Healthpeak Properties 8K HCP Announces Second Quarter 2009 Results | DOC 4 Aug 09

Exhibit 99.2

Supplemental Information

June 30, 2009

(Unaudited)


San Francisco, CA		San Diego, CA		Irvine, CA		Richmond, VA

Table of Contents

Company Information	1
Highlights	2
Consolidated Funds From Operations	3
Capitalization	4
Indebtedness and Ratios	5
Investments and Dispositions	6
Development	7
Owned Portfolio
Portfolio summary	8
Portfolio concentrations	9
Same property operating lease portfolio	10
Lease expirations and debt investment maturities	11
Owned Senior Housing Portfolio
Investments and operator concentration	12
Trends	13
Owned Life Science Portfolio
Investments, tenant concentration and trends	14
Lease expirations and leasing activity	15
Owned Medical Office Portfolio
Investments and trends	16
Leasing activity	17
Owned Hospital Portfolio
Investments and operator concentration	18
Trends	19
Owned Skilled Nursing Portfolio
Investments and operator concentration	20
Trends	21
Investment Management Platform
Summary and balance sheets	22
Statement of operations and funds from operations	23-24
Net operating income	25
Portfolio summary	26
Reporting Definitions and Reconciliations of Non-GAAP Measures	27-32

“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this supplemental information which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include among other things the Company’s estimate of (i) yields, (ii) completion dates, stabilization dates, rentable square feet and total investment for development projects in progress, and (iii) rentable square feet for land held for future development. These statements are made as of the date hereof and are subject to known and unknown risks, uncertainties, assumptions and other factors—many of which are out of the Company’s control and difficult to forecast—that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include but are not limited to: national and local economic conditions, including the possibility of a prolonged recession; continued volatility in the capital markets, including changes in interest rates and the availability and cost of capital, which changes and volatility affect opportunities for profitable investment; the Company’s ability to access external sources of capital when desired and on reasonable terms; the Company’s ability to manage its indebtedness levels; changes in the terms of the Company’s indebtedness; the Company’s ability to maintain its credit ratings; the potential impact of existing and future litigation matters, including related developments; the Company’s ability to achieve the expected benefits from acquisitions, including integrating and preserving the goodwill of the acquired companies; the Company’s ability to sell its properties when desired and on profitable terms; competition for lessees and mortgagors (including new leases and mortgages and the renewal or rollover of existing leases); the Company’s ability to reposition its properties on the same or better terms if existing leases are not renewed or the Company exercises its right to replace an existing operator or tenant upon default; continuing reimbursement uncertainty in the skilled nursing segment; competition in the senior housing segment specifically and in the healthcare industry in general; the ability of the Company’s operators and tenants to maintain or increase occupancy levels at, and rental income from, the senior housing segment; the Company’s ability to realize the benefits of its mezzanine investments; the ability of the Company’s lessees and mortgagors to maintain the financial strength and liquidity necessary to satisfy their respective obligations to the Company and other third parties; the bankruptcy, insolvency or financial deterioration of the Company’s operators, lessees, borrowers or other obligors; changes in healthcare laws and regulations, including the impact of future or pending healthcare reform, and other changes in the healthcare industry which affect the operations of the Company’s lessees or obligors; the Company’s ability to recruit and retain key management personnel; costs of compliance with regulations and environmental laws affecting the Company’s properties; changes in tax laws and regulations; the Company’s ability and willingness to maintain its qualification as a REIT; changes in rules governing financial reporting, including new accounting pronouncements; and other risks described from time to time in the Company’s Securities and Exchange Commission filings. The Company assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements as a result of new information or new or future developments, except as otherwise required by law.

Company Information (1)

Board of Directors

Robert R. Fanning, Jr.	Harold M. Messmer, Jr.
Managing Director (Retired),	Chairman and Chief Executive Officer
The Huron Consulting Group	Robert Half International, Inc.

James F. Flaherty III	Peter L. Rhein
Chairman and Chief Executive Officer	Partner, Sarlot & Rhein
HCP, Inc.
	Kenneth B. Roath
Christine N. Garvey	Chairman Emeritus, HCP, Inc.
Former Global Head of Corporate
Real Estate Services, Deutsche Bank AG	Richard M. Rosenberg
	Chairman and Chief Executive Officer
David B. Henry	(Retired), BankAmerica Corporation
Vice Chairman, President and Chief
Investment Officer, Kimco Realty Corporation	Joseph P. Sullivan
	Chairman of the Board of Advisors
Lauralee E. Martin	RAND Health
Chief Operating and Financial Officer
Jones Lang LaSalle Incorporated

Michael D. McKee
Chief Executive Officer and Vice Chairman
(Retired), The Irvine Company

Senior Management

James F. Flaherty III	Thomas D. Kirby
Chairman and	Executive Vice President
Chief Executive Officer	Acquisitions and Valuations

Paul F. Gallagher	Thomas M. Klaritch
Executive Vice President	Executive Vice President
Chief Investment Officer	Medical Office Properties

Edward J. Henning	Timothy M. Schoen
Executive Vice President	Executive Vice President
General Counsel, Chief Administrative	Life Science and Investment Management
Officer and Corporate Secretary
	Susan M. Tate
Thomas M. Herzog	Executive Vice President
Executive Vice President	Asset Management and Senior Housing
Chief Financial Officer and Treasurer

Other Information

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

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

Nashville Office

3100 West End Avenue, Suite 800

Nashville, TN 37203

San Francisco Office

400 Oyster Point Boulevard, Suite 409

South San Francisco, CA 94080

The information in this supplemental information package should be read in conjunction with the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other information filed with the SEC (“Securities and Exchange Commission”). The Reporting Definitions and Reconciliations of Non-GAAP Measures are an integral part of the information presented herein.

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

For more information, contact Thomas M. Herzog, Executive Vice President, Chief Financial Officer and Treasurer at (562) 733-5309.

(1) As of July 31, 2009.

Highlights

Dollars in thousands, except per share data

	Three Months Ended June 30,				Six Months Ended June 30,
	2009		2008		2009		2008

Revenues	$	267,336	$	248,775	$	518,951	$	493,569

NOI	220,762		200,866		423,263		395,972

Adjusted EBITDA	242,541		233,852		463,832		471,158

Net income applicable to common shares	91,784		225,890		135,069		270,729

FFO applicable to common shares	146,094		119,111		274,060		240,475

Per diluted common share:

EPS	$	0.35	$	0.96	$	0.52	$	1.19

FFO	0.55		0.50		1.05		1.06

FFO payout ratio per diluted common share	84%		91%		88%		86%

Financial Leverage	44%		52%

Adjusted fixed charge coverage	2.6x		2.3x		2.5x		2.1x

	June 30,		December 31,
	2009		2008

Properties:

Senior housing	259		260

Life science	100		104

Medical office	253		251

Hospital	22		23

Skilled nursing	48		48

Total	682		686

Portfolio Income from Assets Under Management(1)		Assets Under Management: $13.3 billion(2)

(1) Represents the NOI from real estate owned by HCP, the interest income from debt investments and HCP’s pro rata share of the NOI from real estate owned by the Company’s Investment Management Platform, excluding assets under development and land held for future development, for the six months ended June 30, 2009.

(2) Represents the historical cost of real estate owned by HCP, the carrying amount of debt investments and 100% of the cost of real estate owned by the Company’s Investment Management Platform, excluding assets under development and land held for future development, at June 30, 2009.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Consolidated Funds From Operations

Dollars in thousands, except per share data

	Three Months Ended June 30,						Six Months Ended June 30,
	2009			2008(1)			2009			2008(1)

Net income applicable to common shares	$	91,784		$	225,890		$	135,069		$	270,729
Depreciation and amortization of real estate, in-place lease and other intangibles:
Continuing operations	79,606			77,861			160,143			155,493
Discontinued operations	23			1,827			84			6,553
Gain on sales of real estate	(30,540		)	(190,505		)	(31,897		)	(200,643		)
Equity income from unconsolidated joint ventures	(1,127		)	(1,221		)	(665		)	(2,509		)
FFO from unconsolidated joint ventures	6,940			5,108			12,571			11,728
Noncontrolling interests’ and participating securities’ share in earnings	4,111			6,907			8,252			12,913
Noncontrolling interests’ and participating securities’ share in FFO	(4,703		)	(6,756		)	(9,497		)	(13,789		)
FFO applicable to common shares	$	146,094		$	119,111		$	274,060		$	240,475

Distributions on convertible units	$	2,941		$	2,398		$	4,561		$	7,163

Diluted FFO applicable to common shares	$	149,035		$	121,509		$	278,621		$	247,638

Basic FFO per common share	$	0.55		$	0.51		$	1.06		$	1.06

Diluted FFO per common share	$	0.55		$	0.50		$	1.05		$	1.06

Weighted average shares used to calculate diluted FFO per common share	271,457			241,314			264,243			234,112

Dividends declared per common share	$	0.460		$	0.455		$	0.920		$	0.910

FFO payout ratio per common share	83.6%			91.0%			87.6%			85.8%

Impact of merger related charges and impairments	$	5,906		$	10,856		$	5,906		$	12,045

Per common share impact of merger-related charges and impairments on diluted FFO	$	0.02		$	0.05		$	0.03		$	0.05

FFO payout ratio per common share prior to merger-related charges and impairments	80.7%			82.7%			85.2%			82.0%

