Healthpeak Properties (DOC) 10-Q 4 Aug 09 2009 Q2 Quarterly report Financial data

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands	Jun. 30, 2009	Dec. 31, 2008
Real estate:
Buildings and improvements	$7,796,873	$7,752,714
Development costs and construction in progress	255,565	224,337
Land	1,550,490	1,550,219
Accumulated depreciation and amortization	(940,544)	(820,441)
Net real estate	8,662,384	8,706,829
Net investment in direct financing leases	648,864	648,234
Loans receivable, net	1,078,418	1,076,392
Investments in and advances to unconsolidated joint ventures	264,346	272,929
Accounts receivable, net of allowance of $17,929 and $18,413, respectively	29,535	34,211
Cash and cash equivalents	49,484	57,562
Restricted cash	32,351	35,078
Intangible assets, net	433,874	505,986
Real estate held for sale, net		19,799
Other assets, net	586,594	492,806
Total assets	11,785,850	11,849,826
LIABILITIES AND EQUITY
Bank line of credit	100,000	150,000
Term loan	200,000	200,000
Bridge loan		320,000
Senior unsecured notes	3,518,147	3,523,513
Mortgage debt	1,592,712	1,641,734
Other debt	98,984	102,209
Intangible liabilities, net	215,571	232,654
Accounts payable and accrued liabilities	197,295	211,691
Deferred revenue	71,716	60,185
Total liabilities	5,994,425	6,441,986
Commitments and contingencies
Preferred stock, $1.00 par value: 50,000,000 shares authorized; 11,820,000 shares issued and outstanding, liquidation preference of $25 per share	285,173	285,173
Common stock, $1.00 par value: 750,000,000 shares authorized; 275,253,104 and 253,601,454 shares issued and outstanding, respectively	275,253	253,601
Additional paid-in capital	5,298,213	4,873,727
Cumulative dividends in excess of earnings	(228,424)	(130,068)
Accumulated other comprehensive loss	(18,819)	(81,162)
Total stockholders' equity	5,611,396	5,201,271
Joint venture partners	8,278	12,912
Non-managing member unitholders	171,751	193,657
Total noncontrolling interests	180,029	206,569
Total equity	5,791,425	5,407,840
Total liabilities and equity	$11,785,850	$11,849,826

1_CONDENSED CONSOLIDATED BALANC

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Share data	Jun. 30, 2009	Dec. 31, 2008
CONDENSED CONSOLIDATED BALANCE SHEETS
Allowance for doubtful accounts, accounts receivable (in dollars)	$17,929	$18,413
Preferred stock, $1.00 par value (in dollars per share)	$1	$1
Preferred stock, shares authorized (in shares)	50,000,000	50,000,000
Preferred stock, shares issued (in shares)	11,820,000	11,820,000
Preferred stock, shares outstanding (in shares)	11,820,000	11,820,000
Preferred stock, liquidation preference (in dollars per share)	$25	$25
Common stock, $1.00 par value (in dollars per share)	$1	$1
Common stock, shares authorized (in shares)	750,000,000	750,000,000
Common stock, shares issued (in shares)	275,253,104	253,601,454
Common stock, shares outstanding (in shares)	275,253,104	253,601,454

