8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES AND EXCHANGE ACT OF 1934

July 29, 2004

Date of Report (Date of earliest event reported)

HEALTH CARE PROPERTY INVESTORS, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-08895	33-0091377
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

3760 Kilroy Airport Way

Suite 300

Long Beach, California 90806

(Address of principal executive offices) (Zip Code)

(562) 733-5100

(Registrant’s telephone number, including area code)

N/A

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

Item 12. Disclosure of Results of Operations and Financial Condition.

On July 29, 2004, we issued a press release, which sets forth our results of operations for the quarter ended June 30, 2004. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any filing of the company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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SIGNATURES

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

	HEALTH CARE PROPERTY INVESTORS, INC.
	(Registrant)
Date: July 29, 2004	By:	/s/ Edward J. Henning
	Name:	Edward J. Henning
	Title:	Senior Vice President, General Counsel and Corporate Secretary

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Exhibit Index

Exhibit 99.1 Press Release Dated July 29, 2004.

4

EX-99.1

Exhibit 99.1

NEWS RELEASE	Contact:	Talya Nevo-Hacohen
		Laura Catalino 562-733-5100

HEALTH CARE PROPERTY INVESTORS, INC. REPORTS RESULTS FOR

THE QUARTER ENDED JUNE 30, 2004

LONG BEACH, CA, July 29, 2004 — Health Care Property Investors, Inc. (NYSE:HCP), a health care real estate investment trust (“REIT”), today announced operating results for the quarter ended June 30, 2004. Net income applicable to common shares for the quarter ended June 30, 2004 totaled $36.3 million, or $0.27 per diluted share of common stock. This compares with net income applicable to common shares of $20.3 million, or $0.17 per diluted share of common stock for the quarter ended June 30, 2003.

Funds From Operations (“FFO”) was $58.0 million, or $0.44 per diluted share of common stock, for the quarter ended June 30, 2004. This compares with FFO of $40.0 million, or $0.33 per diluted share of common stock, for the quarter ended June 30, 2003. Prior to asset impairment charges, FFO was $0.45 and $0.35 per diluted share for the quarters ended June 30, 2004 and 2003, respectively.

The Company has revised its presentation of FFO for all periods to include the effect of asset impairment charges, consistent with recent clarifications from the National Association of Real Estate Investment Trusts (“NAREIT”). For the second quarter of 2004 and 2003, asset impairments reduced FFO by $2.5 million and $2.8 million, respectively. FFO is a supplemental non-GAAP financial measurement used to evaluate the operating performance of real estate investment trusts.

SECOND QUARTER HIGHLIGHTS AND RECENT DEVELOPMENTS

• On June 1, 2004, the Company acquired two long-term care facilities with a total of 234 beds for approximately $16 million. As previously announced, on April 30, 2004, the Company acquired seven long-term care facilities with a total of 700 beds for approximately $47 million. The nine facilities, all leased to the same operator, have an initial lease term of five years, with three five-year renewal options. The initial annual lease rate is approximately 9.3% with annual rent escalators of 2%.

• On June 10, 2004, the Company acquired a 79,000 square foot medical office building located in Las Vegas, Nevada, for a purchase price of approximately $22 million at a capitalization rate of 9.7%. The medical office building is 100% occupied.

• On July 15, 2004, the Company acquired substantially all of American Retirement Corporation’s (“ARC”) interest in three continuing care retirement communities and one assisted living facility for $113 million, including transaction costs. The transaction was structured as a sale lease-back with ARC using a portion of the proceeds to repay its existing $82.6 million mezzanine loan to the Company. These facilities have an initial lease term of ten years, with three ten-year renewal options. The annual lease rate is 9% with additional rents contingent on facility revenue exceeding certain thresholds. Additionally, the Company provided ARC with a new $5.7 million two-year mortgage loan at 9%, secured by three properties, and maintained its minority equity investment in two other ARC assets. The Company’s cash investment in ARC related entities, after transaction costs, increased by $36 million.