Consolidated selected supplemental cash flow information:
Impairments of real estate and intangible assets, net	$	5,906		$	9,715		$	5,906		$	9,715
Amortization of above and below market lease intangibles, net	(8,320		)	(1,877		)	(10,980		)	(4,029		)
Stock-based compensation	3,991			3,959			7,537			7,485
Amortization of debt premiums, discounts and issuance costs, net	2,687			3,123			5,455			6,162
Straight-line rents	(14,337		)	(9,751		)	(25,759		)	(19,533		)
Interest accretion – DFLs	(1,994		)	(2,118		)	(3,949		)	(4,190		)
Increase in deferred revenues – tenant improvement related	3,418			4,332			7,360			8,917
Increase (decrease) in deferred revenues – additional rents (SAB 104)	(2,442		)	342			530			4,362
Lease commissions and tenant and capital improvements	(9,184		)	(14,252		)	(18,826		)	(32,359		)

HCP’s share of selected supplemental cash flow information from the Investment Management Platform:
Amortization of above and below market lease intangibles, net	$	(187	)	$	266		$	1,255		$	535
Amortization of debt premiums, discounts and issuance costs, net	83			101			189			206
Straight-line rents	(1,026		)	(1,131		)	(2,065		)	(2,339		)
Lease commissions and tenant and capital improvements	(541		)	(510		)	(1,102		)	(802		)

(1) Presentation and certain computational changes have been made for the adoption of FSP-EITF 03-6-1, Determining Whether Instruments Granted in Share Based Payment Transactions are Participating Securities, to compute earnings per share and funds from operations per share under the two-class method.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Capitalization

Dollars and shares in thousands, except price data

Total Debt
	June 30, 2009		December 31, 2008		June 30, 2008
Bank line of credit	$	100,000	$	150,000	$	—
Bridge and term loans	200,000		520,000		1,150,000
Senior unsecured notes	3,518,147		3,523,513		3,821,786
Mortgage debt	1,592,712		1,641,734		1,516,380
Other debt	98,984		102,209		105,264
Consolidated debt	5,509,843		5,937,456		6,593,430
HCP’s share of unconsolidated debt(1)	343,949		346,470		348,921
Total debt	$	5,853,792	$	6,283,926	$	6,942,351

Total Market Capitalization
	June 30, 2009
	Shares/Units	Price		Value
Common stock	275,253	$	21.19	$	5,832,611
Convertible partnership units
2 for 1(2)	1,627	42.38		68,952
1 for 1(3)	2,661	21.19		56,387
	4,288			125,339
Preferred stock:
7.25% Series E (Callable at par after September 15, 2008)	4,000	19.00		76,000
7.10% Series F (Callable at par after December 3, 2008)	7,820	18.75		146,625
	11,820			222,625

Consolidated market equity				$	6,180,575

Consolidated debt				5,509,843

Consolidated market capitalization				$	11,690,418

HCP’s share of unconsolidated debt(1)				343,949

Total market capitalization				$	12,034,367

*Common Stock and Equivalents*
		Weighted Average Shares
	Shares	Three Months Ended		Six Months Ended
	Outstanding	June 30, 2009		June 30, 2009
	June 30, 2009	Diluted EPS	Diluted FFO	Diluted EPS	Diluted FFO
Common Stock	275,253	265,422	265,422	259,412	259,412
Dilutive securities:
Restricted stock and units	1,540	59	59	49	49
Options	55	61	61	55	55
Convertible partnership units	5,915	—	5,915	—	4,727
Total common and equivalents	282,763	265,542	271,457	259,516	264,243

*Other Information*
Trading Symbol		Senior Debt Ratings
HCP	Common Stock	Moody’s	Baa3 (stable outlook)
HCP_pe	Series E Preferred Stock	Standard & Poor’s	BBB (stable outlook)
HCP_pf	Series F Preferred Stock	Fitch	BBB (positive outlook)

Stock Exchange Listing

NYSE

(1) Reflects the Company’s pro rata share of amounts from the Investment Management Platform. Excludes unconsolidated joint ventures outside of the Investment Management Platform.

(2) Each convertible partnership unit is exchangeable for an amount of cash approximating the then-current market value of two shares of the Company’s common stock at the time of conversion or, at the Company’s election, two shares of the Company’s common stock.

(3) Each convertible partnership unit is exchangeable for an amount of cash approximating the then-current market value of one share of the Company’s common stock at the time of conversion or, at the Company’s election, one share of the Company’s common stock.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Indebtedness and Ratios

Dollars in thousands

Debt Maturities and Scheduled Principal Repayments (Amortization)

*June 30, 2009*
					Senior												HCP’s Share of
	Bank Line				Unsecured				Mortgage			Other		Consolidated			Unconsolidated
	of Credit		Term Loans		Notes			Rates(1)	Debt(2)		Rates(1)	Debt(3)		Debt			Mortgage Debt(4)			Rates(1)	Total Debt
2009 (6 months)	$	—	$	—	$	—		—%	$	107,276	5.91%	$	98,984	$	206,260		$	2,622		—%	$	208,882
2010	—		—		206,421			5.17	298,503		4.80	—		504,924			5,546			—	510,470
2011	100,000		200,000		292,265			4.90	137,573		5.11	—		729,838			6,224			—	736,062
2012	—		—		250,000			6.68	60,922		5.44	—		310,922			13,560			4.85	324,482
2013	—		—		550,000			5.83	233,293		6.01	—		783,293			44,508			5.76	827,801
2014	—		—		87,000			4.98	174,490		5.88	—		261,490			4,364			—	265,854
2015	—		—		400,000			6.64	279,536		5.68	—		679,536			15,070			5.39	694,606
2016	—		—		400,000			6.43	237,114		6.52	—		637,114			50,975			5.84	688,089
2017	—		—		750,000			6.05	3,203		—	—		753,203			201,648			5.67	954,851
2018	—		—		600,000			6.85	3,389		—	—		603,389			—			—	603,389
Thereafter	—		—		—			—	53,576		5.69	—		53,576			—			—	53,576
Subtotal	100,000		200,000		3,535,686				1,588,875			98,984		5,523,545			344,517				5,868,062

(Discounts) and premiums, net	—		—		(17,539		)		3,837			—		(13,702		)	(568		)		(14,270		)
Total	$	100,000	$	200,000	$	3,518,147			$	1,592,712		$	98,984	$	5,509,843		$	343,949			$	5,853,792

Weighted average interest rate	1.31%		2.78%		6.13%				5.97%			N/A		5.87%			5.70%				5.87%

Weighted average maturity in years	2.14		2.12		5.80				4.39			N/A		5.18			7.40				5.31

Ratios

Covenants

June 30,

December
31,

The following is a summary of the financial covenants under the revolving line of credit facility and term loan at June 30, 2009.

2009

2008

Consolidated Debt/Consolidated Gross Assets

43.6%

47.1%

Financial Leverage (Total Debt/Total Gross Assets)

44.2%

47.6%

Line of Credit and Term Loan

Financial Covenants(5)

Requirement

Actual Compliance

Consolidated Secured Debt/Consolidated Gross Assets

12.6%

13.0%

Total Secured Debt/Total Gross Assets

14.6%

15.1%

Leverage Ratio

No greater than 60%

46%

Secured Debt Ratio

No greater than 30%

16%

Fixed and variable rate ratios:

Unsecured Leverage Ratio

No greater than 65%

46%

Fixed rate Total Debt

86.8%

85.8%

Fixed Charge Coverage Ratio (12 months)

No less than 1.75x

2.4x

Variable rate Total Debt

13.2%

14.2%

100.0%

(1) Senior unsecured notes and mortgage debt weighted-average effective rates relate to maturing amounts.

(2) Mortgage debt attributable to non-controlling interests at June 30, 2009 was $15.6 million.

(3) Other debt represents non-interest bearing Life Care Bonds and occupancy fee deposits at three of the Company’s senior housing facilities, which are payable on-demand, under certain conditions.

(4) Includes pro-rata share of the Company’s Investment Management Platform. At June 30, 2009, 100% of the Company’s Investment Management Platform’s mortgage debt accrues interest at fixed rates.

(5) The revolving line of credit facility and term loan have very similar terms, including financial covenants that are calculated based on the definitions contained within the agreements and may be different than similar terms in the Company’s Consolidated Financial Statements provided herein and as provided in its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Compliance with certain of these financial covenants requires the inclusion of the Company’s consolidated amounts and its proportionate share of unconsolidated investees.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Investments and Dispositions

Dollars and square feet in thousands

Investments

June 30, 2009

Three Months

Six Months

Description

Ended

Acquisition of joint venture interests

—

14,250

Total fundings for development, tenant and capital improvements(1)

30,424

55,079

Total investments

30,424

69,329

Dispositions(2)

Property

Sales Price,

Description

Capacity

Count

Segment

Net of Costs

Location

Date

New Orleans, Louisiana

January 20, 2009

96 sq. ft.

MOB

384

Amarillo, Texas

February 2, 2009

40 beds

Hospital

839

Wichita, Kansas

February 27, 2009

110 units

Senior housing

480

Seattle, Washington

March 13, 2009

40 sq. ft.

MOB

4,312

First quarter total

6,015

Los Gatos, California

April 10, 2009

395 beds

Hospital

44,912

Plaquemine, Louisiana

May 7, 2009

80 beds

Hospital

749

Reston, Virginia

June 5, 2009

2 sq. ft.

—(3)

MOB

605

Second quarter property dispositions

46,266

Marketable securities

May 11, 2009

Hospital

4,800

Second quarter total

51,066

Total dispositions

57,081

(1) Includes capitalized interest for the three months and six months ended June 30, 2009, of $6.3 million and $12.3 million, respectively.