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (USD $)
In Thousands, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Revenues:
Rental and related revenues	$231,728	$213,021	$445,316	$419,926
Tenant recoveries	21,035	20,168	44,699	41,616
Income from direct financing leases	13,204	14,129	26,129	29,103
Investment management fee income	1,369	1,457	2,807	2,924
Total revenues	267,336	248,775	518,951	493,569
Costs and expenses:
Depreciation and amortization	79,606	77,861	160,143	155,493
Operating	45,205	46,452	92,881	94,673
General and administrative	20,932	18,732	39,923	39,177
Impairments	5,906	1,574	5,906	1,574
Total costs and expenses	151,649	144,619	298,853	290,917
Other income (expense):
Interest and other income, net	28,732	30,739	53,065	66,061
Interest expense	(75,340)	(85,446)	(152,014)	(181,709)
Total other income (expense)	(46,608)	(54,707)	(98,949)	(115,648)
Income before income taxes and equity income from unconsolidated joint ventures	69,079	49,449	121,149	87,004
Income taxes	(841)	(1,274)	(1,756)	(3,517)
Equity income from unconsolidated joint ventures	1,127	1,221	665	2,509
Income from continuing operations	69,365	49,396	120,058	85,996
Discontinued operations:
Income before gain on sales of real estate, net of income taxes	1,273	6,320	1,932	15,710
Impairments		(8,141)		(8,141)
Gain on sales of real estate, net of income taxes	30,540	190,505	31,897	200,643
Total discontinued operations	31,813	188,684	33,829	208,212
Net income	101,178	238,080	153,887	294,208
Noncontrolling interests' and participating securities' share in earnings	(4,111)	(6,907)	(8,252)	(12,913)
Preferred stock dividends	(5,283)	(5,283)	(10,566)	(10,566)
Net income applicable to common shares	$91,784	$225,890	$135,069	$270,729
Basic earnings per common share:
Continuing operations (in dollars per share)	0.23	0.16	0.39	0.28
Discontinued operations (in dollars per share)	0.12	0.8	0.13	0.92
Net income applicable to common shares (in dollars per share)	0.35	0.96	0.52	1.2
Diluted earnings per common share:
Continuing operations (in dollars per share)	0.23	0.16	0.39	0.28
Discontinued operations (in dollars per share)	0.12	0.8	0.13	0.91
Net income applicable to common shares (in dollars per share)	0.35	0.96	0.52	1.19
Weighted average shares used to calculate earnings per common share:
Basic (in shares)	265,422	235,117	259,412	225,945
Diluted (in shares)	265,542	236,099	259,516	226,745
Dividends declared per common share	0.46	0.455	0.92	0.91

2_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (USD $)
In Thousands	Total Stockholders' Equity	Preferred Stock	Common Stock	Additional Paid-in Capital	Cumulative Dividends in Excess of Earnings	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests	Total
Balance at beginning of period at Dec. 31, 2008	$5,201,271	$285,173	$253,601	$4,873,727	($130,068)	($81,162)	$206,569	$5,407,840
Shares at beginning of period at Dec. 31, 2008		11,820	253,601
Comprehensive income:
Net income	146,342				146,342		7,545	153,887
Change in net unrealized gains (losses) on securities:
Unrealized gains	61,787					61,787		61,787
Less reclassification adjustment realized in net income	(131)					(131)		(131)
Change in net unrealized gains (losses) on cash flow hedges:
Unrealized losses	32					32		32
Less reclassification adjustment realized in net income	590					590		590
Change in Supplemental Executive Retirement Plan obligation	44					44		44
Foreign currency translation adjustment	21					21		21
Total comprehensive income	208,685						7,545	216,230
Issuance of common stock, net	445,507		21,745	423,762			(21,873)	423,634
Issuance of common stock, net (in shares)			21,745
Repurchase of common stock	(2,181)		(93)	(2,088)				(2,181)
Repurchase of common stock (in shares)			(93)
Amortization of deferred compensation	7,537			7,537				7,537
Preferred dividends	(10,566)				(10,566)			(10,566)
Common dividends ($0.92 per share)	(234,132)				(234,132)			(234,132)
Distributions to noncontrolling interests							(7,840)	(7,840)
Purchase of noncontrolling interests	(4,725)			(4,725)			(4,372)	(9,097)
Balance at end of period at Jun. 30, 2009	5,611,396	285,173	275,253	5,298,213	(228,424)	(18,819)	180,029	5,791,425
Shares at end of period at Jun. 30, 2009		11,820	275,253
Balance at beginning of period at Mar. 31, 2009		285,173
Shares at beginning of period at Mar. 31, 2009		11,820
Change in net unrealized gains (losses) on cash flow hedges:
Balance at end of period at Jun. 30, 2009		$285,173
Shares at end of period at Jun. 30, 2009		11,820

3_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (Parenthetical) (USD $)
	4/1/2009 - 6/30/2009	4/1/2008 - 6/30/2008	1/1/2009 - 6/30/2009	1/1/2008 - 6/30/2008
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
Dividends declared per common share	0.46	0.455	0.92	0.91

