI	$	391,969		$	349,149		$	1,168,007		$	1,041,877

The Company’s total assets by segment were (in thousands):

	September 30,			December 31,
Segments	2013			2012
Senior housing	$	7,811,003		$	7,654,221
Post-acute/skilled nursing	6,269,566			6,080,826
Life science	3,969,723			3,932,397
Medical office	2,686,241			2,661,394
Hospital	542,187			505,393
Gross segment assets	21,278,720			20,834,231
Accumulated depreciation and amortization	(2,192,342		)	(1,900,221		)
Net segment assets	19,086,378			18,934,010
Assets held-for-sale, net	130,765			145,621
Other non-segment assets	672,366			835,924
Total assets	$	19,889,509		$	19,915,555

At September 30, 2013, goodwill of $50 million was allocated to segment assets as follows: (i) senior housing—$31 million, (ii) post-acute/skilled nursing—$3 million, (iii) medical office—$11 million, and (iv) hospital—$5 million.

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(14) Earnings Per Common Share

The following table illustrates the computation of basic and diluted earnings per share (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Numerator
Income from continuing operations	$	223,462		$	192,363		$	662,308		$	581,106
Noncontrolling interests’ share in continuing operations	(3,102		)	(2,935		)	(9,625		)	(9,070		)
Income from continuing operations applicable to HCP, Inc.	220,360			189,428			652,683			572,036
Preferred stock dividends	—			—			—			(17,006		)
Participating securities’ share in continuing operations	(474		)	(479		)	(1,330		)	(2,154		)
Income from continuing operations applicable to common shares	219,886			188,949			651,353			552,876
Discontinued operations	13,396			6,680			25,059			19,476
Net income applicable to common shares	$	233,282		$	195,629		$	676,412		$	572,352
Denominator
Basic weighted average common shares	455,345			429,557			454,553			420,049
Dilutive potential common shares	733			1,221			835			1,355
Diluted weighted average common shares	456,078			430,778			455,388			421,404
Basic earnings per common share
Income from continuing operations	$	0.48		$	0.44		$	1.43		$	1.32
Discontinued operations	0.03			0.02			0.06			0.04
Net income applicable to common shares	$	0.51		$	0.46		$	1.49		$	1.36
Diluted earnings per common share
Income from continuing operations	$	0.48		$	0.44		$	1.43		$	1.32
Discontinued operations	0.03			0.01			0.06			0.04
Net income applicable to common shares	$	0.51		$	0.45		$	1.49		$	1.36

Restricted stock and certain of the Company’s performance restricted stock units are considered participating securities, because dividend payments are not forfeited even if the underlying award does not vest, which require the use of the two-class method when computing basic and diluted earnings per share.

Options to purchase approximately 0.9 million and 0.5 million shares of common stock that had an exercise price (including deferred compensation expense) in excess of the average closing market price of the Company’s common stock during the three months ended September 30, 2013 and 2012, respectively, were not included in the Company’s earnings per share calculations because they are anti-dilutive. Restricted stock and performance restricted stock units representing 7,500 shares of common stock during the three months ended September 30, 2013 were not included because they are anti-dilutive. Additionally, 6.0 million shares issuable upon conversion of 3.9 million DownREIT units during the three months ended September 30, 2013 were not included because they are anti-dilutive. During the three months ended September 30, 2012, 6.4 million shares issuable upon conversion of 4.4 million DownREIT units were not included because they are anti-dilutive.

(15) Supplemental Cash Flow Information

The following table provides supplemental cash flow information (in thousands):

	Nine Months Ended September 30,
	2013			2012
Supplemental cash flow information:
Interest paid, net of capitalized interest	$	363,229		$	339,190
Income taxes paid (refunded)	(2		)	1,645
Capitalized interest	10,852			18,517
Supplemental schedule of non-cash investing activities:
Accrued construction costs	18,495			18,024
Fair value of real estate acquired in exchange for sale of real estate	15,204			—

21

	Nine Months Ended September 30,
	2013	2012
Supplemental schedule of non-cash financing activities:
Vesting of restricted stock units	110	385
Cancellation of restricted stock	17	6
Conversion of non-managing member units into common stock	2,997	2,398
Noncontrolling interests issued in connection with acquisitions	—	27,432
Mortgages and other liabilities assumed with real estate acquisitions	12,728	35,120
Unrealized gains on available-for-sale securities and derivatives designated as cash flow hedges, net	6,990	2,203

See additional information regarding supplemental non-cash financing activities related to a real estate exchange in Note 4 and the preferred stock redemption in Note 12.

(16) Variable Interest Entities

Unconsolidated Variable Interest Entities

At September 30, 2013, the Company leased 48 properties to a total of seven VIE tenants and has additional investments in a loan and marketable debt securities to VIE borrowers. The Company has determined that it is not the primary beneficiary of these VIEs.

The Company holds an interest-only, senior secured term loan made to a borrower (Delphis Operations, L.P.) that has been identified as a VIE (see Note 6 for additional information on the Delphis loan). The Company does not consolidate the VIE because it does not have the ability to control the activities that most significantly impact the VIE’s economic performance. The loan is collateralized by all of the assets of the borrower (comprised primarily of interests in partnerships that operate surgical facilities, of which one partnership is a tenant of the Company).

The Company holds commercial mortgage-backed securities (“CMBS”) issued by Federal Home Loan Mortgage Corporation (“Freddie MAC”) through a special purpose entity that has been identified as a VIE. The Company does not consolidate the VIE because it does not have the ability to control the activities that most significantly impact the VIE’s economic performance. The CMBS issued by the VIE are backed by mortgages on senior housing facilities.

The carrying value and classification of the related assets, liabilities and maximum exposure to loss as a result of the Company’s involvement with these VIEs are presented below at September 30, 2013 (in thousands):

VIE Type	Maximum Loss Exposure(1)		Asset/Liability Type	Carrying Amount
VIE tenants—operating leases	$	262,598	Lease intangibles, net and straight-line rent receivables	$	14,526
VIE tenants—DFLs	1,091,935		Net investment in DFLs	602,366
Loan—senior secured	29,151		Loans receivable, net	29,151
Debt investment	16,984		Marketable debt securities	16,984

(1)The Company’s maximum loss exposure related to the VIE tenants represents the future minimum lease payments over the remaining term of the respective leases, which may be mitigated by re-leasing the properties to new tenants. The Company’s maximum loss exposure related to its loans and marketable debt securities to the VIE borrowers represents its current aggregate carrying amount.

As of September 30, 2013, the Company has not provided, and is not required to provide, financial support through a liquidity arrangement or otherwise, to its unconsolidated VIEs, including circumstances in which it could be exposed to further losses (e.g., cash shortfalls). See Notes 5 and 6 for additional descriptions of the nature, purpose and activities of the Company’s unconsolidated VIEs and interests therein.

Consolidated Variable Interest Entities

In September 2013, the Company made loans to two entities that entered into a tax credit structure (“Tax Credit Subsidiaries”). The Company consolidates the Tax Credit Subsidiaries because they are VIEs and the Company is the primary beneficiary of these VIEs. The assets and liabilities of the Tax Credit Subsidiaries substantially consist of notes receivable, prepaid expenses, notes payable and accounts payable and accrued liabilities generated from their operating activities. Assets generated by the operating activities of the Tax Credit Subsidiaries may only be used to settle their contractual obligations.

22

In September 2011, the Company formed a partnership in which it has a 90% ownership interest in a joint venture entity that owns and operates 21 properties in a RIDEA structure (“RIDEA Entity”). The Company consolidated the RIDEA Entity as a result of the rights it acquired through the joint venture agreement with Brookdale. In the fourth quarter of 2012, upon the occurrence of a reconsideration event, it was determined that this RIDEA Entity was a VIE and that the Company was the primary beneficiary of the VIE; therefore, the Company continued to consolidate this entity. During the second quarter of 2013, upon the occurrence of a reconsideration event, it was determined that this RIDEA Entity was no longer a VIE; however, the Company continues to consolidate the RIDEA Entity. The assets and liabilities of this RIDEA Entity substantially consist of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities generated from its operating activities. The assets generated by the operating activities of the RIDEA Entity may be used to settle its contractual obligations, which include lease obligations to the Company. The Company is entitled to its ownership share of the RIDEA Entity’s assets; however, it does not guarantee its liabilities (or contractual obligations) and is not liable to its general creditors.

(17) Fair Value Measurements

The following table illustrates the Company’s financial assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets. Recognized gains and losses are recorded in other income, net on the Company’s condensed consolidated statements of income. During the nine months ended September 30, 2013, there were no transfers of financial assets or liabilities within the fair value hierarchy.

The financial assets and liabilities carried at fair value on a recurring basis at September 30, 2013 follow (in thousands):

Financial Instrument(1)	Fair Value			Level 2			Level 3
Currency swap liabilities	$	(1,897	)	$	(1,897	)	$	—
Interest-rate swap assets	1,564			1,564			—
Interest-rate swap liabilities	(9,283		)	(9,283		)	—
Warrants	180			—			180
	$	(9,436	)	$	(9,616	)	$	180

(1)Interest rate and currency swaps as well as common stock warrant fair values are determined based on observable and unobservable market assumptions utilizing standardized derivative pricing models.

(18) Disclosures About Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities are reasonable estimates of fair value because of the short-term maturities of these instruments. The fair values of loans receivable, bank line of credit, term loan, mortgage debt and other debt are based on rates currently prevailing for similar instruments with similar maturities. The fair values of interest-rate and currency swap contracts as well as common stock warrants are determined based on observable and unobservable market assumptions using standardized pricing models. The fair values of senior unsecured notes and marketable equity and debt securities are determined utilizing market quotes.

The table below summarizes the carrying values and fair values of the Company’s financial instruments (in thousands):

	September 30, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Loans receivable, net(2)	$	390,803	$	402,243	$	276,030	$	279,850
Marketable debt securities(1)	238,834		272,745		222,809		234,137
Marketable equity securities(1)	—		—		24,829		24,829
Warrants(3)	180		180		670		670
Bank line of credit(2)	285,000		285,000		—		—
Term loan(2)	221,748		221,748		222,694		222,694
Senior unsecured notes(1)	6,565,934		7,027,982		6,712,624		7,432,012
Mortgage debt(2)	1,410,407		1,452,732		1,676,544		1,771,155
Other debt(2)	77,503		77,503		81,958		81,958
Interest-rate swap assets(2)	1,564		1,564		89		89
Interest-rate swap liabilities(2)	9,283		9,283		12,699		12,699
Currency swap liabilities(2)	1,897		1,897		2,641		2,641

(1)Level 1: Fair value calculated based on quoted prices in active markets.

(2)Level 2: Fair value based on quoted prices for similar or identical instruments in active or inactive markets, respectively, or calculated utilizing model derived valuations in which significant inputs or value drivers are observable in active markets.

(3)Level 3: Fair value determined based on significant unobservable market inputs using standardized derivative pricing models.

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(19) Derivative Financial Instruments

The following table summarizes the Company’s outstanding interest-rate and foreign currency swap contracts as of September 30, 2013 (dollars and GBP in thousands):

Date Entered	Maturity Date	Hedge Designation	Fixed Rate/Buy Amount			Floating/Exchange Rate Index	Notional/ Sell Amount		Fair Value(1)
July 2005(2)	July 2020	Cash Flow	3.82		%	BMA Swap Index	$	45,600	$	(6,319	)
November 2008(3)	October 2016	Cash Flow	5.95		%	1 Month LIBOR+1.50%	$	26,600	$	(2,964	)
July 2012(4)	June 2016	Cash Flow	1.81		%	1 Month GBP LIBOR+1.20%	£	137,000	$	1,564
July 2012(5)	June 2016	Cash Flow	$	68,200		Buy USD/Sell GBP	£	43,500	$	(1,897	)

(1)Interest-rate and foreign currency swap assets are recorded in other assets, net and interest-rate and foreign currency swap liabilities are recorded in accounts payable and accrued liabilities on the condensed consolidated balance sheets.

(2)Represents three interest-rate swap contracts with an aggregate notional amount of $45.6 million which hedge fluctuations in interest payments on variable-rate secured debt due to overall changes in hedged cash flows.

(3)Acquired in conjunction with mortgage debt assumed related to real estate acquired on December 28, 2010. Hedges fluctuations in interest payments on variable-rate secured debt due to fluctuations in the underlying benchmark interest rate.

(4)Hedges fluctuations in interest payments on variable-rate unsecured debt due to fluctuations in the underlying benchmark interest rate.

(5)Currency swap contract (buy USD/sell GBP) hedges the foreign currency exchange risk related to a portion of the Company’s forecasted interest receipts on GBP denominated senior unsecured notes. Represents six foreign exchange contracts to sell £7.2 million at a rate of 1.5695 on various dates through June 2016.

The Company uses derivative instruments to mitigate the effects of interest rate and foreign currency fluctuations on specific forecasted transactions as well as recognized financial obligations or assets. Utilizing derivative instruments allows the Company to manage the risk of fluctuations in interest and foreign currency rates related to the potential impact these changes could have on future earnings and forecasted cash flows. The Company does not use derivative instruments for speculative or trading purposes.

The primary risks associated with derivative instruments are market and credit risk. Market risk is defined as the potential for loss in value of a derivative instrument due to adverse changes in market prices. Credit risk is the risk that one of the parties to a derivative contract fails to perform or meet its financial obligation. The Company does not obtain collateral associated with its derivative contracts, but monitors the credit standing of its counterparties on a regular basis. Should a counterparty fail to perform, the Company would incur a financial loss to the extent that the associated derivative contract was in an asset position. At September 30, 2013, the Company does not anticipate non-performance by the counterparties to its outstanding derivative contracts.

On July 27, 2012, the Company entered into a foreign currency swap contract to hedge the foreign currency exchange risk related to a portion of the forecasted interest receipts from its GBP denominated senior unsecured notes (see additional discussion of the Four Seasons senior unsecured notes in Note 9). The cash flow hedge has a fixed USD/GBP exchange rate of 1.5695 (buy $11.4 million and sell £7.2 million semi-annually) for a portion of its forecasted semi-annual cash receipts denominated in GBP. The foreign currency swap contract matures in June 2016 (the end of the non-call period of the senior unsecured notes). The fair value of the contract at September 30, 2013 was a liability of $1.9 million and is included in accounts payable and accrued liabilities. During the nine months ended September 30, 2013, there was no ineffective portion related to this hedge.

On July 27, 2012, the Company entered into an interest-rate swap contract that is designated as hedging the interest payments on its GBP denominated Term Loan due to fluctuations in the underlying benchmark interest rate (see additional discussion of the Term Loan in Note 10). The cash flow hedge has a notional amount of £137 million and expires in June 2016 (the maturity of the Term Loan). The fair value of the contract at September 30, 2013 was $1.6 million and is included in other assets, net. During the nine months ended September 30, 2013, there was no ineffective portion related to this hedge.

At September 30, 2013, the Company expects that the hedged forecasted transactions for each of the outstanding qualifying cash flow hedging relationships remain probable of occurring, and as a result, no gains or losses recorded to accumulated other comprehensive loss are expected to be reclassified to earnings.

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To illustrate the effect of movements in the interest rate and foreign currency markets, the Company performed a market sensitivity analysis on its outstanding hedging instruments. The Company applied various basis point spreads to the underlying interest rate curves and foreign currency exchange rates of the derivative portfolio in order to determine the instruments’ change in fair value. The following table summarizes the results of the analysis performed (dollars in thousands):

		Effects of Change in Interest and Foreign Currency Rates
Date Entered	Maturity Date	+50 Basis Points			-50 Basis Points			+100 Basis Points			-100 Basis Points
July 2005	July 2020	$	1,442		$	(1,455	)	$	2,890		$	(2,904	)
November 2008	October 2016	404			(379		)	796			(770		)
July 2012 (interest-rate swap)	June 2016	3,038			(2,902		)	6,008			(5,872		)
July 2012 (foreign currency swap)	June 2016	(580		)	123			(932		)	475

(20) Impairments

During the three months ended September 30, 2012, the Company executed an expansion of its relationship with its tenant General Atomics in Poway, CA, to a total of 396,000 square feet, consisting of the following: (i) a lease extension of 281,000 square feet through June 2024, (ii) a new 10-year lease for a 115,000 square foot building to be developed and (iii) the purchase of a 19 acre land parcel from the Company for $19 million. As a result of the land sale, the Company recognized an impairment charge of $7.9 million, which reduced the carrying value of the Company’s investment from $27 million to the $19 million sales price. The fair value of the Company’s land parcel was based on the sales price from its disposition in conjunction with this transaction. The contractual sales price of the land parcel was considered to be a Level 2 measurement within the fair value hierarchy.

(21) Subsequent Events

The Company’s Board of Directors, after its deliberations during the third quarter 2013, terminated its former Chairman, Chief Executive Officer and President on October 2, 2013. As a result of the termination, general and administrative expenses for the three and nine months ended September 30, 2013 include severance-related charges of $26.4 million related to: (i) the acceleration of $16.7 million of deferred compensation for restricted stock units and options that vested upon termination; and (ii) severance payments and other costs of approximately $9.7 million.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Language Regarding Forward-Looking Statements

Statements in this Quarterly Report on Form 10-Q that are not historical factual statements are “forward-looking statements.” We intend to have our forward-looking statements covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with those provisions. Forward-looking statements include, among other things, statements regarding our and our officers’ intent, belief or expectation as identified by the use of words such as “may,” “will,” “project,” “expect,” “believe,” “intend,” “anticipate,” “seek,” “forecast,” “plan,” “estimate,” “could,” “would,” “should” and other comparable and derivative terms or the negatives thereof. In addition, we, through our officers, from time to time, make forward-looking oral and written public statements concerning our expected future operations, strategies, securities offerings, growth and investment opportunities, dispositions, capital structure changes, budgets and other developments. Readers are cautioned that, while forward-looking statements reflect our good faith belief and reasonable assumptions based upon current information, we can give no assurance that our expectations or forecasts will be attained. Therefore, readers should be mindful that forward-looking statements are not guarantees of future performance and that they are subject to known and unknown risks and uncertainties that are difficult to predict. As more fully set forth under “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, factors that may cause our actual results to differ materially from the expectations contained in the forward-looking statements include:

(a)Changes in global, national and local economic conditions, including a prolonged period of weak economic growth;

(b)Volatility in the capital markets, including changes in interest rates and the availability and cost of capital;

(c)Our ability to manage our indebtedness level and changes in the terms of such indebtedness;

(d)The effect on healthcare providers of the automatic spending cuts enacted by Congress (“Sequestration”) on entitlement programs, including Medicare, which will, unless modified, result in future reductions in reimbursements;

(e)The ability of our operators, tenants and borrowers to conduct their respective businesses in a manner sufficient to maintain or increase their revenues and to generate sufficient income to make rent and loan payments to us and our ability to recover investments made, if applicable, in their operations;

(f)The financial weakness of some operators and tenants, including potential bankruptcies and downturns in their businesses, which results in uncertainties regarding our ability to continue to realize the full benefit of such operators’ and/or tenants’ leases;

(g)Changes in federal, state or local laws and regulations, including those affecting the healthcare industry that affect our costs of compliance or increase the costs, or otherwise affect the operations of our operators, tenants and borrowers;

(h)The potential impact of future litigation matters, including the possibility of larger than expected litigation costs, adverse results and related developments;

(i)Competition for tenants and borrowers, including with respect to new leases and mortgages and the renewal or rollover of existing leases;

(j)Our ability to negotiate the same or better terms with new tenants or operators if existing leases are not renewed or we exercise our right to replace an existing operator or tenant upon default;

(k)Availability of suitable properties to acquire at favorable prices and the competition for the acquisition and financing of those properties;

(l)The financial, legal, regulatory and reputational difficulties of significant operators of our properties;

(m)The risk that we may not be able to achieve the benefits of investments within expected time-frames or at all, or within expected cost projections;

(n)The ability to obtain financing necessary to consummate acquisitions on favorable terms;

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(o)The risks associated with our investments in joint ventures and unconsolidated entities, including our lack of sole decision making authority and our reliance on our joint venture partners’ financial condition and continued cooperation; and

(p)Changes in the credit ratings on United States (“U.S.”) government debt securities or default or delay in payment by the U.S. of its obligations.

Except as required by law, we undertake no, and hereby disclaim any, obligation to update any forward-looking statements, whether as a result of new information, changed circumstances or otherwise.

The information set forth in this Item 2 is intended to provide readers with an understanding of our financial condition, changes in financial condition and results of operations. We will discuss and provide our analysis in the following order:

·Executive Summary

·2013 Transaction Overview

·Dividends

·Critical Accounting Policies

·Results of Operations

·Liquidity and Capital Resources

·Funds from Operations (“FFO”)

·Off-Balance Sheet Arrangements

·Contractual Obligations

·Inflation

·Recent Accounting Pronouncements

Executive Summary

We are a Maryland corporation and were organized to qualify as a self-administered real estate investment trust (“REIT”) that, together with our unconsolidated joint ventures, invests primarily in real estate serving the healthcare industry in the U.S. We acquire, develop, lease, manage and dispose of healthcare real estate, and provide financing to healthcare providers. At September 30, 2013, our portfolio of investments, including properties in our Investment Management Platform, consisted of interests in 1,163 facilities. Our Investment Management Platform represents the following joint ventures: (i) HCP Ventures III, LLC, (ii) HCP Ventures IV, LLC and (iii) the HCP Life Science ventures.

Our business strategy is based on three principles: (i) opportunistic investing, (ii) portfolio diversification and (iii) conservative financing. We actively redeploy capital from investments with lower return potential or shorter investment horizons into assets representing longer term investments with attractive risk-adjusted return potential. We make investments where the expected risk-adjusted return exceeds our cost of capital and strive to capitalize on our operator, tenant and other business relationships to grow our business.

Our strategy contemplates acquiring and developing properties on terms that are favorable to us. Generally, we prefer larger, more complex private transactions that leverage our management team’s experience and our infrastructure. We follow a disciplined approach to enhancing the value of our existing portfolio, including ongoing evaluation of potential disposition of properties that no longer fit our strategy.

We primarily generate revenue by leasing healthcare properties under long-term leases with fixed and/or inflation indexed escalators. Most of our rents and other earned income from leases are received under triple-net leases or leases that provide for substantial recovery of operating expenses; however, some of our medical office and life science leases are structured as gross or modified gross leases. Operating expenses are generally related to medical office building (“MOB”) and life science leased properties and senior housing properties managed by eligible independent contractors on our behalf (“RIDEA properties”). Accordingly, for such MOBs, life science facilities and RIDEA properties, we incur certain property operating expenses, such as real estate taxes, repairs and maintenance, property management fees, utilities, employee costs for resident care and insurance. Our growth for these assets depends, in part, on our ability to (i) increase rental income and other earned income from leases by increasing rental rates and occupancy levels; (ii) maximize tenant recoveries given underlying lease structures; and (iii) control operating and other expenses. Our operations are impacted by property specific, market specific, general economic and other conditions.

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2013 Transaction Overview

Investment Transactions

During the nine months ended September 30, 2013, we made investments of $541 million, which included the following:

·On September 25, 2013, we acquired a 60-bed hospital located in Webster, Texas valued at $15 million; in exchange we sold a 62-bed hospital located in Greenfield, Wisconsin and recognized a gain of $8 million.

·On September 6, 2013, we received £129 million ($202 million) from the par payoff of our Barchester debt investments, resulting in interest income of $24 million from the acquisition-related discounts. We acquired these debt investments in two tranches: (i) £121 million at a discount for £109 million in May 2013; and (ii) £9 million at a discount for £5 million in August 2013.

·On June 25, 2013, we funded the $102 million second tranche of our 2012 mezzanine loan facility to Tandem Health Care, an affiliate of Formation Capital, as part of the recapitalization of a post-acute/skilled nursing portfolio. The funds from the second tranche were used to repay debt senior to our loan. The loan bears interest at a fixed rate of 12% and 14% per annum for the first and second transactions, respectively. The facility will have a total term of up to 63 months from the initial closing in July 2012. The mezzanine loan facility is subordinate to $443 million of senior mortgage debt.

·In March 2013, we acquired the four remaining senior housing facilities from our previously announced 2012 Blackstone JV Acquisition for $38 million.

·We funded $208 million to acquire a senior housing facility and marketable debt securities, and to fund construction and other capital projects, primarily in our life science, medical office and senior housing segments.

During the nine months ended September 30, 2013, we placed into service a 70,000 square foot building located in Mountain View, California that is 100% leased.

Financing Activities

On February 28, 2013, we repaid $150 million of maturing 5.625% senior unsecured notes.

Dividends

On October 24, 2013, we announced that our Board declared a quarterly common stock cash dividend of $0.525 per share. The common stock dividend will be paid on November 19, 2013 to stockholders of record as of the close of business on November 4, 2013 and represents an annualized dividend pay rate of $2.10 per share.

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to use judgment in the application of accounting policies, including making estimates and assumptions. We base estimates on the best information available to us at the time, our experience and on various other assumptions believed to be reasonable under the circumstances. These estimates affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting would have been applied, resulting in a different presentation of our condensed consolidated financial statements. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the year ended December 31, 2012 in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”; our critical accounting policies have not changed during 2013.

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Results of Operations

We evaluate our business and allocate resources among our five business segments: (i) senior housing, (ii) post-acute/skilled nursing, (iii) life science, (iv) medical office and (v) hospital. Under the senior housing, life science, post-acute/skilled nursing and hospital segments, we invest or co-invest primarily in single operator or tenant properties, through the acquisition and development of real estate, management of operations (“RIDEA”) and by debt issued by operators in these sectors. Under the medical office segment, we invest or co-invest through the acquisition and development of MOBs that are leased under gross, modified gross or triple-net leases, generally to multiple tenants, and which generally require a greater level of property management.

We use net operating income from continuing operations (“NOI”) and adjusted NOI to assess and compare property level performance, including our same property portfolio (“SPP”), and to make decisions about resource allocations and to assess and compare property level performance. We believe these measures provide investors relevant and useful information because they reflect only income and operating expense items that are incurred at the property level and present them on an unleveraged basis. We believe 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 NOI excludes certain components from net income. Further, NOI may not be comparable to that of other REITs or real estate companies, as they may use different methodologies for calculating NOI. See Note 13 to the Condensed Consolidated Financial Statements for additional segment information and the relevant reconciliations from net income to NOI and adjusted NOI.

Operating expenses are generally related to MOB and life science leased properties and senior housing properties managed by eligible independent contractors on our behalf (RIDEA properties). We generally recover all or a portion of MOB and life science expenses from the tenants (tenant recoveries). The presentation of expenses as operating or general and administrative is based on the underlying nature of the expense. Periodically, we review the classification of expenses between categories and make revisions based on changes in the underlying nature of the expenses.

Our evaluation of results of operations by each business segment includes an analysis of our SPP and our total property portfolio. SPP information allows us to evaluate the performance of our leased property portfolio under a consistent population by eliminating changes in the composition of our portfolio of properties. We identify our SPP as stabilized properties that remained in operations and were consistently reported as leased properties or RIDEA properties for the duration of the year-over-year comparison periods presented. Accordingly, it takes a stabilized property a minimum of 12 months in operations under a consistent reporting structure to be included in our SPP. Newly acquired operating assets are generally considered stabilized at the earlier of lease-up (typically when the tenant(s) controls the physical use of at least 80% of the space) or 12 months from the acquisition date. Newly completed developments, including redevelopments, are considered stabilized at the earlier of lease-up or 24 months from the date the property is placed in service. SPP NOI excludes certain non-property specific operating expenses that are allocated to each operating segment on a consolidated basis.

Comparison of the Three Months Ended September 30, 2013 to the Three Months Ended September 30, 2012

During the fourth quarter of 2012 and first quarter of 2013, we acquired a portfolio of 133 senior housing communities (the “Blackstone JV Acquisition”; see additional information in Note 3 to the Condensed Consolidated Financial Statements). The transaction closed in two stages: (i) 129 senior housing facilities during the fourth quarter of 2012 for $1.7 billion; and (ii) four senior housing facilities during the first quarter of 2013 for $38 million. The results of operations from the acquisitions are reflected in our condensed consolidated financial statements from those respective dates.

Segment NOI and Adjusted NOI

The tables below provide selected operating information for our SPP and total property portfolio for each of our five business segments. Our consolidated SPP consists of 923 properties representing properties acquired or placed in service and stabilized on or prior to January 1, 2012 and that remained in operations under a consistent reporting structure through September 30, 2013. Our consolidated total property portfolio represents 1,089 and 950 properties at September 30, 2013 and 2012, respectively, and excludes properties classified as discontinued operations.

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Results are as of and for the three months ended September 30, 2013 and 2012 (dollars and square feet in thousands except per capacity data):

Senior Housing

	SPP									Total Portfolio
	2013			2012			Change			2013			2012				Change
Rental revenues(1)	$	114,868		$	114,661		$	207		$	149,443		$	114,661			$	34,782
Resident fees and services	37,589			36,076			1,513			37,589			36,076				1,513
Total revenues	152,457			150,737			1,720			187,032			150,737				36,295
Operating expenses	(24,027		)	(24,248		)	221			(24,641		)	(24,872			)	231
NOI	128,430			126,489			1,941			162,391			125,865				36,526
Straight-line rents	(3,464		)	(6,985		)	3,521			(10,806		)	(6,985			)	(3,821		)
DFL accretion	(2,440		)	(5,121		)	2,681			(2,440		)	(5,121			)	2,681
Amortization of above and below market lease intangibles, net	(257		)	(358		)	101			(148		)	(358			)	210
Adjusted NOI	$	122,269		$	114,025		$	8,244		$	148,997		$	113,401			$	35,596
Adjusted NOI % change							7.2		%
Property count(2)	311			311						445			311
Average capacity (units)(3)	35,306			35,313						45,396			35,313
Average annual rent per unit(4)	$	13,871		$	12,929					$	13,197		$		12,929

(1)Represents rental and related revenues and income from direct financing leases (“DFLs”).

(2)From our past presentation of SPP for the three months ended September 30, 2012, we removed a senior housing property from SPP that was sold.

(3)Represents average capacity as reported by the respective tenants or operators for the twelve-month period and a quarter in arrears from the periods presented.

(4)Average annual rent per unit includes operating income from properties under a RIDEA structure, which are included based on NOI.

SPP NOI and Adjusted NOI. SPP NOI increased primarily as a result of rent increases related to new leases or leases not recognized on a straight-line basis (cash basis) and increased NOI from RIDEA properties; these increases were partially offset by a decline in DFL income as a result of a 14-property DFL portfolio (the “DFL Portfolio”) that was placed on a cash basis during the three months ended September 30, 2013. SPP adjusted NOI improved primarily as a result of annual rent increases including increases from properties that were previously transitioned from Sunrise to other operators and increased NOI from RIDEA properties.

Total Portfolio NOI and Adjusted NOI. In addition to the impact of our SPP, our total portfolio NOI and adjusted NOI primarily increased as a result of our Blackstone JV Acquisition.

Post-Acute/Skilled Nursing

	SPP										Total Portfolio
	2013			2012				Change			2013			2012				Change
Rental revenues(1)	$	138,289		$	135,183			$	3,106		$	138,289		$	135,183			$	3,106
Operating expenses	(146		)	(154			)	8			(647		)	(154			)	(493		)
NOI	138,143			135,029				3,114			137,642			135,029				2,613
Straight-line rents	(13		)	(155			)	142			(13		)	(155			)	142
DFL accretion	(17,382		)	(18,312			)	930			(17,382		)	(18,312			)	930
Amortization of above and below market lease intangibles, net	11			11				—			11			11				—
Adjusted NOI	$	120,759		$		116,573		$	4,186		$	120,258		$		116,573		$	3,685
Adjusted NOI % change								3.6		%
Property count(2)	312			312							312			312
Average capacity (beds)(3)	39,826			39,850							39,826			39,850
Average annual rent per bed	$	12,142		$		11,715					$	12,142		$		11,715

(1)Represents rental and related revenues and income from DFLs.

(2)From our past presentation of SPP for the three months ended September 30, 2012, we removed a post-acute/skilled nursing property from SPP that was sold.

(3)Represents average capacity as reported by the respective tenants or operators for the twelve-month period and a quarter in arrears from the periods presented.

NOI and Adjusted NOI.  SPP and total portfolio NOI and adjusted NOI primarily increased as a result of annual rent escalations.

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Life Science

	SPP									Total Portfolio
	2013			2012			Change			2013			2012			Change
Rental and related revenues	$	60,469		$	60,204		$	265		$	61,891		$	61,797		$	94
Tenant recoveries	10,181			9,267			914			10,640			9,397			1,243
Total revenues	70,650			69,471			1,179			72,531			71,194			1,337
Operating expenses	(12,182		)	(10,516		)	(1,666		)	(14,091		)	(11,791		)	(2,300		)
NOI	58,468			58,955			(487		)	58,440			59,403			(963		)
Straight-line rents	(2,942		)	(2,827		)	(115		)	(1,864		)	(3,010		)	1,146
Amortization of above and below market lease intangibles, net	(39		)	135			(174		)	(43		)	123			(166		)
Lease termination fees	(181		)	(175		)	(6		)	(181		)	(175		)	(6		)
Adjusted NOI	$	55,306		$	56,088		$	(782	)	$	56,352		$	56,341		$	11
Adjusted NOI % change							(1.4		)%
Property count	105			105						111			110
Average occupancy	91.9		%	90.1		%				91.8		%	89.5		%
Average occupied square feet	6,234			6,112						6,496			6,268
Average annual rent per occupied square foot	$	43		$	44					$	43		$	43

During the three months ended September 30, 2013, 108,000 square feet of new and renewal leases commenced at an average annual base rent of $23.68 per square foot compared to 64,000 square feet of expiring and terminated leases with an average annual base rent of $30.25 per square foot.

Medical Office

	SPP									Total Portfolio
	2013			2012			Change			2013			2012			Change
Rental and related revenues	$	66,224		$	66,787		$	(563	)	$	73,771		$	72,344		$	1,427
Tenant recoveries	13,006			12,898			108			14,702			13,456			1,246
Total revenues	79,230			79,685			(455		)	88,473			85,800			2,673
Operating expenses	(30,936		)	(31,116		)	180			(36,218		)	(34,948		)	(1,270		)
NOI	48,294			48,569			(275		)	52,255			50,852			1,403
Straight-line rents	(60		)	(982		)	922			(299		)	(1,331		)	1,032
Amortization of above and below market lease intangibles, net	146			79			67			282			148			134
Lease termination fees	(24		)	—			(24		)	(24		)	—			(24		)
Adjusted NOI	$	48,356		$	47,666		$	690		$	52,214		$	49,669		$	2,545
Adjusted NOI % change							1.4		%
Property count(1)	184			184						208			205
Average occupancy	90.0		%	91.4		%				89.8		%	91.2		%
Average occupied square feet	11,397			11,576						12,754			12,605
Average annual rent per occupied square foot	$	28		$	27					$	28		$	27

(1)From our past presentation of SPP for the three months ended September 30, 2012, we removed a MOB that was placed into redevelopment in 2013, which no longer meets our criteria for SPP as of the date it was placed into redevelopment.

Total Portfolio NOI and Adjusted NOI.  Total portfolio NOI and adjusted NOI increased primarily as a result of the impact of our MOB acquisitions in 2012.

During the three months ended September 30, 2013, 492,000 square feet of new and renewal leases commenced at an average annual base rent of $21.42 per square foot compared to 491,000 square feet of expiring and terminated leases with an average annual base rent of $23.36 per square foot.

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Hospital

	SPP									Total Portfolio
	2013			2012			Change			2013			2012			Change
Rental and related revenues	$	13,060		$	13,078		$	(18	)	$	14,447		$	13,842		$	605
Tenant recoveries	644			573			71			644			572			72
Total revenues	13,704			13,651			53			15,091			14,414			677
Operating expenses	(972		)	(886		)	(86		)	(972		)	(888		)	(84		)
NOI	12,732			12,765			(33		)	14,119			13,526			593
Straight-line rents	686			(108		)	794			371			(249		)	620
Amortization of above and below market lease intangibles, net	(317		)	(87		)	(230		)	(342		)	(112		)	(230		)
Adjusted NOI	$	13,101		$	12,570		$	531		$	14,148		$	13,165		$	983
Adjusted NOI % change							4.2		%
Property count(1)	11			11						13			12
Average capacity (beds)(2)	1,448			1,453						1,535			1,484
Average annual rent per bed	$	38,876		$	37,043					$	39,401		$	37,879

(1)From our past presentation of SPP for the three months ended September 30, 2012, we removed five hospitals from SPP that were sold or classified as held for sale.