(2) For the six months ended June 30, 2009, unless otherwise indicated.

(3) Represents the partial sale of a medical office building (condominiums).

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Development

As of June 30, 2009, dollars in thousands

Development Projects in Process

Estimated/

Estimated

Actual

Rent

Rentable

Estimated

Completion

Commencement

Square

Investment

Total

Name of Project

Location

Segment

Date

Feet

to Date(1)

Investment

Development

Oyster Point II (A)

So. San Francisco, CA

Life science

4Q 2008

122

88,201

97,448

Oyster Point II (B)

So. San Francisco, CA

Life science

4Q 2008

1Q 2009

129

93,073

103,293

Oyster Point II (C)

So. San Francisco, CA

Life science

4Q 2008

N/A

49,359

60,660

329

230,633

261,401

Percentage pre-leased

76%

Redevelopment

500/600 Saginaw

Redwood City, CA

Life science

4Q 2009

N/A

32,062

45,813

Modular Labs IV

So. San Francisco, CA

Life science

3Q 2010

N/A

23,391

43,231

Innovation Drive

San Diego, CA

MOB

3Q 2010

N/A

20,873

34,272

Folsom

Sacramento, CA

MOB

3Q 2010

N/A

24,478

31,605

Knoxville

Knoxville, TN

MOB

N/A

5,269

7,969

400

106,073

162,890

Total

729

336,706

424,291

*Land Held for Future Development*
				Estimated
			Gross	Rentable
			Site	Square
	Location	Segment	Acreage	Feet
	So. San Francisco, CA	Life science	30	866
	Carlsbad, CA	Life science	41	697
	Poway, CA	Life science	72	1,261
	Torrey Pines, CA	Life science	6	93
			149	2,917

	Investment to date			$	255,950

(1) Investment-to-date includes $68 million of land, $70 million of buildings, $13 million of net intangible assets and $186 million in development costs and construction in progress.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Portfolio Summary

As of and for the six months ended June 30, 2009, dollars and square feet in thousands, unless otherwise indicated

Portfolio Summary by Investment Product

Leased	Property					Average			Occupancy	EBITDAR			EBITDARM
Properties	Count	Investment		NOI		Age (Years)	Capacity		%(1)	Amount		CFC	Amount		CFC
Senior housing	234	$	4,115,489	$	171,217	12	25,497	Units	87.8	$	346,627	1.13 x	$	419,518	1.37 x
Life science	96	2,819,642		103,458		15	6,137	Sq. Ft.	91.1	N/A		N/A	N/A		N/A
Medical office	186	2,124,933		89,506		17	12,882	Sq. Ft.	90.7	N/A		N/A	N/A		N/A
Hospital	18	672,899		40,694		23	2,510	Beds	58.5	299,403		4.38 x	333,457		4.87 x
Skilled nursing	48	255,084		18,388		24	5,628	Beds	85.9	56,824		1.58 x	76,450		2.13 x
	582	$	9,988,047	$	423,263	16

Secured				Interest					Occupancy	EBITDA			EBITDAM
Loans		Investment		Income					%(1)	Amount		DSC	Amount		DSC
Senior housing		$	20,434	$	576				81.8	$	672	1.53 x	$	788	1.79 x
Hospital		35,308		1,501					58.3	11,249		3.75 x	13,172		4.39 x
Skilled nursing		14,394		823					83.9	5,803		2.34 x	7,209		2.90 x
		$	70,136	$	2,900					$	17,724		$	21,169

Mezzanine				Interest						EBITDA			EBITDAM
Loans		Investment		Income						Amount		DSC	Amount		DSC
Hospital		$	366,681	$	21,203					$	85,120	2.32 x	$	93,109	2.54 x
Skilled nursing		926,316		30,512						112,577		2.53 x	140,529		3.16 x
		$	1,292,997	$	51,715					$	197,697		$	233,638

Total		$	11,351,180	$	477,878

Portfolio NOI, Adjusted NOI and Interest Income

	Three Months Ended June 30, 2009
	Rental								NOI and
	Revenues		Operating				Interest		Interest		Adjusted
Segment	& DFL Income		Expenses		NOI(2)		Income(2)		Income		NOI
Senior housing	$	92,981	$	1,000	$	91,981	$	250	$	92,231	$	77,307
Life science	63,011		11,256		51,755		—		51,755		47,182
Medical office	77,125		32,219		44,906		—		44,906		42,670
Hospital	23,363		730		22,633		11,921		34,554		18,986
Skilled nursing	9,487		—		9,487		15,673		25,160		9,252
	$	265,967	$	45,205	$	220,762	$	27,844	$	248,606	$	195,397

	Six Months Ended June 30, 2009
	Rental								NOI and
	Revenues		Operating				Interest		Interest		Adjusted
Segment	& DFL Income		Expenses		NOI(2)		Income(3)		Income		NOI
Senior housing	$	174,918	$	3,701	$	171,217	$	576	$	171,793	$	149,049
Life science	126,150		22,692		103,458		—		103,458		93,549
Medical office	154,512		65,006		89,506		—		89,506		85,716
Hospital	42,176		1,482		40,694		22,704		63,398		35,313
Skilled nursing	18,388		—		18,388		31,335		49,723		18,163
	$	516,144	$	92,881	$	423,263	$	54,615	$	477,878	$	381,790

(1) For MOBs and life science facilities, occupancy percentages are presented as of the end of the period reported. For hospitals, skilled nursing facilities and senior housing facilities, occupancy represents the facilities’ average operating occupancy for the trailing twelve months and one quarter in arrears from the period reported.

(2) NOI attributable to non-controlling interests for the three months and six months ended June 30, 2009, was $1.8 million and $2.7 million, respectively.

(3) Includes loan accretion for the three and six months ended June 30, 2009, of $3.5 million and $7.6 million, respectively.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Portfolio Concentrations

As of and for the six months ended June 30, 2009, dollars in thousands

Geographic Diversification(1)

	Total	Senior		Life		Medical				Skilled				% of
Investment by State	Properties	Housing		Science		Office		Hospital		Nursing		Total		Total
CA	134	$	578,155	$	2,729,375	$	216,923	$	128,508	$	14,347	$	3,667,308	36
TX	80	381,556		—		632,899		260,237		2,818		1,277,510		13
FL	50	479,344		—		142,774		62,450		—		684,568		7
CO	24	168,931		—		189,447		9,028		27,815		395,221		4
VA	21	279,059		—		40,627		—		63,100		382,786		4
WA	14	132,609		—		171,424		—		—		304,033		3
NJ	13	280,589		—		—		—		—		280,589		3
UT	33	27,800		90,267		131,684		—		4,935		254,686		3
MD	12	182,087		—		29,001		—		—		211,088		2
IL	12	187,218		—		12,401		—		—		199,619		2
Other	189	1,438,575		—		557,753		247,984		156,463		2,400,775		23
Total	582	$	4,135,923	$	2,819,642	$	2,124,933	$	708,207	$	269,478	$	10,058,183	100

NOI and Interest	Total	Senior		Life		Medical				Skilled				% of
Income by State	Properties	Housing		Science		Office		Hospital		Nursing		Total		Total
CA	134	$	24,096	$	98,727	$	5,737	$	7,501	$	1,083	$	137,144	32
TX	80	17,470		—		24,246		13,967		204		55,887		13
FL	50	21,168		—		6,391		3,868		—		31,427		7
CO	24	6,622		—		7,548		675		1,515		16,360		4
VA	21	9,900		—		2,285		—		3,432		15,617		4
NJ	13	13,631		—		—		—		—		13,631		3
UT	33	796		4,731		6,634		—		349		12,510		3
WA	14	3,726		—		8,264		—		—		11,990		3
TN	23	1,409		—		7,435		—		1,794		10,638		2
GA	14	4,258		—		89		5,637		142		10,126		2
Other	176	68,717		—		20,877		10,547		10,692		110,833		27
Total	582	$	171,793	$	103,458	$	89,506	$	42,195	$	19,211	$	426,163	100

Operator/Tenant Diversification

	Annualized Revenues
Company	Amount		%
Sunrise Senior Living	$	128,572	14
HCA	68,584		7
Brookdale	60,099		6
HCR ManorCare	44,412		5
Emeritus Corporation	42,875		5
Genentech	34,622		4
Amgen	25,818		3
Aegis Senior Living	19,980		2
Tenet Healthcare Corporation	18,991		2
Cirrus	15,827		2
Other	467,168		50
	$	926,948	100

(1) Owned portfolio geographic concentration includes investments, NOI and interest income from investments in our leased properties and secured loan portfolios and excludes mezzanine loans as the investment and interest income associated with those assets cannot be allocated to a particular geographic region.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Same Property Operating Lease Portfolio

As of June 30, 2009, dollars and square feet in thousands

			Senior			Life			Medical						Skilled
	Total		Housing(1)			Science			Office			Hospital			Nursing

Property count	547		203			93			185			18			48
Investment	$	9,171,432	$	3,478,462		$	2,658,100		$	2,106,887		$	672,899		$	255,084
Percent of operating lease portfolio (by investment)	98.0%		99.7%			94.3%			99.2%			100.0%			100.0%
Capacity			22,255 Units			5,907 Sq. Ft.			12,764 Sq. Ft.			2,510 Beds			5,628 Beds

Year-Over-Year Three-Month SPP

Occupancy(2):
June 30, 2009			86.6%			90.7%			90.9%			60.8%			85.8%
June 30, 2008			89.4%			89.7%			91.0%			64.4%			87.0%
% change			(2.8%		)	1.0%			(0.1%		)	(3.6%		)	(1.2%		)