• On July 23, 2004, the Company announced that its Board of Directors declared a quarterly common stock cash dividend of $0.4175 per share. The common stock dividend will be paid on August 19, 2004, to stockholders of record as of the close of business on August 4, 2004. This most recent dividend equals $1.67 on an annualized basis.

• On July 28, 2004, the Company agreed to acquire 11 assisted living facilities from Emeritus Corporation for $84 million, including $56 million of assumed debt, through a sale lease-back transaction. These facilities have an initial lease term of 15 years, with two ten-year renewal options. The initial annual lease rate is approximately 9.25% with CPI based escalators not exceeding 3% annually. These properties will be added to an existing master lease presently comprised of 25 properties. As part of this transaction, nine existing property leases will be extended by five years. The debt to be assumed currently bears interest at 6.5% and is based on LIBOR plus 4.15% with a 6.5% floor, and contains a prepayment fee that declines over time. Emeritus will use $17 million of the proceeds to repay mezzanine and other debt to the Company.

• The Company and GE Commercial Finance have agreed, subject to final documentation, to increase the size of their joint venture from $600 million to $1.1 billion total capitalization.

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FUTURE OPERATIONS

For the full year 2004, the Company presently expects net income applicable to common shares to range between $1.14 and $1.17 per diluted share, and expects FFO to range between $1.74 and $1.79 per diluted share, including the impact of impairment charges through June 30, 2004, but excluding the impact of future impairments, if any. Excluding asset impairment charges, the Company continues to expect FFO to range between $1.76 and $1.81 per diluted share. Asset impairment charges reduced FFO by $0.02 for the six months ended June 30, 2004.

COMPANY INFORMATION

Health Care Property Investors, Inc. has scheduled a conference call and webcast today, Thursday, July 29, 2004 at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) in order to present the Company’s performance and operating results for the quarter ended June 30, 2004. The conference call is accessible by dialing 800-901-5231 (U.S.) and 617-786-2961 (International). The participant pass code is 42411448. The webcast is accessible via the Company’s Internet web site at www.hcpi.com. A webcast replay of the conference call will be available after 2:00 p.m. Pacific Time on July 29, 2004 through August 12, 2004 on the Company’s website.

Health Care Property Investors, Inc. (NYSE:HCP) is a self-administered real estate investment trust (“REIT”) that invests directly or through joint ventures in health care facilities. As of June 30, 2004, the Company’s portfolio of properties, including investments through joint ventures and mortgage loans, included 538 properties in 43 states and consisted of 30 hospitals, 178 long-term care facilities, 121 assisted living and continuing care retirement communities (“CCRCs”), 185 medical office buildings and 24 other health care facilities. For more information on Health Care Property Investors, Inc., visit the Company’s web site at www.hcpi.com.

###

Statements in this news release and the supplement that are not historical may contain forward-looking statements subject to risks and uncertainties, such as competition for the acquisition and financing of health care facilities, competition for lessees and mortgagors (including with respect to new leases and mortgages and the renewal or roll-over of existing leases); continuing operational difficulties in the long-term care and assisted living sectors; the Company’s ability to acquire, sell or lease facilities and the timing of acquisitions, sales and leasings; changes in health care laws and regulations and other changes in the health care industry which affect the operations of the Company’s lessees or mortgagors; changes in management; costs of compliance with building regulations; changes in tax laws and regulations; changes in the financial position of the Company’s lessees and mortgagors; changes in rules governing financial reporting, including new accounting pronouncements; and changes in economic conditions, including changes in interest rates and the availability and cost of capital, which affect opportunities for profitable investments. Some of these risks are described from time to time in the SEC reports filed by the Company.

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HEALTH CARE PROPERTY INVESTORS, INC.