(2)Represents capacity as reported by the respective tenants or operators for the twelve-month period and a quarter in arrears from the periods presented. Certain operators in our hospital portfolio are not required under their respective leases to provide operational data.

SPP NOI and Adjusted NOI.  SPP adjusted NOI increased primarily as a result of a new lease on our Plano hospital.

Total Portfolio NOI and Adjusted NOI.  In addition to the impact of our SPP, our total portfolio NOI and adjusted NOI primarily increased as a result of rents on our Fresno hospital that was placed in service in January 2013.

Other Income and Expense Items

Interest income

Interest income increased $32 million to $42 million for the three months ended September 30, 2013. The increase was primarily the result of interest income from the repayment of our Barchester loan in September 2013 (acquired earlier in 2013 at discounted prices) and interest earned from the second tranche of our mezzanine loan facility to Tandem Health Care (see Note 6 to the Condensed Consolidated Financial Statements for additional information).

Interest expense

Interest expense increased $5 million to $108 million for the three months ended September 30, 2013. The increase was primarily the result of increases in indebtedness and a decrease of capitalized interest related to assets that were under development in our life science and medical office segments and were placed in service during 2013 and 2012. These increases were partially offset by a reduction in interest rates.

Our exposure to expense fluctuations related to our variable rate indebtedness is substantially mitigated by our interest rate swap contracts. For a more detailed discussion of our interest rate risk, see “Quantitative and Qualitative Disclosures About Market Risk” in Item 3.

The table below sets forth information with respect to our debt, excluding premiums and discounts (dollars in thousands):

	As of September 30,(1)
	2013		2012
Balance:
Fixed rate	$	8,185,353	$	7,813,925
Variable rate	324,902		40,404
Total	$	8,510,255	$	7,854,329

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	As of September 30,(1)
	2013		2012
Percent of total debt:
Fixed rate	96	%	99	%
Variable rate	4		1
Total	100	%	100	%
Weighted average interest rate at end of period:
Fixed rate	5.21	%	5.49	%
Variable rate	1.57	%	4.53	%
Total weighted average rate	5.07	%	5.47	%

(1)Excludes $78 million and $85 million at September 30, 2013 and 2012, respectively, of other debt that represents non-interest bearing life care bonds and occupancy fee deposits at certain of our senior housing facilities, which have no scheduled maturities. At September 30, 2013, $72 million of variable-rate mortgages and a £137 million ($222 million) term loan are presented as fixed-rate debt as the interest payments under such debt have been swapped (pay fixed and receive float). At September 30, 2012, $87 million of variable-rate mortgages are presented as fixed-rate debt as the interest payments under such debt have been swapped (pay fixed and receive float); the interest rates for swapped debt are presented at the swapped rates.

Depreciation and amortization expense

Depreciation and amortization expense increased $18 million to $105 million for the three months ended September 30, 2013. The increase was primarily the result of the impact of our senior housing facility and MOB acquisitions in 2012.

General and administrative expenses

General and administrative expenses increased $26 million to $45 million for the three months ended September 30, 2013. The three months ended September 30, 2013 included $26.4 million of severance-related charges resulting from the termination of our former Chairman, Chief Executive Officer and President (see Note 21 to the Condensed Consolidated Financial Statements for additional information).

Impairments

During the three months ended September 30, 2012, we recognized an impairment of $8 million as a result of the sale a life science land parcel (see Note 20 to the Condensed Consolidated Financial Statements for additional information). No impairments were recognized during the three months ended September 30, 2013.

Discontinued operations

During the three months ended September 30, 2013, we sold a hospital and recognized a gain of $8 million. There were no sales of properties during the three months ended September 30, 2012.

Comparison of the Nine Months Ended September 30, 2013 to the Nine Months Ended September 30, 2012

During the fourth quarter of 2012 and first quarter of 2013, we acquired a portfolio of 133 senior housing communities (the “Blackstone JV Acquisition”, see additional information in Note 3 to the Condensed Consolidated Financial Statements). The transaction closed in two stages: (i) 129 senior housing facilities during the fourth quarter of 2012 for $1.7 billion; and (ii) four senior housing facilities during the first quarter of 2013 for $38 million. The results of operations from the acquisitions are reflected in our condensed consolidated financial statements from those respective dates.

Segment NOI and Adjusted NOI

The tables below provide selected operating information for our SPP and total property portfolio for each of our five business segments. Our consolidated SPP consists of 920 properties representing properties acquired or placed in service and stabilized on or prior to January 1, 2012 and that remained in operations under a consistent reporting structure through September 30, 2013. Our consolidated total property portfolio represents 1,089 and 950 properties at September 30, 2013 and 2012, respectively, and excludes properties classified as discontinued operations.

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Results are as of and for the nine months ended September 30, 2013 and 2012 (dollars and square feet in thousands except per capacity data):

Senior Housing

	SPP												Total Portfolio
	2013				2012				Change			2013				2012			Change
Rental revenues(1)	$	346,093			$		341,257		$	4,836		$		448,600		$	341,353		$	107,247
Resident fees and services	112,070				107,824				4,246			112,070				107,824			4,246
Total revenues	458,163				449,081				9,082			560,670				449,177			111,493
Operating expenses	(70,933		)		(68,017			)	(2,916		)	(73,169			)	(69,926		)	(3,243		)
NOI	387,230				381,064				6,166			487,501				379,251			108,250
Straight-line rents	(12,692		)		(21,664			)	8,972			(34,371			)	(21,677		)	(12,694		)
DFL accretion	(12,202		)		(14,706			)	2,504			(12,202			)	(14,706		)	2,504
Amortization of above and below market lease intangibles, net	(939		)		(1,074			)	135			(533			)	(1,074		)	541
Adjusted NOI	$	361,397			$		343,620		$	17,777		$		440,395		$	341,794		$	98,601
Adjusted NOI % change									5.2		%
Property count(2)	311				311							445				311
Average capacity (units)(3)	35,306				35,313							45,391				35,313
Average annual rent per unit(4)	$	13,668		$		12,989						$		13,017		$	12,992

(1)Represents rental and related revenues and income from DFLs.

(2)From our past presentation of SPP for the nine months ended September 30, 2012, we removed a senior housing property from SPP that was sold.

(3)Represents average capacity as reported by the respective tenants or operators for the twelve-month period and a quarter in arrears from the periods presented.

(4)Average annual rent per unit includes operating income from properties under a RIDEA structure, which are included based on NOI.

SPP NOI and Adjusted NOI. SPP NOI increased primarily as a result of rent increases related to new leases or leases not recognized on a straight-line basis (cash basis) and increased NOI from RIDEA properties; these increases were partially offset by a decline in DFL income as a result of the DFL Portfolio that was placed on a cash basis during the three months ended September 30, 2013. SPP adjusted NOI improved primarily as a result of annual rent increases including increases from properties that were previously transitioned from Sunrise to other operators and increased NOI from RIDEA properties.

Total Portfolio NOI and Adjusted NOI. In addition to the impact of our SPP, our total portfolio NOI and adjusted NOI primarily increased as a result of our Blackstone JV Acquisition.

Post-Acute/Skilled Nursing

	SPP									Total Portfolio
	2013			2012			Change			2013			2012			Change
Rental revenues(1)	$	411,912		$	403,209		$	8,703		$	411,912		$	403,209		$	8,703
Operating expenses	(445		)	(515		)	70			(1,947		)	(519		)	(1,428		)
NOI	411,467			402,694			8,773			409,965			402,690			7,275
Straight-line rents	(271		)	(422		)	151			(271		)	(422		)	151
DFL accretion	(53,184		)	(56,366		)	3,182			(53,184		)	(56,366		)	3,182
Amortization of above and below market lease intangibles, net	34			34			—			34			34			—
Adjusted NOI	$	358,046		$	345,940		$	12,106		$	356,544		$	345,936		$	10,608
Adjusted NOI % change							3.5		%
Property count(2)	312			312						312			312
Average capacity (beds)(3)	39,826			39,850						39,826			39,850
Average annual rent per bed	$	12,001		$	11,591					$	12,001		$	11,591

(1)Represents rental and related revenues and income from DFLs.

(2)From our past presentation of SPP for the nine months ended September 30, 2012, we removed a post-acute/skilled nursing property from SPP that was sold.

(3)Represents average capacity as reported by the respective tenants or operators for the twelve-month period and a quarter in arrears from the periods presented.

NOI and Adjusted NOI.  SPP and total portfolio NOI and adjusted NOI primarily increased as a result of annual rent escalations.

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Life Science

	SPP									Total Portfolio
	2013			2012			Change			2013			2012			Change
Rental and related revenues	$	180,455		$	179,917		$	538		$	188,309		$	184,600		$	3,709
Tenant recoveries	31,320			30,639			681			32,779			30,969			1,810
Total revenues	211,775			210,556			1,219			221,088			215,569			5,519
Operating expenses	(35,990		)	(34,460		)	(1,530		)	(41,313		)	(38,230		)	(3,083		)
NOI	175,785			176,096			(311		)	179,775			177,339			2,436
Straight-line rents	(9,211		)	(5,530		)	(3,681		)	(8,759		)	(6,300		)	(2,459		)
Amortization of above and below market lease intangibles, net	160			352			(192		)	135			315			(180		)
Lease termination fees	(194		)	(175		)	(19		)	(194		)	(175		)	(19		)
Adjusted NOI	$	166,540		$	170,743		$	(4,203	)	$	170,957		$	171,179		$	(222	)
Adjusted NOI % change							(2.5		)%
Property count	102			102						111			110
Average occupancy	92.8		%	91.1		%				91.6		%	89.2		%
Average occupied square feet	6,206			6,090						6,465			6,212
Average annual rent per occupied square foot	$	43		$	45					$	44		$	45

SPP NOI and Adjusted NOI.  SPP NOI decreased primarily as a result of mark-to-market rent reductions on renewed leases. SPP adjusted NOI decreased primarily as a result of a $4 million rent payment received in February 2012 in connection with a lease amendment and mark-to-market rent reductions, partially offset by annual rent escalations.

Total Portfolio NOI and Adjusted NOI.  In addition to the impact of our SPP, our total portfolio NOI increased primarily as a result of rents on recent development projects placed in service during 2013 and 2012.

During the nine months ended September 30, 2013, 369,000 square feet of new and renewal leases commenced at an average annual base rent of $28.37 per square foot compared to 236,000 square feet of expiring and terminated leases with an average annual base rent of $36.68 per square foot.

Medical Office

	SPP									Total Portfolio
	2013			2012			Change			2013			2012			Change
Rental and related revenues	$	199,726		$	200,178		$	(452	)	$	225,181		$	209,714		$	15,467
Tenant recoveries	35,771			36,205			(434		)	40,721			36,947			3,774
Total revenues	235,497			236,383			(886		)	265,902			246,661			19,241
Operating expenses	(90,390		)	(90,335		)	(55		)	(105,732		)	(98,631		)	(7,101		)
NOI	145,107			146,048			(941		)	160,170			148,030			12,140
Straight-line rents	(1,796		)	(3,355		)	1,559			(3,152		)	(3,747		)	595
Amortization of above and below market lease intangibles, net	359			207			152			750			240			510
Lease termination fees	(26		)	(251		)	225			(26		)	(251		)	225
Adjusted NOI	$	143,644		$	142,649		$	995		$	157,742		$	144,272		$	13,470
Adjusted NOI % change							0.7		%
Property count(1)	184			184						208			205
Average occupancy	90.6		%	91.2		%				90.4		%	91.1		%
Average occupied square feet	11,479			11,542						12,822			12,085
Average annual rent per occupied square foot	$	27		$	27					$	27		$	27

(1)From our past presentation of SPP for the nine months ended September 30, 2012, we removed a MOB that was placed into redevelopment in 2013, which no longer meets our criteria for SPP as of the date it was placed into redevelopment.

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Total Portfolio NOI and Adjusted NOI.  Total portfolio NOI and adjusted NOI increased primarily as a result of the impact of our MOB acquisitions during 2012.

During the nine months ended September 30, 2013, 1.4 million square feet of new and renewal leases commenced at an average annual base rent of $21.59 per square foot compared to 1.8 million square feet of expiring and terminated leases with an average annual base rent of $22.03 per square foot.

Hospital

	SPP									Total Portfolio
	2013			2012			Change			2013			2012			Change
Rental and related revenues	$	28,151		$	38,615		$	(10,464	)	$	31,868		$	40,907		$	(9,039	)
Tenant recoveries	1,835			1,741			94			1,835			1,740			95
Total revenues	29,986			40,356			(10,370		)	33,703			42,647			(8,944		)
Operating expenses	(2,819		)	(2,722		)	(97		)	(2,821		)	(2,728		)	(93		)
NOI	27,167			37,634			(10,467		)	30,882			39,919			(9,037		)
Straight-line rents	18,556			(454		)	19,010			17,969			(889		)	18,858
Amortization of above and below market lease intangibles, net	(6,407		)	(260		)	(6,147		)	(6,482		)	(334		)	(6,148		)
Adjusted NOI	$	39,316		$	36,920		$	2,396		$	42,369		$	38,696		$	3,673
Adjusted NOI % change							6.5		%
Property count(1)	11			11						13			12
Average capacity (beds)(2)	1,448			1,453						1,535			1,484
Average annual rent per bed	$	38,798		$	36,377					$	39,253		$	37,218

(1)From our past presentation of SPP for the nine months ended September 30, 2012, we removed five hospitals from SPP that were sold or classified as held for sale.

(2)Represents capacity as reported by the respective tenants or operators for the twelve-month period and a quarter in arrears from the periods presented. Certain operators in our hospital portfolio are not required under their respective leases to provide operational data.

SPP and Total Portfolio NOI and Adjusted NOI.  SPP and total portfolio NOI primarily decreased due to a net $12 million correction of an error that reduced previously recognized straight-line rents and to increasing amortization of below market lease intangibles related to our Medical City Dallas hospital. SPP and total portfolio adjusted NOI increased due to annual rent increases, a new lease on our Plano hospital and rents on our Fresno hospital that was placed in service in January 2013.

Other Income and Expense Items

Interest income

Interest income increased $56 million to $69 million for the nine months ended September 30, 2013. The increase was primarily the result of interest income from the repayment of our Barchester loan in September 2013 (acquired earlier in 2013 at discounted prices), and interest earned from our Four Seasons senior unsecured notes purchased in 2012 and the second tranche of our mezzanine loan facility to Tandem Health Care (see Notes 6 and 9 to the Condensed Consolidated Financial Statements for additional information).

Interest expense

Interest expense increased $17 million to $326 million for the nine months ended September 30, 2013. The increase was primarily the result of increases in indebtedness and a decrease of capitalized interest related to assets that were under development in our life science and medical office segments and were placed in service during 2013 and 2012. These increases were partially offset by a reduction in interest rates.

Our exposure to expense fluctuations related to our variable rate indebtedness is substantially mitigated by our interest rate swap contracts. For a more detailed discussion of our interest rate risk, see “Quantitative and Qualitative Disclosures About Market Risk” in Item 3.

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Depreciation and amortization expense

Depreciation and amortization expense increased $63 million to $317 million for the nine months ended September 30, 2013. The increase was primarily the result of the impact of our senior housing facility and MOB acquisitions during 2012.

General and administrative expenses

General and administrative expenses increased $36 million to $90 million for the nine months ended September 30, 2013. The nine months ended September 30, 2013 included $26.4 million of severance-related charges resulting from the termination of our former Chairman, Chief Executive Officer and President (see Note 21 to the Condensed Consolidated Financial Statements for additional information). The increase in general and administrative expenses was also attributable to an insurance recovery of $7 million received in 2012 for previously incurred legal expenses.

Impairments

During the nine months ended September 30, 2012, we recognized an impairment of $8 million as a result of the sale of a life science land parcel (see Note 20 to the Condensed Consolidated Financial Statements for additional information). No impairments were recognized during the nine months ended September 30, 2013.

Other income, net

Other income, net increased $15 million to $17 million for the nine months ended September 30, 2013. The increase was primarily the result of gains from the sale of marketable equity securities during 2013 of $11 million.

Discontinued operations

During the nine months ended September 30, 2013, we sold two properties realizing a gain of $9 million. During the nine months ended September 30, 2012, we sold one property realizing a gain of $3 million.

Preferred stock dividends

On March 22, 2012, we announced the redemption of all outstanding shares of preferred stock. On April 23, 2012, we redeemed all outstanding shares of our preferred stock and paid all accrued and unpaid dividends to the redemption date. During the nine months ended September 30, 2012, we incurred a redemption charge of $10.4 million related to the original issuance costs of the preferred stock (this charge is presented as an additional preferred stock dividend in our consolidated income statements).

Liquidity and Capital Resources

Our principal liquidity needs are to: (i) fund recurring operating expenses, (ii) meet debt service requirements including principal payments and maturities in the last three months of 2013, (iii) fund capital expenditures, including tenant improvements and leasing costs, (iv) fund acquisition and development activities, and (v) make dividend distributions. We anticipate that cash flow from continuing operations over the next 12 months will be adequate to fund our business operations, debt service payments, recurring capital expenditures and cash dividends to shareholders. Capital requirements relating to maturing indebtedness, acquisitions and development activities may require funding from borrowings and/or equity and debt offerings.

Access to capital markets impacts our cost of capital and ability to refinance maturing indebtedness, as well as our ability to fund future acquisitions and development through the issuance of additional securities or secured debt. Credit ratings impact our ability to access capital and directly impact our cost of capital as well. For example, as noted below, our revolving line of credit facility accrues interest at a rate per annum equal to LIBOR plus a margin that depends upon our debt ratings. We also pay a facility fee on the entire revolving commitment that depends upon our debt ratings. As of October 25, 2013, we had a credit rating of BBB+ from Fitch, Baa1 from Moody’s and BBB+ from S&P on our senior unsecured debt securities.

Net cash provided by operating activities was $844 million and $721 million for the nine months ended September 30, 2013 and 2012, respectively. The increase in operating cash flows is primarily the result of the following: (i) the impact of our investments in 2012 and 2013, (ii) assets placed in service during 2012 and 2013 and (iii) rent escalations and resets in 2012 and 2013, which increases were partially offset by increased debt interest payments. Our cash flows from operations are dependent upon the occupancy level of multi-tenant buildings, rental rates on leases, our tenants’ performance on their lease obligations, the level of operating expenses and other factors.

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The following are significant investing and financing activities for the nine months ended September 30, 2013:

·made investments of $280 million (development and acquisition of real estate), net of loan repayments of $231 million;

·paid dividends on common stock of $717 million, which were generally funded by cash provided by our operating activities; and

·borrowed $283 million under our unsecured revolving line of credit facility to fund, among other things, the aforementioned investments and repaid $435 million of mortgages and senior unsecured notes.

Debt

Bank Line of Credit and Term Loan

Our $1.5 billion unsecured revolving line of credit facility (the “Facility”) matures in March 2016 and contains a one-year extension option. Borrowings under the Facility accrue interest at LIBOR plus a margin that depends upon our debt ratings. We pay a facility fee on the entire revolving commitment that depends on our debt ratings. Based on our debt ratings at October 25, 2013, the margin on the Facility was 1.075%, and the facility fee was 0.175%. The Facility also includes a feature that will allow us to increase the borrowing capacity by an aggregate amount of up to $500 million, subject to securing additional commitments from existing lenders or new lending institutions. At September 30, 2013, we had $285 million outstanding under the Facility.

On July 30, 2012, we entered into a credit agreement with a syndicate of banks for a £137 million ($222 million at September 30, 2013) four-year unsecured term loan (the “Term Loan”) that accrues interest at a rate of GBP LIBOR plus 1.20%, based on our current debt ratings. Concurrent with the closing of the Term Loan, we entered into a four-year interest rate swap contract that fixes the rate of the Term Loan at 1.81%, subject to adjustments based on our debt ratings. The Term Loan contains a one-year committed extension option.

The Facility and Term Loan contain certain financial restrictions and other customary requirements. Among other things, these covenants, using terms defined in the agreements, (i) limit the ratio of Consolidated Total Indebtedness to Consolidated Total Asset Value to 60%, (ii) limit the ratio of Secured Debt to Consolidated Total Asset Value to 30%, (iii) limit the ratio of Unsecured Debt to Consolidated Unencumbered Asset Value to 60%, (iv) require a minimum Fixed Charge Coverage ratio of 1.5 times and (v) require a formula-determined Minimum Consolidated Tangible Net Worth of $9.2 billion at September 30, 2013. At September 30, 2013, we were in compliance with each of these restrictions and requirements of the Facility and Term Loan.

Our Facility also contains cross-default provisions to other indebtedness of ours, including in some instances, certain mortgages on our properties. Certain mortgages contain default provisions relating to defaults under the leases or operating agreements on the applicable properties by our operators or tenants, including default provisions relating to the bankruptcy filings of such operator or tenant. Although we believe that we would be able to secure amendments under the applicable agreements if a default as described above occurs, such a default may result in significantly less favorable borrowing terms than currently available, material delays in the availability of funding or other material adverse consequences.

Senior Unsecured Notes

At September 30, 2013, we had senior unsecured notes outstanding with an aggregate principal balance of $6.6 billion. Interest rates on the notes ranged from 1.22% to 6.98% with a weighted average effective interest rate of 5.10% and a weighted average maturity of five years at September 30, 2013. The senior unsecured notes contain certain covenants including limitations on debt, maintenance of unencumbered assets, cross-acceleration provisions and other customary terms. We believe we were in compliance with these covenants at September 30, 2013.

Mortgage Debt

At September 30, 2013, we had $1.4 billion in aggregate principal amount of mortgage debt outstanding is secured by 132 healthcare facilities (including redevelopment properties) with a carrying value of $2.0 billion. Interest rates on the mortgage debt ranged from 0.69% to 8.69% with a weighted average effective interest rate of 6.16% and a weighted average maturity of four years at September 30, 2013.

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Mortgage debt generally requires monthly principal and interest payments, is collateralized by real estate assets and is generally non-recourse. Mortgage debt typically restricts transfer of the encumbered assets, prohibits additional liens, restricts prepayment, requires payment of real estate taxes, requires maintenance of the assets in good condition, requires maintenance of insurance on the assets and includes conditions to obtain lender consent to enter into and terminate material leases. Some of the mortgage debt is also cross-collateralized by multiple assets and may require tenants or operators to maintain compliance with the applicable leases or operating agreements of such real estate assets.

Other Debt

At September 30, 2013, we had $78 million of non-interest bearing life care bonds at two of our continuing care retirement communities and non-interest bearing occupancy fee deposits at two of our senior housing facilities, all of which were payable to certain residents of the facilities (collectively, “Life Care Bonds”). The Life Care Bonds are generally refundable to the residents upon the termination of the contract or upon the successful resale of the unit.

Debt Maturities

The following table summarizes our stated debt maturities and scheduled principal repayments at September 30, 2013 (in thousands):

Year	Amount(1)
2013 (Three months)	$	414,003
2014	667,042
2015	708,421
2016	1,698,486
2017	1,300,477
Thereafter	3,721,825
	8,510,254
(Discounts) and premiums, net	(27,165		)
	$	8,483,089

(1)Excludes $78 million of other debt that represents Life Care Bonds that have no scheduled maturities.

Derivative Instruments

We use derivative instruments to mitigate the effects of interest rate and foreign currency fluctuations on specific forecasted transactions as well as recognized financial obligations or assets. We do not use derivative instruments for speculative or trading purposes.

The following table summarizes our outstanding interest-rate and foreign currency swap contracts as of September 30, 2013 (dollars and GBP in thousands):

Date Entered	Maturity Date	Hedge Designation	Fixed Rate/Buy Amount			Floating/Exchange Rate Index	Notional/ Sell Amount		Fair Value
July 2005(1)	July 2020	Cash Flow	3.82		%	BMA Swap Index	$	45,600	$	(6,319	)
November 2008	October 2016	Cash Flow	5.95		%	1 Month LIBOR+1.50%	$	26,600	$	(2,964	)
July 2012	June 2016	Cash Flow	1.81		%	1 Month GBP LIBOR+1.20%	£	137,000	$	1,564
July 2012	June 2016	Cash Flow	$	68,200		Buy USD/Sell GBP	£	43,500	$	(1,897	)

(1)Represents three interest-rate swap contracts with an aggregate notional amount of $45.6 million which hedge fluctuations in interest payments on variable-rate secured debt due to overall changes in hedged cash flows.

For a more detailed description of our derivative instruments, see Note 19 to the Condensed Consolidated Financial Statements and “Quantitative and Qualitative Disclosures About Market Risk” in Item 3.

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Equity

At September 30, 2013, we had 456 million shares of common stock outstanding. At September 30, 2013, equity totaled $10.9 billion, and our equity securities had a market value of $18.9 billion.

At September 30, 2013, non-managing members hold an aggregate of 4 million units (“DownREITs”) in four limited liability companies for which we are the managing member. The DownREIT units are exchangeable for an amount of cash approximating the then-current market value of shares of our common stock or, at our option, shares of our common stock (subject to certain adjustments, such as stock splits and reclassifications).

Shelf Registration

We have a prospectus that we filed with the U.S. Securities and Exchange Commission (the “SEC”) as part of a registration statement on Form S-3ASR, using a shelf registration process which expires in July 2015. Under the “shelf” process, we may sell any combination of the securities in one or more offerings. The securities described in the prospectus include common stock, preferred stock, depositary shares, debt securities and warrants.

The prospectus only provides a general description of the securities we may offer. The prospectus may not be used to sell securities unless accompanied by a prospectus supplement or a free writing prospectus. Each time we sell securities under the shelf registration, we will provide a prospectus supplement that will contain specific information about the terms of the securities being offered and of the offering. The prospectus supplement may also add, update or change information contained in the prospectus.

We may offer and sell the securities pursuant to the prospectus through underwriters, dealers or agents or directly to purchasers, on a continuous or delayed basis. The securities may also be resold by selling security holders. The prospectus supplement for each offering will describe in detail the plan of distribution for that offering and will set forth the names of any underwriters, dealers or agents involved in the offering and any applicable fees, commissions or discount arrangements. We intend to use the net proceeds from the sales of the securities as set forth in the applicable prospectus supplement, and unless otherwise set forth therein, we will not receive any proceeds if the securities are sold by a selling security holder.

Funds From Operations (“FFO”)

We believe FFO applicable to common shares, diluted FFO applicable to common shares, and basic and diluted FFO per common share are important supplemental non-GAAP measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets utilizes 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 REIT that uses historical cost accounting for depreciation could be less informative. The term FFO was designed by the REIT industry to address this issue.

FFO is defined as net income applicable to common shares (computed in accordance with GAAP), excluding gains or losses from acquisition and dispositions of depreciable real estate or related interests, impairments of, or related to, depreciable real estate, plus real estate and DFL 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 GAAP, is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income. We compute FFO in accordance with the current National Association of Real Estate Investment Trusts’ (“NAREIT”) definition; however, other REITs may report FFO differently or have a different interpretation of the current NAREIT definition from us. In addition, we present FFO before the impact of severance-related charges, litigation settlement charges, preferred stock redemption charges, impairments (recoveries) of non-depreciable assets and merger-related items (defined below) (“FFO as adjusted”). Management believes FFO as adjusted is a useful alternative measurement. This measure is a modification of the NAREIT definition of FFO and should not be used as an alternative to net income (determined in accordance with GAAP).

40

Details of certain items that affect comparability are discussed under “Results of Operations” above. The following is a reconciliation of net income applicable to common shares, the most direct comparable financial measure calculated and presented in accordance with GAAP, to FFO and FFO as adjusted (in thousands, except per share data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Net income applicable to common shares	$	233,282		$	195,629		$	676,412		$	572,352
Depreciation and amortization of real estate, in-place lease and other intangibles:
Continuing operations	104,859			87,170			317,430			254,463
Discontinued operations	1,433			2,969			4,346			11,876
DFL depreciation	3,631			3,234			10,589			9,426
Gain on sales of real estate	(8,298		)	—			(9,185		)	(2,856		)
Equity income from unconsolidated joint ventures	(13,892		)	(13,396		)	(44,278		)	(42,803		)
FFO from unconsolidated joint ventures	16,642			16,043			52,539			50,495
Noncontrolling interests’ and participating securities’ share in earnings	3,576			3,414			10,955			11,224
Noncontrolling interests’ and participating securities’ share in FFO	(5,162		)	(4,821		)	(15,569		)	(15,512		)
FFO applicable to common shares	336,071			290,242			1,003,239			848,665
Distributions on dilutive convertible units	3,302			3,148			9,966			9,397
Diluted FFO applicable to common shares	$	339,373		$	293,390		$	1,013,205		$	858,062
Diluted FFO per common share	$	0.73		$	0.67		$	2.20		$	2.01
Weighted average shares used to calculate diluted FFO per common share	462,082			437,043			461,403			427,388
Impact of adjustments to FFO:
Severance-related charges(1)	$	26,374		$	—		$	26,374		$	—
Preferred stock redemption charge(2)	—			—			—			10,432
Impairments(3)	—			7,878			—			7,878
	$	26,374		$	7,878		$	26,374		$	18,310
FFO as adjusted applicable to common shares	$	362,445		$	298,120		$	1,029,613		$	866,975
Distributions on dilutive convertible units and other	3,247			3,127			9,907			9,345
Diluted FFO as adjusted applicable to common shares	$	365,692		$	301,247		$	1,039,520		$	876,320
Diluted FFO as adjusted per common share	$	0.79		$	0.69		$	2.25		$	2.05
Weighted average shares used to calculate diluted FFO as adjusted per common share	462,082			437,043			461,403			427,388

(1)The Company’s Board of Directors, after deliberations during the third quarter 2013, terminated its former Chairman, Chief Executive Officer and President on October 2, 2013. As a result of the termination, we incurred severance-related charges of $26.4 million that include: (i) the acceleration of $16.7 million of deferred compensation for restricted stock units and options that vested upon termination; and (ii) severance payments and other costs of approximately $9.7 million. See Note 21 to the Condensed Consolidated Financial Statements for additional information.

(2)In connection with the redemption of our preferred stock, we incurred a one-time, non-cash redemption charge of $10.4 million related to the original issuance costs of the preferred stock.

(3)The impairment charge of $7.9 million related to the sale of a land parcel in our life science segment.

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Off-Balance Sheet Arrangements

We own interests in certain unconsolidated joint ventures as described under Note 7 to the Condensed Consolidated Financial Statements. Except in limited circumstances, our risk of loss is limited to our investment in the joint venture and any outstanding loans receivable. In addition, we have certain properties which serve as collateral for debt that is owed by a previous owner of certain of our facilities, as described under Note 11 to the Condensed Consolidated Financial Statements. Our risk of loss for these certain properties is limited to the outstanding debt balance plus penalties, if any. We have no other material off-balance sheet arrangements that we expect would materially affect our liquidity and capital resources except those described below under “Contractual Obligations.”

Contractual Obligations

The following table summarizes our material contractual payment obligations and commitments at September 30, 2013 (in thousands):

	Total(1)		Less than One Year		2014-2015		2016-2017		More than Five Years
Line of credit	$	285,000	$	—	$	—	$	285,000	$	—
Term loan(2)	221,748		—		—		221,748		—
Senior unsecured notes	6,587,000		400,000		887,000		1,650,000		3,650,000
Mortgage debt	1,416,506		14,003		488,463		842,215		71,825
Construction loan commitments(3)	37,389		7,740		29,649		—		—
Development commitments(4)	20,943		17,433		3,510		—		—
Ground and other operating leases	220,789		1,711		11,522		8,014		199,542
Interest(5)	2,192,980		51,629		725,312		528,282		887,757
Total	$	10,982,355	$	492,516	$	2,145,456	$	3,535,259	$	4,809,124

(1)Excludes $78 million of other debt that represents Life Care Bonds that have no scheduled maturities.

(2)Represents £137 million translated into U.S. dollars.

(3)Represents commitments to finance development projects and related working capital financings.

(4)Represents construction and other commitments for developments in progress.

(5)Interest on variable-rate debt is calculated using rates in effect at September 30, 2013.

Inflation

Our leases often provide for either fixed increases in base rents or indexed escalators, based on the Consumer Price Index or other measures, and/or additional rent based on increases in the tenants’ operating revenues. Most of our MOB leases require the tenant to pay a share of property operating costs such as real estate taxes, insurance and utilities. Substantially all of our senior housing, life science, post-acute/skilled nursing and hospital leases require the operator or tenant to pay all of the property operating costs or reimburse us for all such costs. We believe that inflationary increases in expenses will be offset, in part, by the operator or tenant expense reimbursements and contractual rent increases described above.

Recent Accounting Pronouncements

See Note 2 to the Condensed Consolidated Financial Statements for the impact of new accounting standards. There are no accounting pronouncements that have been issued, but not yet adopted by us, that we believe will materially impact our condensed consolidated financial statements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

We use derivative financial instruments in the normal course of business to mitigate interest rate and foreign currency risk. We do not use derivative financial instruments for speculative or trading purposes. Derivatives are recorded on the condensed consolidated balance sheets at their fair value. See Note 19 to the Condensed Consolidated Financial Statements for additional information.

To illustrate the effect of movements in the interest rate and foreign currency markets, we performed a market sensitivity analysis on our hedging instruments. We applied various basis point spreads to the underlying interest rate curves and foreign currency exchange rates of the derivative portfolio in order to determine the instruments’ change in fair value. Assuming a one percentage point change in the underlying interest rate curve and foreign currency exchange rates, the estimated change in fair value of each of the underlying derivative instruments would not exceed $6 million. See Note 19 to the Condensed Consolidated Financial Statements for additional analysis details.

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Interest Rate Risk.  At September 30, 2013, we are exposed to market risks related to fluctuations in interest rates on the following: (i) $285 million of variable-rate line of credit borrowings, (ii) $25 million of variable-rate senior unsecured notes and (iii) $15 million of variable-rate mortgage debt payable (excludes $72 million of variable-rate mortgage notes that have been hedged through interest-rate swap contracts) that are partially offset by properties with a gross value of $83 million that are subject to leases where the payments fluctuate with changes in LIBOR. Additionally, our exposure to market risks related to fluctuations in interest rates excludes our GBP denominated $222 million (£137 million) variable-rate Term Loan that has been hedged through interest-rate swap contracts.

Interest rate fluctuations will generally not affect our future earnings or cash flows on our fixed rate debt and assets unless such instruments mature or are otherwise terminated. However, interest rate changes will affect the fair value of our fixed rate instruments. Conversely, changes in interest rates on variable rate debt and investments would change our future earnings and cash flows, but not significantly affect the fair value of those instruments. Assuming a one percentage point increase in the interest rate related to the variable-rate investments and variable-rate debt, and assuming no other changes in the outstanding balance as of September 30, 2013, our annual interest expense would increase by approximately $2 million, or less than $0.01 per common share on a diluted basis.

Foreign Currency Risk.  At September 30, 2013, our exposure to foreign currency exchange rates relates to forecasted interest receipts from our GBP denominated senior unsecured notes (see additional discussion of the Four Seasons senior unsecured notes in Note 9 to the Condensed Consolidated Financial Statements). Our foreign currency exchange exposure is mitigated by the forecasted interest and principal payments from our GBP denominated unsecured Term Loan (see Note 10 to the Condensed Consolidated Financial Statements for additional information), and a foreign currency swap contract for approximately 85% of the forecasted interest receipts from our Four Seasons senior unsecured notes through their non-call period, which ends on June 15, 2016.

Market Risk.  We have investments in marketable debt securities classified as held-to-maturity, because we have the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are recorded at amortized cost and adjusted for the amortization of premiums and discounts through maturity. We consider a variety of factors in evaluating an other-than-temporary decline in value, such as: the length of time and the extent to which the market value has been less than our current adjusted carrying value; the issuer’s financial condition, capital strength and near-term prospects; any recent events specific to that issuer and economic conditions of its industry; and our investment horizon in relationship to an anticipated near-term recovery in the market value, if any. At September 30, 2013, the fair value and adjusted carrying value of marketable debt securities were $273 million and $239 million, respectively.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures.  We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Also, we have investments in certain unconsolidated entities. Our disclosure controls and procedures with respect to such entities are substantially more limited than those we maintain with respect to our consolidated subsidiaries.

As required by Rules 13a-15(b) and 15d-15(b) of the Securities Exchange Act of 1934, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2013. Based upon that evaluation, our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting.  There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1A.  Risk Factors

There are no material changes to the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2012.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

(a)

None.

(b)

None.

(c)

The table below sets forth information with respect to purchases of our common stock made by us or on our behalf or by any “affiliated purchaser,” as such term is defined in Rule 10b-18(a)(3) of the Securities Exchange Act of 1934, as amended, during the three months ended September 30, 2013.