NOI % change	10.4%		17.9%			9.6%			4.6%			2.7%			5.4%

Adjusted NOI:
June 30, 2009	$	183,152	$	66,187		$	45,029		$	43,698		$	18,986		$	9,252
June 30, 2008	$	174,971	$	63,619		$	38,763		$	42,026		$	21,678		$	8,885
Adjusted NOI % change	4.7%		4.0%			16.2%			4.0%			(12.4%		)	4.1%

Sequential Three-Month SPP

Occupancy(2):
June 30, 2009			86.6%			90.7%			90.9%			60.8%			85.8%
March 31, 2009			87.7%			91.1%			90.8%			55.3%			85.4%
% change			(1.1%		)	(0.4%		)	0.1%			5.5%			0.4%

NOI % change	9.5%		19.1%			0.4%			(0.2%		)	25.3%			6.6%

Adjusted NOI:
June 30, 2009	$	183,152	$	66,187		$	45,029		$	43,698		$	18,986		$	9,252
March 31, 2009	$	174,472	$	60,701		$	44,105		$	44,428		$	16,327		$	8,911
Adjusted NOI % change	5.0%		9.0%			2.1%			(1.6%		)	16.3%			3.8%

Year-Over-Year Six-Month SPP

NOI % change	7.1%		7.5%			13.0%			4.5%			(0.1%		)	3.4%

Adjusted NOI:
June 30, 2009	$	357,624	$	126,888		$	89,134		$	88,126		$	35,313		$	18,163
June 30, 2008	$	344,146	$	128,033		$	74,607		$	84,037		$	39,938		$	17,531
Adjusted NOI % change	3.9%		(0.9%		)	19.5%			4.9%			(11.6%		)	3.6%

(1) Excludes 30 properties which are classified as direct financing leases.

(2) Occupancy percentages for senior housing, hospital and skilled nursing are calculated based on the average three month occupancy one quarter in arrears from the period presented. Occupancy percentages for life science and medical office are as of the end of the period presented.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Portfolio Lease Expirations and Debt Investment Maturities

At June 30, 2009, dollars and square feet in thousands

	Expiration Year
Segment	Total		2009(1)		2010		2011		2012		2013		2014		2015		2016		2017		2018		Thereafter

*Lease Expirations*

Senior housing:
Properties	234		—		4		3		4		6		8		2		24		26		65		92
Annualized revenues	$	315,076	$	—	$	659	$	785	$	1,075	$	24,428	$	15,600	$	3,174	$	26,976	$	31,807	$	100,541	$	110,031

Life science:
Square feet	5,589		184		274		459		191		376		367		524		263		733		411		1,807
Annualized revenues	$	197,190	$	2,793	$	6,429	$	15,218	$	4,880	$	11,172	$	10,195	$	16,868	$	8,187	$	24,283	$	23,452	$	73,713

Medical office:
Square feet	11,688		1,015		1,979		1,416		1,568		1,291		1,043		606		520		468		674		1,108
Annualized revenues	$	236,283	$	22,335	$	41,156	$	30,965	$	32,420	$	23,636	$	23,950	$	12,192	$	9,794	$	10,409	$	12,776	$	16,650

Hospital:
Properties	18		—		1		—		—		1		3		—		—		2		—		11
Annualized revenues	$	51,796	$	—	$	2,973	$	—	$	—	$	2,424	$	16,018	$	—	$	—	$	4,413	$	—	$	25,968

Skilled nursing:
Properties	48		—		—		—		—		10		12		5		5		9		4		3
Annualized revenues	$	36,096	$	—	$	—	$	—	$	—	$	7,091	$	8,079	$	3,259	$	4,898	$	7,953	$	2,462	$	2,354

Total annualized revenues	$	836,441	$	25,128	$	51,217	$	46,968	$	38,375	$	68,751	$	73,842	$	35,493	$	49,855	$	78,865	$	139,231	$	228,716

*Debt Investment Maturities*

Senior housing:
Annualized interest	$	1,289	$	579	$	25	$	312	$	—	$	373	$	—	$	—	$	—	$	—	$	—	$	—

Hospital:
Annualized interest	$	43,180	$	—	$	11,000	$	—	$	—	$	—	$	—	$	—	$	30,330	$	1,850	$	—	$	—

Skilled nursing:
Annualized interest	$	46,038	$	182	$	1,444	$	—	$	—	$	44,412	$	—	$	—	$	—	$	—	$	—	$	—

Total annualized interest	$	90,507	$	761	$	12,469	$	312	$	—	$	44,785	$	—	$	—	$	30,330	$	1,850	$	—	$	—

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

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Senior Housing Portfolio

As of and for the six months ended June 30, 2009, dollars in thousands

Investments Operating	Property					Average Age			EBITDAR			EBITDARM
Leases	Count	Investment		NOI		(Years)	Units	Occupancy %	Amount		CFC	Amount		CFC
Assisted living	167	$	2,267,626	$	93,315	11	14,245	86.8	$	187,084	1.11 x	$	228,480	1.36 x
Independent living	28	682,030		26,855		15	4,582	87.0	56,171		1.02 x	64,886		1.18 x
CCRCs	9	540,724		24,918		21	3,529	91.7	60,662		1.32 x	72,277		1.58 x
	204	$	3,490,380	$	145,088	12	22,356	87.6	$	303,917	1.13 x	$	365,643	1.36 x

Direct						Average
Financing	Property					Age			EBITDAR			EBITDARM
Leases	Count	Investment		NOI		(Years)	Units	Occupancy %	Amount		CFC	Amount		CFC
Assisted living	27	$	570,450	$	24,179	12	3,141	89.7	$	42,710	1.13 x	$	53,875	1.42 x
CCRCs(1)	3	54,659		1,950
	30	$	625,109	$	26,129

Leased Properties	234	$	4,115,489	$	171,217	12	25,497	87.8	$	346,627	1.13 x	$	419,518	1.37 x

				Interest					EBITDA			EBITDAM
Secured Loans		Investment		Income				Occupancy %	Amount		DSC	Amount		DSC
Assisted living		$	8,253	$	226			N/A	$	N/A	N/A	N/A		N/A
Independent living		2,964		156				81.8	672		1.53 x	788		1.79 x
CCRC(2)		9,217		194
		$	20,434	$	576

Total		$	4,135,923	$	171,793

Operator Concentration

						NOI and
	Properties		Investment			Interest Income					EBITDA(R)	EBITDA(R)M
Operator(3)	Count	% Pooled	Amount		%	Amount		%	Units	Occupancy %	CFC/DSC	CFC/DSC
Sunrise Senior Living(4)	90	99	$	1,932,683	47	$	68,775	40	10,263	89.4	1.09 x	1.36 x
Brookdale	24	92	675,804		16	34,758		20	4,819	90.8	1.28 x	1.51 x
Emeritus Corporation	37	84	537,369		13	27,744		16	3,786	89.0	1.18 x	1.41 x
Aegis Senior Living	12	67	258,008		6	11,289		7	965	87.7	1.00 x	1.16 x
Capital Senior Living	15	73	176,517		4	7,456		4	1,530	81.8	1.07 x	1.22 x
Harbor Retirement Associates	10	90	160,679		4	6,005		3	1,069	77.3	1.05 x	1.35 x
Atria Senior Living Group	6	100	88,076		2	4,547		3	854	81.6	0.92 x	1.07 x
Other	40	58	306,787		8	11,219		7	2,211	83.9	1.10 x	1.35 x
	234	85	$	4,135,923	100	$	171,793	100	25,497	87.8	1.13 x	1.37 x

(1) Represents ground leases on CCRCs.

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

(3) Property count and units are presented for leased properties, excludes secured loans.

(4) Sunrise Senior Living percentage pooled consists of 90 assets under 12 separate pools.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Senior Housing Portfolio

Dollars in thousands

Portfolio Trends

	Same Property Operating Lease Portfolio															Total Portfolio
	As of and for the Quarter Ended									As of and for the YTD Period Ended						As of and for the Twelve Months Ended
	06/30/09			03/31/09			06/30/08			06/30/09			06/30/08			06/30/09		03/31/09(1)		06/30/08(1)

Property count	203			203			203			203			203			234		234		237
Investment	$	3,478,462		$	3,484,625		$	3,478,543		$	3,478,462		$	3,478,543		$	4,135,923	$	4,143,028	$	4,149,152
Units	22,255			22,215			22,217			22,255			22,217			25,497		25,457		25,670
3-Month Occupancy %(2)	86.6			87.7			89.4									86.5		87.6		89.3
12-Month Occupancy %(2)	87.6			88.3			90.2									87.8		88.6		90.1
EBITDAR(3)	$	302,841		$	302,928		$	307,972								$	347,299	$	347,555	$	350,645
EBITDAR CFC/DSC(3)	1.13 x			1.13 x			1.20 x									1.13 x		1.13 x		1.19 x
EBITDARM(3)	$	364,405		$	364,496		$	369,138								$	420,306	$	420,561	$	423,938
EBITDARM CFC/DSC(3)	1.36 x			1.36 x			1.43 x									1.37 x		1.37 x		1.43 x
NOI:
Rental revenues	$	79,498		$	68,732		$	69,173		$	148,230		$	139,702
Operating expenses	(680		)	(2,538		)	(2,332		)	(3,218		)	(4,864		)
	$	78,818		$	66,194		$	66,841		$	145,012		$	134,838
Adjusted NOI:
Straight-line rents	(6,081		)	(5,402		)	(3,259		)	(11,483		)	(6,878		)
Above (below) market lease intangibles, net	(6,550		)	(91		)	37			(6,641		)	73
	$	66,187		$	60,701		$	63,619		$	126,888		$	128,033

(1) Amounts are reflected as originally reported, except for changes to property count and units to conform with current presentation.