Summary Information (Unaudited)

In Thousands, Except Per Share Data

	Quarter Ended June 30,				Six Months Ended June 30,
	2004		2003		2004		2003
Revenue	$	107,186	$	92,417	$	204,808	$	177,730
Net income applicable to common shares	$	36,302	$	20,295	$	77,854	$	41,734
Basic earnings per share	$	0.28	$	0.17	$	0.59	$	0.35
Diluted earnings per share	$	0.27	$	0.17	$	0.59	$	0.34
Shares used to calculate diluted earnings per share		132,856		122,436		132,778		121,240
Funds from operations1	$	57,998	$	39,989	$	111,975	$	78,843
Diluted funds from operations per share1	$	0.44	$	0.33	$	0.84	$	0.65
Impairments	$	2,462	$	2,800	$	3,437	$	11,652
Per share impact of impairments on diluted funds from operations	$	0.01	$	0.02	$	0.02	$	0.10

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

The Company defines FFO as net income applicable to common shares (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from real estate dispositions, plus real estate depreciation and amortization, and after adjustments for unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles, is not necessarily indicative of cash available to fund cash needs, and should not be considered as an alternative to net income. A reconciliation of net income applicable to common shares to FFO is provided herein.

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HEALTH CARE PROPERTY INVESTORS, INC.

Consolidated Statements of Income (Unaudited)

In Thousands, Except Per Share Data

	Quarter Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
Revenues
Rental income	$	95,350		$	82,724		$	182,581		$	157,895
Equity income from unconsolidated joint ventures		849			22			2,086			164
Interest and other income		10,987			9,671			20,141			19,671
		107,186			92,417			204,808			177,730
Expenses
Interest		20,618			22,411			42,466			43,688
Real estate depreciation and amortization		21,076			18,390			41,558			36,610
Operating expenses from medical office buildings		10,192			7,415			19,241			14,735
General and administrative		8,394			5,662			15,698			10,904
Impairments		1,216			—			1,216			—
		61,496			53,878			120,179			105,937
Income from operations		45,690			38,539			84,629			71,793
Minority interests		(3,289	)		(2,264	)		(6,153	)		(4,259	)
Income from continuing operations		42,401			36,275			78,476			67,534
Discontinued operations
Operating income from discontinued operations		143			3,011			1,895			5,679
Gain (loss) on real estate dispositions and impairments		(960	)		(2,372	)		8,048			(8,635	)
		(817	)		639			9,943			(2,956	)
Net income		41,584			36,914			88,419			64,578
Dividends to preferred stockholders		(5,282	)		(4,848	)		(10,565	)		(11,073	)
Preferred stock redemption charges		—			(11,771	)		—			(11,771	)
Net Income applicable to common shares	$	36,302		$	20,295		$	77,854		$	41,734
Basic earnings per share
Income from continuing operations applicable to common shares	$	0.28		$	0.16		$	0.52		$	0.37
Discontinued operations		—			0.01			0.07			(0.02	)
Net Income applicable to common shares	$	0.28		$	0.17		$	0.59		$	0.35
Diluted earnings per share
Income from continuing operations applicable to common shares	$	0.28		$	0.16		$	0.51		$	0.37
Discontinued operations		(0.01	)		0.01			0.08			(0.03	)
Net Income applicable to common shares	$	0.27		$	0.17		$	0.59		$	0.34
Shares used to calculate earnings per share
Basic		131,653			121,456			131,196			120,307
Diluted		132,856			122,436			132,778			121,240

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HEALTH CARE PROPERTY INVESTORS, INC.

Funds From Operations Information (Unaudited)