Period Covered	Total Number Of Shares Purchased(1)	Average Price Paid Per Share		Total Number Of Shares (Or Units) Purchased As Part Of Publicly Announced Plans Or Programs	Maximum Number (Or Approximate Dollar Value) Of Shares (Or Units) That May Yet Be Purchased Under The Plans Or Programs
July 1-31, 2013	3,826	$	45.05	—	—
September 1-30, 2013	1,472	41.42		—	—
Total	5,298	44.04		—	—

(1)Represents restricted shares withheld under our 2006 Performance Incentive Plan (the “2006 Incentive Plan”), to offset tax withholding obligations that occur upon vesting of restricted shares. Our 2006 Incentive Plan provides that the value of the shares withheld shall be the closing price of our common stock on the date the relevant transaction occurs.

Item 5.  Other Information

On October 31, 2013, we entered into amendments to the existing employment agreements (each an “Amendment”) with each of Paul F. Gallagher, Executive Vice President and Chief Investment Officer, and Timothy M. Schoen, Executive Vice President and Chief Financial Officer which memorialize the terms previously agreed to in binding term sheets, as previously disclosed.  We also entered into a substantially similar Amendment with James W. Mercer, Executive Vice President, General Counsel and Corporate Secretary.  Additionally, we entered into restricted stock unit award agreements (each an “Award Agreement”) with each of Messrs. Gallagher, Schoen and Mercer with respect to a one-time grant of restricted stock units with a value of $1,000,000.  Pursuant to the Award Agreement, fifty percent of the restricted stock units will vest on each of the first and second anniversaries of the grant.

The foregoing summary of each Amendment and Award Agreement is qualified in its entirety by the text of such agreements, copies of which are attached as Exhibits 10.4 through 10.9 to this Quarterly Report on Form 10-Q and incorporated herein by reference.

44

Item 6. Exhibits

2.2	Purchase and Sale Agreement, dated as of October 16, 2012, by and among BRE/SW Portfolio LLC, those owner entities listed on Schedule 1 thereto, HCP, Inc. and Emeritus Corporation; and First Amendment to such Purchase and Sale Agreement, by and among such parties, dated as of December 4, 2012 (incorporated by reference to Exhibit 2.2 to HCP’s Quarterly Report on Form 10-Q (File No. 1-08895) filed May 2, 2013).
3.1	Articles of Restatement of HCP (incorporated by reference to Exhibit 3.1 to HCP’s Registration Statement on Form S-3 (Registration No. 333-182824), filed on July 24, 2012).
3.2	Fourth Amended and Restated Bylaws of HCP (incorporated herein by reference to Exhibit 3.1 to HCP’s Current Report on Form 8-K (File No. 1-08895) filed September 25, 2006).
3.2.1	Amendment No. 1 to Fourth Amended and Restated Bylaws of HCP (incorporated by reference herein to Exhibit 3.2.1 to HCP’s Quarterly Report on Form 10-Q (File No. 1-08895) for the quarter ended September 30, 2007).
3.2.2	Amendment No. 2 to Fourth Amended and Restated Bylaws of HCP (incorporated herein by reference to Exhibit 3.2.2 to HCP’s Quarterly Report on Form 10-Q (File No. 1-08895) for the quarter ended September 30, 2009).
3.2.3	Amendment No. 3 to Fourth Amended and Restated Bylaws of HCP (incorporated herein by reference to Exhibit 3.1 to HCP’s Current Report on Form 8-K (File No. 1-08895), filed March 10, 2011).
3.2.4	Amendment No. 4 to Fourth Amended and Restated Bylaws of HCP (incorporated herein by reference to Exhibit 3.1 to HCP’s Current Report on Form 8-K (File No. 1-08895), filed October 3, 2013).
10.1	Employment Agreement, dated October 2, 2013, by and between the Company and Lauralee Martin (incorporated herein by reference to Exhibit 10.1 to HCP’s Current Report on Form 8-K (File No. 1-08895) filed October 3, 2013). †
10.2	Term Sheet Amendment to Employment Agreement, dated October 3, 2013, by and between the Company and Timothy M. Schoen (incorporated herein by reference to Exhibit 10.2 to HCP’s Current Report on Form 8-K (File No. 1-08895) filed October 3, 2013). †
10.3	Term Sheet Amendment to Employment Agreement, dated October 3, 2013, by and between the Company and Paul F. Gallagher (incorporated herein by reference to Exhibit 10.3 to HCP’s Current Report on Form 8-K (File No. 1-08895) filed October 3, 2013). †
10.4	Amendment No. 2, dated as of October 31, 2013, to the Employment Agreement, dated as of January 26, 2012, by and between the Company and Paul F. Gallagher.*†
10.5	Amendment No. 2, dated as of October 31, 2013, to the Employment Agreement, dated as of January 26, 2012, by and between the Company and Timothy M. Schoen.*†
10.6	Amendment No. 2, dated as of October 31, 2013, to the Employment Agreement, dated as of October 25, 2012, by and between the Company and James W. Mercer.*†
10.7	Restricted Stock Unit Award Agreement, dated as of October 3, 2013, by and between the Company and Paul F. Gallagher.*†
10.8	Restricted Stock Unit Award Agreement, dated as of October 3, 2013, by and between the Company and Timothy M. Schoen.*†
10.9	Restricted Stock Unit Award Agreement, dated as of October 31, 2013, by and between the Company and James W. Mercer.*†

45

31.1	Certification by Lauralee E. Martin, HCP’s Principal Executive Officer, Pursuant to Securities Exchange Act Rule 13a-14(a). *
31.2	Certification by Timothy M. Schoen, HCP’s Principal Financial Officer, Pursuant to Securities Exchange Act Rule 13a-14(a). *
32.1	Certification by Lauralee E. Martin, HCP’s Principal Executive Officer, Pursuant to Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350. **
32.2	Certification by Timothy M. Schoen, HCP’s Principal Financial Officer, Pursuant to Securities Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350. **
101.INS	XBRL Instance Document.*
101.SCH	XBRL Taxonomy Extension Schema Document.*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.*

*	Filed herewith.
**	Furnished herewith.
†	Management Contract or Compensatory Plan or Arrangement.

46

SIGNATURES

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

Date: November 4, 2013	HCP, Inc.
	(Registrant)
	/s/ LAURALEE E. MARTIN
	Lauralee E. Martin
	President and Chief Executive Officer
	(Principal Executive Officer)
	/s/ TIMOTHY M. SCHOEN
	Timothy M. Schoen
	Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)
	/s/ SCOTT A. ANDERSON
	Scott A. Anderson
	Senior Vice President and
	Chief Accounting Officer
	(Principal Accounting Officer)

47

EX-10.4

EXHIBIT 10.4

SECOND AMENDMENT TO HCP, INC. EMPLOYMENT AGREEMENT

THIS SECOND AMENDMENT (the “Amendment”) is made as of October 31, 2013 (the “Effective Date”), by and between HCP, Inc. (the “Company”) and Paul F. Gallagher (“Executive”).

RECITALS

WHEREAS, the Company and Executive entered into an Employment Agreement on January 26, 2012, which was subsequently amended as of April 5, 2013 (collectively, the “Agreement”);

WHEREAS, the Company and Executive entered into a binding term sheet as of October 3, 2013 (the “Term Sheet”); and

WHEREAS, the Company and Executive now wish to amend the Agreement to reflect certain provisions of the Term Sheet as set forth below.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned, intending to be legally bound hereby, agree as follows:

1.Unless otherwise defined in this Amendment, capitalized terms used herein shall have the meanings ascribed to such terms in the Agreement.

2.Section 2 of the Agreement is hereby amended and restated to read as follows:

“Term.  Executive’s employment under the terms and conditions of this Agreement shall commence on the Effective Date.  Such employment shall continue for an initial term that shall end on October 1, 2016 (the “Initial Term”), which will be automatically extended as of October 1, 2016 for an additional one (1)-year term and on each anniversary of October 1 thereafter, unless either Executive or the Company has given written notice to the other no less than sixty (60) days prior to the expiration of the Term then in effect that the Term shall not be so extended.  As used herein, the “Term” shall refer to the Initial Term and any extension thereof pursuant to the preceding sentence.  Provision of notice that the Term shall not be extended or further extended, as the case may be, shall not constitute a breach of this Agreement and shall not constitute “Good Reason” for purposes of this Agreement.  Notwithstanding the above, the Term shall earlier expire immediately upon the termination of Executive’s employment pursuant to Section 5 hereof.”

1

3.Section 5(b)(i) of the Agreement is hereby amended and restated to read as follows:

“an amount equal to two (2) times the sum of (x) Executive’s Base Compensation, at the rate in effect on the date of Executive’s termination of employment and (y) the greater of (I) Executive’s annual incentive bonus paid or payable for the last fiscal year of the Company for which the Compensation Committee has determined bonuses for the Company’s executives generally prior to the date of such termination or (II) the average of Executive’s annual incentive bonuses for the three consecutive fiscal years of the Company ending with the last fiscal year of the Company for which the Compensation Committee has determined bonuses for the Company’s executives generally prior to the date of such termination (or, if less, the average of Executive’s annual incentive bonuses for the entire period of his employment with the Company), such amount to be paid in a lump sum in the month following the month in which Executive’s Separation from Service (as defined below) occurs; and”

4.Section 5(d) of the Agreement is hereby amended and restated to read as follows:

“Welfare Benefit Continuation.  Subject to Section 5(e) below, in the event that Executive’s employment hereunder is terminated other than (i) by the Company for Cause or (ii) by Executive without Good Reason, the Company shall reimburse Executive for the full amount of the COBRA premiums incurred by Executive during the 24 month period following the date of such termination, provided that (A) such reimbursement does not result in adverse tax consequences to the Company under Section 105(h) of the Code or otherwise and (B) such reimbursement shall immediately cease in the event that Executive becomes eligible to participate in the health insurance plan of a subsequent employer or other service recipient (or at such time as the Company ceases to offer group medical coverage to its active executive employees or the Company is otherwise under no obligation to offer COBRA continuation coverage to Executive).”

5.The following sentence shall be added to the end of Section 4(c) of the Agreement:

“The Company shall reimburse Executive’s documented, reasonable attorney fees and costs incurred for his attorney’s review of and advice regarding the Term Sheet, the Retention Award (as defined in the Term Sheet) and this Amendment, not to exceed $10,000 in the aggregate, which reimbursement shall be made directly to Executive’s attorney upon the presentment of a statement of fees actually incurred.”

6.The parties acknowledge that this Amendment is the result of arm’s-length negotiations between sophisticated parties, each afforded the opportunity to be represented by legal counsel.  Each and every provision of this Amendment shall be construed as though both parties participated equally in the drafting of the same, and any rule of construction that a document shall be construed against the drafting party shall not be applicable to this Amendment.

7.In the event of any inconsistency between any provision of this Amendment and any provision of the Term Sheet, the provisions of this Amendment shall control.

2

8.Except as expressly set forth herein, all of the provisions of the Agreement shall remain unchanged and in full force and effect.  After the date hereof, any reference to the Agreement shall mean the Agreement as amended or modified hereby.

9.This Amendment may be executed by the parties hereto in separate counterparts (including by facsimile or .pdf or .tif attachment to electronic mail), each of which when so executed and delivered shall be an original but all such counterparts together shall constitute one and the same instrument.  Each counterpart may consist of two copies hereof each signed by one of the parties hereto.

[Signature Page Follows]

3

IN WITNESS WHEREOF, the Company and Executive have executed this Amendment, in the case of the Company by a duly authorized officer, as of the day and year first above written.

HCP, INC.
By:	/s/ Lauralee E. Martin
	Lauralee E. Martin
	President and Chief Executive Officer
EXECUTIVE:
/s/ Paul F. Gallagher
Paul F. Gallagher

4

EX-10.5

EXHIBIT 10.5

SECOND AMENDMENT TO HCP, INC. EMPLOYMENT AGREEMENT

THIS SECOND AMENDMENT (the “Amendment”) is made as of October 31, 2013 (the “Effective Date”), by and between HCP, Inc. (the “Company”) and Timothy M. Schoen (“Executive”).

RECITALS

WHEREAS, the Company and Executive entered into an Employment Agreement on January 26, 2012, which was subsequently amended as of April 5, 2013 (collectively, the “Agreement”);

WHEREAS, the Company and Executive entered into a binding term sheet as of October 3, 2013 (the “Term Sheet”); and

WHEREAS, the Company and Executive now wish to amend the Agreement to reflect certain provisions of the Term Sheet as set forth below.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned, intending to be legally bound hereby, agree as follows:

1.Unless otherwise defined in this Amendment, capitalized terms used herein shall have the meanings ascribed to such terms in the Agreement.

2.Section 2 of the Agreement is hereby amended and restated to read as follows:

“Term. Executive’s employment under the terms and conditions of this Agreement shall commence on the Effective Date.  Such employment shall continue for an initial term that shall end on October 1, 2016 (the “Initial Term”), which will be automatically extended as of October 1, 2016 for an additional one (1)-year term and on each anniversary of October 1 thereafter, unless either Executive or the Company has given written notice to the other no less than sixty (60) days prior to the expiration of the Term then in effect that the Term shall not be so extended.  As used herein, the “Term” shall refer to the Initial Term and any extension thereof pursuant to the preceding sentence.  Provision of notice that the Term shall not be extended or further extended, as the case may be, shall not constitute a breach of this Agreement and shall not constitute “Good Reason” for purposes of this Agreement.  Notwithstanding the above, the Term shall earlier expire immediately upon the termination of Executive’s employment pursuant to Section 5 hereof.”

1

3.Section 5(b)(i) of the Agreement is hereby amended and restated to read as follows:

“an amount equal to two (2) times the sum of (x) Executive’s Base Compensation, at the rate in effect on the date of Executive’s termination of employment and (y) the greater of (I) Executive’s annual incentive bonus paid or payable for the last fiscal year of the Company for which the Compensation Committee has determined bonuses for the Company’s executives generally prior to the date of such termination or (II) the average of Executive’s annual incentive bonuses for the three consecutive fiscal years of the Company ending with the last fiscal year of the Company for which the Compensation Committee has determined bonuses for the Company’s executives generally prior to the date of such termination (or, if less, the average of Executive’s annual incentive bonuses for the entire period of his employment with the Company), such amount to be paid in a lump sum in the month following the month in which Executive’s Separation from Service (as defined below) occurs; and”

4.Section 5(d) of the Agreement is hereby amended and restated to read as follows:

“Welfare Benefit Continuation.  Subject to Section 5(e) below, in the event that Executive’s employment hereunder is terminated other than (i) by the Company for Cause or (ii) by Executive without Good Reason, the Company shall reimburse Executive for the full amount of the COBRA premiums incurred by Executive during the 24 month period following the date of such termination, provided that (A) such reimbursement does not result in adverse tax consequences to the Company under Section 105(h) of the Code or otherwise and (B) such reimbursement shall immediately cease in the event that Executive becomes eligible to participate in the health insurance plan of a subsequent employer or other service recipient (or at such time as the Company ceases to offer group medical coverage to its active executive employees or the Company is otherwise under no obligation to offer COBRA continuation coverage to Executive).”

5.The following sentence shall be added to the end of Section 4(c) of the Agreement:

“The Company shall reimburse Executive’s documented, reasonable attorney fees and costs incurred for his attorney’s review of and advice regarding the Term Sheet, the Retention Award (as defined in the Term Sheet) and this Amendment, not to exceed $10,000 in the aggregate, which reimbursement shall be made directly to Executive’s attorney upon the presentment of a statement of fees actually incurred.”

6.The parties acknowledge that this Amendment is the result of arm’s-length negotiations between sophisticated parties, each afforded the opportunity to be represented by legal counsel.  Each and every provision of this Amendment shall be construed as though both parties participated equally in the drafting of the same, and any rule of construction that a document shall be construed against the drafting party shall not be applicable to this Amendment.

7.In the event of any inconsistency between any provision of this Amendment and any provision of the Term Sheet, the provisions of this Amendment shall control.

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8.Except as expressly set forth herein, all of the provisions of the Agreement shall remain unchanged and in full force and effect.  After the date hereof, any reference to the Agreement shall mean the Agreement as amended or modified hereby.

9.This Amendment may be executed by the parties hereto in separate counterparts (including by facsimile or .pdf or .tif attachment to electronic mail), each of which when so executed and delivered shall be an original but all such counterparts together shall constitute one and the same instrument.  Each counterpart may consist of two copies hereof each signed by one of the parties hereto.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company and Executive have executed this Amendment, in the case of the Company by a duly authorized officer, as of the day and year first above written.

HCP, INC.
By:	/s/ Lauralee E. Martin
	Lauralee E. Martin
	President and Chief Executive Officer
EXECUTIVE:
/s/ Timothy M. Schoen
Timothy M. Schoen

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EX-10.6

Exhibit 10.6

SECOND AMENDMENT TO HCP, INC. EMPLOYMENT AGREEMENT

THIS SECOND AMENDMENT (the “Amendment”) is made as of October 31, 2013 (the “Effective Date”), by and between HCP, Inc. (the “Company”) and James W. Mercer (“Executive”).

RECITALS

WHEREAS, the Company and Executive entered into an Employment Agreement effective May 30, 2011, which was subsequently amended and restated by the Employment Agreement dated as of October 25, 2012, by and between the Company and Executive (the “Original Agreement”);

WHEREAS, the Original Agreement was subsequently amended by a first Amendment to HCP, Inc. Employment Agreement, dated as of April 5, 2013, by and between the Company and Executive (the “First Amendment,” and collectively with the Original Agreement, the “Agreement”); and

WHEREAS, the Company and Executive now wish to amend the Agreement as set forth below.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned, intending to be legally bound hereby, agree as follows:

1.Unless otherwise defined in this Amendment, capitalized terms used herein shall have the meanings ascribed to such terms in the Agreement.

2.Section 2 of the Agreement is hereby amended and restated to read as follows:

“Term. Executive’s employment under the terms and conditions of this Agreement shall commence on the Effective Date.  Such employment shall continue for an initial term that shall end on October 1, 2016 (the “Initial Term”), which will be automatically extended as of October 1, 2016 for an additional one (1)-year term and on each anniversary of October 1 thereafter, unless either Executive or the Company has given written notice to the other no less than sixty (60) days prior to the expiration of the Term then in effect that the Term shall not be so extended.  As used herein, the “Term” shall refer to the Initial Term and any extension thereof pursuant to the preceding sentence.  Provision of notice that the Term shall not be extended or further extended, as the case may be, shall not constitute a breach of this Agreement and shall not constitute “Good Reason” for purposes of this Agreement.  Notwithstanding the above, the Term shall earlier expire immediately upon the termination of Executive’s employment pursuant to Section 5 hereof.”

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3.Section 5(b)(i) of the Agreement is hereby amended and restated to read as follows:

“an amount equal to two (2) times the sum of (x) Executive’s Base Compensation, at the rate in effect on the date of Executive’s termination of employment and (y) the greater of (I) Executive’s annual incentive bonus paid or payable for the last fiscal year of the Company for which the Compensation Committee has determined bonuses for the Company’s executives generally prior to the date of such termination or (II) the average of Executive’s annual incentive bonuses for the three consecutive fiscal years of the Company ending with the last fiscal year of the Company for which the Compensation Committee has determined bonuses for the Company’s executives generally prior to the date of such termination (or, if less, the average of Executive’s annual incentive bonuses for the entire period of his employment with the Company), such amount to be paid in a lump sum in the month following the month in which Executive’s Separation from Service (as defined below) occurs; and”

4.Section 5(d) of the Agreement is hereby amended and restated to read as follows:

“Welfare Benefit Continuation.  Subject to Section 5(e) below, in the event that Executive’s employment hereunder is terminated other than (i) by the Company for Cause or (ii) by Executive without Good Reason, the Company shall reimburse Executive for the full amount of the COBRA premiums incurred by Executive during the 24 month period following the date of such termination, provided that (A) such reimbursement does not result in adverse tax consequences to the Company under Section 105(h) of the Code or otherwise and (B) such reimbursement shall immediately cease in the event that Executive becomes eligible to participate in the health insurance plan of a subsequent employer or other service recipient (or at such time as the Company ceases to offer group medical coverage to its active executive employees or the Company is otherwise under no obligation to offer COBRA continuation coverage to Executive).”

5.The parties acknowledge that this Amendment is the result of arm’s-length negotiations between sophisticated parties, each afforded the opportunity to be represented by legal counsel.  Each and every provision of this Amendment shall be construed as though both parties participated equally in the drafting of the same, and any rule of construction that a document shall be construed against the drafting party shall not be applicable to this Amendment.

6.Except as expressly set forth herein, all of the provisions of the Agreement shall remain unchanged and in full force and effect.  After the date hereof, any reference to the Agreement shall mean the Agreement as amended or modified hereby.

7.This Amendment may be executed by the parties hereto in separate counterparts (including by facsimile or .pdf or .tif attachment to electronic mail), each of which when so executed and delivered shall be an original but all such counterparts together shall constitute one and the same instrument.  Each counterpart may consist of two copies hereof each signed by one of the parties hereto.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company and Executive have executed this Amendment, in the case of the Company by a duly authorized officer, as of the day and year first above written.

HCP, INC.
By:	/s/ Lauralee E. Martin
	Lauralee E. Martin
	President and Chief Executive Officer
EXECUTIVE:
/s/ James W. Mercer
James W. Mercer

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EX-10.7

EXHIBIT 10.7

HCP, INC.
2006 PERFORMANCE INCENTIVE PLAN
2013 RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS 2013 RESTRICTED STOCK UNIT AWARD AGREEMENT  (this “Agreement”) is dated as of October 3, 2013 (the “Award Date”) by and between HCP, Inc., a Maryland corporation (the “Corporation”), and Paul F. Gallagher (the “Participant”).

W I T N E S S E T H

WHEREAS , the Corporation and Participant entered into a binding term sheet as of October 3, 2013 (the “Term Sheet”), which provided for the grant of a restricted stock award pursuant to the terms and conditions of the Corporation’s 2006 Performance Incentive Plan with a fair value of One Million dollars ($1,000,000), based on the average of the stock price for the five trading days beginning October 4, 2013.

WHEREAS, pursuant to the HCP, Inc. 2006 Performance Incentive Plan, as amended and/or restated from time to time (the “Plan”), the Corporation hereby grants to the Participant, effective as of the date hereof, an award of restricted stock units under the Plan (the “Award”), upon the terms and conditions set forth herein and in the Plan in satisfaction of the Term Sheet.

NOW THEREFORE , in consideration of services rendered and to be rendered by the Participant, and the mutual promises made herein and the mutual benefits to be derived therefrom, the parties agree as follows:

1.Defined Terms.  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Plan.

2.Grant.  Subject to the terms of this Agreement, the Corporation hereby grants to the Participant an Award with respect to that number of stock units equal to the quotient of (a) $1,000,000 divided by (b) the average of the stock price for the five trading days beginning October 4, 2013, rounded up to the nearest whole number that is evenly divisible by two (2) (subject to adjustment as provided in Section 7.1 of the Plan) (the “Stock Units”).  As used herein, the term “stock unit” means a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of the Corporation’s Common Stock (subject to adjustment as provided in Section 7.1 of the Plan) solely for purposes of the Plan and this Agreement.  The Stock Units shall be used solely as a device for the determination of the payment to eventually be made to the Participant if such Stock Units vest pursuant to Section 3.  The Stock Units shall not be treated as property or as a trust fund of any kind.  The Award is subject to all of the terms and conditions set forth in this Agreement and is further subject to all of the terms and conditions of the Plan, as it may be amended from time to time, and any rules adopted by the Administrator, as such rules are in effect from time to time.

3.Vesting.  Subject to Section 8 below, the Award shall vest and become nonforfeitable with respect to 50% of the total number of the Stock Units (subject to adjustment under Section 7.1 of the Plan) on each of the first and second anniversaries of October 3, 2013.

4.Continuance of Employment.  The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Agreement.  Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 8 below or under the Plan.

Nothing contained in this Agreement or the Plan constitutes an employment or service commitment by the Corporation, affects the Participant’s status as an employee at will who is subject to termination without cause, confers upon the Participant any right to remain employed by or in service to the Corporation or any of its Subsidiaries, interferes in any way with the right of the Corporation or any of its Subsidiaries at any time to terminate such employment or services, or affects the right of the Corporation or any of its Subsidiaries to increase or decrease the Participant’s other compensation or benefits.  Nothing in this paragraph, however, is intended to adversely affect any independent contractual right of the Participant without his or her consent thereto.

5.Dividend and Voting Rights.

(a)Limitations on Rights Associated with Units.  The Participant shall have no rights as a stockholder of the Corporation, no dividend rights (except as expressly provided in Section 5(b) with respect to Dividend Equivalent Rights) and no voting rights, with respect to the Stock Units and any shares of Common Stock underlying or issuable in respect of such Stock Units until such shares of Common Stock are actually issued to and held of record by the Participant.  No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of such shares.

(b)Dividend Equivalent Rights Distributions.   As of any date that the Corporation pays an ordinary cash dividend on its Common Stock, the Corporation shall pay the Participant an amount equal to the per share cash dividend paid by the Corporation on its Common Stock on such date multiplied by the number of Stock Units remaining subject to this Award as of the related dividend payment record date.  No such payment shall be made with respect to any Stock Units which, as of such record date, have either been paid pursuant to Section 7 or terminated pursuant to Section 8.

6.Restrictions on Transfer .  Neither the Award, nor any interest therein or amount or shares payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily.  The transfer restrictions in the preceding sentence shall not apply to (a) transfers to the Corporation, or (b) transfers by will or the laws of descent and distribution.

7.Timing and Manner of Payment of Stock Units.  On or as soon as administratively practical following each vesting of the applicable portion of the total Award pursuant to the terms hereof (and in all events within sixty (60) days after such vesting event), the Corporation shall deliver to the Participant a number of shares of Common Stock (either by delivering one or more certificates for such shares or by entering such shares in book entry form,

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as determined by the Corporation in its discretion) equal to the number of Stock Units subject to this Award that vest on the applicable vesting date; provided, however, that in the event that the vesting and payment of the Stock Units is triggered by the Participant’s “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) and the Participant is a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of such separation from service, the Participant shall not be entitled to any payment of the Stock Units until the earlier of (i) the date which is six (6) months after the Participant’s separation from service with the Corporation for any reason other than death, or (ii) the date of the Participant’s death, if and to the extent such delay in payment is required to comply with Section 409A of the Code.  The Corporation’s obligation to deliver shares of Common Stock or otherwise make payment with respect to vested Stock Units is subject to the condition precedent that the Participant or other person entitled under the Plan to receive any shares with respect to the vested Stock Units deliver to the Corporation any representations or other documents or assurances that the Administrator may deem necessary or desirable to assure compliance with all applicable legal and accounting requirements.  The Participant shall have no further rights with respect to any Stock Units that are paid or that terminate pursuant to Section 8.

8.Effect of Termination of Employment or Services.  If the Participant ceases to be employed by or ceases to provide services to the Corporation or a Subsidiary (the date of such termination of employment or service is referred to as the Participant’s “Severance Date”), the Participant’s Stock Units shall terminate to the extent such units have not become vested pursuant to Section 3 hereof upon the Severance Date regardless of the reason for the termination of the Participant’s employment or services; provided, however, that (a) if the event Participant’s employment is terminated pursuant to Section 5(b) of Participant’s Employment Agreement with the Company, dated January 26, 2012, as amended, then, subject to the provisions of Section 5(b) thereof, the Award shall immediately vest and become non-forfeitable with respect to any then unvested Stock Units and shall be paid in accordance with Section 7 hereof; and (b) if the Participant’s employment is terminated as a result of the Participant’s death, Total Disability (as defined below) or Retirement (as defined below), the Participant’s Stock Units, to the extent such units are not then vested, shall become fully vested as of the Severance Date and shall be paid in accordance with Section 7.  If any unvested Stock Units are terminated hereunder, such Stock Units shall automatically terminate and be cancelled as of the applicable Severance Date without payment of any consideration by the Corporation and without any other action by the Participant, or the Participant’s beneficiary or personal representative, as the case may be.

For purposes of the Award, “Total Disability” means a “permanent and total disability” (within the meaning of Section 22(e)(3) of the Code or as otherwise determined by the Administrator).  For purposes of the Award, “Retirement” means the Participant (1) has attained age 65 and completed at least five (5) full years of service as an employee of the Corporation and its Subsidiaries and/or a member of the Board, or (2) has attained age 60 and completed at least fifteen (15) full years of service as an employee of the Corporation and its Subsidiaries and/or a member of the Board.

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9.Adjustments Upon Specified Events; Change in Control Event.

(a)Adjustments.  Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.1 of the Plan (including, without limitation, an extraordinary cash dividend on such stock), the Administrator shall make adjustments in accordance with such section in the number of Stock Units then outstanding and the number and kind of securities that may be issued in respect of the Award.  No such adjustment shall be made with respect to any ordinary cash dividend for which dividend equivalents are paid pursuant to Section 5(b).

(b)Change in Control Event.  Upon the occurrence of an event contemplated by Section 7.2 or 7.3 of the Plan and notwithstanding any provision of Section 7.2 or 7.3 of the Plan to the contrary, the Award (to the extent outstanding at the time of such event) shall continue in effect in accordance with its terms following such event (subject to adjustment in connection with such event pursuant to Section 7.1 of the Plan); provided, however, that the Administrator shall determine, in its sole discretion, whether the vesting of the Stock Units will accelerate in connection with such event and the extent of any such accelerated vesting; provided, further, that any Stock Units that are so accelerated will be paid on or as soon as administratively practical after (and in all events within sixty (60) days after) the first to occur of the original vesting date of such accelerated Stock Units set forth in Section 3 above or the Participant’s separation from service (and subject to the six-month delayed payment provision of Section 7 in the event payment is triggered by the Participant’s separation from service).  Notwithstanding the foregoing, the Administrator may provide for payment of the Stock Units in connection with such event to the extent such payment does not result in noncompliance with Section 409A of the Code, including providing for payment in accordance with the requirements of Treasury Regulation 1.409A-3(j)(4)(ix)(A), (B) or (C) promulgated under Section 409A of the Code (or any similar successor provision), which regulation generally provides that a deferred compensation arrangement may be terminated in limited circumstances following a dissolution or change in control of the Company, provided that any otherwise outstanding and unvested units shall become vested upon (or, to the extent necessary to effect the acceleration, immediately prior to) such a termination.

10.Tax Withholding.  Upon any vesting of the Stock Units or distribution of shares of Common Stock in respect of the Stock Units, the Participant or other person entitled to receive such distribution may irrevocably elect, in such manner and at such time or times prior to any applicable tax date as may be permitted or required under Section 8.5 of the Plan and rules established by the Administrator, to have the Corporation reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole shares, valued at their then fair market value to satisfy any withholding obligations of the Corporation or its Subsidiaries with respect to such distribution of shares at the minimum applicable withholding rates; provided, however, that in the event that the Corporation cannot legally satisfy such withholding obligations by such reduction of shares, or in the event of a cash payment or any other withholding event in respect of the Stock Units, the Corporation (or a Subsidiary) shall be entitled to require a cash payment by or on behalf of the Participant and/or to deduct from other compensation payable to the Participant any sums required by federal, state or local tax law to be withheld with respect to such distribution or payment.

11.Notices.  Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Participant at the Participant’s last address reflected on the Corporation’s payroll records.  Any notice shall be delivered in person or shall be enclosed in a properly sealed

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envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government.  Any such notice shall be given only when received, but if the Participant is no longer an Eligible Person, shall be deemed to have been duly given five (5) business days after the date mailed in accordance with the foregoing provisions of this Section 11.

12.Plan.  The Award and all rights of the Participant under this Agreement are subject to the terms and conditions of the provisions of the Plan, incorporated herein by reference, except as otherwise expressly provided in this Agreement.  The Participant agrees to be bound by the terms of the Plan and this Agreement.  The Participant acknowledges having read and understanding the Plan, the Prospectus for the Plan and this Agreement.  Unless otherwise expressly provided in other sections of this Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not (and shall not be deemed to) create any rights in the Participant unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.

13.Entire Agreement.  This Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof (including but not limited to the Term Sheet).  The Plan and this Agreement may be amended pursuant to Section 8.6 of the Plan.  Any such amendment must be in writing and signed by the Corporation.  Any such amendment that materially and adversely affects the Participant’s rights under this Agreement requires the consent of the Participant in order to be effective with respect to the Award.  The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Participant hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.  The Participant acknowledges receipt of a copy of this Agreement, the Plan and the Prospectus for the Plan.

14.Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Corporation as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  The Participant shall have only the rights of a general unsecured creditor of the Corporation with respect to amounts credited and benefits payable, if any, with respect to the Stock Units, and rights no greater than the right to receive the Common Stock as a general unsecured creditor with respect to the Stock Units, as and when payable hereunder.  The Award has been granted to the Participant in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to the Participant.

15.Counterparts   This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

16.Section Headings.  The section headings of this Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

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17.Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Maryland without regard to conflict of law principles thereunder.

18.Construction.  It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code.  This Agreement shall be construed and interpreted consistent with that intent.

19.Clawback Policy.  The Stock Units are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Stock Units or any shares of Common Stock or other cash or property received with respect to the Stock Units (including any value received from a disposition of the shares acquired upon payment of the Stock Units).

YOUR ACCEPTANCE OF THE AWARD THROUGH THE ELECTRONIC STOCK PLAN AWARD RECORDKEEPING SYSTEM MAINTAINED BY THE CORPORATION OR ITS DESIGNEE CONSTITUTES YOUR AGREEMENT TO THE TERMS AND CONDITIONS HEREOF, AND THAT THE AWARD IS GRANTED UNDER AND GOVERNED BY THE TERMS AND CONDITIONS OF THE PLAN AND THIS AGREEMENT.

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[The remainder of this page is intentionally left blank.]

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EX-10.8

EXHIBIT 10.8

HCP, INC.
2006 PERFORMANCE INCENTIVE PLAN
2013 RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS 2013 RESTRICTED STOCK UNIT AWARD AGREEMENT  (this “Agreement”) is dated as of October 3, 2013 (the “Award Date”) by and between HCP, Inc., a Maryland corporation (the “Corporation”), and Timothy M. Schoen (the “Participant”).

W I T N E S S E T H

WHEREAS , the Corporation and Participant entered into a binding term sheet as of October 3, 2013 (the “Term Sheet”), which provided for the grant of a restricted stock award pursuant to the terms and conditions of the Corporation’s 2006 Performance Incentive Plan with a fair value of One Million dollars ($1,000,000), based on the average of the stock price for the five trading days beginning October 4, 2013.

WHEREAS, pursuant to the HCP, Inc. 2006 Performance Incentive Plan, as amended and/or restated from time to time (the “Plan”), the Corporation hereby grants to the Participant, effective as of the date hereof, an award of restricted stock units under the Plan (the “Award”), upon the terms and conditions set forth herein and in the Plan in satisfaction of the Term Sheet.

NOW THEREFORE , in consideration of services rendered and to be rendered by the Participant, and the mutual promises made herein and the mutual benefits to be derived therefrom, the parties agree as follows:

1.Defined Terms.  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Plan.

2.Grant.  Subject to the terms of this Agreement, the Corporation hereby grants to the Participant an Award with respect to that number of stock units equal to the quotient of (a) $1,000,000 divided by (b) the average of the stock price for the five trading days beginning October 4, 2013, rounded up to the nearest whole number that is evenly divisible by two (2) (subject to adjustment as provided in Section 7.1 of the Plan) (the “Stock Units”).  As used herein, the term “stock unit” means a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of the Corporation’s Common Stock (subject to adjustment as provided in Section 7.1 of the Plan) solely for purposes of the Plan and this Agreement.  The Stock Units shall be used solely as a device for the determination of the payment to eventually be made to the Participant if such Stock Units vest pursuant to Section 3.  The Stock Units shall not be treated as property or as a trust fund of any kind.  The Award is subject to all of the terms and conditions set forth in this Agreement and is further subject to all of the terms and conditions of the Plan, as it may be amended from time to time, and any rules adopted by the Administrator, as such rules are in effect from time to time.

3.Vesting.  Subject to Section 8 below, the Award shall vest and become nonforfeitable with respect to 50% of the total number of the Stock Units (subject to adjustment under Section 7.1 of the Plan) on each of the first and second anniversaries of October 3, 2013.

4.Continuance of Employment.  The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Agreement.  Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 8 below or under the Plan.