(2) Occupancy percentages are one quarter in arrears from the period presented.

(3) EBITDAR and EBITDARM amounts and coverages are based on the trailing twelve-month period presented and are one quarter in arrears from the period presented.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Life Science Portfolio

As of and for the six months ended June 30, 2009, unless otherwise indicated, dollars and square feet in thousands

Investments

	Property					Average	Square	Occupancy
Leased Properties	Count	Investment		NOI(1)		Age (Years)	Feet	%(2)
San Francisco	70	$	2,232,558	$	81,137	15	4,171	89.8
San Diego	17	496,817		17,590		18	1,382	92.4
Utah	9	90,267		4,731		10	584	97.0
	96	$	2,819,642	$	103,458	15	6,137	91.1

Tenant Concentration

	Annualized Revenues		Square Feet
Tenant	Amount	%	Amount		%
Genentech	34,622	18	$	794	14
Amgen	25,818	13	433		8
Takeda	14,479	7	283		5
Rigel Pharmaceuticals	14,438	7	147		3
Exelixis, Inc.	12,462	6	295		5
ARUP	5,100	3	324		6
Alexza Pharmaceuticals, Inc.	4,916	2	107		2	��
Sequenom	4,583	2	83		1
Myriad Genetics	4,510	2	225		4
NuVasive, Inc.	4,235	2	145		3
Other	72,027	38	2,753		49
	197,190	100	$	5,589	100

Portfolio Trends

	Same Property Operating Lease Portfolio															Total Portfolio
										As of and for the
	As of and for the Quarter Ended									YTD Period Ended						At the Period Ended
	06/30/09			03/31/09			06/30/08			06/30/09			06/30/08			06/30/09		03/31/09(2)		06/30/08(3)

Property count	93			93			93			93			93			96		96		99
Investment	$	2,658,100		$	2,655,837		$	2,620,194		$	2,658,100		$	2,620,194		$	2,819,642	$	2,817,301	$	2,729,716
Square feet	5,907			5,896			5,897			5,907			5,897			6,137		6,126		6,171
Occupancy %(3)	90.7			91.1			89.7			90.7			89.7			91.1		91.4		88.1
NOI:
Rental revenues	$	59,169		$	58,675		$	53,693		$	117,844		$	106,104
Operating expenses	(10,431		)	(10,146		)	(9,231		)	(20,577		)	(20,027		)
	$	48,738		$	48,529		$	44,462		$	97,267		$	86,077
Adjusted NOI:
Straight-line rents	(3,307		)	(3,159		)	(4,959		)	(6,466		)	(9,294		)
Below market lease intangibles, net	(402		)	(1,265		)	(740		)	(1,667		)	(2,176		)
	$	45,029		$	44,105		$	38,763		$	89,134		$	74,607

(1) Excludes $2.7 million of rent, $2.2 million from San Francisco and $0.5 million from San Diego, collected on leases where the respective tenant improvement build outs are not complete (deferred rent). These leases are included in occupied square feet and annualized revenues when determining occupancy and tenant concentration.

(2) Occupancy percentages are presented as of the end of the period reported.

(3) Amounts are reflected as originally reported.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Life Science Portfolio

Dollars and square feet in thousands

Selected Lease Expirations Data (next 3 years):

	Total						San Francisco			San Diego			Utah
	Square Feet			Annualized Revenues			Square	Annualized		Square	Annualized		Square	Annualized
Year	Amount		%	Amount		%	Feet	Revenues		Feet	Revenues		Feet	Revenues
2009 (6 months)(1)	$	184	3	$	2,793	1	82	$	1,141	102	$	1,652	—	$	—
2010	274		5	6,429		3	132	3,697		142	2,732		—	—
2011	459		8	15,218		8	429	14,241		30	977		—	—
2012	191		3	4,880		2	120	3,100		53	1,498		18	282
Thereafter	4,481		81	167,870		86	2,983	129,531		950	28,730		548	9,609
	$	5,589	100	$	197,190	100	3,746	$	151,710	1,277	$	35,589	566	$	9,891

Leasing Activity

			Annualized				Tenant		Leasing		Average
	Leased		Base Rent		%		Improvements		Costs Per		Lease	Retention
	Square		Per		Change		Per Square		Square		Term	Rate
	Feet		Square Foot		In Rents		Foot		Foot		(Months)	YTD
Leased Square Feet as of December 31, 2008	5,579		$	33.79
Expirations	(159	)	20.43
Renewals, amendments and extensions	126		16.68		(7.2	)	—		$	2.54	109	79.7
New leases and expansions	87		33.70				$	68.95	12.28		79
Terminations	(34	)	13.92

Leased Square Feet as of March 31, 2009	5,599		$	34.80
Expirations	(317	)	28.44
Renewals, amendments and extensions	310		24.56		(13.6	)	1.96		6.70		54	91.9
New leases and expansions	39		17.70				—		—		2
Terminations	(42	)	18.91

Leased Square Feet as of June 30, 2009	5,589		$	35.28

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

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Medical Office Portfolio

As of and for the six months ended June 30, 2009, dollars and square feet in thousands

Investments

	Property					Average		Occupancy
Leased Properties	Count	Investment		NOI		Age (Years)	Square Feet	%
On-Campus	143	$	1,716,527	$	70,328	17	10,765	90.3
Off-Campus	43	408,406		19,178		17	2,117	92.9
	186	$	2,124,933	$	89,506	17	12,882	90.7

Portfolio Trends


	Same Property Operating Lease Portfolio															Total Portfolio
										As of and for the
	As of and for the Quarter Ended									YTD Period Ended						At the Period Ended
	06/30/09			03/31/09			06/30/08			06/30/09			06/30/08			06/30/09		03/31/09(1)		06/30/08(1)
Property count	185			185			185			185			185			186		187		192
Investment	$	2,106,887		$	2,101,332		$	2,080,957		$	2,106,887		$	2,080,957		$	2,124,933	$	2,124,046	$	2,160,156
Square feet	12,764			12,757			12,758			12,764			12,758			12,882		12,912		13,204
Occupancy %(2)	90.9			90.8			91.0									90.7		90.5		90.3
NOI:
Rental revenues	$	76,327		$	76,704		$	74,878		$	153,031		$	149,071
Operating expenses	(30,439		)	(30,735		)	(31,015		)	(61,174		)	(61,170		)
	$	45,888		$	45,969		$	43,863		$	91,857		$	87,901
Adjusted NOI:
Straight-line rents	(665		)	(728		)	(1,104		)	(1,393		)	(2,418		)
Below market lease intangibles, net	(811		)	(752		)	(733		)	(1,563		)	(1,446		)
Lease terminations	(714		)	(61		)	—			(775		)	—
	$	43,698		$	44,428		$	42,026		$	88,126		$	84,037

(1) Amounts are reflected as originally reported.

(2) Occupancy percentages are presented as of the end of the period reported.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Medical Office Portfolio

Square feet in thousands

Leasing Activity

			Annualized			Tenant
	Leased		Base Rent		%	Improvements		Leasing		Average	Retention
	Square		Per		Change	Per Square		Costs Per		Lease Term	Rate
	Feet		Square Foot		In Rents	Foot		Square Foot		(Months)	YTD

Leased Square Feet as of December 31, 2008	11,699		$	20.86
Dispositions	(36	)	24.90
Expirations	(468	)	21.02
Renewals, amendments and extensions	369		19.77		1.2	$	7.70	$	1.73	38	78.7
New leases	162		19.19			20.64		3.42		49
Terminations	(35	)	21.37

Leased Square Feet as of March 31, 2009	11,691		$	20.99
Dispositions	(38	)	14.77
Expirations	(686	)	18.74
Renewals, amendments and extensions	542		18.84		15.6	2.62		0.89		35	78.8
New leases	268		17.96			10.84		1.76		53
Terminations	(89	)	19.37

Leased Square Feet as of June 30, 2009	11,688		$	21.21

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Hospital Portfolio

As of and for the six months ended June 30, 2009, dollars in thousands, unless otherwise indicated

Investments

						Average
Leased	Property					Age		Occupancy	EBITDAR(1)			EBITDARM(1)
Properties	Count	Investment		NOI		(Years)	Beds	%(1)	Amount		CFC	Amount		CFC
Acute care	6	$	478,658	$	29,434	31	1,742	58.4	$	241,506		$	265,693
Rehab	7	95,347		4,623		19	487	60.2	21,763			24,943
Specialty	2	63,689		2,640		25	37	—	24,429			27,401
LTACH	3	35,205		3,997		15	244	55.9	11,705			15,420
	18	$	672,899	$	40,694	23	2,510	58.5	$	299,403	4.38 x	$	333,457	4.87 x

Secured				Interest					EBITDA(1)			EBITDAM(1)
Loans		Investment		Income				Occupancy %	Amount		DSC	Amount		DSC
Acute care		$	35,308	$	1,501			58.3	$	11,249	3.75 x	$	13,172	4.39 x

Mezzanine				Interest					EBITDA			EBITDAM
Loans		Investment		Income					Amount		DSC	Amount		DSC
Acute care		$	283,372	$	14,343				$	67,569	2.47 x	$	75,558	2.76 x
Specialty		83,309		6,860					17,551		1.87 x	17,551		1.87 x
		$	366,681	$	21,203				$	85,120	2.32 x	$	93,109	2.54 x