In Thousands, Except Per Share Data

QUARTERLY RESULTS:	Quarter Ended June 30,						Six Months Ended June 30,
	2004			2003			2004			2003
Net income applicable to common shares	$	36,302		$	20,295		$	77,854		$	41,734
Real estate depreciation and amortization		21,076			18,390			41,558			36,610
Gain on real estate dispositions		(286	)		(428	)		(10,269	)		(3,017	)
Depreciation and amortization included in discontinued operations		102			1,386			918			2,929
Joint venture FFO adjustments		804			346			1,914			587
Funds from operations1	$	57,998		$	39,989		$	111,975		$	78,843
Dividend on convertible partnership units		2,195			—			2,195			—
Dilutive funds from operations	$	60,193		$	39,989		$	114,170		$	78,843
Diluted funds from operations per share1	$	0.44		$	0.33		$	0.84		$	0.65
Shares used to calculate diluted FFO		138,115			122,436			135,407			121,240
Impairments	$	2,462		$	2,800		$	3,437		$	11,652
Per share impact of impairments on diluted funds from operations	$	0.01		$	0.02		$	0.02		$	0.10
FUTURE OPERATIONS:	Full Year 2004
	Low			High
Diluted earnings per share	$	1.14		$	1.17
Gain on sale		(0.08	)		(0.08	)
Real estate depreciation and amortization		0.66			0.68
Joint venture adjustments		0.03			0.03
Dilutive impact of operating partnership units		(0.01	)		(0.01	)
Diluted funds from operations per share	$	1.74		$	1.79
Impairments per share2		0.02			0.02
Diluted funds from operations per share, excluding impairment charges		1.76			1.81

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

The Company defines FFO as Net Income applicable to common shares (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from real estate dispositions, plus real estate depreciation and amortization, and after adjustments for unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect FFO on the same basis. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles, is not necessarily indicative of cash available to fund cash needs and should not be considered as an alternative to net income.

² Represents actual impairment charges through June 30, 2004. Future impairments, if any, are excluded because they cannot by projected.

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HEALTH CARE PROPERTY INVESTORS, INC.

Consolidated Balance Sheets (Unaudited)

In Thousands

	June 30,			December 31,
	2004			2003
Assets
Real estate investments:
Buildings and improvements	$	2,745,553		$	2,682,206
Accumulated depreciation		(512,906	)		(486,421	)
		2,232,647			2,195,785
Construction in progress		35,589			64,303
Land		277,835			283,352
		2,546,071			2,543,440
Loans receivable, net		168,569			184,360
Loans to joint venture partners		80,380			83,253
Investments in and advances to unconsolidated joint ventures		72,339			172,450
Accounts receivable, net		17,077			16,471
Cash and cash equivalents		11,549			17,768
Other assets		22,839			18,215
Total Assets	$	2,918,824		$	3,035,957
Liabilities and Stockholders’ Equity
Bank notes payable	$	154,000		$	198,000
Senior notes payable		1,013,902			1,050,476
Mortgage notes payable		124,769			158,808
Accounts payable and accrued expenses		54,813			55,055
Deferred revenue		14,735			16,080
Minority interests in joint ventures		13,714			12,931
Minority interests convertible into common stock		103,473			103,990
Stockholders’ equity:
Preferred stock		285,173			285,173
Common stock		132,631			131,040
Additional paid-in capital		1,384,437			1,355,299
Cumulative net income		1,267,468			1,179,049
Cumulative dividends		(1,618,241	)		(1,497,727	)
Other equity		(12,050	)		(12,217	)
Total Stockholders’ Equity		1,439,418			1,440,617
Total Liabilities and Stockholders’ Equity	$	2,918,824		$	3,035,957

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HEALTH CARE PROPERTY INVESTORS, INC.

Supplemental Financial and Operating Information

As of June 30, 2004

INVESTMENTS

During the quarter and six months ended June 30, 2004, the Company acquired properties with an aggregate cost of approximately $85 million and $133 million, respectively.

As of June 30, 2004, the Company’s total undepreciated investment in properties, including investments through joint ventures and mortgage loans, was approximately $3.3 billion.

OTHER INFORMATION

The following summarizes certain information for the six months ended June 30, 2004 and 2003 (In thousands):

	Quarter Ended June 30, 2004				Six Months Ended June 30, 2004
	2004		2003		2004		2003
Capitalized interest	$	707	$	120	$	881	$	281
Amortization of deferred financing costs		688		701		1,655		1,321
Income from straight line rents and interest		1,854		954		3,693		1,726
Lease commissions and tenant and capital improvements on medical office buildings		193		1,454		1,318		2,808
	Quarter Ended June 30, 2004				Six Months Ended June 30, 2004
	2004		2003		2004		2003
Rental Income:
Triple net	$	67,920	$	62,403	$	130,563	$	117,222
Medical office buildings		27,430		20,321		52,018		40,673
	$	95,350	$	82,724	$	182,581	$	157,895

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HEALTH CARE PROPERTY INVESTORS, INC.