Nothing contained in this Agreement or the Plan constitutes an employment or service commitment by the Corporation, affects the Participant’s status as an employee at will who is subject to termination without cause, confers upon the Participant any right to remain employed by or in service to the Corporation or any of its Subsidiaries, interferes in any way with the right of the Corporation or any of its Subsidiaries at any time to terminate such employment or services, or affects the right of the Corporation or any of its Subsidiaries to increase or decrease the Participant’s other compensation or benefits.  Nothing in this paragraph, however, is intended to adversely affect any independent contractual right of the Participant without his or her consent thereto.

5.Dividend and Voting Rights.

(a)Limitations on Rights Associated with Units.  The Participant shall have no rights as a stockholder of the Corporation, no dividend rights (except as expressly provided in Section 5(b) with respect to Dividend Equivalent Rights) and no voting rights, with respect to the Stock Units and any shares of Common Stock underlying or issuable in respect of such Stock Units until such shares of Common Stock are actually issued to and held of record by the Participant.  No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of such shares.

(b)Dividend Equivalent Rights Distributions.   As of any date that the Corporation pays an ordinary cash dividend on its Common Stock, the Corporation shall pay the Participant an amount equal to the per share cash dividend paid by the Corporation on its Common Stock on such date multiplied by the number of Stock Units remaining subject to this Award as of the related dividend payment record date.  No such payment shall be made with respect to any Stock Units which, as of such record date, have either been paid pursuant to Section 7 or terminated pursuant to Section 8.

6.Restrictions on Transfer .  Neither the Award, nor any interest therein or amount or shares payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily.  The transfer restrictions in the preceding sentence shall not apply to (a) transfers to the Corporation, or (b) transfers by will or the laws of descent and distribution.

7.Timing and Manner of Payment of Stock Units.  On or as soon as administratively practical following each vesting of the applicable portion of the total Award pursuant to the terms hereof (and in all events within sixty (60) days after such vesting event), the Corporation shall deliver to the Participant a number of shares of Common Stock (either by delivering one or more certificates for such shares or by entering such shares in book entry form,

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as determined by the Corporation in its discretion) equal to the number of Stock Units subject to this Award that vest on the applicable vesting date; provided, however, that in the event that the vesting and payment of the Stock Units is triggered by the Participant’s “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) and the Participant is a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of such separation from service, the Participant shall not be entitled to any payment of the Stock Units until the earlier of (i) the date which is six (6) months after the Participant’s separation from service with the Corporation for any reason other than death, or (ii) the date of the Participant’s death, if and to the extent such delay in payment is required to comply with Section 409A of the Code.  The Corporation’s obligation to deliver shares of Common Stock or otherwise make payment with respect to vested Stock Units is subject to the condition precedent that the Participant or other person entitled under the Plan to receive any shares with respect to the vested Stock Units deliver to the Corporation any representations or other documents or assurances that the Administrator may deem necessary or desirable to assure compliance with all applicable legal and accounting requirements.  The Participant shall have no further rights with respect to any Stock Units that are paid or that terminate pursuant to Section 8.

8.Effect of Termination of Employment or Services.  If the Participant ceases to be employed by or ceases to provide services to the Corporation or a Subsidiary (the date of such termination of employment or service is referred to as the Participant’s “Severance Date”), the Participant’s Stock Units shall terminate to the extent such units have not become vested pursuant to Section 3 hereof upon the Severance Date regardless of the reason for the termination of the Participant’s employment or services; provided, however, that (a) if the event Participant’s employment is terminated pursuant to Section 5(b) of Participant’s Employment Agreement with the Company, dated January 26, 2012, as amended, then, subject to the provisions of Section 5(b) thereof, the Award shall immediately vest and become non-forfeitable with respect to any then unvested Stock Units and shall be paid in accordance with Section 7 hereof; and (b) if the Participant’s employment is terminated as a result of the Participant’s death, Total Disability (as defined below) or Retirement (as defined below), the Participant’s Stock Units, to the extent such units are not then vested, shall become fully vested as of the Severance Date and shall be paid in accordance with Section 7.  If any unvested Stock Units are terminated hereunder, such Stock Units shall automatically terminate and be cancelled as of the applicable Severance Date without payment of any consideration by the Corporation and without any other action by the Participant, or the Participant’s beneficiary or personal representative, as the case may be.

For purposes of the Award, “Total Disability” means a “permanent and total disability” (within the meaning of Section 22(e)(3) of the Code or as otherwise determined by the Administrator).  For purposes of the Award, “Retirement” means the Participant (1) has attained age 65 and completed at least five (5) full years of service as an employee of the Corporation and its Subsidiaries and/or a member of the Board, or (2) has attained age 60 and completed at least fifteen (15) full years of service as an employee of the Corporation and its Subsidiaries and/or a member of the Board.

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9.Adjustments Upon Specified Events; Change in Control Event.

(a)Adjustments.  Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.1 of the Plan (including, without limitation, an extraordinary cash dividend on such stock), the Administrator shall make adjustments in accordance with such section in the number of Stock Units then outstanding and the number and kind of securities that may be issued in respect of the Award.  No such adjustment shall be made with respect to any ordinary cash dividend for which dividend equivalents are paid pursuant to Section 5(b).

(b)Change in Control Event.  Upon the occurrence of an event contemplated by Section 7.2 or 7.3 of the Plan and notwithstanding any provision of Section 7.2 or 7.3 of the Plan to the contrary, the Award (to the extent outstanding at the time of such event) shall continue in effect in accordance with its terms following such event (subject to adjustment in connection with such event pursuant to Section 7.1 of the Plan); provided, however, that the Administrator shall determine, in its sole discretion, whether the vesting of the Stock Units will accelerate in connection with such event and the extent of any such accelerated vesting; provided, further, that any Stock Units that are so accelerated will be paid on or as soon as administratively practical after (and in all events within sixty (60) days after) the first to occur of the original vesting date of such accelerated Stock Units set forth in Section 3 above or the Participant’s separation from service (and subject to the six-month delayed payment provision of Section 7 in the event payment is triggered by the Participant’s separation from service).  Notwithstanding the foregoing, the Administrator may provide for payment of the Stock Units in connection with such event to the extent such payment does not result in noncompliance with Section 409A of the Code, including providing for payment in accordance with the requirements of Treasury Regulation 1.409A-3(j)(4)(ix)(A), (B) or (C) promulgated under Section 409A of the Code (or any similar successor provision), which regulation generally provides that a deferred compensation arrangement may be terminated in limited circumstances following a dissolution or change in control of the Company, provided that any otherwise outstanding and unvested units shall become vested upon (or, to the extent necessary to effect the acceleration, immediately prior to) such a termination.

10.Tax Withholding.  Upon any vesting of the Stock Units or distribution of shares of Common Stock in respect of the Stock Units, the Participant or other person entitled to receive such distribution may irrevocably elect, in such manner and at such time or times prior to any applicable tax date as may be permitted or required under Section 8.5 of the Plan and rules established by the Administrator, to have the Corporation reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole shares, valued at their then fair market value to satisfy any withholding obligations of the Corporation or its Subsidiaries with respect to such distribution of shares at the minimum applicable withholding rates; provided, however, that in the event that the Corporation cannot legally satisfy such withholding obligations by such reduction of shares, or in the event of a cash payment or any other withholding event in respect of the Stock Units, the Corporation (or a Subsidiary) shall be entitled to require a cash payment by or on behalf of the Participant and/or to deduct from other compensation payable to the Participant any sums required by federal, state or local tax law to be withheld with respect to such distribution or payment.

11.Notices.  Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Participant at the Participant’s last address reflected on the Corporation’s payroll records.  Any notice shall be delivered in person or shall be enclosed in a properly sealed

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envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government.  Any such notice shall be given only when received, but if the Participant is no longer an Eligible Person, shall be deemed to have been duly given five (5) business days after the date mailed in accordance with the foregoing provisions of this Section 11.

12.Plan.  The Award and all rights of the Participant under this Agreement are subject to the terms and conditions of the provisions of the Plan, incorporated herein by reference, except as otherwise expressly provided in this Agreement.  The Participant agrees to be bound by the terms of the Plan and this Agreement.  The Participant acknowledges having read and understanding the Plan, the Prospectus for the Plan and this Agreement.  Unless otherwise expressly provided in other sections of this Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not (and shall not be deemed to) create any rights in the Participant unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.

13.Entire Agreement.  This Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof (including but not limited to the Term Sheet).  The Plan and this Agreement may be amended pursuant to Section 8.6 of the Plan.  Any such amendment must be in writing and signed by the Corporation.  Any such amendment that materially and adversely affects the Participant’s rights under this Agreement requires the consent of the Participant in order to be effective with respect to the Award.  The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Participant hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.  The Participant acknowledges receipt of a copy of this Agreement, the Plan and the Prospectus for the Plan.

14.Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Corporation as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  The Participant shall have only the rights of a general unsecured creditor of the Corporation with respect to amounts credited and benefits payable, if any, with respect to the Stock Units, and rights no greater than the right to receive the Common Stock as a general unsecured creditor with respect to the Stock Units, as and when payable hereunder.  The Award has been granted to the Participant in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to the Participant.

15.Counterparts   This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

16.Section Headings.  The section headings of this Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

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17.Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Maryland without regard to conflict of law principles thereunder.

18.Construction.  It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code.  This Agreement shall be construed and interpreted consistent with that intent.

19.Clawback Policy.  The Stock Units are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Stock Units or any shares of Common Stock or other cash or property received with respect to the Stock Units (including any value received from a disposition of the shares acquired upon payment of the Stock Units).

YOUR ACCEPTANCE OF THE AWARD THROUGH THE ELECTRONIC STOCK PLAN AWARD RECORDKEEPING SYSTEM MAINTAINED BY THE CORPORATION OR ITS DESIGNEE CONSTITUTES YOUR AGREEMENT TO THE TERMS AND CONDITIONS HEREOF, AND THAT THE AWARD IS GRANTED UNDER AND GOVERNED BY THE TERMS AND CONDITIONS OF THE PLAN AND THIS AGREEMENT.

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EX-10.9

EXHIBIT 10.9

HCP, INC.
2006 PERFORMANCE INCENTIVE PLAN
2013 RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS 2013 RESTRICTED STOCK UNIT AWARD AGREEMENT  (this “Agreement”) is dated as of October 31, 2013 (the “Award Date”) by and between HCP, Inc., a Maryland corporation (the “Corporation”), and James W. Mercer (the “Participant”).

W I T N E S S E T H

WHEREAS, pursuant to the HCP, Inc. 2006 Performance Incentive Plan, as amended and/or restated from time to time (the “Plan”), the Corporation hereby grants to the Participant, effective as of the date hereof, an award of restricted stock units under the Plan (the “Award”) with a fair value of One Million dollars ($1,000,000), based on the average of the stock price for the five trading days beginning October 31, 2013.

NOW THEREFORE, in consideration of services rendered and to be rendered by the Participant, and the mutual promises made herein and the mutual benefits to be derived therefrom, the parties agree as follows:

1.Defined Terms.  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Plan.

2.Grant.  Subject to the terms of this Agreement, the Corporation hereby grants to the Participant an Award with respect to that number of stock units equal to the quotient of (a) $1,000,000 divided by (b) the average of the stock price for the five trading days beginning October 31, 2013, rounded up to the nearest whole number that is evenly divisible by two (2) (subject to adjustment as provided in Section 7.1 of the Plan) (the “Stock Units”).  As used herein, the term “stock unit” means a non-voting unit of measurement which is deemed for bookkeeping purposes to be equivalent to one outstanding share of the Corporation’s Common Stock (subject to adjustment as provided in Section 7.1 of the Plan) solely for purposes of the Plan and this Agreement.  The Stock Units shall be used solely as a device for the determination of the payment to eventually be made to the Participant if such Stock Units vest pursuant to Section 3.  The Stock Units shall not be treated as property or as a trust fund of any kind.  The Award is subject to all of the terms and conditions set forth in this Agreement and is further subject to all of the terms and conditions of the Plan, as it may be amended from time to time, and any rules adopted by the Administrator, as such rules are in effect from time to time.

3.Vesting.  Subject to Section 8 below, the Award shall vest and become nonforfeitable with respect to 50% of the total number of the Stock Units (subject to adjustment under Section 7.1 of the Plan) on each of the first and second anniversaries of October 31, 2013.

4.Continuance of Employment.  The vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under this Agreement.  Employment or service for only a portion of the vesting period, even if a substantial portion, will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 8 below or under the Plan.

Nothing contained in this Agreement or the Plan constitutes an employment or service commitment by the Corporation, affects the Participant’s status as an employee at will who is subject to termination without cause, confers upon the Participant any right to remain employed by or in service to the Corporation or any of its Subsidiaries, interferes in any way with the right of the Corporation or any of its Subsidiaries at any time to terminate such employment or services, or affects the right of the Corporation or any of its Subsidiaries to increase or decrease the Participant’s other compensation or benefits.  Nothing in this paragraph, however, is intended to adversely affect any independent contractual right of the Participant without his or her consent thereto.

5.Dividend and Voting Rights.

(a)Limitations on Rights Associated with Units.  The Participant shall have no rights as a stockholder of the Corporation, no dividend rights (except as expressly provided in Section 5(b) with respect to Dividend Equivalent Rights) and no voting rights, with respect to the Stock Units and any shares of Common Stock underlying or issuable in respect of such Stock Units until such shares of Common Stock are actually issued to and held of record by the Participant.  No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of such shares.

(b)Dividend Equivalent Rights Distributions.   As of any date that the Corporation pays an ordinary cash dividend on its Common Stock, the Corporation shall pay the Participant an amount equal to the per share cash dividend paid by the Corporation on its Common Stock on such date multiplied by the number of Stock Units remaining subject to this Award as of the related dividend payment record date.  No such payment shall be made with respect to any Stock Units which, as of such record date, have either been paid pursuant to Section 7 or terminated pursuant to Section 8.

6.Restrictions on Transfer .  Neither the Award, nor any interest therein or amount or shares payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily.  The transfer restrictions in the preceding sentence shall not apply to (a) transfers to the Corporation, or (b) transfers by will or the laws of descent and distribution.

7.Timing and Manner of Payment of Stock Units.  On or as soon as administratively practical following each vesting of the applicable portion of the total Award pursuant to the terms hereof (and in all events within sixty (60) days after such vesting event), the Corporation shall deliver to the Participant a number of shares of Common Stock (either by delivering one or more certificates for such shares or by entering such shares in book entry form, as determined by the Corporation in its discretion) equal to the number of Stock Units subject to this Award that vest on the applicable vesting date; provided, however, that in the event that the vesting and payment of the Stock Units is triggered by the Participant’s “separation from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) and the Participant is a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the

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date of such separation from service, the Participant shall not be entitled to any payment of the Stock Units until the earlier of (i) the date which is six (6) months after the Participant’s separation from service with the Corporation for any reason other than death, or (ii) the date of the Participant’s death, if and to the extent such delay in payment is required to comply with Section 409A of the Code.  The Corporation’s obligation to deliver shares of Common Stock or otherwise make payment with respect to vested Stock Units is subject to the condition precedent that the Participant or other person entitled under the Plan to receive any shares with respect to the vested Stock Units deliver to the Corporation any representations or other documents or assurances that the Administrator may deem necessary or desirable to assure compliance with all applicable legal and accounting requirements.  The Participant shall have no further rights with respect to any Stock Units that are paid or that terminate pursuant to Section 8.

8.Effect of Termination of Employment or Services.  If the Participant ceases to be employed by or ceases to provide services to the Corporation or a Subsidiary (the date of such termination of employment or service is referred to as the Participant’s “Severance Date”), the Participant’s Stock Units shall terminate to the extent such units have not become vested pursuant to Section 3 hereof upon the Severance Date regardless of the reason for the termination of the Participant’s employment or services; provided, however, that (a) if the event Participant’s employment is terminated pursuant to Section 5(b) of Participant’s Employment Agreement with the Company, dated January 26, 2012, as amended, then, subject to the provisions of Section 5(b) thereof, the Award shall immediately vest and become non-forfeitable with respect to any then unvested Stock Units and shall be paid in accordance with Section 7 hereof; and (b) if the Participant’s employment is terminated as a result of the Participant’s death, Total Disability (as defined below) or Retirement (as defined below), the Participant’s Stock Units, to the extent such units are not then vested, shall become fully vested as of the Severance Date and shall be paid in accordance with Section 7.  If any unvested Stock Units are terminated hereunder, such Stock Units shall automatically terminate and be cancelled as of the applicable Severance Date without payment of any consideration by the Corporation and without any other action by the Participant, or the Participant’s beneficiary or personal representative, as the case may be.

For purposes of the Award, “Total Disability” means a “permanent and total disability” (within the meaning of Section 22(e)(3) of the Code or as otherwise determined by the Administrator).  For purposes of the Award, “Retirement” means the Participant (1) has attained age 65 and completed at least five (5) full years of service as an employee of the Corporation and its Subsidiaries and/or a member of the Board, or (2) has attained age 60 and completed at least fifteen (15) full years of service as an employee of the Corporation and its Subsidiaries and/or a member of the Board.

9.Adjustments Upon Specified Events; Change in Control Event.

(a)Adjustments.  Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 7.1 of the Plan (including, without limitation, an extraordinary cash dividend on such stock), the Administrator shall make adjustments in accordance with such section in the number of Stock Units then outstanding and the number and kind of securities that may be issued in respect of the Award.  No such adjustment shall be made with respect to any ordinary cash dividend for which dividend equivalents are paid pursuant to Section 5(b).

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(b)Change in Control Event.  Upon the occurrence of an event contemplated by Section 7.2 or 7.3 of the Plan and notwithstanding any provision of Section 7.2 or 7.3 of the Plan to the contrary, the Award (to the extent outstanding at the time of such event) shall continue in effect in accordance with its terms following such event (subject to adjustment in connection with such event pursuant to Section 7.1 of the Plan); provided, however, that the Administrator shall determine, in its sole discretion, whether the vesting of the Stock Units will accelerate in connection with such event and the extent of any such accelerated vesting; provided, further, that any Stock Units that are so accelerated will be paid on or as soon as administratively practical after (and in all events within sixty (60) days after) the first to occur of the original vesting date of such accelerated Stock Units set forth in Section 3 above or the Participant’s separation from service (and subject to the six-month delayed payment provision of Section 7 in the event payment is triggered by the Participant’s separation from service).  Notwithstanding the foregoing, the Administrator may provide for payment of the Stock Units in connection with such event to the extent such payment does not result in noncompliance with Section 409A of the Code, including providing for payment in accordance with the requirements of Treasury Regulation 1.409A-3(j)(4)(ix)(A), (B) or (C) promulgated under Section 409A of the Code (or any similar successor provision), which regulation generally provides that a deferred compensation arrangement may be terminated in limited circumstances following a dissolution or change in control of the Company, provided that any otherwise outstanding and unvested units shall become vested upon (or, to the extent necessary to effect the acceleration, immediately prior to) such a termination.

10.Tax Withholding.  Upon any vesting of the Stock Units or distribution of shares of Common Stock in respect of the Stock Units, the Participant or other person entitled to receive such distribution may irrevocably elect, in such manner and at such time or times prior to any applicable tax date as may be permitted or required under Section 8.5 of the Plan and rules established by the Administrator, to have the Corporation reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole shares, valued at their then fair market value to satisfy any withholding obligations of the Corporation or its Subsidiaries with respect to such distribution of shares at the minimum applicable withholding rates; provided, however, that in the event that the Corporation cannot legally satisfy such withholding obligations by such reduction of shares, or in the event of a cash payment or any other withholding event in respect of the Stock Units, the Corporation (or a Subsidiary) shall be entitled to require a cash payment by or on behalf of the Participant and/or to deduct from other compensation payable to the Participant any sums required by federal, state or local tax law to be withheld with respect to such distribution or payment.

11.Notices.  Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Participant at the Participant’s last address reflected on the Corporation’s payroll records.  Any notice shall be delivered in person or shall be enclosed in a properly sealed envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government.  Any such notice shall be given only when received, but if the Participant is no longer an Eligible Person, shall be deemed to have been duly given five (5) business days after the date mailed in accordance with the foregoing provisions of this Section 11.

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12.Plan.  The Award and all rights of the Participant under this Agreement are subject to the terms and conditions of the provisions of the Plan, incorporated herein by reference, except as otherwise expressly provided in this Agreement.  The Participant agrees to be bound by the terms of the Plan and this Agreement.  The Participant acknowledges having read and understanding the Plan, the Prospectus for the Plan and this Agreement.  Unless otherwise expressly provided in other sections of this Agreement, provisions of the Plan that confer discretionary authority on the Board or the Administrator do not (and shall not be deemed to) create any rights in the Participant unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Administrator so conferred by appropriate action of the Board or the Administrator under the Plan after the date hereof.

13.Entire Agreement.  This Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof.  The Plan and this Agreement may be amended pursuant to Section 8.6 of the Plan.  Any such amendment must be in writing and signed by the Corporation.  Any such amendment that materially and adversely affects the Participant’s rights under this Agreement requires the consent of the Participant in order to be effective with respect to the Award.  The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Participant hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.  The Participant acknowledges receipt of a copy of this Agreement, the Plan and the Prospectus for the Plan.

14.Limitation on Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Corporation as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  The Participant shall have only the rights of a general unsecured creditor of the Corporation with respect to amounts credited and benefits payable, if any, with respect to the Stock Units, and rights no greater than the right to receive the Common Stock as a general unsecured creditor with respect to the Stock Units, as and when payable hereunder.  The Award has been granted to the Participant in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to the Participant.

15.Counterparts   This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

16.Section Headings.  The section headings of this Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

17.Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Maryland without regard to conflict of law principles thereunder.

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18.Construction.  It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code.  This Agreement shall be construed and interpreted consistent with that intent.

19.Clawback Policy.  The Stock Units are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Stock Units or any shares of Common Stock or other cash or property received with respect to the Stock Units (including any value received from a disposition of the shares acquired upon payment of the Stock Units).

YOUR ACCEPTANCE OF THE AWARD THROUGH THE ELECTRONIC STOCK PLAN AWARD RECORDKEEPING SYSTEM MAINTAINED BY THE CORPORATION OR ITS DESIGNEE CONSTITUTES YOUR AGREEMENT TO THE TERMS AND CONDITIONS HEREOF, AND THAT THE AWARD IS GRANTED UNDER AND GOVERNED BY THE TERMS AND CONDITIONS OF THE PLAN AND THIS AGREEMENT.

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Lauralee E. Martin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of HCP, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2013	/s/ LAURALEE E. MARTIN
	Lauralee E. Martin
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Timothy M. Schoen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of HCP, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 4, 2013	/s/ TIMOTHY M. SCHOEN
	Timothy M. Schoen
	Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of HCP, Inc., a Maryland corporation (the “Company”), hereby certifies, to his knowledge, that:

(i) the accompanying quarterly report on Form 10-Q of the Company for the period ended September 30, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 4, 2013	/s/ LAURALEE E. MARTIN
	Lauralee E. Martin
	President and Chief Executive Officer
	(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to HCP, Inc. and will be retained by HCP, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of HCP, Inc., a Maryland corporation (the “Company”), hereby certifies, to his knowledge, that:

(i) the accompanying quarterly report on Form 10-Q of the Company for the period ended September 30, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 4, 2013	/s/ TIMOTHY M. SCHOEN
	Timothy M. Schoen
	Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to HCP, Inc. and will be retained by HCP, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates it by reference.

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Other Assets

9 Months Ended

Sep. 30, 2013

Other Assets.

Other Assets

(9) Other Assets

The Company’s other assets consisted of the following (in thousands):

	September 30,		December 31,
	2013		2012
Straight-line rent assets, net of allowance of $34,123 and $33,521, respectively	$	358,514	$	306,294
Marketable debt securities, net(1)	238,834		222,809
Leasing costs, net	98,406		93,763
Deferred financing costs, net	37,379		45,490
Goodwill	50,346		50,346
Marketable equity securities	—		24,829
Other(2)	52,518		44,989
Total other assets	$	835,997	$	788,520

(1) Includes £137 million ($222 million and $223 million at September 30, 2013 and December 31, 2012, respectively) of Four Seasons senior unsecured notes translated into U.S. dollars (see below for additional information).

(2) Includes a $5.4 million allowance for losses related to accrued interest receivable on the Delphis loan, which accrued interest is included in other assets. At both September 30, 2013 and December 31, 2012, the carrying value of interest accrued related to the Delphis loan was zero. See Note 6 for additional information about the Delphis loan and the related impairment. At both September 30, 2013 and December 31, 2012, includes a loan receivable of $10 million from HCP Ventures IV, LLC, an unconsolidated joint venture (see Note 7 for additional information) with an interest rate of 12% which matures in May 2014. The loan is secured by HCP’s joint venture partner’s 80% partnership interest in the joint venture.

During the nine months ended September 30, 2013, the Company realized gains from the sale of marketable equity securities of $11 million, which were included in other income, net. At December 31, 2012, the fair value and adjusted cost basis of the marketable equity securities were $24.8 million and $17.1 million, respectively. The marketable equity securities were classified as available-for-sale.

Four Seasons Health Care Senior Unsecured Notes

On June 28, 2012, the Company purchased senior unsecured notes with an aggregate par value of £138.5 million at a discount for £136.8 million ($214.9 million). The notes were issued by Elli Investments Limited, a subsidiary of Terra Firma, a European private equity firm, as part of its financing for the acquisition of Four Seasons Health Care (“Four Seasons”), an elderly and specialist care provider in the United Kingdom. The notes mature in June 2020 and are non-callable through June 2016. The notes bear interest on their par value at a fixed rate of 12.25% per annum, with an original issue discount resulting in a yield to maturity of 12.5%. This investment was financed by a GBP denominated unsecured term loan that is discussed in Note 10. These senior unsecured notes are accounted for as marketable debt securities and classified as held-to-maturity.

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Investments in and Advances to Unconsolidated Joint Ventures (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Company owned interests in entities, accounted under equity method:
Investments in and advances to unconsolidated joint ventures	$ 206,004,000		$ 206,004,000		$ 212,213,000
Investment reported in liabilities	(1,126,000)		(1,126,000)
Summarized combined financial information for unconsolidated joint ventures:
Real estate, net	3,676,367,000		3,676,367,000		3,731,740,000
Goodwill and other assets, net	5,802,930,000		5,802,930,000		5,734,318,000
Total assets	9,479,297,000		9,479,297,000		9,466,058,000
Capital lease obligations and mortgage debt	6,782,574,000		6,782,574,000		6,875,932,000
Accounts payable	1,060,153,000		1,060,153,000		971,095,000
Other partners' capital	1,452,308,000		1,452,308,000		1,435,885,000
HCP's capital	184,262,000		184,262,000		183,146,000
Total liabilities and partners' capital	9,479,297,000		9,479,297,000		9,466,058,000
Combined basis difference	20,000,000		20,000,000
Total revenues	1,055,889,000	1,057,567,000	3,208,752,000	3,196,086,000
Net income (loss)	1,739,000	(8,851,000)	22,232,000	8,416,000
HCP's share in earnings	13,892,000	13,396,000	44,278,000	42,803,000
Fees earned by HCP	464,000	460,000	1,406,000	1,423,000
Distributions received by HCP	1,390,000	1,419,000	3,918,000	4,826,000
HCR ManorCare | Operating segment | Post-acute/skilled
Company owned interests in entities, accounted under equity method:
Investments in and advances to unconsolidated joint ventures	85,777,000		85,777,000
Investment ownership percentage	9.50%		9.50%
Reduction in DFL income	15,400,000	14,900,000	46,600,000	44,400,000
HCP Ventures III, LLC | Operating segment | Medical office
Company owned interests in entities, accounted under equity method:
Number of properties	13		13
Investments in and advances to unconsolidated joint ventures	7,251,000		7,251,000
Investment ownership percentage	30.00%		30.00%
HCP Ventures IV, LLC | Operating segment | Hospital and medical office segments
Company owned interests in entities, accounted under equity method:
Investments in and advances to unconsolidated joint ventures	30,420,000		30,420,000
Investment ownership percentage	20.00%		20.00%
HCP Ventures IV, LLC | Operating segment | Medical office
Company owned interests in entities, accounted under equity method:
Number of properties	54		54
HCP Ventures IV, LLC | Operating segment | Hospital
Company owned interests in entities, accounted under equity method:
Number of properties	4		4
HCP Life Science | Operating segment | Life science
Company owned interests in entities, accounted under equity method:
Number of properties	4		4
Investments in and advances to unconsolidated joint ventures	68,992,000		68,992,000
Number of unconsolidated joint ventures			3
HCP Life Science | Operating segment | Life science | Minimum
Company owned interests in entities, accounted under equity method:
Investment ownership percentage	50.00%		50.00%
HCP Life Science | Operating segment | Life science | Maximum
Company owned interests in entities, accounted under equity method:
Investment ownership percentage	63.00%		63.00%
Torrey Pines Science Center, LP | Operating segment | Life science
Company owned interests in entities, accounted under equity method:
Investment ownership percentage	50.00%		50.00%
Britannia Biotech Gateway, LP | Operating segment | Life science
Company owned interests in entities, accounted under equity method:
Investment ownership percentage	55.00%		55.00%
LASDK, LP | Operating segment | Life science
Company owned interests in entities, accounted under equity method:
Investment ownership percentage	63.00%		63.00%
Horizon Bay Hyde Park, LLC | Operating segment | Senior housing
Company owned interests in entities, accounted under equity method:
Number of properties	1		1
Investments in and advances to unconsolidated joint ventures	6,725,000		6,725,000
Investment ownership percentage	72.00%		72.00%
Suburban Properties, LLC | Operating segment | Medical office
Company owned interests in entities, accounted under equity method:
Number of properties	1		1
Investments in and advances to unconsolidated joint ventures	6,666,000		6,666,000
Investment ownership percentage	67.00%		67.00%
Advances to unconsolidated joint ventures, net
Company owned interests in entities, accounted under equity method:
Investments in and advances to unconsolidated joint ventures	173,000		173,000
Edgewood Assisted Living Center, LLC | Operating segment | Senior housing
Company owned interests in entities, accounted under equity method:
Number of properties	1		1
Investment reported in liabilities	(429,000)		(429,000)
Investment ownership percentage	45.00%		45.00%
Seminole Shores Living Center, LLC | Operating segment | Senior housing
Company owned interests in entities, accounted under equity method:
Number of properties	1		1
Investment reported in liabilities	$ (697,000)		$ (697,000)
Investment ownership percentage	50.00%		50.00%

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Revenues:
Rental and related revenues	$ 280,588	$ 241,993	$ 833,461	$ 714,438
Tenant recoveries	25,986	23,425	75,335	69,656
Resident fees and services	37,589	36,076	112,070	107,824
Income from direct financing leases	157,253	155,834	472,409	465,345
Interest income	42,078	10,278	68,611	12,313
Investment management fee income	464	460	1,406	1,423
Total revenues	543,958	468,066	1,563,292	1,370,999
Costs and expenses:
Interest expense	108,088	103,355	326,094	309,399
Depreciation and amortization	104,859	87,170	317,430	254,463
Operating	76,569	72,653	224,982	210,034
General and administrative	45,423	19,415	90,080	54,299
Impairments		7,878		7,878
Total costs and expenses	334,939	290,471	958,586	836,073
Other income, net	1,584	770	16,887	2,232
Income before income taxes and equity income from unconsolidated joint ventures	210,603	178,365	621,593	537,158
Income taxes	(1,033)	602	(3,563)	1,145
Equity income from unconsolidated joint ventures	13,892	13,396	44,278	42,803
Income from continuing operations	223,462	192,363	662,308	581,106
Discontinued operations:
Income before gain on sales of real estate	5,098	6,680	15,874	16,620
Gain on sales of real estate	8,298		9,185	2,856
Total discontinued operations	13,396	6,680	25,059	19,476
Net income	236,858	199,043	687,367	600,582
Noncontrolling interests' share in earnings	(3,102)	(2,935)	(9,625)	(9,070)
Net income attributable to HCP, Inc.	233,756	196,108	677,742	591,512
Preferred stock dividends				(17,006)
Participating securities' share in earnings	(474)	(479)	(1,330)	(2,154)
Net income applicable to common shares	$ 233,282	$ 195,629	$ 676,412	$ 572,352
Basic earnings per common share:
Continuing operations (in dollars per share)	$ 0.48	$ 0.44	$ 1.43	$ 1.32
Discontinued operations (in dollars per share)	$ 0.03	$ 0.02	$ 0.06	$ 0.04
Net income applicable to common shares (in dollars per share)	$ 0.51	$ 0.46	$ 1.49	$ 1.36
Diluted earnings per common share:
Continuing operations (in dollars per share)	$ 0.48	$ 0.44	$ 1.43	$ 1.32
Discontinued operations (in dollars per share)	$ 0.03	$ 0.01	$ 0.06	$ 0.04
Net income applicable to common shares (in dollars per share)	$ 0.51	$ 0.45	$ 1.49	$ 1.36
Weighted average shares used to calculate earnings per common share:
Basic (in shares)	455,345	429,557	454,553	420,049
Diluted (in shares)	456,078	430,778	455,388	421,404
Dividends declared per common share (in dollars per share)	$ 0.525	$ 0.50	$ 1.575	$ 1.50

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(2) Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Management is required to make estimates and assumptions in the preparation of financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management’s estimates.

The condensed consolidated financial statements include the accounts of HCP, Inc., its wholly-owned subsidiaries and joint ventures or variable interest entities (“VIEs”) that it controls through voting rights or other means. Intercompany transactions and balances have been eliminated upon consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been included. Operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The accompanying unaudited interim financial information should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2012 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”).

Certain amounts in the Company’s condensed consolidated financial statements have been reclassified for prior periods to conform to the current period presentation. Assets sold or held for sale and associated liabilities have been reclassified on the condensed consolidated balance sheets and the related operating results reclassified from continuing to discontinued operations on the condensed consolidated statements of income (see Note 4).

Acquisition Costs

Transaction costs related to acquisitions of businesses, including properties, are expensed as incurred.

Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2013-10, Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes (a consensus of the FASB Emerging Issues Task Force) (“ASU 2013-10”). This update permits the Fed Funds Effective Swap Rate (“OIS”) to be used as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to the interest rates on direct Treasury obligations of the U.S. government (“UST”) and the London Interbank Offered Rate (“LIBOR”). The amendments are effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The adoption of ASU 2013-10 on July 17, 2013 did not have a material impact on the Company’s consolidated financial position or results of operations.

In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). This update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The adoption of ASU 2013-02 on January 1, 2013 did not have a material impact on the Company’s consolidated financial position or results of operations.

In July 2012, the FASB issued Accounting Standards Update No. 2012-01, Continuing Care Retirement Communities—Refundable Advance Fees (“ASU 2012-01”). This update clarifies the situations in which recognition of deferred revenue for refundable advance fees is appropriate. The adoption of ASU 2012-01 on January 1, 2013 did not have a material impact on the Company’s consolidated financial position or results of operations.

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Variable Interest Entities

9 Months Ended

Sep. 30, 2013

Variable Interest Entities

Variable Interest Entities

(16) Variable Interest Entities

Unconsolidated Variable Interest Entities

At September 30, 2013, the Company leased 48 properties to a total of seven VIE tenants and has additional investments in a loan and marketable debt securities to VIE borrowers. The Company has determined that it is not the primary beneficiary of these VIEs.

The Company holds an interest-only, senior secured term loan made to a borrower (Delphis Operations, L.P.) that has been identified as a VIE (see Note 6 for additional information on the Delphis loan). The Company does not consolidate the VIE because it does not have the ability to control the activities that most significantly impact the VIE’s economic performance. The loan is collateralized by all of the assets of the borrower (comprised primarily of interests in partnerships that operate surgical facilities, of which one partnership is a tenant of the Company).

The Company holds commercial mortgage-backed securities (“CMBS”) issued by Federal Home Loan Mortgage Corporation (“Freddie MAC”) through a special purpose entity that has been identified as a VIE. The Company does not consolidate the VIE because it does not have the ability to control the activities that most significantly impact the VIE’s economic performance. The CMBS issued by the VIE are backed by mortgages on senior housing facilities.

The carrying value and classification of the related assets, liabilities and maximum exposure to loss as a result of the Company’s involvement with these VIEs are presented below at September 30, 2013 (in thousands):

VIE Type	Maximum Loss Exposure(1)		Asset/Liability Type	Carrying Amount
VIE tenants—operating leases	$	262,598	Lease intangibles, net and straight-line rent receivables	$	14,526
VIE tenants—DFLs	1,091,935		Net investment in DFLs	602,366
Loan—senior secured	29,151		Loans receivable, net	29,151
Debt investment	16,984		Marketable debt securities	16,984

(1) The Company’s maximum loss exposure related to the VIE tenants represents the future minimum lease payments over the remaining term of the respective leases, which may be mitigated by re-leasing the properties to new tenants. The Company’s maximum loss exposure related to its loans and marketable debt securities to the VIE borrowers represents its current aggregate carrying amount.