Total		$	1,074,888	$	63,398

Operator Concentration(2)

						NOI and
	Properties		Investment			Interest Income
		%
Operator(1)	Count	Pooled	Amount		%	Amount		%	Beds
HCA	1	—	$	449,598	42	$	24,195	38	645
Tenet Healthcare Corp	4	—	223,633		21	13,677		22	921
Cirrus Health	2	—	130,397		12	8,575		14	37
HealthSouth	5	60	55,981		5	4,399		7	372
Other	6	50	215,279		20	12,552		19	535
	18	33	$	1,074,888	100	$	63,398	100	2,510

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

(2) Property count and beds are presented for leased properties, excludes secured and mezzanine loans.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Hospital Portfolio

Dollars in thousands

Portfolio Trends

	Same Property Operating Lease Portfolio															Total Portfolio
	As of and for the Quarter Ended									As of and for the YTD Period Ended						As of and for the Twelve Months Ended
	06/30/09			03/31/09			06/30/08			06/30/09			06/30/08			06/30/09		03/31/09(1)		06/30/08(1)

Property count	18			18			18			18			18			18		18		20
Investment	$	672,899		$	673,105		$	668,396		$	672,899		$	668,396		$	1,074,888	$	1,010,130	$	1,077,322
Beds	2,510			2,463			2,442			2,510			2,442			2,510		2,463		2,723
3-Month Occupancy %(2)	60.8			55.3			64.4									60.8		55.3		64.4
12-Month Occupancy %(2)	58.5			59.3			59.6									58.5		56.9		54.3
EBITDAR(3)	$	299,403		$	295,694		$	287,660								$	395,772	$	393,801	$	382,980
EBITDAR CFC/DSC(3)	4.38 x			4.35 x			4.39 x									3.66 x		3.31 x		3.07 x
EBITDARM(3)	$	333,457		$	329,702		$	321,470								$	439,738	$	439,196	$	430,223
EBITDARM CFC/DSC(3)	4.87 x			4.86 x			4.91 x									4.07 x		3.70 x		3.45 x
NOI:
Rental revenues	$	23,363		$	18,813		$	23,012		$	42,176		$	42,436
Operating expenses	(730		)	(752		)	(983		)	(1,482		)	(1,797		)
	$	22,633		$	18,061		$	22,029		$	40,694		$	40,639
Adjusted NOI:
Straight-line rents	(3,429		)	(1,516		)	(133		)	(4,945		)	(266		)
Below market lease intangibles, net	(218		)	(218		)	(218		)	(436		)	(435		)
	$	18,986		$	16,327		$	21,678		$	35,313		$	39,938

(1) Amounts are reflected as originally reported, except for property count and beds to conform with current presentation.

(2) Occupancy percentages are one quarter in arrears from the period presented.

(3) EBITDAR and EBITDARM amounts and coverages are based on the trailing twelve-month period one quarter in arrears from the period presented.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Skilled Nursing Portfolio

As of and for the six months ended June 30, 2009, dollars in thousands, unless otherwise indicated

Investments

Leased	Property					Average Age		Occupancy	EBITDAR			EBITDARM
Properties	Count	Investment		NOI		(Years)	Beds	%(1)	Amount		CFC	Amount		CFC

Skilled nursing	48	$	255,084	$	18,388	24	5,628	85.9	$	56,824	1.58 x	$	76,450	2.13 x

Debt				Interest					EBITDA(1)			EBITDAM(1)
Investments		Investment		Income				Occupancy %	Amount		DSC	Amount		DSC
Secured loans		$	14,394	$	823			83.9	$	5,803	2.34 x	$	7,209	2.90 x
Mezzanine loans(1)		926,316		30,512					112,577		2.53 x	140,529		3.16 x
		940,710		$	31,335
Total		$	1,195,794	$	49,723

Operator Concentration

					NOI and
	Properties		Investment		Interest Income
		%						Occupancy	EBITDA(R)	EBITDA(R)M
Operator(2)	Count	Pooled	Amount	%	Amount	%	Beds	%	CFC/DSC	CFC/DSC
HCR ManorCare	—	—	$926,316	77	$30,512	61	N/A	N/A	2.53 x	3.16 x
Formation Capital	9	100	63,100	5	3,432	8	934	94.8	1.96 x	2.47 x
Covenant Care	12	—	62,318	5	4,499	9	1,373	81.4	1.54 x	2.09 x
Sun Healthcare	4	100	38,260	3	2,235	4	479	83.1	2.32x	2.86 x
Kindred	9	100	38,117	3	4,142	8	1,288	87.2	1.38 x	2.03 x
Trilogy Health Services	5	100	33,351	3	2,579	5	546	91.2	1.48 x	1.86 x
Other	9	56	34,332	4	2,324	5	1,008	83.4	1.18 x	1.80 x
	48	67	$1,195,794	100	$49,723	100	5,628	85.7	2.12 x	2.71 x

(1) Represents an investment in mezzanine loans having an aggregate face value of $1.0 billion. These interest-only loans mature in January 2013 and bear interest on their face amounts at a floating rate of one-month LIBOR plus 4.0%. These loans are mandatorily pre-payable in January 2012 unless the borrower satisfies certain financial conditions. The loans are secured by an indirect pledge of equity ownership in 339 HCR ManorCare facilities located in 30 states and are subordinate to other debt of approximately $3.6 billion at closing.

(2) Property count and beds are presented for leased properties, excludes secured and mezzanine loans.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Owned Skilled Nursing Portfolio

Dollars in thousands

Portfolio Trends

	Same Property Operating Lease Portfolio															Total Portfolio
	As of and for the Quarter Ended								As of and for the YTD Period Ended							As of and for the Twelve Months Ended
	06/30/09			03/31/09		06/30/08			06/30/09			06/30/08			��	06/30/09		03/31/09(1)		06/30/08(1)

Property count	48			48		48			48			48				48		48		48
Investment	$	255,084		$	255,084	$	242,637		$	255,084		$	242,637			$	1,195,794	$	1,191,843	$	1,168,391
Beds	5,628			5,651		5,614			5,628			5,614				5,628		5,651		5,637
3-Month Occupancy %(2)	85.8			85.4		87.0										85.6		85.4		87.0
12-Month Occupancy %(2)	85.9			86.2		86.2										85.7		86.1		85.9
EBITDAR(3)	$	56,824		$	53,727	$	47,684									$	175,204	$	154,540	$	53,082
EBITAR CFC/DSC(3)	1.58 x			1.51 x		1.41 x										2.12 x		1.86 x		1.46 x
EBITDARM(3)	$	76,450		$	73,271	$	66,528									$	224,188	$	199,454	$	73,260
EBITDARM CFC/DSC(3)	2.13 x			2.06 x		1.97 x										2.71 x		2. 40 x		2.01 x
NOI:
Rental revenues	$	9,487		$	8,901	$	8,999		$	18,388		$	17,775
Adjusted NOI:
Straight-line rents	(235		)	10		(138		)	(225		)	(297		)
Above market lease intangibles, net	—			—		24			—			53
	$	9,252		$	8,911	$	8,885		$	18,163		$	17,531

(1) Amounts are reflected as originally reported, except for property count and beds and investment amounts to conform with current presentation.

(2) Occupancy percentages are one quarter in arrears from the period presented.

(3) EBITDAR and EBITDARM amounts and coverages are based on the trailing twelve-month period one quarter in arrears from the period presented.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Investment Management Platform

As of and for the six months ended June 30, 2009, dollars in thousands

								HCP’s
		Date	HCP’s	Joint		HCP’s Net		Investment		Initial
	Primary	Established/	Ownership	Venture’s		Equity		Management		Term (in
Unconsolidated Institutional Joint Ventures	Segment	Acquired	Percentage	Investment		Investment(1)		Fee Income		years)

HCP Ventures II	Senior housing	January-07	35%	$	1,097,267	$	139,851	$	1,521	Indefinite
HCP Ventures III	Medical office	October-06	30%(2)	141,336		11,501		230		10
HCP Ventures IV	Medical office	April-07	20%	656,733		42,989		1,054		10
HCP Life Science	Life science	August-07	50%-63%	80,779		63,735		2		97-98
				$	1,976,115	$	258,076	$	2,807

Balance Sheets
	June 30, 2009												December 31, 2008
	HCP Ventures II			HCP Ventures III			HCP Ventures IV			HCP Life Science			HCP Ventures II			HCP Ventures III			HCP Ventures IV			HCP Life Science
ASSETS
Real estate:
Buildings and improvements	$	935,211		$	130,437		$	526,689		$	43,137		$	935,211		$	129,838		$	523,750		$	43,124
Development costs and construction in progress	—			65			1,587			951			—			367			2,599			513
Land	108,907			1,780			66,040			8,271			108,907			1,780			65,996			8,271
Accumulated depreciation and amortization	(73,508		)	(11,130		)	(50,488		)	(28,858		)	(60,143		)	(9,412		)	(38,184		)	(26,398		)
Net real estate	970,610			121,152			543,828			23,501			983,975			122,573			554,161			25,510

Cash and cash equivalents and restricted cash	8,438			2,470			14,447			1,295			9,142			1,489			10,746			1,269
Other assets, net	45,166			3,939			12,657			2,477			39,733			4,045			13,326			3,145
Intangible assets, net	41,889			9,642			46,888			—			44,033			10,578			51,914			—
Total assets	$	1,066,103		$	137,203		$	617,820		$	27,273		$	1,076,883		$	138,685		$	630,147		$	29,924

LIABILITIES AND MEMBERS’ CAPITAL
Mortgage debt	$	664,223		$	91,730		$	378,202		$	14,429		$	668,938		$	91,730		$	378,448		$	15,844
Intangible liabilities, net	1,122			4,599			10,737			—			1,176			4,926			11,462			—
Accounts payable, accrued liabilities and deferred revenue	6,415			2,402			13,937			708			7,662			3,285			12,512			1,093
Total liabilities	671,760			98,731			402,876			15,137			677,776			99,941			402,422			16,937

HCP’s capital	135,261			9,879			32,848			6,090			136,927			9,880			35,404			6,755
Partners’ capital	259,082			28,593			182,096			6,046			262,180			28,864			192,321			6,232
Total liabilities and members’ capital	$	1,066,103		$	137,203		$	617,820		$	27,273		$	1,076,883		$	138,685		$	630,147		$	29,924

(1) The carrying value of investments in unconsolidated joint ventures is based on the amount we paid to purchase the joint venture interest, which is different from our capital balance as reflected at the joint venture level as the records of the unconsolidated joint venture are reflected at their historical cost. These differences in basis are generally amortized over the lives of the related assets and liabilities and included in the Company’s share of equity in earnings of the respective joint venture.