Supplementary Financial Information-Portfolio Overview as of June 30, 2004 (Unaudited)

Dollars In Thousands, Except Investment Per Bed/Unit/Square Foot

	PORTFOLIO OVERVIEW1
	Hospitals			Long-Term Care			Assisted Living & CCRCs			Medical Office Building MOP.(Excl. HCP)			Other			HCP Medical Office Portfolio, LLC ("HCP MOP")2
Investment3	$	795,934		$	733,986		$	815,459		$	732,392		$	210,266		$	52,932
Number of properties		30			178			121			89			24			96
Assets held for sale		—			4			—			—			3			1
Number of beds/units/square feet4, 5		3,483 Beds			21,545 Beds			13,072 Units			5,141,000 Sq Ft			1,441,000 Sq Ft			5,244,000 Sq Ft
Investment per bed/unit/square foot6	$	229,000		$	34,000		$	62,000		$	144		$	146		$	89
Occupancy data:4, 7
Current quarter		63	%		81	%		82	%		91	%		100	%		87	%
First quarter 2004		61	%		80	%		80	%		94	%		100	%		87	%
Cash flow coverage after management fees4, 7, 8, 9		2.4x			1.3x			1.2x			N/A			N/A			N/A

¹ All amounts exclude assets held for sale unless otherwise indicated.

² The Company is the managing member of HCP Medical Office Portfolio, LLC, an unconsolidated joint venture, and has a 33% interest therein.

³ Represents the historical cost of the Company's real estate investments and the net book value of our unconsolidated joint ventures and secured loans receivable.

⁴ Information for the Company's hospital, long-term care, and assisted and retirement living facilities was derived from information provided by its lessees without verification.

⁵ Hospital and long-term care facilities are measured by bed count. Assisted and retirement living facilities are apartment-like facilities and are stated in units (studio, one or two bedroom apartments). Medical office buildings and other health care facilities are measured in square feet.

⁶ Excludes facilities under construction.

⁷ Excludes facilities under construction, newly completed facilities under start up, vacant facilities and facilities where data is not available or meaningful.

⁸ Results exclude data related to nine hospitals leased to HealthSouth until greater assurances about HealthSouth's financial information is received.

⁹ Includes imputed management fees of 2% to 5%.

TENANT OVERVIEW1
PORTFOLIO BY OPERATOR/TENANT:
	Six Months Ended June 30, 2004
Operator/Tenant	Percentage of Revenue Less Operating Expenses2
Tenet Healthcare	14.3	%
American Retirement Corp.	9.7	%
Emeritus Corporation	5.9	%
HealthSouth Corporation	4.9	%
Kindred Healthcare, Inc.	4.3	%
HCA Inc.	3.6	%
Not-for-profit investment grade tenants	1.4	%
Other publicly traded operators or guarantors	10.6	%
Other non-public operators and tenants	45.3	%
	100.0	%

SAME PROPERTY OVERVIEW1
SAME PROPERTY GROWTH:
Comparable Facilities for the Six Months Ended June 30, 2004 vs. June 30, 2003
Investment properties, excluding medical office buildings
Number of same properties	284
Revenue percentage increase	1.0	%
Medical office buildings, excluding HCP MOP
Number of same properties	71
Occupancy percentage at June 30, 2004	94	%
Revenue percentage decrease	-0.3	%

¹ All amounts exclude assets sold and assets held for sale.

² Since the tenant is responsible for operating expenses under a triple-net lease, management believes revenues are not comparable between property types without deducting operating expenses for properties leased under gross or modified gross leases. Revenue excludes non-property specific revenue and equity income from unconsolidated joint ventures.

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