As of September 30, 2013, the Company has not provided, and is not required to provide, financial support through a liquidity arrangement or otherwise, to its unconsolidated VIEs, including circumstances in which it could be exposed to further losses (e.g., cash shortfalls). See Notes 5 and 6 for additional descriptions of the nature, purpose and activities of the Company’s unconsolidated VIEs and interests therein.

Consolidated Variable Interest Entities

In September 2013, the Company made loans to two entities that entered into a tax credit structure (“Tax Credit Subsidiaries”). The Company consolidates the Tax Credit Subsidiaries because they are VIEs and the Company is the primary beneficiary of these VIEs. The assets and liabilities of the Tax Credit Subsidiaries substantially consist of notes receivable, prepaid expenses, notes payable and accounts payable and accrued liabilities generated from their operating activities. Assets generated by the operating activities of the Tax Credit Subsidiaries may only be used to settle their contractual obligations.

In September 2011, the Company formed a partnership in which it has a 90% ownership interest in a joint venture entity that owns and operates 21 properties in a RIDEA structure (“RIDEA Entity”). The Company consolidated the RIDEA Entity as a result of the rights it acquired through the joint venture agreement with Brookdale. In the fourth quarter of 2012, upon the occurrence of a reconsideration event, it was determined that this RIDEA Entity was a VIE and that the Company was the primary beneficiary of the VIE; therefore, the Company continued to consolidate this entity. During the second quarter of 2013, upon the occurrence of a reconsideration event, it was determined that this RIDEA Entity was no longer a VIE; however, the Company continues to consolidate the RIDEA Entity. The assets and liabilities of this RIDEA Entity substantially consist of cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities generated from its operating activities. The assets generated by the operating activities of the RIDEA Entity may be used to settle its contractual obligations, which include lease obligations to the Company. The Company is entitled to its ownership share of the RIDEA Entity’s assets; however, it does not guarantee its liabilities (or contractual obligations) and is not liable to its general creditors.

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Derivative Financial Instruments (Details)	3 Months Ended		9 Months Ended							9 Months Ended
	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)	Sep. 30, 2013 Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges Reclassification out of Accumulated Other Comprehensive Income USD ($)	Sep. 30, 2013 Interest rate swap, entered in July 2005, maturity in July 2020 Cash flow hedge USD ($) item	Sep. 30, 2013 Interest rate swap, entered in November 2008, maturity in October 2016 Cash flow hedge USD ($)	Sep. 30, 2013 Interest rate swap, entered in July 2012, maturity in June 2016 Cash flow hedge USD ($)	Sep. 30, 2013 Interest rate swap, entered in July 2012, maturity in June 2016 Cash flow hedge GBP (£)	Sep. 30, 2013 Foreign currency swap, entered in July 2012, maturity in June 2016 Cash flow hedge USD ($) item	Sep. 30, 2013 Foreign currency swap, entered in July 2012, maturity in June 2016 Cash flow hedge GBP (£)
Derivative
Fixed Rate/Buy Amount (as a percent)						3.82%	5.95%	1.81%
Floating/Exchange Rate Index						BMA Swap Index	1 Month LIBOR	1 Month GBP LIBOR
Floating/Exchange Rate Index, percentage							1.50%	1.20%
Buy (sell) amount										$ 68,200,000
Notional amount						45,600,000	26,600,000		137,000,000		43,500,000
Semi-annual buy (sell) amount										11,400,000	(7,200,000)
Fair value of hedge, liabilities						(6,319,000)	(2,964,000)
Fair value of hedge, liabilities										(1,897,000)
Number of interest-rate swap contracts						3
Exchange rate USD/GBP										1.5695
Number of foreign exchange contracts										6
Fair value of hedge, assets								1,564,000
Gain (loss) on cash flow hedge, ineffective portion								0		0
Gains or losses recorded to accumulated other comprehensive loss reclassified to earnings	236,858,000	199,043,000	687,367,000	600,582,000	0
Effects of Change in Interest Rates
+50 Basis Points						1,442,000	404,000	3,038,000		(580,000)
-50 Basis Points						(1,455,000)	(379,000)	(2,902,000)		123,000
+100 Basis Points						2,890,000	796,000	6,008,000		(932,000)
-100 Basis Points						$ (2,904,000)	$ (770,000)	$ (5,872,000)		$ 475,000

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Debt (Details)				9 Months Ended	0 Months Ended			0 Months Ended	9 Months Ended			0 Months Ended					9 Months Ended
	Sep. 30, 2013 USD ($)	Dec. 31, 2012 USD ($)	Sep. 30, 2013 Line of Credit and Term Loan USD ($)	Sep. 30, 2013 Bank Line of Credit USD ($)	Jul. 30, 2012 2012 Term Loan GBP (£)	Sep. 30, 2013 2012 Term Loan USD ($)	Sep. 30, 2013 2012 Term Loan GBP (£)	Jul. 30, 2012 2012 Term Loan Interest-rate swap contracts	Sep. 30, 2013 Senior Unsecured Notes USD ($)	Sep. 30, 2013 Senior Unsecured Notes Minimum	Sep. 30, 2013 Senior Unsecured Notes Maximum	Jun. 25, 2012 Senior Unsecured, 6.45% notes due 2012 USD ($)	Jan. 23, 2012 Senior Unsecured, 3.75% notes due 2019 USD ($)	Jul. 23, 2012 Senior Unsecured, 3.15% notes due 2022 USD ($)	Nov. 19, 2012 Senior Unsecured, 2.625% notes due 2020 USD ($)	Feb. 28, 2013 Senior Unsecured, 5.625% USD ($)	Sep. 30, 2013 Mortgage Debt USD ($) item	Sep. 30, 2013 Mortgage Debt Minimum	Sep. 30, 2013 Mortgage Debt Maximum	Sep. 30, 2013 Other Debt USD ($) item
Debt Instrument
Line of credit facility, maximum borrowing capacity				$ 1,500,000,000
Length of debt instrument extension period				1 year	1 year
Debt instrument, variable rate basis				LIBOR	GBP LIBOR
Debt instrument, basis spread on variable rate (as a percent)				1.075%	1.20%
Debt instrument, facility fee (as a percent)				0.175%
Line of credit facility additional aggregate amount, maximum				500,000,000
Line of credit facility, amount outstanding				285,000,000
Debt instrument, covenant debt to assets (as a percent)			60.00%
Debt instrument, covenant secured debt to assets (as a percent)			30.00%
Debt instrument, covenant unsecured debt to unencumbered assets (as a percent)			60.00%
Debt instrument, covenant minimum fixed charge coverage ratio			1.5
Debt instrument, covenant net worth			9,200,000,000
Debt instrument, effective interest rate (as a percent)													3.80%	3.30%	2.70%
Weighted-average interest rate (as a percent)									5.10%								6.16%
Weighted-average maturity									5 years								4 years
Issuance of senior unsecured notes													450,000,000	300,000,000	800,000,000
Debt issuance price as a percentage of principal amount													99.50%	98.90%	99.70%
Net proceeds from issuance of senior unsecured notes													444,000,000	294,000,000	793,000,000
Repayment of senior unsecured notes												250,000,000				150,000,000
Stated interest rate (as a percent)										1.22%	6.98%	6.45%	3.75%	3.15%	2.625%	5.625%		0.69%	8.69%
2013 (Three months)	414,003,000								400,000,000								14,003,000
2014	667,042,000								487,000,000								180,042,000
2015	708,421,000								400,000,000								308,421,000
2016	1,698,486,000			285,000,000		221,748,000			900,000,000								291,738,000
2017	1,300,477,000								750,000,000								550,477,000
Thereafter	3,721,825,000								3,650,000,000								71,825,000
Debt instrument principal outstanding, total	8,510,254,000			285,000,000		221,748,000			6,587,000,000								1,416,506,000
(Discounts) and premiums, net	(27,165,000)								(21,066,000)								(6,099,000)
Debt instruments, carrying amount	8,483,089,000			285,000,000	137,000,000	222,000,000	137,000,000		6,565,934,000								1,410,407,000
Maturity period of debt instruments					4 years
Term of the interest rate swap agreement								4 years
Debt instrument, fixed interest rate (as a percent)								1.81%
Number of healthcare facilities used to secure debt																	132
Debt instrument, collateral, healthcare facilities carrying value																	2,000,000,000
Portion of other debt and occupancy fee deposits excluded from schedule of debt maturities	$ 77,503,000	$ 81,958,000																		$ 78,000,000
Number of continuing care retirement communities issuing life care bonds																				2
Non-interest bearing occupancy fee deposits																				2

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Debt

9 Months Ended

Sep. 30, 2013

Debt

Debt

(10) Debt

Bank Line of Credit and Term Loan

The Company’s $1.5 billion unsecured revolving line of credit facility (the “Facility”) matures in March 2016 and contains a one-year extension option. Borrowings under the Facility accrue interest at LIBOR plus a margin that depends on the Company’s debt ratings. The Company pays a facility fee on the entire revolving commitment that depends upon its debt ratings. Based on the Company’s debt ratings at September 30, 2013, the margin on the Facility was 1.075%, and the facility fee was 0.175%. The Facility also includes a feature that will allow the Company to increase the borrowing capacity by an aggregate amount of up to $500 million, subject to securing additional commitments from existing lenders or new lending institutions. At September 30, 2013, the Company had $285 million outstanding under the Facility.

On July 30, 2012, the Company entered into a credit agreement with a syndicate of banks for a £137 million ($222 million at September 30, 2013) four-year unsecured term loan (the “Term Loan”) that accrues interest at a rate of GBP LIBOR plus 1.20%, based on the Company’s current debt ratings. Concurrent with the closing of the Term Loan, the Company entered into a four-year interest rate swap contract that fixes the interest rate of the Term Loan at 1.81%, subject to adjustments based on the Company’s debt ratings. The Term Loan contains a one-year committed extension option.

The Facility and Term Loan contain certain financial restrictions and other customary requirements, including cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the agreements, (i) limit the ratio of Consolidated Total Indebtedness to Consolidated Total Asset Value to 60%, (ii) limit the ratio of Secured Debt to Consolidated Total Asset Value to 30%, (iii) limit the ratio of Unsecured Debt to Consolidated Unencumbered Asset Value to 60%, (iv) require a minimum Fixed Charge Coverage ratio of 1.5 times and (v) require a formula-determined Minimum Consolidated Tangible Net Worth of $9.2 billion at September 30, 2013. At September 30, 2013, the Company was in compliance with each of these restrictions and requirements of the Facility and Term Loan.

Senior Unsecured Notes

At September 30, 2013, the Company had senior unsecured notes outstanding with an aggregate principal balance of $6.6 billion. At September 30, 2013, interest rates on the notes ranged from 1.22% to 6.98% with a weighted average effective interest rate of 5.10% and a weighted average maturity of five years. Discounts and premiums are amortized to interest expense over the term of the related senior unsecured notes. The senior unsecured notes contain certain covenants including limitations on debt, maintenance of unencumbered assets, cross-acceleration provisions and other customary terms. The Company believes it was in compliance with these covenants at September 30, 2013.

On February 28, 2013, the Company repaid $150 million of maturing 5.625% senior unsecured notes.

On November 19, 2012, the Company issued $800 million of 2.625% senior unsecured notes due in 2020. The notes were priced at 99.7% of the principal amount with an effective yield to maturity of 2.7%; net proceeds from this offering were $793 million.

On July 23, 2012, the Company issued $300 million of 3.15% senior unsecured notes due in 2022. The notes were priced at 98.9% of the principal amount with an effective yield to maturity of 3.3%; net proceeds from the offering were $294 million.

On June 25, 2012, the Company repaid $250 million of maturing 6.45% senior unsecured notes. The notes were repaid with proceeds from the Company’s June 2012 common stock offering.

On January 23, 2012, the Company issued $450 million of 3.75% senior unsecured notes due in 2019. The notes were priced at 99.5% of the principal amount with an effective yield to maturity of 3.8%; net proceeds from the offering were $444 million.

Mortgage Debt

At September 30, 2013, the Company had $1.4 billion in aggregate principal amount of mortgage debt outstanding secured by 132 healthcare facilities (including redevelopment properties) with a carrying value of $2.0 billion. At September 30, 2013, interest rates on the mortgage debt ranged from 0.69% to 8.69% with a weighted average effective interest rate of 6.16% and a weighted average maturity of four years.

Mortgage debt generally requires monthly principal and interest payments, is collateralized by real estate assets and is generally non-recourse. Mortgage debt typically restricts transfer of the encumbered assets, prohibits additional liens, restricts prepayment, requires payment of real estate taxes, requires maintenance of the assets in good condition, requires maintenance of insurance on the assets and includes conditions to obtain lender consent to enter into or terminate material leases. Some of the mortgage debt is also cross-collateralized by multiple assets and may require tenants or operators to maintain compliance with the applicable leases or operating agreements of such real estate assets.

Other Debt

At September 30, 2013, the Company had $78 million of non-interest bearing life care bonds at two of its continuing care retirement communities and non-interest bearing occupancy fee deposits at two of its senior housing facilities, all of which were payable to certain residents of the facilities (collectively, “Life Care Bonds”). The Life Care Bonds are generally refundable to the residents upon the termination of the contract or upon the successful resale of the unit.

Debt Maturities

The following table summarizes the Company’s stated debt maturities and scheduled principal repayments at September 30, 2013 (in thousands):

Year	Line of Credit		Term Loan(1)		Senior Unsecured Notes			Mortgage Debt			Total(2)
2013 (Three months)	$	—	$	—	$	400,000		$	14,003		$	414,003
2014	—		—		487,000			180,042			667,042
2015	—		—		400,000			308,421			708,421
2016	285,000		221,748		900,000			291,738			1,698,486
2017	—		—		750,000			550,477			1,300,477
Thereafter	—		—		3,650,000			71,825			3,721,825
	285,000		221,748		6,587,000			1,416,506			8,510,254
(Discounts) and premiums, net	—		—		(21,066		)	(6,099		)	(27,165		)
	$	285,000	$	221,748	$	6,565,934		$	1,410,407		$	8,483,089

(1) Represents £137 million translated into U.S. dollars.

(2) Excludes $78 million of other debt that represents Life Care Bonds that have no scheduled maturities.

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Real Estate Property Investments (Details) (Operating segment, USD $)	9 Months Ended			3 Months Ended			6 Months Ended	9 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2013 Senior housing	Sep. 30, 2012 Senior housing	Mar. 31, 2013 Blackstone JV Senior housing item	Dec. 31, 2012 Blackstone JV Senior housing item	Sep. 30, 2012 Blackstone JV Senior housing	Mar. 31, 2013 Blackstone JV Senior housing item	Sep. 30, 2012 Blackstone JV Senior housing	Mar. 31, 2013 Blackstone JV Senior housing Emeritus Corporation item	Dec. 31, 2012 Blackstone JV Senior housing Emeritus Corporation Real Estate Secured item	Mar. 31, 2013 Blackstone JV Senior housing Minimum Emeritus Corporation	Mar. 31, 2013 Blackstone JV Senior housing Maximum Emeritus Corporation
Acquisition
Acquisition of facility		$ 18,000,000		$ 38,000,000	$ 1,700,000,000
Consideration, Cash Paid	172,380,000		3,860,000	1,730,000,000
Assets Acquired, Real Estate	184,564,000		3,541,000	1,570,000,000			1,570,000,000
Assets Acquired, Net Intangibles	50,368,000		319,000	174,000,000			174,000,000
Number of senior housing communities				4	129		133			9
Number of individual leases									5
Number of properties operated pursuant to a new triple-net master lease									128
Number of states where acquired senior housing communities are located				29			29
Percentage of assisted living units							61.00%
Percentage of independent living units							25.00%
Percentage of memory care units							13.00%
Percentage of skilled nursing							1.00%
Number of communities that are stabilized				99			99
Number of communities currently lease-up				34			34		34
Number of stages for acquisition to close							2
Liabilities assumed	35,120,000			13,000,000			13,000,000
Consideration, assumed intangible liabilities				4,000,000			4,000,000
Rental and related revenues									105,800,000
Rate of increase in minimum lease revenue per year on average over the initial 5 years of the lease (as a percent)									3.70%
Initial lease term with Emeritus Corporation									5 years
Rate of increase in minimum lease revenue per year for remaining years of lease term (as a percent)									3.00%
Percentage of operating leases basis spread on variable floor rate									103.00%
Percentage of operating leases basis spread on variable cap rate									130.00%
Number of asset pools									3
Initial available term of asset pools											14 years	16 years
Number of extension options with Emeritus Corporation									2
Total initial available term of asset pools											30 years	35 years
Principal amount of secured debt										52,000,000
Term of loan										4 years
Interest rate on debt, initially (as a percent)										6.10%
Interest rate on debt after four year term (as a percent)										6.80%
Unaudited pro forma consolidated results of operations
Revenues						494,516,000		1,450,349,000
Net income						206,448,000		622,797,000
Net income applicable to HCP, Inc.						$ 203,513,000		$ 613,727,000
Basic earnings per common share (in dollars per share)						$ 0.45		$ 1.35
Diluted earnings per common share (in dollars per share)						$ 0.45		$ 1.34

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Commitments and Contingencies (Details) (USD $)	3 Months Ended			9 Months Ended						3 Months Ended		9 Months Ended					3 Months Ended		9 Months Ended			9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012	Dec. 31, 2012		Dec. 31, 2011	Sep. 30, 2013 HCR ManorCare	Sep. 30, 2012 HCR ManorCare	Sep. 30, 2013 HCR ManorCare	Sep. 30, 2012 HCR ManorCare	Dec. 31, 2012 HCR ManorCare	Sep. 30, 2013 Operating segment	Dec. 31, 2012 Operating segment	Sep. 30, 2013 Operating segment Senior housing Brookdale Senior Living item	Sep. 30, 2012 Operating segment Senior housing Brookdale Senior Living	Sep. 30, 2013 Operating segment Senior housing Brookdale Senior Living item	Sep. 30, 2012 Operating segment Senior housing Brookdale Senior Living	Dec. 31, 2012 Operating segment Senior housing Brookdale Senior Living item	Sep. 30, 2013 Total Assets Operators Emeritus	Dec. 31, 2012 Total Assets Operators Emeritus	Sep. 30, 2013 Total Assets Operators Sunrise Senior Living	Dec. 31, 2012 Total Assets Operators Sunrise Senior Living	Sep. 30, 2013 Total Assets Operators HCR ManorCare	Dec. 31, 2012 Total Assets Operators HCR ManorCare	Sep. 30, 2013 Total Assets Operators Brookdale Senior Living	Dec. 31, 2012 Total Assets Operators Brookdale Senior Living	Sep. 30, 2013 Total Assets Operators Operating segment Senior housing Emeritus	Dec. 31, 2012 Total Assets Operators Operating segment Senior housing Emeritus	Sep. 30, 2013 Total Assets Operators Operating segment Senior housing Sunrise Senior Living	Dec. 31, 2012 Total Assets Operators Operating segment Senior housing Sunrise Senior Living	Sep. 30, 2013 Total Assets Operators Operating segment Senior housing HCR ManorCare	Dec. 31, 2012 Total Assets Operators Operating segment Senior housing HCR ManorCare	Sep. 30, 2013 Total Assets Operators Operating segment Senior housing Brookdale Senior Living	Dec. 31, 2012 Total Assets Operators Operating segment Senior housing Brookdale Senior Living	Sep. 30, 2013 Total Assets Operators Operating segment Post-acute/skilled HCR ManorCare	Dec. 31, 2012 Total Assets Operators Operating segment Post-acute/skilled HCR ManorCare	Sep. 30, 2013 Revenue Operators Emeritus	Sep. 30, 2012 Revenue Operators Emeritus	Sep. 30, 2013 Revenue Operators Emeritus	Sep. 30, 2012 Revenue Operators Emeritus	Sep. 30, 2013 Revenue Operators Sunrise Senior Living	Sep. 30, 2012 Revenue Operators Sunrise Senior Living	Sep. 30, 2013 Revenue Operators Sunrise Senior Living	Sep. 30, 2012 Revenue Operators Sunrise Senior Living	Sep. 30, 2013 Revenue Operators HCR ManorCare	Sep. 30, 2012 Revenue Operators HCR ManorCare	Sep. 30, 2013 Revenue Operators HCR ManorCare	Sep. 30, 2012 Revenue Operators HCR ManorCare	Sep. 30, 2013 Revenue Operators Brookdale Senior Living	Sep. 30, 2012 Revenue Operators Brookdale Senior Living	Sep. 30, 2013 Revenue Operators Brookdale Senior Living	Sep. 30, 2012 Revenue Operators Brookdale Senior Living	Sep. 30, 2013 Revenue Operators Operating segment Senior housing Emeritus	Sep. 30, 2012 Revenue Operators Operating segment Senior housing Emeritus	Sep. 30, 2013 Revenue Operators Operating segment Senior housing Emeritus	Sep. 30, 2012 Revenue Operators Operating segment Senior housing Emeritus	Sep. 30, 2013 Revenue Operators Operating segment Senior housing Sunrise Senior Living	Sep. 30, 2012 Revenue Operators Operating segment Senior housing Sunrise Senior Living	Sep. 30, 2013 Revenue Operators Operating segment Senior housing Sunrise Senior Living	Sep. 30, 2012 Revenue Operators Operating segment Senior housing Sunrise Senior Living	Sep. 30, 2013 Revenue Operators Operating segment Senior housing HCR ManorCare	Sep. 30, 2012 Revenue Operators Operating segment Senior housing HCR ManorCare	Sep. 30, 2013 Revenue Operators Operating segment Senior housing HCR ManorCare	Sep. 30, 2012 Revenue Operators Operating segment Senior housing HCR ManorCare	Sep. 30, 2013 Revenue Operators Operating segment Senior housing Brookdale Senior Living	Sep. 30, 2012 Revenue Operators Operating segment Senior housing Brookdale Senior Living	Sep. 30, 2013 Revenue Operators Operating segment Senior housing Brookdale Senior Living	Sep. 30, 2012 Revenue Operators Operating segment Senior housing Brookdale Senior Living	Sep. 30, 2013 Revenue Operators Operating segment Post-acute/skilled HCR ManorCare	Sep. 30, 2012 Revenue Operators Operating segment Post-acute/skilled HCR ManorCare	Sep. 30, 2013 Revenue Operators Operating segment Post-acute/skilled HCR ManorCare	Sep. 30, 2012 Revenue Operators Operating segment Post-acute/skilled HCR ManorCare
Concentration of Credit Risk
Concentration risk (as a percent)																						14.60%	14.30%	6.80%	6.70%	32.10%	31.50%	4.20%	4.10%	37.30%	37.30%	17.20%	17.50%	11.00%	11.00%	10.60%	10.70%	88.10%	89.30%	34.80%	20.30%	34.60%	20.50%	11.50%	15.60%	12.20%	15.70%	9.60%	11.70%	9.50%	11.80%	11.70%	14.40%	11.60%	14.20%	12.20%	6.60%	12.60%	6.70%	4.00%	5.00%	4.40%	5.20%	27.00%	30.70%	28.00%	31.20%	4.10%	4.70%	4.20%	4.70%	72.70%	87.20%	81.30%	90.90%
Concentration risk, assets																	$ 778,000,000		$ 778,000,000		$ 759,000,000
Concentration risk, revenue																	37,600,000	36,100,000	112,000,000	106,800,000
Number of senior living communities operated in a RIDEA structure																	21		21		21
Percentage of operator assets to segment assets after inclusion of assets under RIDEA structure																																				21.00%	21.00%
Percentage of operator assets to total entity assets after inclusion of assets under RIDEA structure																												8.00%	8.00%
Percentage of operator revenue to segment revenue after inclusion of revenue under RIDEA structure																																																																				31.00%	38.00%	31.00%	38.00%
Percentage of operator revenue to total entity revenue after inclusion of revenue under RIDEA structure																																																				11.00%	12.00%	11.00%	12.00%
Balance Sheets:
Real estate and other property, net	10,699,853,000			10,699,853,000			10,739,567,000			3,008,700,000		3,008,700,000		3,046,600,000
Cash and cash equivalents	49,414,000		96,476,000	49,414,000		96,476,000	247,673,000		33,506,000	158,500,000		158,500,000		120,500,000
Goodwill, intangible and other assets, net	835,997,000			835,997,000			788,520,000			5,563,700,000		5,563,700,000		5,625,400,000
Total assets	19,889,509,000	[1]		19,889,509,000	[1]		19,915,555,000	[1]		8,730,900,000		8,730,900,000		8,792,500,000	19,086,378,000	18,934,010,000
Debt and financing obligations										6,289,000,000		6,289,000,000		6,374,600,000
Accounts payable, accrued liabilities and other	303,966,000			303,966,000			293,994,000			1,021,800,000		1,021,800,000		1,021,900,000
Total equity	10,850,237,000		9,727,853,000	10,850,237,000		9,727,853,000	10,753,777,000		9,220,622,000	1,420,100,000		1,420,100,000		1,396,000,000
Total liabilities and equity	19,889,509,000			19,889,509,000			19,915,555,000			8,730,900,000		8,730,900,000		8,792,500,000
Income Statements:
Revenues	543,958,000		468,066,000	1,563,292,000		1,370,999,000				1,030,300,000	1,037,800,000	3,131,700,000	3,113,300,000
Operating, general and administrative expense										(888,100,000)	(880,800,000)	(2,677,400,000)	(2,663,700,000)
Depreciation and amortization expense	(104,859,000)		(87,170,000)	(317,430,000)		(254,463,000)				(36,300,000)	(41,600,000)	(110,000,000)	(125,200,000)
Interest expense	(108,088,000)		(103,355,000)	(326,094,000)		(309,399,000)				(103,800,000)	(105,200,000)	(312,300,000)	(317,300,000)
Other income, net	1,584,000		770,000	16,887,000		2,232,000				2,300,000	3,700,000	4,000,000	10,100,000
Income before income taxes										4,400,000	13,900,000	36,000,000	17,200,000
Income taxes	(1,033,000)		602,000	(3,563,000)		1,145,000				(1,800,000)	(4,800,000)	(11,600,000)	(4,700,000)
Net income	236,858,000		199,043,000	687,367,000		600,582,000				2,600,000	9,100,000	24,400,000	12,500,000
Credit Enhancement Guarantee
Third party debt collateralized by facilities, debt amount (maturing in May 1, 2025)	113,000,000			113,000,000
Third party debt collateralized by facilities, asset carrying amount (maturing in May 1, 2025)	$ 376,000,000			$ 376,000,000

[1] The Company's consolidated total assets at September 30, 2013 and December 31, 2012, include assets of certain variable interest entities ("VIEs") that can only be used to settle the liabilities of those VIEs. At September 30, 2013: $1.5 million, other assets, net. At December 31, 2012: accounts receivable, net, $2 million; cash and cash equivalents, $10 million; and other assets, net, $2 million, respectively. See Note 16 to the Condensed Consolidated Financial Statements for additional information.

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies.

Schedule of concentration of credit risk by segments

Segment Concentrations:

	Percentage of Senior Housing Gross Assets							Percentage of Senior Housing Revenues					Percentage of Senior Housing Revenues
	September 30,			December 31,			Three Months Ended September 30,					Nine Months Ended September 30,
Operators	2013		2012			2013				2012		2013			2012
Emeritus	37.3	%	37.3		%	34.8			%	20.3	%	34.6		%	20.5	%
Sunrise Senior Living (“Sunrise”)(1)	17.2		17.5			11.5				15.6		12.2			15.7
HCR ManorCare	11.0		11.0			9.6				11.7		9.5			11.8
Brookdale Senior Living (“Brookdale”)(2)	10.6		10.7			11.7				14.4		11.6			14.2

	Percentage of Post-Acute/ Skilled Nursing Gross Assets							Percentage of Post-Acute/ Skilled Nursing Revenues					Percentage of Post-Acute/ Skilled Nursing Revenues
	September 30,			December 31,			Three Months Ended September 30,					Nine Months Ended September 30,
Operators	2013		2012			2013				2012		2013			2012
HCR ManorCare	88.1	%	89.3		%	72.7			%	87.2	%	81.3		%	90.9	%

Total Company Concentrations:

	Percentage of Total Company Assets							Percentage of Total Company Revenues					Percentage of Total Company Revenues
	September 30,			December 31,			Three Months Ended September 30,					Nine Months Ended September 30,
Operators	2013		2012			2013				2012		2013			2012
HCR ManorCare	32.1	%	31.5		%	27.0			%	30.7	%	28.0		%	31.2	%
Emeritus	14.6		14.3			12.2				6.6		12.6			6.7
Sunrise(1)	6.8		6.7			4.0				5.0		4.4			5.2
Brookdale(2)	4.2		4.1			4.1				4.7		4.2			4.7

(1) Certain of the Company’s properties are leased to tenants who have entered into management contracts with Sunrise to operate the respective property on their behalf. The Company’s concentration of gross assets includes properties directly leased to Sunrise and properties that are managed by Sunrise on behalf of third party tenants.

(2) At September 30, 2013 and December 31, 2012, Brookdale percentages exclude $778 million and $759 million, respectively, of senior housing assets related to 21 senior housing facilities that Brookdale operates on the Company’s behalf under a RIDEA structure. Assuming that these assets were attributable to Brookdale, the percentage of senior housing assets for Brookdale would be 21% at both September 30, 2013 and December 31, 2012. Assuming that these assets were attributable to Brookdale, the percentage of total assets for Brookdale would be 8% at both September 30, 2013 and December 31, 2012. For the three and nine months ended September 30, 2013, Brookdale percentages exclude $37.6 million and $112.0 million, respectively, of senior housing revenues related to these facilities. Assuming that these revenues were attributable to Brookdale, the percentage of senior housing revenues for Brookdale would be 31% for both the three and nine months ended September 30, 2013. Assuming that these revenues were attributable to Brookdale, the percentage of total revenues for Brookdale would be 11% for both the three and nine months ended September 30, 2013. For the three and nine months ended September 30, 2012, Brookdale percentages exclude $36.1 million and $106.8 million, respectively, of senior housing revenues related to these facilities. Assuming that these revenues were attributable to Brookdale, the percentage of senior housing revenues for Brookdale would be 38% for both the three and nine months ended September 30, 2012. Assuming that these revenues were attributable to Brookdale, the percentage of total revenues for Brookdale would be 12% for both the three and nine months ended September 30, 2012.

Summary of HCR ManorCare's condensed consolidated financial information

HCR ManorCare’s summarized condensed consolidated financial information follows (in millions):

	September 30,		December 31,
	2013		2012
Real estate and other property, net	$	3,008.7	$	3,046.6
Cash and cash equivalents	158.5		120.5
Goodwill, intangible and other assets, net	5,563.7		5,625.4
Total assets	$	8,730.9	$	8,792.5
Debt and financing obligations	$	6,289.0	$	6,374.6
Accounts payable, accrued liabilities and other	1,021.8		1,021.9
Total equity	1,420.1		1,396.0
Total liabilities and equity	$	8,730.9	$	8,792.5

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues	$	1,030.3		$	1,037.8		$	3,131.7		$	3,113.3
Operating, general and administrative expense	(888.1		)	(880.8		)	(2,677.4		)	(2,663.7		)
Depreciation and amortization expense	(36.3		)	(41.6		)	(110.0		)	(125.2		)
Interest expense	(103.8		)	(105.2		)	(312.3		)	(317.3		)
Other income, net	2.3			3.7			4.0			10.1
Income before income taxes	4.4			13.9			36.0			17.2
Income taxes	(1.8		)	(4.8		)	(11.6		)	(4.7		)
Net income	$	2.6		$	9.1		$	24.4		$	12.5

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Derivative Financial Instruments

9 Months Ended

Sep. 30, 2013

Derivative Financial Instruments

Derivative Financial Instruments

(19) Derivative Financial Instruments

The following table summarizes the Company’s outstanding interest-rate and foreign currency swap contracts as of September 30, 2013 (dollars and GBP in thousands):

Date Entered	Maturity Date	Hedge Designation	Fixed Rate/Buy Amount			Floating/Exchange Rate Index	Notional/ Sell Amount		Fair Value(1)
July 2005(2)	July 2020	Cash Flow	3.82		%	BMA Swap Index	$	45,600	$	(6,319	)
November 2008(3)	October 2016	Cash Flow	5.95		%	1 Month LIBOR+1.50%	$	26,600	$	(2,964	)
July 2012(4)	June 2016	Cash Flow	1.81		%	1 Month GBP LIBOR+1.20%	£	137,000	$	1,564
July 2012(5)	June 2016	Cash Flow	$	68,200		Buy USD/Sell GBP	£	43,500	$	(1,897	)

(1) Interest-rate and foreign currency swap assets are recorded in other assets, net and interest-rate and foreign currency swap liabilities are recorded in accounts payable and accrued liabilities on the condensed consolidated balance sheets.

(2) Represents three interest-rate swap contracts with an aggregate notional amount of $45.6 million which hedge fluctuations in interest payments on variable-rate secured debt due to overall changes in hedged cash flows.

(3) Acquired in conjunction with mortgage debt assumed related to real estate acquired on December 28, 2010. Hedges fluctuations in interest payments on variable-rate secured debt due to fluctuations in the underlying benchmark interest rate.

(4) Hedges fluctuations in interest payments on variable-rate unsecured debt due to fluctuations in the underlying benchmark interest rate.

(5) Currency swap contract (buy USD/sell GBP) hedges the foreign currency exchange risk related to a portion of the Company’s forecasted interest receipts on GBP denominated senior unsecured notes. Represents six foreign exchange contracts to sell £7.2 million at a rate of 1.5695 on various dates through June 2016.

The Company uses derivative instruments to mitigate the effects of interest rate and foreign currency fluctuations on specific forecasted transactions as well as recognized financial obligations or assets. Utilizing derivative instruments allows the Company to manage the risk of fluctuations in interest and foreign currency rates related to the potential impact these changes could have on future earnings and forecasted cash flows. The Company does not use derivative instruments for speculative or trading purposes.

The primary risks associated with derivative instruments are market and credit risk. Market risk is defined as the potential for loss in value of a derivative instrument due to adverse changes in market prices. Credit risk is the risk that one of the parties to a derivative contract fails to perform or meet its financial obligation. The Company does not obtain collateral associated with its derivative contracts, but monitors the credit standing of its counterparties on a regular basis. Should a counterparty fail to perform, the Company would incur a financial loss to the extent that the associated derivative contract was in an asset position. At September 30, 2013, the Company does not anticipate non-performance by the counterparties to its outstanding derivative contracts.

On July 27, 2012, the Company entered into a foreign currency swap contract to hedge the foreign currency exchange risk related to a portion of the forecasted interest receipts from its GBP denominated senior unsecured notes (see additional discussion of the Four Seasons senior unsecured notes in Note 9). The cash flow hedge has a fixed USD/GBP exchange rate of 1.5695 (buy $11.4 million and sell £7.2 million semi-annually) for a portion of its forecasted semi-annual cash receipts denominated in GBP. The foreign currency swap contract matures in June 2016 (the end of the non-call period of the senior unsecured notes). The fair value of the contract at September 30, 2013 was a liability of $1.9 million and is included in accounts payable and accrued liabilities. During the nine months ended September 30, 2013, there was no ineffective portion related to this hedge.

On July 27, 2012, the Company entered into an interest-rate swap contract that is designated as hedging the interest payments on its GBP denominated Term Loan due to fluctuations in the underlying benchmark interest rate (see additional discussion of the Term Loan in Note 10). The cash flow hedge has a notional amount of £137 million and expires in June 2016 (the maturity of the Term Loan). The fair value of the contract at September 30, 2013 was $1.6 million and is included in other assets, net. During the nine months ended September 30, 2013, there was no ineffective portion related to this hedge.

At September 30, 2013, the Company expects that the hedged forecasted transactions for each of the outstanding qualifying cash flow hedging relationships remain probable of occurring, and as a result, no gains or losses recorded to accumulated other comprehensive loss are expected to be reclassified to earnings.