(2) The Company owns an 85% interest in HCP Birmingham Portfolio LLC, which owns a 30% interest in HCP Ventures III.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Investment Management Platform

In thousands

*Statements of Operations and Funds From Operations*
	Three Months Ended June 30, 2009												Three Months Ended June 30, 2008
	HCP Ventures II			HCP Ventures III			HCP Ventures IV			HCP Life Science			HCP Ventures II			HCP Ventures III			HCP Ventures IV			HCP Life Science
Revenues:
Rental and related revenues	$	20,848		$	3,431		$	14,119		$	1,785		$	20,829		$	3,522		$	14,063		$	2,012
Tenant recoveries	—			1,154			3,374			321			—			1,182			2,799			757
Total revenues	20,848			4,585			17,493			2,106			20,829			4,704			16,862			2,769

Costs and expenses:
Depreciation and amortization	7,030			1,313			8,232			441			7,141			1,267			6,396			571
Operating	—			1,553			7,422			349			4			1,533			6,660			892
General and administrative	1,172			211			832			17			1,385			238			861			35
Total costs and expenses	8,202			3,077			16,486			807			8,530			3,038			13,917			1,498

Other income (expense):
Interest and other income, net	1			—			226			—			6			9			80			—
Interest expense	(9,684		)	(1,434		)	(5,492		)	(264		)	(9,802		)	(1,434		)	(5,549		)	(316		)
Net income (loss)	$	2,963		$	74		$	(4,259	)	$	1,035		$	2,503		$	241		$	(2,524	)	$	955

Depreciation and amortization of real estate and in-place lease intangibles	7,030			1,313			8,232			441			7,141			1,267			6,396			571
FFO	$	9,993		$	1,387		$	3,973		$	1,476		$	9,644		$	1,508		$	3,872		$	1,526

HCP’s pro rata share of FFO	$	3,498		$	416		$	795		$	825		$	3,375		$	452		$	774		$	866

Selected supplemental cash flow information:
Amortization of above (below) market lease intangibles, net	$	793		$	(142	)	$	212		$	—		$	713		$	(143	)	$	296		$	—
Amortization of debt premiums, discounts and issuance costs, net	172			38			151			9			155			38			151			9
Straight-line rents	(2,522		)	(72		)	(322		)	(8		)	(3,128		)	(203		)	(349		)	125
Lease commissions and tenant and capital improvements	(295		)	(247		)	(1,082		)	(295		)	—			—			(1,832		)	(287		)

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Investment Management Platform

In thousands

*Statement of Operations and Funds From Operations*
	Six Months Ended June 30, 2009												Six Months Ended June 30, 2008
	HCP Ventures II			HCP Ventures III			HCP Ventures IV			HCP Life Science			HCP Ventures II			HCP Ventures III			HCP Ventures IV			HCP Life Science
Revenues:
Rental and related revenues	$	41,699		$	6,926		$	28,562		$	3,745		$	41,750		$	6,837		$	28,488		$	4,072
Tenant recoveries	—			2,420			6,833			491			—			2,359			5,939			1,103
Total revenues	41,699			9,346			35,395			4,236			41,750			9,196			34,427			5,175

Costs and expenses:
Depreciation and amortization	14,061			2,615			16,431			2,802			14,282			2,516			12,934			1,137
Operating	—			3,144			14,360			786			4			3,095			13,476			1,237
General and administrative	2,498			448			1,744			32			2,632			402			1,577			49
Total costs and expenses	16,559			6,207			32,535			3,620			16,918			6,013			27,987			2,423
																					��
Other income (expense):
Interest and other income, net	1			3			233			—			42			19			83			12
Interest expense	(19,301		)	(2,818		)	(10,933		)	(539		)	(19,637		)	(2,868		)	(11,055		)	(657		)
Net income (loss)	$	5,840		$	324		$	(7,840	)	$	77		$	5,237		$	334		$	(4,532	)	$	2,107

Depreciation and amortization of real estate and in-place lease intangibles	14,061			2,615			16,431			2,802			14,282			2,516			12,934			1,137
FFO	$	19,901		$	2,939		$	8,591		$	2,879		$	19,519		$	2,850		$	8,402		$	3,244

HCP’s pro rata share of FFO	$	6,965		$	882		$	1,718		$	1,620		$	6,832		$	855		$	1,680		$	1,855

Selected supplemental cash flow information:
Amortization of above (below) market lease intangibles, net	$	1,616		$	(283	)	$	460		$	—		$	1,426		$	(284	)	$	607		$	—
Amortization of debt premiums, discounts and issuance costs, net	343			76			303			17			311			76			303			24
Straight-line rents	(5,034		)	(162		)	(857		)	(56		)	(6,256		)	(173		)	(904		)	87
Lease commissions and tenant and capital improvements	(911		)	(325		)	(2,297		)	(452		)	—			(10		)	(2,329		)	(666		)

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Investment Management Platform

In thousands

*Net Operating Income*
	Three Months Ended June 30, 2009												Three Months Ended June 30, 2008
	HCP			HCP			HCP			HCP			HCP			HCP			HCP			HCP
	Ventures II			Ventures III			Ventures IV			Life Science			Ventures II			Ventures III			Ventures IV			Life Science

Net income (loss)	$	2,963		$	74		$	(4,259	)	$	1,035		$	2,503		$	241		$	(2,524	)	$	955
Depreciation and amortization	7,030			1,313			8,232			441			7,141			1,267			6,396			571
General and administrative	1,172			211			832			17			1,385			238			861			35
Interest and other income, net	(1		)	—			(226		)	—			(6		)	(9		)	(80		)	—
Interest expense	9,684			1,434			5,492			264			9,802			1,434			5,549			316

NOI	$	20,848		$	3,032		$	10,071		$	1,757		$	20,825		$	3,171		$	10,202		$	1,877
Straight-line rents	(2,522		)	(72		)	(322		)	(8		)	(3,128		)	(203		)	(349		)	125
Amortization of above (below) market lease intangibles, net	793			(142		)	212			—			713			(143		)	296			—

Adjusted NOI	$	19,119		$	2,818		$	9,961		$	1,749		$	18,410		$	2,825		$	10,149		$	2,002

HCP’s pro rata share of NOI	$	7,297		$	910		$	2,014		$	988		$	7,289		$	951		$	2,040		$	1,071

HCP’s pro rata share of adjusted NOI	$	6,692		$	845		$	1,992		$	983		$	6,444		$	848		$	2,030		$	1,168

	Six Months Ended June 30, 2009												Six Months Ended June 30, 2008
	HCP			HCP			HCP			HCP			HCP			HCP			HCP			HCP
	Ventures II			Ventures III			Ventures IV			Life Science			Ventures II			Ventures III			Ventures IV			Life Science
Net income (loss)	$	5,840		$	324		$	(7,840	)	$	77		$	5,237		$	334		$	(4,532	)	$	2,107
Depreciation and amortization	14,061			2,615			16,431			2,802			14,282			2,516			12,934			1,137
General and administrative	2,498			448			1,744			32			2,632			402			1,577			49
Interest and other income, net	(1		)	(3		)	(233		)	—			(42		)	(19		)	(83		)	(12		)
Interest expense	19,301			2,818			10,933			539			19,637			2,868			11,055			657

NOI	$	41,699		$	6,202		$	21,035		$	3,450		$	41,746		$	6,101		$	20,951		$	3,938
Straight-line rents	(5,034		)	(162		)	(857		)	(56		)	(6,256		)	(173		)	(904		)	87
Amortization of above (below) market lease intangibles, net	1,616			(283		)	460			—			1,426			(284		)	607			—

Adjusted NOI	$	38,281		$	5,757		$	20,638		$	3,394		$	36,916		$	5,644		$	20,654		$	4,025

HCP’s pro rata share of NOI	$	14,595		$	1,861		$	4,207		$	1,951		$	14,611		$	1,830		$	4,190		$	2,261

HCP’s pro rata share of adjusted NOI	$	13,398		$	1,727		$	4,128		$	1,920		$	12,921		$	1,693		$	4,131		$	2,346

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Investment Management Platform

As of and for the six months ended June 30, 2009, dollars and square feet in thousands