To illustrate the effect of movements in the interest rate and foreign currency markets, the Company performed a market sensitivity analysis on its outstanding hedging instruments. The Company applied various basis point spreads to the underlying interest rate curves and foreign currency exchange rates of the derivative portfolio in order to determine the instruments’ change in fair value. The following table summarizes the results of the analysis performed (dollars in thousands):

		Effects of Change in Interest and Foreign Currency Rates
Date Entered	Maturity Date	+50 Basis Points			-50 Basis Points			+100 Basis Points			-100 Basis Points
July 2005	July 2020	$	1,442		$	(1,455	)	$	2,890		$	(2,904	)
November 2008	October 2016	404			(379		)	796			(770		)
July 2012 (interest-rate swap)	June 2016	3,038			(2,902		)	6,008			(5,872		)
July 2012 (foreign currency swap)	June 2016	(580		)	123			(932		)	475

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Disclosures About Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2013

Disclosures About Fair Value of Financial Instruments

Disclosures About Fair Value of Financial Instruments

(18) Disclosures About Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities are reasonable estimates of fair value because of the short-term maturities of these instruments. The fair values of loans receivable, bank line of credit, term loan, mortgage debt and other debt are based on rates currently prevailing for similar instruments with similar maturities. The fair values of interest-rate and currency swap contracts as well as common stock warrants are determined based on observable and unobservable market assumptions using standardized pricing models. The fair values of senior unsecured notes and marketable equity and debt securities are determined utilizing market quotes.

The table below summarizes the carrying values and fair values of the Company’s financial instruments (in thousands):

	September 30, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Loans receivable, net(2)	$	390,803	$	402,243	$	276,030	$	279,850
Marketable debt securities(1)	238,834		272,745		222,809		234,137
Marketable equity securities(1)	—		—		24,829		24,829
Warrants(3)	180		180		670		670
Bank line of credit(2)	285,000		285,000		—		—
Term loan(2)	221,748		221,748		222,694		222,694
Senior unsecured notes(1)	6,565,934		7,027,982		6,712,624		7,432,012
Mortgage debt(2)	1,410,407		1,452,732		1,676,544		1,771,155
Other debt(2)	77,503		77,503		81,958		81,958
Interest-rate swap assets(2)	1,564		1,564		89		89
Interest-rate swap liabilities(2)	9,283		9,283		12,699		12,699
Currency swap liabilities(2)	1,897		1,897		2,641		2,641

(1) Level 1: Fair value calculated based on quoted prices in active markets.

(2) Level 2: Fair value based on quoted prices for similar or identical instruments in active or inactive markets, respectively, or calculated utilizing model derived valuations in which significant inputs or value drivers are observable in active markets.

(3) Level 3: Fair value determined based on significant unobservable market inputs using standardized derivative pricing models.

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Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Financial Instruments

Schedule of derivative instruments

The following table summarizes the Company’s outstanding interest-rate and foreign currency swap contracts as of September 30, 2013 (dollars and GBP in thousands):

Date Entered	Maturity Date	Hedge Designation	Fixed Rate/Buy Amount			Floating/Exchange Rate Index	Notional/ Sell Amount		Fair Value(1)
July 2005(2)	July 2020	Cash Flow	3.82		%	BMA Swap Index	$	45,600	$	(6,319	)
November 2008(3)	October 2016	Cash Flow	5.95		%	1 Month LIBOR+1.50%	$	26,600	$	(2,964	)
July 2012(4)	June 2016	Cash Flow	1.81		%	1 Month GBP LIBOR+1.20%	£	137,000	$	1,564
July 2012(5)	June 2016	Cash Flow	$	68,200		Buy USD/Sell GBP	£	43,500	$	(1,897	)

(1) Interest-rate and foreign currency swap assets are recorded in other assets, net and interest-rate and foreign currency swap liabilities are recorded in accounts payable and accrued liabilities on the condensed consolidated balance sheets.

(2) Represents three interest-rate swap contracts with an aggregate notional amount of $45.6 million which hedge fluctuations in interest payments on variable-rate secured debt due to overall changes in hedged cash flows.

(3) Acquired in conjunction with mortgage debt assumed related to real estate acquired on December 28, 2010. Hedges fluctuations in interest payments on variable-rate secured debt due to fluctuations in the underlying benchmark interest rate.

(4) Hedges fluctuations in interest payments on variable-rate unsecured debt due to fluctuations in the underlying benchmark interest rate.

(5) Currency swap contract (buy USD/sell GBP) hedges the foreign currency exchange risk related to a portion of the Company’s forecasted interest receipts on GBP denominated senior unsecured notes. Represents six foreign exchange contracts to sell £7.2 million at a rate of 1.5695 on various dates through June 2016.

Schedule of effect of change in interest and foreign currency rate

The following table summarizes the results of the analysis performed (dollars in thousands):

		Effects of Change in Interest and Foreign Currency Rates
Date Entered	Maturity Date	+50 Basis Points			-50 Basis Points			+100 Basis Points			-100 Basis Points
July 2005	July 2020	$	1,442		$	(1,455	)	$	2,890		$	(2,904	)
November 2008	October 2016	404			(379		)	796			(770		)
July 2012 (interest-rate swap)	June 2016	3,038			(2,902		)	6,008			(5,872		)
July 2012 (foreign currency swap)	June 2016	(580		)	123			(932		)	475

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Loans Receivable (Tables)

9 Months Ended

Sep. 30, 2013

Loans Receivable

Schedule of loans receivable

The following table summarizes the Company’s loans receivable (in thousands):

	September 30, 2013								December 31, 2012
	Real Estate Secured		Other Secured			Total			Real Estate Secured		Other Secured			Total
Mezzanine	$	—	$	245,535		$	245,535		$	—	$	145,150		$	145,150
Other(1)	161,471		—			161,471			147,264		—			147,264
Unamortized discounts, fees and costs	—		(2,793		)	(2,793		)	—		(2,974		)	(2,974		)
Allowance for loan losses	—		(13,410		)	(13,410		)	—		(13,410		)	(13,410		)
	$	161,471	$	229,332		$	390,803		$	147,264	$	128,766		$	276,030

(1) Includes $110 million and $72 million at September 30, 2013 and December 31, 2012, respectively, of construction loans outstanding related to senior housing development projects.  At September 30, 2013, the Company had $37 million remaining in its commitments to fund development projects.

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Segment Disclosures (Tables)

9 Months Ended

Sep. 30, 2013

Segment Disclosures

Information of revenue of reportable segment

Summary information for the reportable segments follows (in thousands):

For the three months ended September 30, 2013:

Segments	Rental Revenues(1)		Resident Fees and Services		Interest Income		Investment Management Fee Income		Total Revenues		NOI(2)		Adjusted NOI(2)(Cash NOI)
Senior housing	$	149,443	$	37,589	$	3,121	$	—	$	190,153	$	162,391	$	148,997
Post-acute/skilled	138,289		—		38,642		—		176,931		137,642		120,258
Life science	72,531		—		—		1		72,532		58,440		56,352
Medical office	88,473		—		—		463		88,936		52,255		52,214
Hospital	15,091		—		315		—		15,406		14,119		14,148
Total	$	463,827	$	37,589	$	42,078	$	464	$	543,958	$	424,847	$	391,969

For the three months ended September 30, 2012:

Segments	Rental Revenues(1)		Resident Fees and Services		Interest Income		Investment Management Fee Income		Total Revenues		NOI(2)		Adjusted NOI(2)(Cash NOI)
Senior housing	$	114,661	$	36,076	$	877	$	—	$	151,614	$	125,865	$	113,401
Post-acute/skilled	135,183		—		9,135		—		144,318		135,029		116,573
Life science	71,194		—		—		1		71,195		59,403		56,341
Medical office	85,800		—		—		459		86,259		50,852		49,669
Hospital	14,414		—		266		—		14,680		13,526		13,165
Total	$	421,252	$	36,076	$	10,278	$	460	$	468,066	$	384,675	$	349,149

For the nine months ended September 30, 2013:

Segments	Rental Revenues(1)		Resident Fees and Services		Interest Income		Investment Management Fee Income		Total Revenues		NOI(2)		Adjusted NOI(2)(Cash NOI)
Senior housing	$	448,600	$	112,070	$	8,328	$	—	$	568,998	$	487,501	$	440,395
Post-acute/skilled	411,912		—		59,656		—		471,568		409,965		356,544
Life science	221,088		—		—		3		221,091		179,775		170,957
Medical office	265,902		—		—		1,403		267,305		160,170		157,742
Hospital	33,703		—		627		—		34,330		30,882		42,369
Total	$	1,381,205	$	112,070	$	68,611	$	1,406	$	1,563,292	$	1,268,293	$	1,168,007

For the nine months ended September 30, 2012:

Segments	Rental Revenues(1)		Resident Fees and Services		Interest Income		Investment Management Fee Income		Total Revenues		NOI(2)		Adjusted NOI(2)(Cash NOI)
Senior housing	$	341,353	$	107,824	$	1,686	$	—	$	450,863	$	379,251	$	341,794
Post-acute/skilled	403,209		—		9,842		—		413,051		402,690		345,936
Life science	215,569		—		—		3		215,572		177,339		171,179
Medical office	246,661		—		—		1,420		248,081		148,030		144,272
Hospital	42,647		—		785		—		43,432		39,919		38,696
Total	$	1,249,439	$	107,824	$	12,313	$	1,423	$	1,370,999	$	1,147,229	$	1,041,877

(1) Represents rental and related revenues, tenant recoveries and income from DFLs.

(2) NOI is a non-GAAP supplemental financial measure used to evaluate the operating performance of real estate. The Company defines NOI as rental and related revenues, including tenant recoveries, resident fees and services, and income from DFLs, less property level operating expenses. NOI excludes interest income, investment management fee income, interest expense, depreciation and amortization, general and administrative expenses, litigation settlement, impairments, impairment recoveries, other income, net, income taxes, equity income from and impairments of investments in unconsolidated joint ventures, and discontinued operations. The Company believes NOI provides relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis. Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL accretion, amortization of above and below market lease intangibles, and lease termination fees. Adjusted NOI is sometimes referred to as “cash NOI.” The Company uses NOI and adjusted NOI to make decisions about resource allocations and to assess and compare property level performance. 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 because it does not reflect the aforementioned excluded items. Further, the Company’s definition of NOI may not be comparable to the definition used by other REITs or real estate companies, as those companies may use different methodologies for calculating NOI.

Reconciliation of reported net income to NOI and adjusted NOI

The following is a reconciliation of reported net income to NOI and adjusted NOI (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Net income	$	236,858		$	199,043		$	687,367		$	600,582
Interest income	(42,078		)	(10,278		)	(68,611		)	(12,313		)
Investment management fee income	(464		)	(460		)	(1,406		)	(1,423		)
Interest expense	108,088			103,355			326,094			309,399
Depreciation and amortization	104,859			87,170			317,430			254,463
General and administrative	45,423			19,415			90,080			54,299
Impairments	—			7,878			—			7,878
Other income, net	(1,584		)	(770		)	(16,887		)	(2,232		)
Income taxes	1,033			(602		)	3,563			(1,145		)
Equity income from unconsolidated joint ventures	(13,892		)	(13,396		)	(44,278		)	(42,803		)
Total discontinued operations	(13,396		)	(6,680		)	(25,059		)	(19,476		)
NOI	424,847			384,675			1,268,293			1,147,229
Straight-line rents	(12,604		)	(11,821		)	(28,559		)	(33,608		)
DFL accretion	(19,822		)	(23,433		)	(65,386		)	(71,072		)
Amortization of above and below market lease intangibles, net	(346		)	(533		)	(6,414		)	(1,855		)
Lease termination fees	(205		)	(175		)	(220		)	(574		)
NOI adjustments related to discontinued operations	99			436			293			1,757
Adjusted NOI	$	391,969		$	349,149		$	1,168,007		$	1,041,877

Reconciliation of company's assets to total assets

The Company’s total assets by segment were (in thousands):

	September 30,			December 31,
Segments	2013			2012
Senior housing	$	7,811,003		$	7,654,221
Post-acute/skilled nursing	6,269,566			6,080,826
Life science	3,969,723			3,932,397
Medical office	2,686,241			2,661,394
Hospital	542,187			505,393
Gross segment assets	21,278,720			20,834,231
Accumulated depreciation and amortization	(2,192,342		)	(1,900,221		)
Net segment assets	19,086,378			18,934,010
Assets held-for-sale, net	130,765			145,621
Other non-segment assets	672,366			835,924
Total assets	$	19,889,509		$	19,915,555

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Real Estate Property Investments (Details 2) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Other real estate acquisitions
Consideration, Noncontrolling Interest		$ 27,432,000
Operating segment
Other real estate acquisitions
Consideration, Cash Paid		172,380,000
Consideration, Debt and Other Liabilities Assumed		35,120,000
Consideration, Noncontrolling Interest		27,432,000
Assets Acquired, Real Estate		184,564,000
Assets Acquired, Net Intangibles		50,368,000
Operating segment | Post-acute/skilled
Acquisition
Acquisition of facility	400,000
Land acquired (in acres)	38
Operating segment | Medical office
Other real estate acquisitions
Consideration, Cash Paid		157,556,000
Consideration, Debt and Other Liabilities Assumed		35,120,000
Consideration, Noncontrolling Interest		27,346,000
Assets Acquired, Real Estate		170,443,000
Assets Acquired, Net Intangibles		49,579,000
Operating segment | Life science
Other real estate acquisitions
Consideration, Cash Paid		7,964,000
Consideration, Noncontrolling Interest		86,000
Assets Acquired, Real Estate		7,580,000
Assets Acquired, Net Intangibles		470,000
Operating segment | Senior housing
Acquisition
Acquisition of facility	18,000,000
Price paid upon exercise of purchase option	16,000,000
Other real estate acquisitions
Consideration, Cash Paid		3,860,000
Assets Acquired, Real Estate		3,541,000
Assets Acquired, Net Intangibles		319,000
Operating segment | Hospital
Other real estate acquisitions
Consideration, Cash Paid		3,000,000
Assets Acquired, Real Estate		3,000,000
Operating segment | Senior housing, life science and medical office
Other real estate acquisitions
Payments to acquire productive assets	$ 123,000,000	$ 126,000,000

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Real Estate Property Investments (Tables)

9 Months Ended

Sep. 30, 2013

Acquisition

Schedule of real estate acquisitions

A summary of real estate acquisitions for the nine months ended September 30, 2012 follows (in thousands):

	Consideration							Assets Acquired
Segment	Cash Paid		Debt and Other Liabilities Assumed		Noncontrolling Interest			Real Estate		Net Intangibles
Medical office	$	157,556	$	35,120	$	27,346	(1)	$	170,443	$	49,579
Life science	7,964		—		86			7,580		470
Senior housing	3,860		—		—			3,541		319
Hospital	3,000		—		—			3,000		—
	$	172,380	$	35,120	$	27,432		$	184,564	$	50,368

(1) Represents non-managing member limited liability company units.

Blackstone JV | Operating segment | Senior housing

Acquisition

Schedule of unaudited pro forma consolidated results of operations

The following unaudited pro forma consolidated results of operations assume that the Blackstone JV Acquisition was completed as of January 1, 2012 (in thousands, except per share amounts):

	Three Months Ended September 30, 2012		Nine Months Ended September 30, 2012
Revenues	$	494,516	$	1,450,349
Net income	206,448		622,797
Net income applicable to HCP, Inc.	203,513		613,727
Basic earnings per common share	0.45		1.35
Diluted earnings per common share	0.45		1.34

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Variable Interest Entities (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended		9 Months Ended					1 Months Ended
	Sep. 30, 2013 Delphis item	Sep. 30, 2013 Unconsolidated Variable Interest Entities item	Sep. 30, 2013 VIE tenants-operating leases	Sep. 30, 2013 VIE tenants-DFLs	Sep. 30, 2013 Loan-senior secured	Sep. 30, 2013 Loan-senior secured Delphis item	Sep. 30, 2013 Debt investment	Sep. 30, 2011 Consolidated Variable Interest Entities item	Sep. 30, 2013 Consolidated Variable Interest Entities item
Company's involvement with VIEs:
Number of senior housing facilities leased		48						21
Number of partnerships, which are tenants of the company	1					1
Number of VIE tenants		7
Maximum Loss Exposure			$ 262,598	$ 1,091,935	$ 29,151		$ 16,984
Assets/liability type			Lease intangibles, net and straight-line rent receivables	Net investment in DFLs	Loans receivable, net		Marketable debt securities
Carrying amount			$ 14,526	$ 602,366	$ 29,151		$ 16,984
Percentage of partnership interest								90.00%
Number of tax credit subsidiaries									2

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Supplemental Cash Flow Information (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Supplemental cash flow information:
Interest paid, net of capitalized interest	$ 363,229	$ 339,190
Income taxes paid (refunded)	(2)	1,645
Capitalized interest	10,852	18,517
Supplemental schedule of non-cash investing activities:
Accrued construction costs	18,495	18,024
Fair value of real estate acquired in exchange for sale of real estate	15,204
Supplemental schedule of non-cash financing activities:
Vesting of restricted stock units	110	385
Cancellation of restricted stock	17	6
Conversion of non-managing member units into common stock	2,997	2,398
Noncontrolling interests issued in connection with acquisitions		27,432
Mortgages and other liabilities assumed with real estate acquisitions	12,728	35,120
Unrealized gains on available-for-sale securities and derivatives designated as cash flow hedges, net	$ 6,990	$ 2,203

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Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2013

Variable Interest Entities

Variable Interest Entities

The carrying value and classification of the related assets, liabilities and maximum exposure to loss as a result of the Company’s involvement with these VIEs are presented below at September 30, 2013 (in thousands):

VIE Type	Maximum Loss Exposure(1)		Asset/Liability Type	Carrying Amount
VIE tenants—operating leases	$	262,598	Lease intangibles, net and straight-line rent receivables	$	14,526
VIE tenants—DFLs	1,091,935		Net investment in DFLs	602,366
Loan—senior secured	29,151		Loans receivable, net	29,151
Debt investment	16,984		Marketable debt securities	16,984

(1) The Company’s maximum loss exposure related to the VIE tenants represents the future minimum lease payments over the remaining term of the respective leases, which may be mitigated by re-leasing the properties to new tenants. The Company’s maximum loss exposure related to its loans and marketable debt securities to the VIE borrowers represents its current aggregate carrying amount.

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Subsequent Events (Details) (Subsequent event, Former Chairman, Chief Executive Officer and President, USD $) In Millions, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013
Subsequent event | Former Chairman, Chief Executive Officer and President
Subsequent Events
Severance-related charges	$ 26.4	$ 26.4
Accelerated deferred compensation on termination	16.7	16.7
Severance payments and other costs	$ 9.7	$ 9.7

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Fair Value Measurements

9 Months Ended

Sep. 30, 2013

Fair Value Measurements

Fair Value Measurements

(17) Fair Value Measurements

The following table illustrates the Company’s financial assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets. Recognized gains and losses are recorded in other income, net on the Company’s condensed consolidated statements of income. During the nine months ended September 30, 2013, there were no transfers of financial assets or liabilities within the fair value hierarchy.

The financial assets and liabilities carried at fair value on a recurring basis at September 30, 2013 follow (in thousands):

Financial Instrument(1)	Fair Value			Level 2			Level 3
Currency swap liabilities	$	(1,897	)	$	(1,897	)	$	—
Interest-rate swap assets	1,564			1,564			—
Interest-rate swap liabilities	(9,283		)	(9,283		)	—
Warrants	180			—			180
	$	(9,436	)	$	(9,616	)	$	180

(1) Interest rate and currency swaps as well as common stock warrant fair values are determined based on observable and unobservable market assumptions utilizing standardized derivative pricing models.

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (USD $) In Thousands, unless otherwise specified	Total	Total Stockholders' Equity	Preferred Stock	Common Stock	Additional Paid-In Capital	Cumulative Dividends In Excess Of Earnings	Accumulated Other Comprehensive Income (Loss)	Total Noncontrolling Interests
Balance at Dec. 31, 2011	$ 9,220,622	$ 9,033,482	$ 285,173	$ 408,629	$ 9,383,536	$ (1,024,274)	$ (19,582)	$ 187,140
Balance (in shares) at Dec. 31, 2011			11,820	408,629
Increase (Decrease) in Stockholders' Equity
Net income	600,582	591,512				591,512		9,070
Other comprehensive income (loss)	2,936	2,936					2,936
Preferred stock redemption	(295,500)	(295,500)	(285,173)			(10,327)
Preferred stock redemption (in shares)			(11,820)
Issuance of common stock, net	761,070	763,508		19,096	744,412			(2,438)
Issuance of common stock, net (in shares)				19,096
Repurchase of common stock	(8,167)	(8,167)		(196)	(7,971)
Repurchase of common stock (in shares)				(196)
Exercise of stock options	51,509	51,509		2,451	49,058
Exercise of stock options (in shares)	2,451			2,451
Amortization of deferred compensation	16,947	16,947			16,947
Preferred dividends	(6,679)	(6,679)				(6,679)
Common dividends ($1.575 and $1.50 per share for the period ended September 30, 2013 and 2012, respectively)	(631,549)	(631,549)				(631,549)
Distributions to noncontrolling interests	(11,759)							(11,759)
Noncontrolling interests in acquisitions	27,432							27,432
Issuance of noncontrolling interests	826							826
Purchase of noncontrolling interests	(417)							(417)
Balance at Sep. 30, 2012	9,727,853	9,517,999		429,980	10,185,982	(1,081,317)	(16,646)	209,854
Balance (in shares) at Sep. 30, 2012				429,980
Increase (Decrease) in Stockholders' Equity
Issuance of common stock, net				979,000
Issuance of common stock, net (in shares)				22,000
Balance at Oct. 31, 2012
Balance at Dec. 31, 2012	10,753,777	10,551,237		453,191	11,180,066	(1,067,367)	(14,653)	202,540
Balance (in shares) at Dec. 31, 2012				453,191
Increase (Decrease) in Stockholders' Equity
Net income	687,367	677,742				677,742		9,625
Other comprehensive income (loss)	(1,226)	(1,226)					(1,226)
Issuance of common stock, net	77,509	80,506		1,859	78,647			(2,997)
Issuance of common stock, net (in shares)				1,859
Repurchase of common stock	(2,502)	(2,502)		(51)	(2,451)
Repurchase of common stock (in shares)				(51)
Exercise of stock options	17,497	17,497		875	16,622
Exercise of stock options (in shares)	875			875
Amortization of deferred compensation	33,833	33,833			33,833
Common dividends ($1.575 and $1.50 per share for the period ended September 30, 2013 and 2012, respectively)	(716,869)	(716,869)				(716,869)
Distributions to noncontrolling interests	(11,536)							(11,536)
Issuance of noncontrolling interests	12,387							12,387
Balance at Sep. 30, 2013	$ 10,850,237	$ 10,640,218		$ 455,874	$ 11,306,717	$ (1,106,494)	$ (15,879)	$ 210,019
Balance (in shares) at Sep. 30, 2013				455,874

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net income	$ 687,367	$ 600,582
Depreciation and amortization of real estate, in-place lease and other intangibles:
Continuing operations	317,430	254,463
Discontinued operations	4,346	11,876
Amortization of above and below market lease intangibles, net	(6,414)	(1,855)
Amortization of deferred compensation	33,833	16,947
Amortization of deferred financing costs, net	13,922	12,415
Straight-line rents	(28,559)	(33,608)
Loan and direct financing lease interest accretion	(65,296)	(71,923)
Deferred rental revenues	73	1,101
Equity income from unconsolidated joint ventures	(44,278)	(42,803)
Distributions of earnings from unconsolidated joint ventures	2,724	2,775
Gain on sales of real estate	(9,185)	(2,856)
Gain on sales of marketable securities, net	(11,350)
Foreign currency and derivative losses, net	386	43
Impairments		7,878
Changes in:
Accounts receivable, net	6,389	(5,082)
Other assets	(43,939)	(7,303)
Accounts payable and accrued liabilities	(13,769)	(21,697)
Net cash provided by operating activities	843,680	720,953
Cash flows from investing activities:
Acquisitions of real estate	(63,878)	(172,380)
Development of real estate	(96,914)	(87,119)
Leasing costs and tenant and capital improvements	(33,964)	(42,817)
Proceeds from sales of real estate, net	3,777	7,238
Distributions in excess of earnings from unconsolidated joint ventures	1,194	2,051
Purchases of marketable debt securities	(16,706)	(214,859)
Proceeds from the sale of marketable securities	28,403
Principal repayments on loans receivable	231,004	4,660
Investments in loans receivable	(316,494)	(145,597)
Increase in restricted cash	(10,376)	(1,875)
Net cash used in investing activities	(273,954)	(650,698)
Cash flows from financing activities:
Net borrowings (repayments) under bank line of credit	283,082	(454,000)
Borrowings under term loan		214,789
Issuance of senior unsecured notes		750,000
Repayments of senior unsecured notes	(150,000)	(250,000)
Repayments of mortgage debt	(285,005)	(109,569)
Issuance of mortgage and other debt	6,798
Deferred financing costs		(18,256)
Preferred stock redemption		(295,500)
Net proceeds from the issuance of common stock and exercise of options	92,504	804,412
Dividends paid on common and preferred stock	(716,869)	(638,228)
Issuance of noncontrolling interests	12,387	826
Distributions to noncontrolling interests	(11,536)	(11,759)
Net cash used in financing activities	(768,639)	(7,285)
Effect of foreign exchange on cash and cash equivalents	654
Net increase (decrease) in cash and cash equivalents	(198,259)	62,970
Cash and cash equivalents, beginning of period	247,673	33,506
Cash and cash equivalents, end of period	$ 49,414	$ 96,476

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Real Estate Property Investments

9 Months Ended

Sep. 30, 2013

Real Estate Property Investments

Real Estate Property Investments

(3) Real Estate Property Investments

$1.73 Billion Senior Housing Portfolio Acquisition (the “Blackstone JV Acquisition”)

During the fourth quarter of 2012 and first quarter of 2013, the Company acquired 133 senior housing communities for $1.73 billion from a joint venture between Emeritus Corporation (“Emeritus”) and Blackstone Real Estate Partners VI, an affiliate of the Blackstone Group (the “Blackstone JV”). Located in 29 states, the portfolio encompasses a diversified care mix of 61% assisted living, 25% independent living, 13% memory care and 1% skilled nursing based on units. Based on operating performance at closing, the 133 communities consisted of 99 that were stabilized and 34 that were in lease-up. The transaction closed in two stages: (i) 129 senior housing facilities during the fourth quarter of 2012 for $1.7 billion; and (ii) four senior housing facilities during the first quarter of 2013 for $38 million. The Company paid $1.73 billion in cash consideration and assumed $13 million of mortgage debt to acquire: (i) real estate with a fair value of $1.57 billion, (ii) intangible assets with a fair value of $174 million; and (iii) assumed intangible liabilities with a fair value of $4 million.

Emeritus operates the communities pursuant to a new triple-net master lease for 128 properties (the “Master Lease”) and five individual leases, all guaranteed by Emeritus (together, the “Leases”). The Leases provide aggregate contractual rent in the first year of $105.8 million. The contractual rent will increase annually by the greater of the percentage increase in the Consumer Price Index (“CPI”) or 3.7% on average over the initial five years, and thereafter by the greater of CPI or 3.0% for the remaining initial lease term. At the beginning of the sixth lease year, rent on the 34 lease-up properties will increase to the greater of the percentage increase in CPI or fair market, subject to a floor of 103% and a cap of 130% of the prior year’s rent.

The Master Lease properties are grouped into three pools that share comparable characteristics. The Leases have initial terms of 14 to 16 years. Emeritus has two extension options, which, if exercised, will provide for lease terms of 30 to 35 years.

Concurrent with the acquisition in 2012, Emeritus purchased nine communities from the Blackstone JV, for which the Company provided secured debt financing of $52 million with a four-year term. The loan is secured by the underlying real estate and is prepayable at Emeritus’ option. The interest rate on the loan was initially 6.1% and will gradually increase during its four year term to 6.8%.

Pro Forma Results of Operations

The following unaudited pro forma consolidated results of operations assume that the Blackstone JV Acquisition was completed as of January 1, 2012 (in thousands, except per share amounts):

	Three Months Ended September 30, 2012		Nine Months Ended September 30, 2012
Revenues	$	494,516	$	1,450,349
Net income	206,448		622,797
Net income applicable to HCP, Inc.	203,513		613,727
Basic earnings per common share	0.45		1.35
Diluted earnings per common share	0.45		1.34

Other Real Estate Acquisitions

In addition to the Blackstone JV Acquisition (discussed above), during the nine months ended September 30, 2013, the Company acquired a senior housing facility for $18 million, exercised its purchase option for a senior housing facility it previously leased for $16 million and acquired 38 acres of land in the post-acute/skilled nursing segment for $0.4 million.

A summary of real estate acquisitions for the nine months ended September 30, 2012 follows (in thousands):

	Consideration							Assets Acquired
Segment	Cash Paid		Debt and Other Liabilities Assumed		Noncontrolling Interest			Real Estate		Net Intangibles
Medical office	$	157,556	$	35,120	$	27,346	(1)	$	170,443	$	49,579
Life science	7,964		—		86			7,580		470
Senior housing	3,860		—		—			3,541		319
Hospital	3,000		—		—			3,000		—
	$	172,380	$	35,120	$	27,432		$	184,564	$	50,368

(1) Represents non-managing member limited liability company units.

During the nine months ended September 30, 2013 and 2012, the Company funded an aggregate of $123 million and $126 million, respectively, for construction, tenant and other capital improvement projects, primarily in its senior housing, life science and medical office segments.

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Business

9 Months Ended

Sep. 30, 2013

Business

Business

(1) Business

HCP, Inc., an S&P 500 company, together with its consolidated entities (collectively, “HCP” or the “Company”), invests primarily in real estate serving the healthcare industry in the United States (“U.S.”). The Company is a Maryland corporation and was organized to qualify as a self-administered real estate investment trust (“REIT”) in 1985. The Company is headquartered in Long Beach, California, with offices in Nashville, Tennessee and San Francisco, California. The Company acquires, develops, leases, manages and disposes of healthcare real estate, and provides financing to healthcare providers. The Company’s portfolio is comprised of investments in the following five healthcare segments: (i) senior housing, (ii) post-acute/skilled nursing, (iii) life science, (iv) medical office and (v) hospital. The Company makes investments within the healthcare segments using the following five investment products: (i) properties under lease, (ii) debt investments, (iii) developments and redevelopments, (iv) investment management and (v) investments in senior housing operations utilizing the structure permitted by the Housing and Economic Recovery Act of 2008, which is commonly referred to as “RIDEA.”

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Earnings Per Common Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Common Share

Computation of basic and diluted earnings per share

The following table illustrates the computation of basic and diluted earnings per share (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Numerator
Income from continuing operations	$	223,462		$	192,363		$	662,308		$	581,106
Noncontrolling interests’ share in continuing operations	(3,102		)	(2,935		)	(9,625		)	(9,070		)
Income from continuing operations applicable to HCP, Inc.	220,360			189,428			652,683			572,036
Preferred stock dividends	—			—			—			(17,006		)
Participating securities’ share in continuing operations	(474		)	(479		)	(1,330		)	(2,154		)
Income from continuing operations applicable to common shares	219,886			188,949			651,353			552,876
Discontinued operations	13,396			6,680			25,059			19,476
Net income applicable to common shares	$	233,282		$	195,629		$	676,412		$	572,352
Denominator
Basic weighted average common shares	455,345			429,557			454,553			420,049
Dilutive potential common shares	733			1,221			835			1,355
Diluted weighted average common shares	456,078			430,778			455,388			421,404
Basic earnings per common share
Income from continuing operations	$	0.48		$	0.44		$	1.43		$	1.32
Discontinued operations	0.03			0.02			0.06			0.04
Net income applicable to common shares	$	0.51		$	0.46		$	1.49		$	1.36
Diluted earnings per common share
Income from continuing operations	$	0.48		$	0.44		$	1.43		$	1.32
Discontinued operations	0.03			0.01			0.06			0.04
Net income applicable to common shares	$	0.51		$	0.45		$	1.49		$	1.36

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Impairments

9 Months Ended

Sep. 30, 2013

Impairments

Impairments

(20) Impairments

During the three months ended September 30, 2012, the Company executed an expansion of its relationship with its tenant General Atomics in Poway, CA, to a total of 396,000 square feet, consisting of the following: (i) a lease extension of 281,000 square feet through June 2024, (ii) a new 10-year lease for a 115,000 square foot building to be developed and (iii) the purchase of a 19 acre land parcel from the Company for $19 million. As a result of the land sale, the Company recognized an impairment charge of $7.9 million, which reduced the carrying value of the Company’s investment from $27 million to the $19 million sales price. The fair value of the Company’s land parcel was based on the sales price from its disposition in conjunction with this transaction. The contractual sales price of the land parcel was considered to be a Level 2 measurement within the fair value hierarchy.

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Dispositions of Real Estate and Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2013

Dispositions of Real Estate and Discontinued Operations

Summary of operating loss from discontinued operations and gain on sales of real estate included in discontinued operations

The following table summarizes operating loss from discontinued operations and gain on sales of real estate included in discontinued operations (dollars in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013		2012
Rental and related revenues	$	6,460		$	10,260	$	20,458	$	31,023
Depreciation and amortization expenses	1,433			2,969		4,346		11,876
Operating expenses	3			18		9		75
Other income (expense), net	(74		)	593		229		2,452
Income before gain on sales of real estate	$	5,098		$	6,680	$	15,874	$	16,620
Gain on sales of real estate, net of income taxes	$	8,298		$	—	$	9,185	$	2,856
Number of properties included in discontinued operations	5			9		6		10

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Debt (Tables)

9 Months Ended

Sep. 30, 2013

Debt

Summary of stated debt maturities and scheduled principal repayments

The following table summarizes the Company’s stated debt maturities and scheduled principal repayments at September 30, 2013 (in thousands):

Year	Line of Credit		Term Loan(1)		Senior Unsecured Notes			Mortgage Debt			Total(2)
2013 (Three months)	$	—	$	—	$	400,000		$	14,003		$	414,003
2014	—		—		487,000			180,042			667,042
2015	—		—		400,000			308,421			708,421
2016	285,000		221,748		900,000			291,738			1,698,486
2017	—		—		750,000			550,477			1,300,477
Thereafter	—		—		3,650,000			71,825			3,721,825
	285,000		221,748		6,587,000			1,416,506			8,510,254
(Discounts) and premiums, net	—		—		(21,066		)	(6,099		)	(27,165		)
	$	285,000	$	221,748	$	6,565,934		$	1,410,407		$	8,483,089

(1) Represents £137 million translated into U.S. dollars.

(2) Excludes $78 million of other debt that represents Life Care Bonds that have no scheduled maturities.

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Other Assets (Details)	9 Months Ended				0 Months Ended
	Sep. 30, 2013 USD ($)	Dec. 31, 2012 USD ($)	Sep. 30, 2013 Delphis USD ($)	Dec. 31, 2012 Delphis USD ($)	Jun. 28, 2012 Four Seasons USD ($)	Jun. 28, 2012 Four Seasons GBP (£)	Sep. 30, 2013 Four Seasons USD ($)	Sep. 30, 2013 Four Seasons GBP (£)	Dec. 31, 2012 Four Seasons USD ($)	Dec. 31, 2012 Four Seasons GBP (£)	Sep. 30, 2013 HCP Ventures IV, LLC USD ($)	Dec. 31, 2012 HCP Ventures IV, LLC USD ($)
Other Assets.
Straight-line rent assets, net of allowance of $34,123 and $33,521, respectively	$ 358,514,000	$ 306,294,000
Allowance on straight-line rent assets	34,123,000	33,521,000
Marketable debt securities, net	238,834,000	222,809,000
Leasing costs, net	98,406,000	93,763,000
Deferred financing costs, net	37,379,000	45,490,000
Goodwill	50,346,000	50,346,000
Marketable equity securities		24,829,000
Other	52,518,000	44,989,000
Total other assets	835,997,000	788,520,000
Cost basis of marketable equity securities		17,100,000
Other assets
Carrying value of interest accrued related to the Delphis loan			0	0
Reserve related to accrued interest receivable			5,400,000	5,400,000
Loans receivables	390,803,000	276,030,000									10,000,000	10,000,000
Loan receivable, interest rate payable (as a percent)					12.25%	12.25%					12.00%	12.00%
Percentage of counter party's partnership interest in the joint venture, by which loans receivable from unconsolidated joint venture are secured											80.00%
Realized gains on marketable debt securities sold	11,000,000
Marketable debt security, par value						138,500,000
Marketable debt security, par value, discounted					$ 214,900,000	£ 136,800,000	$ 222,000,000	£ 137,000,000	$ 223,000,000	£ 137,000,000
Yield to maturity (as a percent)					12.50%	12.50%

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Dispositions of Real Estate and Discontinued Operations (Details) (USD $)	3 Months Ended		9 Months Ended					9 Months Ended	1 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended
	Sep. 30, 2013 item	Sep. 30, 2012 item	Sep. 30, 2013 item	Sep. 30, 2012 item	Dec. 31, 2012	Sep. 30, 2013 Operating segment	Dec. 31, 2012 Operating segment	Sep. 30, 2012 Operating segment Medical office	Sep. 30, 2013 Operating segment Hospital item	Sep. 30, 2013 Operating segment Hospital item	Dec. 31, 2012 Operating segment Hospital item	Sep. 30, 2013 Operating segment Senior housing
Dispositions of Real Estate and Land
Total consideration for disposition of real estate								$ 7,000,000				$ 4,000,000
Number of beds sold									62
Number of beds acquired									60
Number of properties held for sale										4	5
Carrying value of properties classified as held for sale	130,765,000		130,765,000		145,621,000	130,765,000	145,621,000		131,000,000	131,000,000	146,000,000
Gain on sales of real estate, net of income taxes	8,298,000		9,185,000	2,856,000					8,000,000
Operating income from discontinued operations
Rental and related revenues	6,460,000	10,260,000	20,458,000	31,023,000
Depreciation and amortization expenses	1,433,000	2,969,000	4,346,000	11,876,000
Operating expenses	3,000	18,000	9,000	75,000
Other income (expense), net	(74,000)	593,000	229,000	2,452,000
Income before gain on sales of real estate	$ 5,098,000	$ 6,680,000	$ 15,874,000	$ 16,620,000
Number of properties included in discontinued operations	5	9	6	10

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Disclosures About Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2013

Disclosures About Fair Value of Financial Instruments

Summary of the carrying values and fair values of financial instruments

The table below summarizes the carrying values and fair values of the Company’s financial instruments (in thousands):

	September 30, 2013				December 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
Loans receivable, net(2)	$	390,803	$	402,243	$	276,030	$	279,850
Marketable debt securities(1)	238,834		272,745		222,809		234,137
Marketable equity securities(1)	—		—		24,829		24,829
Warrants(3)	180		180		670		670
Bank line of credit(2)	285,000		285,000		—		—
Term loan(2)	221,748		221,748		222,694		222,694
Senior unsecured notes(1)	6,565,934		7,027,982		6,712,624		7,432,012
Mortgage debt(2)	1,410,407		1,452,732		1,676,544		1,771,155
Other debt(2)	77,503		77,503		81,958		81,958
Interest-rate swap assets(2)	1,564		1,564		89		89
Interest-rate swap liabilities(2)	9,283		9,283		12,699		12,699
Currency swap liabilities(2)	1,897		1,897		2,641		2,641

(1) Level 1: Fair value calculated based on quoted prices in active markets.

(2) Level 2: Fair value based on quoted prices for similar or identical instruments in active or inactive markets, respectively, or calculated utilizing model derived valuations in which significant inputs or value drivers are observable in active markets.

(3) Level 3: Fair value determined based on significant unobservable market inputs using standardized derivative pricing models.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Accounts receivable, net	$ 27,343	$ 34,150
Cash and cash equivalents	49,414	247,673
Other assets, net	835,997	788,520
Other debt	77,503	81,958
Accounts payable and accrued liabilities	303,966	293,994
Deferred revenue	71,655	68,055
Accounts receivable, allowance (in dollars)	1,843	1,668
Common stock, par value (in dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized	750,000,000	750,000,000
Common stock, shares issued	455,873,953	453,191,321
Common stock, shares outstanding	455,873,953	453,191,321
VIEs
Accounts receivable, net		2,000
Cash and cash equivalents		10,000
Other assets, net	2,000	2,000
Other debt		200
Accounts payable and accrued liabilities	10,000	14,000
Deferred revenue		$ 2,000

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Loans Receivable

9 Months Ended

Sep. 30, 2013

Loans Receivable

Loans Receivable

(6)   Loans Receivable

The following table summarizes the Company’s loans receivable (in thousands):

	September 30, 2013								December 31, 2012
	Real Estate Secured		Other Secured			Total			Real Estate Secured		Other Secured			Total
Mezzanine	$	—	$	245,535		$	245,535		$	—	$	145,150		$	145,150
Other(1)	161,471		—			161,471			147,264		—			147,264
Unamortized discounts, fees and costs	—		(2,793		)	(2,793		)	—		(2,974		)	(2,974		)
Allowance for loan losses	—		(13,410		)	(13,410		)	—		(13,410		)	(13,410		)
	$	161,471	$	229,332		$	390,803		$	147,264	$	128,766		$	276,030

(1) Includes $110 million and $72 million at September 30, 2013 and December 31, 2012, respectively, of construction loans outstanding related to senior housing development projects.  At September 30, 2013, the Company had $37 million remaining in its commitments to fund development projects.

Other Secured Loans

Barchester Loan.  On May 2, 2013, the Company acquired £121 million ($188 million) of subordinated debt at a discount for £109 million ($170 million). The loan was secured by an interest in 160 facilities leased and operated by Barchester Healthcare (“Barchester”). On August 23, 2013, the Company acquired an additional investment in this loan of £9 million ($14 million) at a discount for £5 million ($8 million). This loan accrued interest on its face value at a floating rate LIBOR plus a weighted-average margin of 3.14%. This loan investment was financed by a GBP denominated draw on the Company’s revolving line of credit facility that is discussed in Note 10. On September 6, 2013, the Company received £129 million ($202 million) from the par payoff of its Barchester debt investments; as a result, the Company recognized interest income of $24 million representing primarily the debt investments’ unamortized discounts. A portion of the proceeds from the Barchester repayment were used to repay the total outstanding amount of the Company’s GBP denominated draw on its revolving line of credit facility.

Tandem Health Care Loan.  On July 31, 2012, the Company closed a mezzanine loan facility to lend up to $205 million to Tandem Health Care (“Tandem”), an affiliate of Formation Capital, as part of the recapitalization of a post-acute/skilled nursing portfolio. At closing, the loan was subordinate to $400 million in senior mortgage debt and $137 million in senior mezzanine debt. The Company funded $100 million (the “First Tranche”) at closing and funded an additional $102 million (the “Second Tranche”) in June 2013. The Second Tranche was used to repay the senior mezzanine debt. At September 30, 2013, the loan was subordinate to $443 million of senior mortgage debt. The loan bears interest at a fixed rate of 12% and 14% per annum for the First and Second Tranches, respectively. The facility has a total term of up to 63 months from the initial closing, is prepayable at the borrower’s option and is secured by real estate partnership interests. The loan is subject to a prepayment premium if repaid on or before the third anniversary from the initial closing date.

Delphis Operations, L.P. Loan.  The Company holds a secured term loan made to Delphis Operations, L.P. (“Delphis” or the “Borrower”) that is collateralized by all of the assets of the Borrower. The Borrower’s collateral is comprised primarily of interests in partnerships operating surgical facilities, of which one partnership leases a property owned by the Company. In December 2009, the Company determined that the loan was impaired. Further, in January 2011 the Company placed the loan on cost-recovery status, whereby accrual of interest income was suspended, and any payments received from the Borrower are applied to reduce the recorded investment in the loan.

As part of a March 2012 agreement (the “2012 Agreement”) between Delphis, certain past and current principals of Delphis and the Cirrus Group, LLC (the “Guarantors”), and the Company, the Company agreed, among other things, to allow the distribution of $1.5 million to certain of the Guarantors from funds generated from sales of assets that were pledged as additional collateral for this loan. Further, the Company, as part of the 2012 Agreement, agreed to provide financial incentives to the Borrower regarding the liquidation of the primary collateral assets for this loan.

Pursuant to the 2012 Agreement, the Company received the remaining cash ($4.8 million, after reducing this amount by $0.5 million for related legal expenses) and other consideration ($2.1 million) of $6.9 million from the Guarantors. In addition, during 2012, the Company received $38.1 million in net proceeds from the sales of two of the primary collateral assets, which proceeds, together with the cash payments and other consideration, were applied to reduce the carrying value of the loan. The carrying value of the loan was $29.2 million and $30.7 million at September 30, 2013 and December 31, 2012, respectively. During the nine months ended September 30, 2013, the Company received cash payments from the Borrower of $1.5 million. At September 30, 2013, the Company believes the fair value of the collateral supporting this loan is in excess of its carrying value.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 236,858	$ 199,043	$ 687,367	$ 600,582
Change in net unrealized gains on securities:
Unrealized gains		5,374	1,355	5,716
Reclassification adjustment realized in net income			(9,131)
Change in net unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses)	(3,710)	(2,734)	5,635	(3,513)
Reclassification adjustment realized in net income	191	129	751	308
Change in Supplemental Executive Retirement Plan obligation	56	46	167	136
Foreign currency translation adjustment	(56)	243	(3)	289
Total other comprehensive income (loss)	(3,519)	3,058	(1,226)	2,936
Total comprehensive income	233,339	202,101	686,141	603,518
Total comprehensive income attributable to noncontrolling interests	(3,102)	(2,935)	(9,625)	(9,070)
Total comprehensive income attributable to HCP, Inc.	$ 230,237	$ 199,166	$ 676,516	$ 594,448

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Equity (Details) (USD $)	0 Months Ended				3 Months Ended		9 Months Ended			0 Months Ended	3 Months Ended	0 Months Ended		1 Months Ended			9 Months Ended
	Oct. 24, 2013	Jul. 25, 2013	Apr. 25, 2013	Jan. 24, 2013	Sep. 30, 2013 item	Sep. 30, 2012	Sep. 30, 2013 item	Sep. 30, 2012	Dec. 31, 2012	Apr. 23, 2012 Preferred Stock	Mar. 31, 2012 Preferred Stock	Apr. 23, 2012 Preferred Stock Series E cumulative redeemable preferred stock	Apr. 23, 2012 Preferred Stock Series F cumulative redeemable preferred stock	Oct. 31, 2012 Common Stock	Jun. 30, 2012 Common Stock	Mar. 31, 2012 Common Stock	Sep. 30, 2013 Common Stock	Sep. 30, 2012 Common Stock
Class of Stock
Shares redeemed												4,000,000	7,820,000
Dividend Rate (as a percent)												7.25%	7.10%
Preferred stock redemption value (in dollars per share)												$ 25	$ 25
Aggregate redemption amount								$ 295,500,000		$ 295,500,000
Preferred stock issuance costs write-off											10,400,000
Dividends declared per common share (in dollars per share)	$ 0.525	$ 0.525	$ 0.525	$ 0.525	$ 0.525	$ 0.50	$ 1.575	$ 1.50
Issuance of common stock, net							77,509,000	761,070,000						979,000,000	376,000,000	359,000,000	1,859,000	19,096,000
Issuance of common stock, net (in shares)														22,000,000	8,970,000	9,000,000	1,859,000	19,096,000
Stock issued under new issues (in dollars per share)														$ 44.50	$ 41.88	$ 39.93
Repayment of senior unsecured notes															250,000,000
Dividend Reinvestment and Stock Purchase Plan (in shares)							1,681,000	675,000
Conversion of DownREIT units (in shares)																	85,000	72,000
Exercise of stock options (in shares)							875,000	2,451,000									875,000	2,451,000
Vesting of restricted stock units (in shares)																	110,000	385,000
Accumulated Other Comprehensive Loss
Unrealized gains on available for sale securities									7,776,000
Unrealized losses on cash flow hedges, net					(12,066,000)		(12,066,000)		(18,452,000)
Supplemental Executive Retirement Plan minimum liability					(2,983,000)		(2,983,000)		(3,150,000)
Cumulative foreign currency translation adjustment					(830,000)		(830,000)		(827,000)
Total accumulated other comprehensive loss					(15,879,000)		(15,879,000)		(14,653,000)
Noncontrolling interests
Non-managing members DownREIT units outstanding					4,000,000		4,000,000
Number of DownREIT LLCs					4		4
DownREIT unit, carrying value					184,791,000		184,791,000		187,788,000
DownREIT unit, fair value					$ 246,000,000		$ 246,000,000

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013		Dec. 31, 2012
Real estate:
Buildings and improvements	$ 10,530,094		$ 10,330,668
Development costs and construction in progress	247,268		236,864
Land	1,841,333		1,833,607
Accumulated depreciation and amortization	(1,918,842)		(1,661,572)
Net real estate	10,699,853		10,739,567
Net investment in direct financing leases	6,993,352		6,881,393
Loans receivable, net	390,803		276,030
Investments in and advances to unconsolidated joint ventures	206,004		212,213
Accounts receivable, net of allowance of $1,843 and $1,668, respectively	27,343		34,150
Cash and cash equivalents	49,414		247,673
Restricted cash	48,224		37,848
Intangible assets, net	507,754		552,540
Real estate and intangible assets held for sale, net	130,765		145,621
Other assets, net	835,997		788,520
Total assets	19,889,509	[1]	19,915,555	[1]
LIABILITIES AND EQUITY
Bank line of credit	285,000
Term loan	221,748		222,694
Senior unsecured notes	6,565,934		6,712,624
Mortgage debt	1,410,407		1,676,544
Intangible liabilities on assets held for sale			1,729
Other debt	77,503		81,958
Intangible liabilities, net	103,059		104,180
Accounts payable and accrued liabilities	303,966		293,994
Deferred revenue	71,655		68,055
Total liabilities	9,039,272	[2]	9,161,778	[2]
Commitments and contingencies
Common stock, $1.00 par value: 750,000,000 shares authorized; 455,873,953 and 453,191,321 shares issued and outstanding, respectively	455,874		453,191
Additional paid-in capital	11,306,717		11,180,066
Cumulative dividends in excess of earnings	(1,106,494)		(1,067,367)
Accumulated other comprehensive loss	(15,879)		(14,653)
Total stockholders' equity	10,640,218		10,551,237
Joint venture partners	25,228		14,752
Non-managing member unitholders	184,791		187,788
Total noncontrolling interests	210,019		202,540
Total equity	10,850,237		10,753,777
Total liabilities and equity	$ 19,889,509		$ 19,915,555

[1] The Company's consolidated total assets at September 30, 2013 and December 31, 2012, include assets of certain variable interest entities ("VIEs") that can only be used to settle the liabilities of those VIEs. At September 30, 2013: $1.5 million, other assets, net. At December 31, 2012: accounts receivable, net, $2 million; cash and cash equivalents, $10 million; and other assets, net, $2 million, respectively. See Note 16 to the Condensed Consolidated Financial Statements for additional information.

[2] The Company's consolidated total liabilities at September 30, 2013 and December 31, 2012, include liabilities of certain VIEs for which the VIE creditors do not have recourse to HCP, Inc. At September 30, 2013: $9.8 million, accounts payable and accrued liabilities. At December 31, 2012: other debt, $0.2 million; accounts payable and accrued liabilities, $14 million; and deferred revenue, $2 million. See Note 16 to the Condensed Consolidated Financial Statements for additional information.

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Net Investment in Direct Financing Leases (Details) (USD $)	3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		0 Months Ended	9 Months Ended	12 Months Ended		9 Months Ended
	Sep. 30, 2013 item	Sep. 30, 2012	Sep. 30, 2013 item	Sep. 30, 2012	Dec. 31, 2012 item	Sep. 30, 2013 DFL Portfolio item	Sep. 30, 2012 DFL Portfolio	Sep. 30, 2013 DFL Portfolio item	Sep. 30, 2012 DFL Portfolio	Apr. 02, 2013 HCR ManorCare	Sep. 30, 2013 HCR ManorCare item	Mar. 31, 2013 HCR ManorCare	Dec. 31, 2012 HCR ManorCare	Sep. 30, 2013 HCR ManorCare Minimum	Sep. 30, 2013 HCR ManorCare Maximum
Acquisition
Minimum lease payments receivable	$ 24,811,003,000		$ 24,811,003,000		$ 25,217,520,000						$ 23,700,000,000		$ 24,000,000,000
Rent receivable from triple-net lease with HCR ManorCare										506,000,000		489,000,000
Rate of increase in minimum lease revenue per year over each of the next 3 years (as a percent)											3.50%
Remaining specified period of the initial lease term during which the minimum lease revenue increases by a specified percentage per year											3 years
Rate of increase in minimum lease revenue per year for remaining years of lease term (as a percent)											3.00%
Number of asset pools											4
Rate of increase in rent receivable for first year of extension option (as a percent)											3.00%
Total initial available term of asset pools														23 years	35 years
Estimated residual values	4,010,514,000		4,010,514,000		4,010,514,000
Less unearned income	(21,828,165,000)		(21,828,165,000)		(22,346,641,000)
Net investment in direct financing leases	6,993,352,000		6,993,352,000		6,881,393,000	376,000,000		376,000,000
Properties subject to direct financing leases	361		361		361	14		14
DFL income	157,253,000	155,834,000	472,409,000	465,345,000		5,100,000	7,000,000	19,100,000	20,800,000
Cash proceeds from DFL portfolio						$ 6,100,000	$ 5,600,000	$ 17,600,000	$ 17,300,000

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Subsequent Events

9 Months Ended

Sep. 30, 2013

Subsequent Events

Subsequent Events

(21) Subsequent Events

The Company’s Board of Directors, after its deliberations during the third quarter 2013, terminated its former Chairman, Chief Executive Officer and President on October 2, 2013. As a result of the termination, general and administrative expenses for the three and nine months ended September 30, 2013 include severance-related charges of $26.4 million related to: (i) the acceleration of $16.7 million of deferred compensation for restricted stock units and options that vested upon termination; and (ii) severance payments and other costs of approximately $9.7 million.

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Supplemental Cash Flow Information

9 Months Ended

Sep. 30, 2013

Supplemental Cash Flow Information

Supplemental Cash Flow Information

(15) Supplemental Cash Flow Information

The following table provides supplemental cash flow information (in thousands):

	Nine Months Ended September 30,
	2013			2012
Supplemental cash flow information:
Interest paid, net of capitalized interest	$	363,229		$	339,190
Income taxes paid (refunded)	(2		)	1,645
Capitalized interest	10,852			18,517
Supplemental schedule of non-cash investing activities:
Accrued construction costs	18,495			18,024
Fair value of real estate acquired in exchange for sale of real estate	15,204			—

	Nine Months Ended September 30,
	2013	2012
Supplemental schedule of non-cash financing activities:
Vesting of restricted stock units	110	385
Cancellation of restricted stock	17	6
Conversion of non-managing member units into common stock	2,997	2,398
Noncontrolling interests issued in connection with acquisitions	—	27,432
Mortgages and other liabilities assumed with real estate acquisitions	12,728	35,120
Unrealized gains on available-for-sale securities and derivatives designated as cash flow hedges, net	6,990	2,203

See additional information regarding supplemental non-cash financing activities related to a real estate exchange in Note 4 and the preferred stock redemption in Note 12.

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Measurements

Fair value measurements of financial assets and liabilities

The financial assets and liabilities carried at fair value on a recurring basis at September 30, 2013 follow (in thousands):

Financial Instrument(1)	Fair Value			Level 2			Level 3
Currency swap liabilities	$	(1,897	)	$	(1,897	)	$	—
Interest-rate swap assets	1,564			1,564			—
Interest-rate swap liabilities	(9,283		)	(9,283		)	—
Warrants	180			—			180
	$	(9,436	)	$	(9,616	)	$	180

(1) Interest rate and currency swaps as well as common stock warrant fair values are determined based on observable and unobservable market assumptions utilizing standardized derivative pricing models.

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Intangibles (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Intangibles
Intangible assets, gross	$ 784	$ 794
Intangible assets, accumulated amortization	276	241
Intangible liabilities, gross	208	194
Intangible liabilities, accumulated amortization	$ 105	$ 90

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Fair Value Measurements (Details) (Fair value on a recurring basis, USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Fair Value Assets and Liabilities Measured on Recurring Basis
Transfers of financial assets or liabilities within the fair value hierarchy	$ 0
Fair Value
Fair value assets and liabilities measured on recurring basis:
Total fair value assets and liabilities measured on recurring basis	(9,436)
Fair Value | Currency swap contracts
Fair value assets and liabilities measured on recurring basis:
Derivative liabilities	(1,897)
Fair Value | Interest-rate swap contracts
Fair value assets and liabilities measured on recurring basis:
Derivative assets	1,564
Derivative liabilities	(9,283)
Fair Value | Warrants
Fair value assets and liabilities measured on recurring basis:
Derivative assets	180
Level 2
Fair value assets and liabilities measured on recurring basis:
Total fair value assets and liabilities measured on recurring basis	(9,616)
Level 2 | Currency swap contracts
Fair value assets and liabilities measured on recurring basis:
Derivative liabilities	(1,897)
Level 2 | Interest-rate swap contracts
Fair value assets and liabilities measured on recurring basis:
Derivative assets	1,564
Derivative liabilities	(9,283)
Level 3
Fair value assets and liabilities measured on recurring basis:
Total fair value assets and liabilities measured on recurring basis	180
Level 3 | Warrants
Fair value assets and liabilities measured on recurring basis:
Derivative assets	$ 180

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Equity (Tables)

9 Months Ended

Sep. 30, 2013

Equity

Schedule of common stock, cash dividends

Declaration Date	Record Date	Amount Per Share		Dividend Payable Date
January 24	February 4	$	0.525	February 19
April 25	May 6	0.525		May 21
July 25	August 5	0.525		August 20
October 24	November 4	0.525		November 19

Schedule of company's other common stock issuances

The following is a summary of the Company’s other common stock issuances (shares in thousands):

	Nine Months Ended September 30,
	2013	2012
Dividend Reinvestment and Stock Purchase Plan	1,681	675
Conversion of DownREIT units(1)	85	72
Exercise of stock options	875	2,451
Vesting of restricted stock units(2)	110	385

(1) Non-managing member LLC units.

(2) Issued under the Company’s 2006 Performance Incentive Plan.

Schedule of accumulated other comprehensive income (loss)

The following is a summary of the Company’s accumulated other comprehensive loss (in thousands):

	September 30,			December 31,
	2013			2012
Unrealized gains on available for sale securities	$	—		$	7,776
Unrealized losses on cash flow hedges, net	(12,066		)	(18,452		)
Supplemental Executive Retirement Plan minimum liability	(2,983		)	(3,150		)
Cumulative foreign currency translation adjustment	(830		)	(827		)
Total accumulated other comprehensive loss	$	(15,879	)	$	(14,653	)

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Investments in and Advances to Unconsolidated Joint Ventures (Tables)

9 Months Ended

Sep. 30, 2013

Investments in and Advances to Unconsolidated Joint Ventures

Company owned interests in entities, accounted under equity method

The Company owns interests in the following entities that are accounted for under the equity method at September 30, 2013 (dollars in thousands):

Entity(1)	Properties/Segment	Investment(2)			Ownership%
HCR ManorCare	post-acute/skilled nursing operations	$	85,777		9.5
HCP Ventures III, LLC	13 medical office	7,251			30
HCP Ventures IV, LLC	54 medical office and 4 hospital	30,420			20
HCP Life Science(3)	4 life science	68,992			50-63
Horizon Bay Hyde Park, LLC	1 senior housing	6,725			72
Suburban Properties, LLC	1 medical office	6,666			67
Advances to unconsolidated joint ventures, net		173
		$	206,004
Edgewood Assisted Living Center, LLC	1 senior housing	$	(429	)	45
Seminole Shores Living Center, LLC	1 senior housing	(697		)	50
		$	(1,126	)

(1) These entities are not consolidated because the Company does not control, through voting rights or other means, the joint ventures.

(2) Represents the carrying value of the Company’s investment in the unconsolidated joint venture. Negative balances are recorded in accounts payable and accrued liabilities on the Company’s Condensed Consolidated Balance Sheets.

(3) 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 (and the Company’s ownership percentage): (i) Torrey Pines Science Center, LP (50%); (ii) Britannia Biotech Gateway, LP (55%); and (iii) LASDK, LP (63%).

Summarized combined financial information for unconsolidated joint ventures

Summarized combined financial information for the Company’s unconsolidated joint ventures follows (in thousands):

	September 30,		December 31,
	2013		2012
Real estate, net	$	3,676,367	$	3,731,740
Goodwill and other assets, net	5,802,930		5,734,318
Total assets	$	9,479,297	$	9,466,058
Capital lease obligations and mortgage debt	$	6,782,574	$	6,875,932
Accounts payable	1,060,153		971,095
Other partners’ capital	1,452,308		1,435,885
HCP’s capital(1)	184,262		183,146
Total liabilities and partners’ capital	$	9,479,297	$	9,466,058

(1) The combined basis difference of the Company’s investments in these joint ventures of $20 million, as of September 30, 2013, is primarily attributable to goodwill, real estate, capital lease obligations, deferred tax assets and lease related net intangibles.

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013		2012			2013		2012
Total revenues	$	1,055,889	$	1,057,567		$	3,208,752	$	3,196,086
Net income (loss)	1,739		(8,851		)	22,232		8,416
HCP’s share in earnings (1)	13,892		13,396			44,278		42,803
Fees earned by HCP	464		460			1,406		1,423
Distributions received by HCP	1,390		1,419			3,918		4,826

(1) The Company’s joint venture interest in HCR ManorCare is accounted for using the equity method and results in an ongoing reduction of DFL income, proportional to HCP’s ownership in HCR ManorCare. The Company recorded a reduction of $15.4 million and $46.6 million for the three and nine months ended September 30, 2013, respectively. The Company recorded a reduction of $14.9 million and $44.4 million for the three and nine months ended September 30, 2012, respectively. Further, the Company’s share of earnings from HCR ManorCare (equity income) increases for the corresponding reduction of related lease expense recognized at the HCR ManorCare level.

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Other Assets (Tables)

9 Months Ended

Sep. 30, 2013

Other Assets.

Schedule of other assets

The Company’s other assets consisted of the following (in thousands):

	September 30,		December 31,
	2013		2012
Straight-line rent assets, net of allowance of $34,123 and $33,521, respectively	$	358,514	$	306,294
Marketable debt securities, net(1)	238,834		222,809
Leasing costs, net	98,406		93,763
Deferred financing costs, net	37,379		45,490
Goodwill	50,346		50,346
Marketable equity securities	—		24,829
Other(2)	52,518		44,989
Total other assets	$	835,997	$	788,520

(1) Includes £137 million ($222 million and $223 million at September 30, 2013 and December 31, 2012, respectively) of Four Seasons senior unsecured notes translated into U.S. dollars (see below for additional information).

(2) Includes a $5.4 million allowance for losses related to accrued interest receivable on the Delphis loan, which accrued interest is included in other assets. At both September 30, 2013 and December 31, 2012, the carrying value of interest accrued related to the Delphis loan was zero. See Note 6 for additional information about the Delphis loan and the related impairment. At both September 30, 2013 and December 31, 2012, includes a loan receivable of $10 million from HCP Ventures IV, LLC, an unconsolidated joint venture (see Note 7 for additional information) with an interest rate of 12% which matures in May 2014. The loan is secured by HCP’s joint venture partner’s 80% partnership interest in the joint venture.

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Net Investment in Direct Financing Leases

9 Months Ended

Sep. 30, 2013

Net Investment in Direct Financing Leases

Net Investment in Direct Financing Leases

(5) Net Investment in Direct Financing Leases

The components of net investment in direct financing leases (“DFLs”) consisted of the following (dollars in thousands):

	September 30,			December 31,
	2013			2012
Minimum lease payments receivable(1)	$	24,811,003		$	25,217,520
Estimated residual values	4,010,514			4,010,514
Less unearned income	(21,828,165		)	(22,346,641		)
Net investment in direct financing leases	$	6,993,352		$	6,881,393
Properties subject to direct financing leases	361			361

(1) The minimum lease payments receivable are primarily attributable to HCR ManorCare, Inc. (“HCR ManorCare”) ($23.7 billion and $24.0 billion at September 30, 2013 and December 31, 2012, respectively). The triple-net master lease with HCR ManorCare provides for annual rent of $506 million beginning April 1, 2013 (prior to April 1, 2013, annual rent was $489 million). The rent increases by 3.5% per year over the next three years and by 3% for the remaining portion of the initial lease term. The properties are grouped into four pools, and HCR ManorCare has a one-time extension option for each pool with rent increased for the first year of the extension option to the greater of fair market rent or a 3% increase over the rent for the prior year. Including the extension options, which the Company determined to be bargain renewal options, the four leased pools had total initial available terms ranging from 23 to 35 years.

Certain leases contain provisions that allow the tenants to elect to purchase the properties during or at the end of the lease terms for the aggregate initial investment amount plus adjustments, if any, as defined in the lease agreements. Certain leases also permit the Company to require the tenants to purchase the properties at the end of the lease terms.

During the three months ended September 30, 2013, the Company placed a 14-property senior housing DFL (the “DFL Portfolio”) on non-accrual status. Based on the Company’s determination that the collection of all rental payments is no longer reasonably assured, rental revenue for the DFL Portfolio will be recognized on a cash basis. Furthermore, the Company assessed the DFL Portfolio for impairment. The Company determined that the DFL Portfolio was not impaired at September 30, 2013, based on its belief that: (i) it is not probable that it will not collect all of the rental payments under the terms of the lease; and (ii) the fair value of the underlying collateral exceeds the DFL Portfolio’s $376 million carrying amount. The fair value of the DFL Portfolio was estimated based on a discounted cash flow model, which inputs are considered to be a Level 3 measurement within the fair value hierarchy. Inputs to this valuation model include real estate capitalization rates, industry growth rates and operating margins, some of which influence the Company’s expectation of future cash flows from the DFL Portfolio and, accordingly, the fair value of its investment. During the three months ended September 30, 2013 and 2012, the Company recognized DFL income of $5.1 million and $7.0 million, respectively, and received cash payments of $6.1 million and $5.6 million, respectively, from the DFL Portfolio. During the nine months ended September 30, 2013 and 2012, the Company recognized DFL income of $19.1 million and $20.8 million, respectively, and received cash payments of $17.6 million and $17.3 million, respectively, from the DFL Portfolio.

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Earnings Per Common Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Numerator
Income from continuing operations	$ 223,462	$ 192,363	$ 662,308	$ 581,106
Noncontrolling interests' share in continuing operations	(3,102)	(2,935)	(9,625)	(9,070)
Income from continuing operations applicable to HCP, Inc.	220,360	189,428	652,683	572,036
Preferred stock dividends				(17,006)
Participating securities' share in continuing operations	(474)	(479)	(1,330)	(2,154)
Income from continuing operations applicable to common shares	219,886	188,949	651,353	552,876
Discontinued operations	13,396	6,680	25,059	19,476
Net income applicable to common shares	$ 233,282	$ 195,629	$ 676,412	$ 572,352
Denominator
Basic weighted average common shares	455,345,000	429,557,000	454,553,000	420,049,000
Dilutive potential common shares	733,000	1,221,000	835,000	1,355,000
Diluted weighted average common shares	456,078,000	430,778,000	455,388,000	421,404,000
Basic earnings per common share
Income from continuing operations (in dollars per share)	$ 0.48	$ 0.44	$ 1.43	$ 1.32
Discontinued operations (in dollars per share)	$ 0.03	$ 0.02	$ 0.06	$ 0.04
Net income applicable to common shares (in dollars per share)	$ 0.51	$ 0.46	$ 1.49	$ 1.36
Diluted earnings per common share
Income from continuing operations (in dollars per share)	$ 0.48	$ 0.44	$ 1.43	$ 1.32
Discontinued operations (in dollars per share)	$ 0.03	$ 0.01	$ 0.06	$ 0.04
Net income applicable to common shares (in dollars per share)	$ 0.51	$ 0.45	$ 1.49	$ 1.36
Common stock options
Diluted earnings per common share
Shares of anti-dilutive securities excluded from earnings per share calculation	900,000	500,000
Restricted Stock and Performance Restricted Stock Units
Diluted earnings per common share
Shares of anti-dilutive securities excluded from earnings per share calculation	7,500
Down REIT
Diluted earnings per common share
Shares of anti-dilutive securities excluded from earnings per share calculation	6,000,000	6,400,000
DownREIT LLCs, non-managing member units outstanding	3,900,000	4,400,000

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2013

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Management is required to make estimates and assumptions in the preparation of financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from management’s estimates.

The condensed consolidated financial statements include the accounts of HCP, Inc., its wholly-owned subsidiaries and joint ventures or variable interest entities (“VIEs”) that it controls through voting rights or other means. Intercompany transactions and balances have been eliminated upon consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company’s financial position, results of operations and cash flows have been included. Operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The accompanying unaudited interim financial information should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2012 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”).

Certain amounts in the Company’s condensed consolidated financial statements have been reclassified for prior periods to conform to the current period presentation. Assets sold or held for sale and associated liabilities have been reclassified on the condensed consolidated balance sheets and the related operating results reclassified from continuing to discontinued operations on the condensed consolidated statements of income (see Note 4).

Acquisition Costs

Acquisition Costs

Transaction costs related to acquisitions of businesses, including properties, are expensed as incurred.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2013-10, Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate) as a Benchmark Interest Rate for Hedge Accounting Purposes (a consensus of the FASB Emerging Issues Task Force) (“ASU 2013-10”). This update permits the Fed Funds Effective Swap Rate (“OIS”) to be used as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to the interest rates on direct Treasury obligations of the U.S. government (“UST”) and the London Interbank Offered Rate (“LIBOR”). The amendments are effective prospectively for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The adoption of ASU 2013-10 on July 17, 2013 did not have a material impact on the Company’s consolidated financial position or results of operations.

In February 2013, the FASB issued Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”). This update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income. The adoption of ASU 2013-02 on January 1, 2013 did not have a material impact on the Company’s consolidated financial position or results of operations.

In July 2012, the FASB issued Accounting Standards Update No. 2012-01, Continuing Care Retirement Communities—Refundable Advance Fees (“ASU 2012-01”). This update clarifies the situations in which recognition of deferred revenue for refundable advance fees is appropriate. The adoption of ASU 2012-01 on January 1, 2013 did not have a material impact on the Company’s consolidated financial position or results of operations.

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Supplemental Cash Flow Information (Tables)

9 Months Ended

Sep. 30, 2013

Supplemental Cash Flow Information

Supplemental Cash Flow Information

The following table provides supplemental cash flow information (in thousands):

	Nine Months Ended September 30,
	2013			2012
Supplemental cash flow information:
Interest paid, net of capitalized interest	$	363,229		$	339,190
Income taxes paid (refunded)	(2		)	1,645
Capitalized interest	10,852			18,517
Supplemental schedule of non-cash investing activities:
Accrued construction costs	18,495			18,024
Fair value of real estate acquired in exchange for sale of real estate	15,204			—

	Nine Months Ended September 30,
	2013	2012
Supplemental schedule of non-cash financing activities:
Vesting of restricted stock units	110	385
Cancellation of restricted stock	17	6
Conversion of non-managing member units into common stock	2,997	2,398
Noncontrolling interests issued in connection with acquisitions	—	27,432
Mortgages and other liabilities assumed with real estate acquisitions	12,728	35,120
Unrealized gains on available-for-sale securities and derivatives designated as cash flow hedges, net	6,990	2,203

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Intangibles

9 Months Ended

Sep. 30, 2013

Intangibles

Intangibles

(8) Intangibles

At September 30, 2013 and December 31, 2012, intangible lease assets, comprised of lease-up intangibles, above market tenant lease intangibles and below market ground lease intangibles, were $784 million and $794 million, respectively. At September 30, 2013 and December 31, 2012, the accumulated amortization of intangible assets was $276 million and $241 million, respectively.

At September 30, 2013 and December 31, 2012, intangible lease liabilities, comprised of below market lease intangibles and above market ground lease intangible liabilities were $208 million and $194 million, respectively. At September 30, 2013 and December 31, 2012, the accumulated amortization of intangible liabilities was $105 million and $90 million, respectively.

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Dispositions of Real Estate and Discontinued Operations

9 Months Ended

Sep. 30, 2013

Dispositions of Real Estate and Discontinued Operations

Dispositions of Real Estate and Discontinued Operations

(4)   Dispositions of Real Estate and Discontinued Operations

During the nine months ended September 30, 2013, the Company sold a senior housing facility for $4 million. In addition, in September 2013, the Company sold a 62-bed hospital located in Greenfield, Wisconsin in exchange for a 60-bed hospital located in Webster, Texas and recognized a gain of $8 million based on the fair value of the hospital acquired. During the nine months ended September 30, 2012, the Company sold a medical office building for $7 million.

At September 30, 2013, four hospitals were classified as held for sale, with a carrying value of $131 million. At December 31, 2012, properties classified as held for sale included a senior housing facility and five hospitals with a combined aggregate carrying value of $146 million.