						Average			EBITDAR			EBITDARM
HCP Ventures II(1)	Property Count	Investment		NOI		Age (Years)	Units	Occupancy%(2)(3)	Amount		CFC	Amount		CFC
Assisted living	2	$	11,077	$	461	13	111	87.7	$	547	0.68 x	$	743	0.93 x
Independent living	20	978,522		36,929		20	5,057	93.0	62,881		0.95 x	70,464		1.07 x
CCRCs	3	107,668		4,309		14	448	90.4	6,465		0.86 x	7,495		0.99 x
	25	$	1,097,267	$	41,699	19	5,616	92.7	$	69,893	0.94 x	$	78,702	1.06 x

	Property					Average Age	Square
HCP Ventures III	Count	Investment		NOI		(Years)	Feet	Occupancy%(2)
On-Campus	9	$	108,799	$	4,687	9	619	100.0
Off-Campus	4	32,537		1,515		8	183	100.0
	13	$	141,336	$	6,202	9	802	100.0

	Property					Average Age	Square
HCP Ventures IV	Count	Investment		NOI		(Years)	Feet(2)	Occupancy%(2)(4)
Medical office:
On-Campus	23	$	228,267	$	6,554	21	1,212	80.1
Off-Campus	31	347,093		11,521		17	1,478	87.8
Hospital:
LTACH	1	12,184		575		3	N/A	N/A
Rehab	1	13,965		57		3	N/A	N/A
Specialty	2	55,224		2,328		5	N/A	N/A
	58	$	656,733	$	21,035	18

	Property					Average Age	Square
HCP Life Science	Count	Investment		NOI		(Years)	Feet	Occupancy%(2)
San Francisco	2	$	40,560	$	1,934	12	147	100.0
San Diego	2	40,219		1,516		13	131	96.8
	4	$	80,779	$	3,450	13	278	98.5

Total	100	$	1,976,115	$	72,386

(1)	All facilities are operated by Horizon Bay Senior Communities.
(2)	For MOBs and life science facilities, occupancy are presented as of the end of the period reported. Occupancy represents the facilities’ average operating occupancy for the trailing twelve months and are one quarter in arrears from the period reported.
(3)	At June 30, 2009, the average three-month occupancy for senior housing facilities was 91.6%. These occupancy percentages are one quarter in arrears from the period presented.
(4)	Certain operators in the Investment Management Platform hospital portfolio are not required under their respective leases to provide operational data.

See Reporting Definitions and Reconciliations of Non-GAAP Measures

Reporting Definitions and Reconciliations of Non-GAAP Measures

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

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

In thousands

	Three months ended June 30,				Six months ended June 30,
	2009		2008		2009		2008

Adjusted EBITDA	$	242,541	$	233,852	$	463,832	$	471,158
Interest expense:
Continuing operations	75,340		85,446		152,014		181,709
Discontinued operations	—		140		—		247
HCP’s share of interest expense from the Investment Management Platform	5,071		5,153		10,099		10,323
Capitalized interest	6,327		7,538		12,347		16,900
Preferred stock dividends	5,283		5,283		10,566		10,566
Fixed charges	$	92,021	$	103,560	$	185,026	$	219,745

Adjusted fixed charge coverage	2.6 x		2.3 x		2.5 x		2.1 x

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

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

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

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

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

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

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

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

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

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

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

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

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

Debt Investments. Loans secured by a direct interest in real estate and mezzanine loans.

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

Reporting Definitions and Reconciliations of Non-GAAP Measures

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

EBITDA and Adjusted EBITDA. The real estate industry uses earnings before interest, taxes, depreciation and amortization (“EBITDA”), a non-GAAP financial measure, as a measure of both operating performance and liquidity. Adjusted EBITDA is calculated as EBITDA excluding impairments and gains or losses from real estate dispositions. The Company uses EBITDA and Adjusted EBITDA to measure both its operating performance and liquidity. The Company considers Adjusted EBITDA to provide investors relevant and useful information because it permits investors to view income from its operations on an unleveraged basis before the effects of taxes, non-cash depreciation and amortization, impairments and gains or losses from real estate dispositions. By excluding interest expense, Adjusted EBITDA allows investors to measure the Company’s operating performance independent of its capital structure and indebtedness and, therefore, allows for a more meaningful comparison of its operating performance between quarters as well as annual periods and to compare its operating performance to that of other companies, both in the real estate industry and in other industries. As a liquidity measure, the Company believes that EBITDA and Adjusted EBITDA help investors analyze the Company’s ability to meet its interest payments on outstanding debt and to make preferred dividend payments. The Company believes investors should consider EBITDA and Adjusted EBITDA, in conjunction with net income (the primary measure of the Company’s performance) and the other required GAAP measures of its performance and liquidity, to improve their understanding of the Company’s operating results and liquidity, and to make more meaningful comparisons of its performance between periods and as against other companies. EBITDA and Adjusted EBITDA have limitations as analytical tools and should be used in conjunction with the Company’s required GAAP presentations. EBITDA and Adjusted EBITDA do not reflect the Company’s historical cash expenditures or future cash requirements for capital expenditures or contractual commitments. While Adjusted EBITDA is a relevant and widely used measure of operating performance and liquidity, it does not represent net income or cash flow from operations as defined by GAAP and it should not be considered as an alternative to those indicators in evaluating operating performance or liquidity. Further, the Company’s computation of EBITDA and Adjusted EBITDA may not be comparable to similar measures reported by other companies.

The following table reconciles Adjusted EBITDA from net income:

In thousands

	Three months ended June 30,						Six months ended June 30,
	2009			2008			2009			2008

Net income	$	101,178		$	238,080		$	153,887		$	294,208
Interest expense:
Continuing operations	75,340			85,446			152,014			181,709
Discontinued operations	—			140			—			247
Income taxes:
Continuing operations	841			1,274			1,756			3,517
Discontinued operations	130			—			129			91
Depreciation and amortization of real estate, in-place lease and other intangibles:
Continuing operations	79,606			77,861			160,143			155,493
Discontinued operations	23			1,827			84			6,553
Equity (income) loss from unconsolidated joint ventures	(1,127		)	(1,221		)	(665		)	(2,509		)
HCP’s share of EBITDA from the Investment Management Platform	10,603			10,624			21,285			21,552
Other joint venture adjustments	581			611			1,190			1,225
EBITDA	$	267,175		$	414,642		$	489,823		$	662,086

Impairments	5,906			9,715			5,906			9,715
Gain on sales of real estate	(30,540		)	(190,505		)	(31,897		)	(200,643		)
Adjusted EBITDA	$	242,541		$	233,852		$	463,832		$	471,158

Reporting Definitions and Reconciliations of Non-GAAP Measures

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

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

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

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

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

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

Reporting Definitions and Reconciliations of Non-GAAP Measures

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

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

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

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

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

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

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

Reporting Definitions and Reconciliations of Non-GAAP Measures

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

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

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

The following table reconciles NOI from net income:

In thousands

	Three months ended June 30,						Six months ended June 30,
	2009			2008			2009			2008
Net income	$	101,178		$	238,080		$	153,887		$	294,208
Investment management fee income	(1,369		)	(1,457		)	(2,807		)	(2,924		)
Depreciation and amortization	79,606			77,861			160,143			155,493
General and administrative	20,932			18,732			39,923			39,177
Impairments	5,906			1,574			5,906			1,574
Interest and other income, net	(28,732		)	(30,739		)	(53,065		)	(66,061		)
Interest expense	75,340			85,446			152,014			181,709
Income taxes	841			1,274			1,756			3,517
Equity income from unconsolidated joint ventures	(1,127		)	(1,221		)	(665		)	(2,509		)
Total discontinued operations, net of taxes	(31,813		)	(188,684		)	(33,829		)	(208,212		)
NOI	$	220,762		$	200,866		$	423,263		$	395,972
Straight-line rents	(14,337		)	(9,751		)	(25,759		)	(19,533		)
DFL interest accretion	(1,994		)	(2,118		)	(3,949		)	(4,190		)
Amortization of above and below market lease intangibles, net	(8,320		)	(1,877		)	(10,980		)	(4,029		)
Lease termination fees	(1,286		)	—			(1,348		)	—
NOI adjustments related to properties in discontinued operations	572			67			563			290
Adjusted NOI	$	195,397		$	187,187		$	381,790		$	368,510

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

Owned Portfolio. Represents owned properties subject to operating leases and DFLs and debt investments, and excludes properties under and land held for future development.

Reporting Definitions and Reconciliations of Non-GAAP Measures

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

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

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

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

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

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

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

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

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

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

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

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

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

The following table details the calculation of Total Gross Assets:

In thousands

	June 30, 2009			December 31, 2008			June 30, 2008
Consolidated total assets	$	11,785,850		$	11,849,826		$	12,223,730
Investments in and advances to unconsolidated joint ventures	(264,346		)	(272,929		)	(278,479		)
Accumulated depreciation and amortization	1,123,709			994,426			841,257
Accumulated depreciation and amortization from assets held for sale	—			24,257			50,418
Consolidated gross assets	$	12,645,213		$	12,595,580		$	12,836,926
HCP’s share of unconsolidated total assets(1)	553,071			561,397			571,256
HCP’s share of unconsolidated accumulated depreciation and amortization(1)	55,760			46,629			38,104
Total gross assets	$	13,254,044		$	13,203,606		$	13,446,286

Total Market Capitalization. Total Debt plus Consolidated Market Equity.

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

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

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

Healthpeak Properties (DOC) 8-KHCP Announces Second Quarter 2009 Results