The following table summarizes operating loss from discontinued operations and gain on sales of real estate included in discontinued operations (dollars in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013		2012
Rental and related revenues	$	6,460		$	10,260	$	20,458	$	31,023
Depreciation and amortization expenses	1,433			2,969		4,346		11,876
Operating expenses	3			18		9		75
Other income (expense), net	(74		)	593		229		2,452
Income before gain on sales of real estate	$	5,098		$	6,680	$	15,874	$	16,620
Gain on sales of real estate, net of income taxes	$	8,298		$	—	$	9,185	$	2,856
Number of properties included in discontinued operations	5			9		6		10

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) (USD $)	0 Months Ended				3 Months Ended		9 Months Ended
	Oct. 24, 2013	Jul. 25, 2013	Apr. 25, 2013	Jan. 24, 2013	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Common dividends, per share (in dollars per share)	$ 0.525	$ 0.525	$ 0.525	$ 0.525	$ 0.525	$ 0.50	$ 1.575	$ 1.50

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Loans Receivable (Details)	3 Months Ended		9 Months Ended					9 Months Ended		0 Months Ended								0 Months Ended				1 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)	Sep. 30, 2013 USD ($)	Sep. 30, 2012 USD ($)	Dec. 31, 2012 USD ($)	Sep. 30, 2013 Real Estate Secured USD ($)	Dec. 31, 2012 Real Estate Secured USD ($)	Sep. 30, 2013 Other Secured USD ($)	Dec. 31, 2012 Other Secured USD ($)	Sep. 06, 2013 Barchester Loan USD ($)	Sep. 06, 2013 Barchester Loan GBP (£)	Aug. 23, 2013 Barchester Loan USD ($)	Aug. 23, 2013 Barchester Loan GBP (£)	May 02, 2013 Barchester Loan USD ($) item	May 02, 2013 Barchester Loan GBP (£)	Sep. 30, 2013 Tandem Health Care Loan USD ($)	Jul. 31, 2012 Tandem Health Care Loan USD ($)	Jul. 30, 2012 Tandem Health Care Loan Maximum	Jul. 31, 2012 Tandem Health Care Loan Maximum USD ($)	Jul. 31, 2012 Tandem Health Care Loan - First Tranche USD ($)	Jun. 30, 2013 Tandem Health Care Loan - Second Tranche USD ($)	Mar. 31, 2012 Delphis USD ($)	Sep. 30, 2013 Delphis USD ($) item	Dec. 31, 2012 Delphis USD ($) item
Loans receivable:
Mezzanine	$ 245,535,000		$ 245,535,000		$ 145,150,000			$ 245,535,000	$ 145,150,000
Loan receivable, other	161,471,000		161,471,000		147,264,000	161,471,000	147,264,000												205,000,000	100,000,000	102,000,000
Unamortized discounts, fees and costs	(2,793,000)		(2,793,000)		(2,974,000)			(2,793,000)	(2,974,000)
Allowance for loan losses	(13,410,000)		(13,410,000)		(13,410,000)			(13,410,000)	(13,410,000)
Loans receivable, net	390,803,000		390,803,000		276,030,000	161,471,000	147,264,000	229,332,000	128,766,000
Construction loans outstanding related to senior housing development projects								110,000,000	72,000,000
Remaining commitments to fund development projects								37,000,000
Loans receivable purchased, face or par value												14,000,000	9,000,000	188,000,000	121,000,000
Loans receivable purchased, discount												8,000,000	5,000,000	170,000,000	109,000,000
Number of facilities														160	160
Debt instrument, variable rate basis														London Interbank Offered Rate ("LIBOR")	London Interbank Offered Rate ("LIBOR")
Debt instrument, weighted-average basis spread on variable rate (as a percent)														3.14%	3.14%
Loan receivable subordinated to senior mortgage debt																443,000,000	400,000,000
Loan receivable subordinated to senior mezzanine debt																	137,000,000
Loan receivable, interest rate payable (as a percent)																				12.00%	14.00%
Loan receivable term																		63 months
Number of partnerships that lease a property owned by the Company																							1
Distribution of fund to guarantor																						1,500,000
Cash payment received																						4,800,000
Legal expenses																						500,000
Other consideration received																						2,100,000
Proceeds from guarantor																						6,900,000
Proceeds from sale of collateral asset																								38,100,000
Number of collateral primary assets sold																								2
Loans receivable, net reported amount																							29,200,000	30,700,000
Cash payments received from borrower										202,000,000	129,000,000												1,500,000
Additional interest income as a result of extinguishment of loans	$ 42,078,000	$ 10,278,000	$ 68,611,000	$ 12,313,000						$ 24,000,000

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Business (Details)	9 Months Ended
	Sep. 30, 2013 item
Business
Number of reportable segments	5
Number of products in reportable segment	5

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Net Investment in Direct Financing Leases (Tables)

9 Months Ended

Sep. 30, 2013

Net Investment in Direct Financing Leases

Schedule of net investment in direct financing leases

The components of net investment in direct financing leases (“DFLs”) consisted of the following (dollars in thousands):

	September 30,			December 31,
	2013			2012
Minimum lease payments receivable(1)	$	24,811,003		$	25,217,520
Estimated residual values	4,010,514			4,010,514
Less unearned income	(21,828,165		)	(22,346,641		)
Net investment in direct financing leases	$	6,993,352		$	6,881,393
Properties subject to direct financing leases	361			361

(1) The minimum lease payments receivable are primarily attributable to HCR ManorCare, Inc. (“HCR ManorCare”) ($23.7 billion and $24.0 billion at September 30, 2013 and December 31, 2012, respectively). The triple-net master lease with HCR ManorCare provides for annual rent of $506 million beginning April 1, 2013 (prior to April 1, 2013, annual rent was $489 million). The rent increases by 3.5% per year over the next three years and by 3% for the remaining portion of the initial lease term. The properties are grouped into four pools, and HCR ManorCare has a one-time extension option for each pool with rent increased for the first year of the extension option to the greater of fair market rent or a 3% increase over the rent for the prior year. Including the extension options, which the Company determined to be bargain renewal options, the four leased pools had total initial available terms ranging from 23 to 35 years.

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Disclosures About Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Summary of financial instruments
Marketable equity securities		$ 24,829
Bank line of credit	285,000
Senior unsecured notes	6,565,934	6,712,624
Mortgage debt	1,410,407	1,676,544
Other debt	77,503	81,958
Carrying Value
Summary of financial instruments
Loans receivable, net	390,803	276,030
Marketable debt securities	238,834	222,809
Marketable equity securities		24,829
Bank line of credit	285,000
Term loan	221,748	222,694
Senior unsecured notes	6,565,934	6,712,624
Mortgage debt	1,410,407	1,676,544
Other debt	77,503	81,958
Carrying Value | Warrants
Summary of financial instruments
Derivative assets	180	670
Carrying Value | Interest-rate swap contracts
Summary of financial instruments
Derivative assets	1,564	89
Derivative liabilities	9,283	12,699
Carrying Value | Currency swap contracts
Summary of financial instruments
Derivative liabilities	1,897	2,641
Fair Value | Level 1
Summary of financial instruments
Marketable debt securities	272,745	234,137
Marketable equity securities		24,829
Senior unsecured notes	7,027,982	7,432,012
Fair Value | Level 2
Summary of financial instruments
Loans receivable, net	402,243	279,850
Bank line of credit	285,000
Term loan	221,748	222,694
Mortgage debt	1,452,732	1,771,155
Other debt	77,503	81,958
Fair Value | Warrants | Level 3
Summary of financial instruments
Derivative assets	180	670
Fair Value | Interest-rate swap contracts | Level 2
Summary of financial instruments
Derivative assets	1,564	89
Derivative liabilities	9,283	12,699
Fair Value | Currency swap contracts | Level 2
Summary of financial instruments
Derivative liabilities	$ 1,897	$ 2,641

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Segment Disclosures (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 item	Sep. 30, 2012
Segment reporting information, revenues
Number of reportable segments			5
Resident Fees and Services	$ 37,589	$ 36,076	$ 112,070	$ 107,824
Interest Income	42,078	10,278	68,611	12,313
Investment Management Fee Income	464	460	1,406	1,423
Total revenues	543,958	468,066	1,563,292	1,370,999
NOI	424,847	384,675	1,268,293	1,147,229
Adjusted NOI (Cash NOI)	391,969	349,149	1,168,007	1,041,877
Operating segment
Segment reporting information, revenues
Rental Revenues	463,827	421,252	1,381,205	1,249,439
Resident Fees and Services	37,589	36,076	112,070	107,824
Interest Income	42,078	10,278	68,611	12,313
Investment Management Fee Income	464	460	1,406	1,423
Total revenues	543,958	468,066	1,563,292	1,370,999
NOI	424,847	384,675	1,268,293	1,147,229
Adjusted NOI (Cash NOI)	391,969	349,149	1,168,007	1,041,877
Operating segment | Senior housing
Segment reporting information, revenues
Rental Revenues	149,443	114,661	448,600	341,353
Resident Fees and Services	37,589	36,076	112,070	107,824
Interest Income	3,121	877	8,328	1,686
Total revenues	190,153	151,614	568,998	450,863
NOI	162,391	125,865	487,501	379,251
Adjusted NOI (Cash NOI)	148,997	113,401	440,395	341,794
Operating segment | Post-acute/skilled
Segment reporting information, revenues
Rental Revenues	138,289	135,183	411,912	403,209
Interest Income	38,642	9,135	59,656	9,842
Total revenues	176,931	144,318	471,568	413,051
NOI	137,642	135,029	409,965	402,690
Adjusted NOI (Cash NOI)	120,258	116,573	356,544	345,936
Operating segment | Life science
Segment reporting information, revenues
Rental Revenues	72,531	71,194	221,088	215,569
Investment Management Fee Income	1	1	3	3
Total revenues	72,532	71,195	221,091	215,572
NOI	58,440	59,403	179,775	177,339
Adjusted NOI (Cash NOI)	56,352	56,341	170,957	171,179
Operating segment | Medical office
Segment reporting information, revenues
Rental Revenues	88,473	85,800	265,902	246,661
Investment Management Fee Income	463	459	1,403	1,420
Total revenues	88,936	86,259	267,305	248,081
NOI	52,255	50,852	160,170	148,030
Adjusted NOI (Cash NOI)	52,214	49,669	157,742	144,272
Operating segment | Hospital
Segment reporting information, revenues
Rental Revenues	15,091	14,414	33,703	42,647
Interest Income	315	266	627	785
Total revenues	15,406	14,680	34,330	43,432
NOI	14,119	13,526	30,882	39,919
Adjusted NOI (Cash NOI)	$ 14,148	$ 13,165	$ 42,369	$ 38,696

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies.

Commitments and Contingencies

(11) Commitments and Contingencies

Legal Proceedings

From time to time, the Company is a party to legal proceedings, lawsuits and other claims that arise in the ordinary course of the Company’s business. The Company is not aware of any legal proceedings or claims that it believes may have, individually or taken together, a material adverse effect on the Company’s business, prospects, financial condition, results of operations or cash flows. The Company’s policy is to expense legal costs as they are incurred.

Concentration of Credit Risk

Concentrations of credit risks arise when one or more operators, tenants or obligors related to the Company’s investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions. The Company regularly monitors various segments of its portfolio to assess potential concentrations of risks. The Company does not have significant foreign operations.

The following table provides information regarding the Company’s concentrations with respect to certain operators and tenants; the information provided is presented for the gross assets and revenues that are associated with certain operators and tenants as percentages of the respective segment’s and total Company’s assets and revenues:

Segment Concentrations:

	Percentage of Senior Housing Gross Assets							Percentage of Senior Housing Revenues					Percentage of Senior Housing Revenues
	September 30,			December 31,			Three Months Ended September 30,					Nine Months Ended September 30,
Operators	2013		2012			2013				2012		2013			2012
Emeritus	37.3	%	37.3		%	34.8			%	20.3	%	34.6		%	20.5	%
Sunrise Senior Living (“Sunrise”)(1)	17.2		17.5			11.5				15.6		12.2			15.7
HCR ManorCare	11.0		11.0			9.6				11.7		9.5			11.8
Brookdale Senior Living (“Brookdale”)(2)	10.6		10.7			11.7				14.4		11.6			14.2

	Percentage of Post-Acute/ Skilled Nursing Gross Assets							Percentage of Post-Acute/ Skilled Nursing Revenues					Percentage of Post-Acute/ Skilled Nursing Revenues
	September 30,			December 31,			Three Months Ended September 30,					Nine Months Ended September 30,
Operators	2013		2012			2013				2012		2013			2012
HCR ManorCare	88.1	%	89.3		%	72.7			%	87.2	%	81.3		%	90.9	%

Total Company Concentrations:

	Percentage of Total Company Assets							Percentage of Total Company Revenues					Percentage of Total Company Revenues
	September 30,			December 31,			Three Months Ended September 30,					Nine Months Ended September 30,
Operators	2013		2012			2013				2012		2013			2012
HCR ManorCare	32.1	%	31.5		%	27.0			%	30.7	%	28.0		%	31.2	%
Emeritus	14.6		14.3			12.2				6.6		12.6			6.7
Sunrise(1)	6.8		6.7			4.0				5.0		4.4			5.2
Brookdale(2)	4.2		4.1			4.1				4.7		4.2			4.7

(1) Certain of the Company’s properties are leased to tenants who have entered into management contracts with Sunrise to operate the respective property on their behalf. The Company’s concentration of gross assets includes properties directly leased to Sunrise and properties that are managed by Sunrise on behalf of third party tenants.

(2) At September 30, 2013 and December 31, 2012, Brookdale percentages exclude $778 million and $759 million, respectively, of senior housing assets related to 21 senior housing facilities that Brookdale operates on the Company’s behalf under a RIDEA structure. Assuming that these assets were attributable to Brookdale, the percentage of senior housing assets for Brookdale would be 21% at both September 30, 2013 and December 31, 2012. Assuming that these assets were attributable to Brookdale, the percentage of total assets for Brookdale would be 8% at both September 30, 2013 and December 31, 2012. For the three and nine months ended September 30, 2013, Brookdale percentages exclude $37.6 million and $112.0 million, respectively, of senior housing revenues related to these facilities. Assuming that these revenues were attributable to Brookdale, the percentage of senior housing revenues for Brookdale would be 31% for both the three and nine months ended September 30, 2013. Assuming that these revenues were attributable to Brookdale, the percentage of total revenues for Brookdale would be 11% for both the three and nine months ended September 30, 2013. For the three and nine months ended September 30, 2012, Brookdale percentages exclude $36.1 million and $106.8 million, respectively, of senior housing revenues related to these facilities. Assuming that these revenues were attributable to Brookdale, the percentage of senior housing revenues for Brookdale would be 38% for both the three and nine months ended September 30, 2012. Assuming that these revenues were attributable to Brookdale, the percentage of total revenues for Brookdale would be 12% for both the three and nine months ended September 30, 2012.

HCR ManorCare’s summarized condensed consolidated financial information follows (in millions):

	September 30,		December 31,
	2013		2012
Real estate and other property, net	$	3,008.7	$	3,046.6
Cash and cash equivalents	158.5		120.5
Goodwill, intangible and other assets, net	5,563.7		5,625.4
Total assets	$	8,730.9	$	8,792.5
Debt and financing obligations	$	6,289.0	$	6,374.6
Accounts payable, accrued liabilities and other	1,021.8		1,021.9
Total equity	1,420.1		1,396.0
Total liabilities and equity	$	8,730.9	$	8,792.5

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues	$	1,030.3		$	1,037.8		$	3,131.7		$	3,113.3
Operating, general and administrative expense	(888.1		)	(880.8		)	(2,677.4		)	(2,663.7		)
Depreciation and amortization expense	(36.3		)	(41.6		)	(110.0		)	(125.2		)
Interest expense	(103.8		)	(105.2		)	(312.3		)	(317.3		)
Other income, net	2.3			3.7			4.0			10.1
Income before income taxes	4.4			13.9			36.0			17.2
Income taxes	(1.8		)	(4.8		)	(11.6		)	(4.7		)
Net income	$	2.6		$	9.1		$	24.4		$	12.5

To mitigate the credit risk of leasing properties to certain senior housing and post-acute/skilled nursing operators, leases with operators are often combined into portfolios that contain cross-default terms, so that if a tenant of any of the properties in a portfolio defaults on its obligations under its lease, the Company may pursue its remedies under the lease with respect to any of the properties in the portfolio. Certain portfolios also contain terms whereby the net operating profits of the properties are combined for the purpose of securing the funding of rental payments due under each lease.

Credit Enhancement Guarantee

Certain of the Company’s senior housing facilities serve as collateral for $113 million of debt (maturing May 1, 2025) that is owed by a previous owner of the facilities. This indebtedness is guaranteed by the previous owner who has an investment grade credit rating. These senior housing facilities, which are classified as DFLs, had a carrying value of $376 million as of September 30, 2013.

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Investments in and Advances to Unconsolidated Joint Ventures

9 Months Ended

Sep. 30, 2013

Investments in and Advances to Unconsolidated Joint Ventures

Investments in and Advances to Unconsolidated Joint Ventures

(7)   Investments in and Advances to Unconsolidated Joint Ventures

The Company owns interests in the following entities that are accounted for under the equity method at September 30, 2013 (dollars in thousands):

Entity(1)	Properties/Segment	Investment(2)			Ownership%
HCR ManorCare	post-acute/skilled nursing operations	$	85,777		9.5
HCP Ventures III, LLC	13 medical office	7,251			30
HCP Ventures IV, LLC	54 medical office and 4 hospital	30,420			20
HCP Life Science(3)	4 life science	68,992			50-63
Horizon Bay Hyde Park, LLC	1 senior housing	6,725			72
Suburban Properties, LLC	1 medical office	6,666			67
Advances to unconsolidated joint ventures, net		173
		$	206,004
Edgewood Assisted Living Center, LLC	1 senior housing	$	(429	)	45
Seminole Shores Living Center, LLC	1 senior housing	(697		)	50
		$	(1,126	)

(1) These entities are not consolidated because the Company does not control, through voting rights or other means, the joint ventures.

(2) Represents the carrying value of the Company’s investment in the unconsolidated joint venture. Negative balances are recorded in accounts payable and accrued liabilities on the Company’s Condensed Consolidated Balance Sheets.

(3) 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 (and the Company’s ownership percentage): (i) Torrey Pines Science Center, LP (50%); (ii) Britannia Biotech Gateway, LP (55%); and (iii) LASDK, LP (63%).

Summarized combined financial information for the Company’s unconsolidated joint ventures follows (in thousands):

	September 30,		December 31,
	2013		2012
Real estate, net	$	3,676,367	$	3,731,740
Goodwill and other assets, net	5,802,930		5,734,318
Total assets	$	9,479,297	$	9,466,058
Capital lease obligations and mortgage debt	$	6,782,574	$	6,875,932
Accounts payable	1,060,153		971,095
Other partners’ capital	1,452,308		1,435,885
HCP’s capital(1)	184,262		183,146
Total liabilities and partners’ capital	$	9,479,297	$	9,466,058

(1) The combined basis difference of the Company’s investments in these joint ventures of $20 million, as of September 30, 2013, is primarily attributable to goodwill, real estate, capital lease obligations, deferred tax assets and lease related net intangibles.

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013		2012			2013		2012
Total revenues	$	1,055,889	$	1,057,567		$	3,208,752	$	3,196,086
Net income (loss)	1,739		(8,851		)	22,232		8,416
HCP’s share in earnings (1)	13,892		13,396			44,278		42,803
Fees earned by HCP	464		460			1,406		1,423
Distributions received by HCP	1,390		1,419			3,918		4,826

(1) The Company’s joint venture interest in HCR ManorCare is accounted for using the equity method and results in an ongoing reduction of DFL income, proportional to HCP’s ownership in HCR ManorCare. The Company recorded a reduction of $15.4 million and $46.6 million for the three and nine months ended September 30, 2013, respectively. The Company recorded a reduction of $14.9 million and $44.4 million for the three and nine months ended September 30, 2012, respectively. Further, the Company’s share of earnings from HCR ManorCare (equity income) increases for the corresponding reduction of related lease expense recognized at the HCR ManorCare level.

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Impairments (Details) (USD $)			3 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012 Poway, CA property sqft	Sep. 30, 2012 Poway, CA property Land acre
Impairments
Area under expanded tenant relationship (in square feet)			396,000
Area of lease extension (in square feet)			281,000
Real estate lease term			10 years
Area of building to be developed (in square feet)			115,000
Land acquired (in acres)				19
Sales price of parcel				$ 19,000,000
Impairment related to parcel of land				7,900,000
Carrying value, land	$ 1,841,333,000	$ 1,833,607,000		$ 27,000,000

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Earnings Per Common Share

9 Months Ended

Sep. 30, 2013

Earnings Per Common Share

Earnings Per Common Share

(14) Earnings Per Common Share

The following table illustrates the computation of basic and diluted earnings per share (in thousands, except per share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Numerator
Income from continuing operations	$	223,462		$	192,363		$	662,308		$	581,106
Noncontrolling interests’ share in continuing operations	(3,102		)	(2,935		)	(9,625		)	(9,070		)
Income from continuing operations applicable to HCP, Inc.	220,360			189,428			652,683			572,036
Preferred stock dividends	—			—			—			(17,006		)
Participating securities’ share in continuing operations	(474		)	(479		)	(1,330		)	(2,154		)
Income from continuing operations applicable to common shares	219,886			188,949			651,353			552,876
Discontinued operations	13,396			6,680			25,059			19,476
Net income applicable to common shares	$	233,282		$	195,629		$	676,412		$	572,352
Denominator
Basic weighted average common shares	455,345			429,557			454,553			420,049
Dilutive potential common shares	733			1,221			835			1,355
Diluted weighted average common shares	456,078			430,778			455,388			421,404
Basic earnings per common share
Income from continuing operations	$	0.48		$	0.44		$	1.43		$	1.32
Discontinued operations	0.03			0.02			0.06			0.04
Net income applicable to common shares	$	0.51		$	0.46		$	1.49		$	1.36
Diluted earnings per common share
Income from continuing operations	$	0.48		$	0.44		$	1.43		$	1.32
Discontinued operations	0.03			0.01			0.06			0.04
Net income applicable to common shares	$	0.51		$	0.45		$	1.49		$	1.36

Restricted stock and certain of the Company’s performance restricted stock units are considered participating securities, because dividend payments are not forfeited even if the underlying award does not vest, which require the use of the two-class method when computing basic and diluted earnings per share.

Options to purchase approximately 0.9 million and 0.5 million shares of common stock that had an exercise price (including deferred compensation expense) in excess of the average closing market price of the Company’s common stock during the three months ended September 30, 2013 and 2012, respectively, were not included in the Company’s earnings per share calculations because they are anti-dilutive. Restricted stock and performance restricted stock units representing 7,500 shares of common stock during the three months ended September 30, 2013 were not included because they are anti-dilutive. Additionally, 6.0 million shares issuable upon conversion of 3.9 million DownREIT units during the three months ended September 30, 2013 were not included because they are anti-dilutive. During the three months ended September 30, 2012, 6.4 million shares issuable upon conversion of 4.4 million DownREIT units were not included because they are anti-dilutive.

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Equity

9 Months Ended

Sep. 30, 2013

Equity

Equity

(12) Equity

Preferred Stock

On April 23, 2012, the Company redeemed all of its outstanding preferred stock consisting of 4,000,000 shares of its 7.25% Series E preferred stock and 7,820,000 shares of its 7.10% Series F preferred stock. The shares of Series E and Series F preferred stock were redeemed at a price of $25 per share, or $295.5 million in aggregate, plus all accrued and unpaid dividends to the redemption date. As a result of the redemption, which was announced on March 22, 2012, the Company incurred a charge of $10.4 million during the three months ended March 31, 2012 related to the original issuance costs of the preferred stock (this charge is presented as an additional preferred stock dividend in the Company’s condensed consolidated statements of income).

Common Stock

The following table lists the common stock cash dividends declared by the Company in 2013:

Declaration Date	Record Date	Amount Per Share		Dividend Payable Date
January 24	February 4	$	0.525	February 19
April 25	May 6	0.525		May 21
July 25	August 5	0.525		August 20
October 24	November 4	0.525		November 19

In October 2012, the Company completed a $979 million offering of 22 million shares of common stock at a price of $44.50 per share, which proceeds were primarily used to fund the Blackstone JV Acquisition.

In June 2012, the Company completed a $376 million offering of 8.97 million shares of common stock at a price of $41.88 per share, which proceeds were primarily used to repay $250 million of maturing senior unsecured notes.

In March 2012, the Company completed a $359 million offering of 9.0 million shares of common stock at a price of $39.93 per share, which proceeds were primarily used to redeem all outstanding shares of the Company’s preferred stock.

The following is a summary of the Company’s other common stock issuances (shares in thousands):

	Nine Months Ended September 30,
	2013	2012
Dividend Reinvestment and Stock Purchase Plan	1,681	675
Conversion of DownREIT units(1)	85	72
Exercise of stock options	875	2,451
Vesting of restricted stock units(2)	110	385

(1) Non-managing member LLC units.

(2) Issued under the Company’s 2006 Performance Incentive Plan.

Accumulated Other Comprehensive Loss

The following is a summary of the Company’s accumulated other comprehensive loss (in thousands):

	September 30,			December 31,
	2013			2012
Unrealized gains on available for sale securities	$	—		$	7,776
Unrealized losses on cash flow hedges, net	(12,066		)	(18,452		)
Supplemental Executive Retirement Plan minimum liability	(2,983		)	(3,150		)
Cumulative foreign currency translation adjustment	(830		)	(827		)
Total accumulated other comprehensive loss	$	(15,879	)	$	(14,653	)

Noncontrolling Interests

At September 30, 2013, non-managing members hold an aggregate of 4 million units in four limited liability companies (“DownREITs”), for which the Company is the managing member. At September 30, 2013, the carrying and fair values of these DownREIT units were $185 million and $246 million, respectively.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 25, 2013
Document and Entity Information
Entity Registrant Name	HCP, INC.
Entity Central Index Key	0000765880
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		456,271,507
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

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Segment Disclosures

9 Months Ended

Sep. 30, 2013

Segment Disclosures

Segment Disclosures

(13) Segment Disclosures

The Company evaluates its business and makes resource allocations based on its five business segments: (i) senior housing, (ii) post-acute/skilled nursing, (iii) life science, (iv) medical office and (v) hospital. Under the senior housing, post-acute/skilled nursing, life science and hospital segments, the Company invests or co-invests primarily in single operator or tenant properties, through the acquisition and development of real estate, management of operations (RIDEA) and by debt issued by operators in these sectors. Under the medical office segment, the Company invests or co-invests through the acquisition and development of medical office buildings (“MOBs”) that are leased under gross, modified gross or triple-net leases, generally to multiple tenants, and which generally require a greater level of property management. The accounting policies of the segments are the same as those described in Note 2 to the Consolidated Financial Statements for the year ended December 31, 2012 in the Company’s Annual Report on Form 10-K filed with the SEC. There were no intersegment sales or transfers during the nine months ended September 30, 2013 and 2012. The Company evaluates performance based upon property net operating income from continuing operations (“NOI”), adjusted NOI and interest income of the combined investments in each segment.

Non-segment assets consist primarily of corporate assets including cash and cash equivalents, restricted cash, accounts receivable, net, marketable equity securities, deferred financing costs and, if any, real estate held-for-sale. Interest expense, depreciation and amortization and non-property specific revenues and expenses are not allocated to individual segments in determining the Company’s performance measure. See Note 11 for other information regarding concentrations of credit risk.

Summary information for the reportable segments follows (in thousands):

For the three months ended September 30, 2013:

Segments	Rental Revenues(1)		Resident Fees and Services		Interest Income		Investment Management Fee Income		Total Revenues		NOI(2)		Adjusted NOI(2)(Cash NOI)
Senior housing	$	149,443	$	37,589	$	3,121	$	—	$	190,153	$	162,391	$	148,997
Post-acute/skilled	138,289		—		38,642		—		176,931		137,642		120,258
Life science	72,531		—		—		1		72,532		58,440		56,352
Medical office	88,473		—		—		463		88,936		52,255		52,214
Hospital	15,091		—		315		—		15,406		14,119		14,148
Total	$	463,827	$	37,589	$	42,078	$	464	$	543,958	$	424,847	$	391,969

For the three months ended September 30, 2012:

Segments	Rental Revenues(1)		Resident Fees and Services		Interest Income		Investment Management Fee Income		Total Revenues		NOI(2)		Adjusted NOI(2)(Cash NOI)
Senior housing	$	114,661	$	36,076	$	877	$	—	$	151,614	$	125,865	$	113,401
Post-acute/skilled	135,183		—		9,135		—		144,318		135,029		116,573
Life science	71,194		—		—		1		71,195		59,403		56,341
Medical office	85,800		—		—		459		86,259		50,852		49,669
Hospital	14,414		—		266		—		14,680		13,526		13,165
Total	$	421,252	$	36,076	$	10,278	$	460	$	468,066	$	384,675	$	349,149

For the nine months ended September 30, 2013:

Segments	Rental Revenues(1)		Resident Fees and Services		Interest Income		Investment Management Fee Income		Total Revenues		NOI(2)		Adjusted NOI(2)(Cash NOI)
Senior housing	$	448,600	$	112,070	$	8,328	$	—	$	568,998	$	487,501	$	440,395
Post-acute/skilled	411,912		—		59,656		—		471,568		409,965		356,544
Life science	221,088		—		—		3		221,091		179,775		170,957
Medical office	265,902		—		—		1,403		267,305		160,170		157,742
Hospital	33,703		—		627		—		34,330		30,882		42,369
Total	$	1,381,205	$	112,070	$	68,611	$	1,406	$	1,563,292	$	1,268,293	$	1,168,007

For the nine months ended September 30, 2012:

Segments	Rental Revenues(1)		Resident Fees and Services		Interest Income		Investment Management Fee Income		Total Revenues		NOI(2)		Adjusted NOI(2)(Cash NOI)
Senior housing	$	341,353	$	107,824	$	1,686	$	—	$	450,863	$	379,251	$	341,794
Post-acute/skilled	403,209		—		9,842		—		413,051		402,690		345,936
Life science	215,569		—		—		3		215,572		177,339		171,179
Medical office	246,661		—		—		1,420		248,081		148,030		144,272
Hospital	42,647		—		785		—		43,432		39,919		38,696
Total	$	1,249,439	$	107,824	$	12,313	$	1,423	$	1,370,999	$	1,147,229	$	1,041,877

(1) Represents rental and related revenues, tenant recoveries and income from DFLs.

(2) NOI is a non-GAAP supplemental financial measure used to evaluate the operating performance of real estate. The Company defines NOI as rental and related revenues, including tenant recoveries, resident fees and services, and income from DFLs, less property level operating expenses. NOI excludes interest income, investment management fee income, interest expense, depreciation and amortization, general and administrative expenses, litigation settlement, impairments, impairment recoveries, other income, net, income taxes, equity income from and impairments of investments in unconsolidated joint ventures, and discontinued operations. The Company believes NOI provides relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis. Adjusted NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL accretion, amortization of above and below market lease intangibles, and lease termination fees. Adjusted NOI is sometimes referred to as “cash NOI.” The Company uses NOI and adjusted NOI to make decisions about resource allocations and to assess and compare property level performance. 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 because it does not reflect the aforementioned excluded items. Further, the Company’s definition of NOI may not be comparable to the definition used by other REITs or real estate companies, as those companies may use different methodologies for calculating NOI.

The following is a reconciliation of reported net income to NOI and adjusted NOI (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Net income	$	236,858		$	199,043		$	687,367		$	600,582
Interest income	(42,078		)	(10,278		)	(68,611		)	(12,313		)
Investment management fee income	(464		)	(460		)	(1,406		)	(1,423		)
Interest expense	108,088			103,355			326,094			309,399
Depreciation and amortization	104,859			87,170			317,430			254,463
General and administrative	45,423			19,415			90,080			54,299
Impairments	—			7,878			—			7,878
Other income, net	(1,584		)	(770		)	(16,887		)	(2,232		)
Income taxes	1,033			(602		)	3,563			(1,145		)
Equity income from unconsolidated joint ventures	(13,892		)	(13,396		)	(44,278		)	(42,803		)
Total discontinued operations	(13,396		)	(6,680		)	(25,059		)	(19,476		)
NOI	424,847			384,675			1,268,293			1,147,229
Straight-line rents	(12,604		)	(11,821		)	(28,559		)	(33,608		)
DFL accretion	(19,822		)	(23,433		)	(65,386		)	(71,072		)
Amortization of above and below market lease intangibles, net	(346		)	(533		)	(6,414		)	(1,855		)
Lease termination fees	(205		)	(175		)	(220		)	(574		)
NOI adjustments related to discontinued operations	99			436			293			1,757
Adjusted NOI	$	391,969		$	349,149		$	1,168,007		$	1,041,877

The Company’s total assets by segment were (in thousands):

	September 30,			December 31,
Segments	2013			2012
Senior housing	$	7,811,003		$	7,654,221
Post-acute/skilled nursing	6,269,566			6,080,826
Life science	3,969,723			3,932,397
Medical office	2,686,241			2,661,394
Hospital	542,187			505,393
Gross segment assets	21,278,720			20,834,231
Accumulated depreciation and amortization	(2,192,342		)	(1,900,221		)
Net segment assets	19,086,378			18,934,010
Assets held-for-sale, net	130,765			145,621
Other non-segment assets	672,366			835,924
Total assets	$	19,889,509		$	19,915,555

At September 30, 2013, goodwill of $50 million was allocated to segment assets as follows: (i) senior housing—$31 million, (ii) post-acute/skilled nursing—$3 million, (iii) medical office—$11 million, and (iv) hospital—$5 million.

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Segment Disclosures (Details 3) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013		Dec. 31, 2012
Segment Disclosure
Assets held-for-sale, net	$ 130,765		$ 145,621
Total assets	19,889,509	[1]	19,915,555	[1]
Goodwill	50,346		50,346
Operating segment
Segment Disclosure
Gross assets	21,278,720		20,834,231
Accumulated depreciation and amortization	(2,192,342)		(1,900,221)
Assets held-for-sale, net	130,765		145,621
Total assets	19,086,378		18,934,010
Operating segment | Senior housing
Segment Disclosure
Gross assets	7,811,003		7,654,221
Goodwill	31,000
Operating segment | Post-acute/skilled nursing
Segment Disclosure
Gross assets	6,269,566		6,080,826
Goodwill	3,000
Operating segment | Life science
Segment Disclosure
Gross assets	3,969,723		3,932,397
Operating segment | Medical office
Segment Disclosure
Gross assets	2,686,241		2,661,394
Goodwill	11,000
Operating segment | Hospital
Segment Disclosure
Gross assets	542,187		505,393
Assets held-for-sale, net	131,000		146,000
Goodwill	5,000
Other non-segment
Segment Disclosure
Total assets	$ 672,366		$ 835,924

[1] The Company's consolidated total assets at September 30, 2013 and December 31, 2012, include assets of certain variable interest entities ("VIEs") that can only be used to settle the liabilities of those VIEs. At September 30, 2013: $1.5 million, other assets, net. At December 31, 2012: accounts receivable, net, $2 million; cash and cash equivalents, $10 million; and other assets, net, $2 million, respectively. See Note 16 to the Condensed Consolidated Financial Statements for additional information.

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Segment Disclosures (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Reconciliation from reported net income to NOI and adjusted NOI
Net income	$ 236,858	$ 199,043	$ 687,367	$ 600,582
Interest income	(42,078)	(10,278)	(68,611)	(12,313)
Investment management fee income	(464)	(460)	(1,406)	(1,423)
Interest expense	108,088	103,355	326,094	309,399
Depreciation and amortization	104,859	87,170	317,430	254,463
General and administrative	45,423	19,415	90,080	54,299
Impairments		7,878		7,878
Other income, net	(1,584)	(770)	(16,887)	(2,232)
Income taxes	1,033	(602)	3,563	(1,145)
Equity income from unconsolidated joint ventures	(13,892)	(13,396)	(44,278)	(42,803)
Total discontinued operations	(13,396)	(6,680)	(25,059)	(19,476)
NOI	424,847	384,675	1,268,293	1,147,229
Straight-line rents	(12,604)	(11,821)	(28,559)	(33,608)
DFL accretion	(19,822)	(23,433)	(65,386)	(71,072)
Amortization of above and below market lease intangibles, net	(346)	(533)	(6,414)	(1,855)
Lease termination fees	(205)	(175)	(220)	(574)
NOI adjustments related to discontinued operations	99	436	293	1,757
Adjusted NOI	$ 391,969	$ 349,149	$ 1,168,007	$ 1,041,877