4_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Cash flows from operating activities:
Net income	$153,887	$294,208
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of real estate, in-place lease and other intangibles: Continuing operations	160,143	155,493
Depreciation and amortization of real estate, in-place lease and other intangibles: Discontinued operations	84	6,553
Amortization of above and below market lease intangibles, net	(10,980)	(4,029)
Stock-based compensation	7,537	7,485
Amortization of debt premiums, discounts and issuance costs, net	5,455	6,162
Straight-line rents	(25,759)	(19,533)
Interest accretion	(11,567)	(13,026)
Deferred rental revenue	7,890	13,279
Equity income from unconsolidated joint ventures	(665)	(2,509)
Distributions of earnings from unconsolidated joint ventures	2,589	2,073
Gain on sales of real estate	(31,897)	(200,643)
Marketable securities (gains) losses, net	(293)	2,782
Derivative losses, net	154	2,360
Impairments	5,906	9,715
Changes in:
Accounts receivable	4,676	12,972
Other assets	(7,594)	5,399
Accounts payable and accrued liabilities	(9,469)	(6,047)
Net cash provided by operating activities	250,097	272,694
Cash flows from investing activities:
Acquisitions and development of real estate	(39,319)	(72,884)
Lease commissions and tenant and capital improvements	(18,826)	(32,359)
Proceeds from sales of real estate, net	52,281	512,883
Contributions to unconsolidated joint ventures		(2,826)
Distributions in excess of earnings from unconsolidated joint ventures	4,428	6,182
Proceeds from the sale of marketable securities	4,800	10,700
Proceeds from the sales of interests in unconsolidated joint ventures		2,855
Principal repayments on loans receivable and direct financing leases	4,727	2,835
Investment in loans receivable	(16)	(2,190)
Decrease in restricted cash	2,727	4,040
Net cash provided by investing activities	10,802	429,236
Cash flows from financing activities:
Net repayments under bank line of credit	(50,000)	(951,700)
Repayments of bridge loan	(320,000)	(200,000)
Repayments of mortgage debt	(51,060)	(29,945)
Issuance of mortgage debt		258,726
Repurchase of senior unsecured notes	(7,735)
Settlement of cash flow hedge		5,180
Debt issuance costs		(5,784)
Repurchase of common stock	(2,181)
Net proceeds from the issuance of common stock and exercise of options	423,634	572,973
Dividends paid on common and preferred stock and participating securities	(244,698)	(217,019)
Purchase of noncontrolling interests	(9,097)
Distributions to noncontrolling interests	(7,840)	(13,841)
Net cash used in financing activities	(268,977)	(581,410)
Net increase (decrease) in cash and cash equivalents	(8,078)	120,520
Cash and cash equivalents, beginning of period	57,562	96,269
Cash and cash equivalents, end of period	$49,484	$216,789

Business

Business
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Business	(1) Business HCP,Inc. is a Maryland corporation that is organized to qualify as a self-administered real estate investment trust (REIT) which, together with its consolidated entities (collectively, HCP or the Company), invests primarily in real estate serving the healthcare industry in the United States. The Company acquires, develops, leases, disposes and manages healthcare real estate and provides financing to healthcare providers.

Summary of Significant Accounti

Summary of Significant Accounting Policies
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Summary of Significant Accounting Policies	(2) Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form10-Q and Rule10-01 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June30, 2009 are not necessarily indicative of the results that may be expected for the year ending December31, 2009. For further information, refer to the consolidated financial statements and notes thereto for the year ended December31, 2008 included in the Companys Annual Report on Form10-K filed with the Securities and Exchange Commission (SEC). Use of Estimates Management is required to make estimates and assumptions in the preparation of financial statements in conformity with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Principles of Consolidation The condensed consolidated financial statements include the accounts of HCP, its wholly-owned subsidiaries and joint ventures that it controls, through voting rights or other means. All material intercompany transactions and balances have been eliminated in consolidation. The Company applies Financial Accounting Standards Board (FASB) Interpretation No.46R, Consolidation of Variable Interest Entities, as revised (FIN 46R), for arrangements with variable interest entities. FIN 46R provides guidance on the identification of entities for which control is achieved through means other than voting rights (variable interest entities or VIEs) and the determination of which business enterprise is the primary beneficiary of the VIE. A variable interest entity is broadly defined as an entity where either (i)the equity investors as a group, if any, do not have a controlling financial interest, or (ii)the equity investment at risk is insufficient to finance that entitys activities without additional subordinated financial support. The Company consolidates investments in VIEs when it is determined to be the primary beneficiary at either the creation of the variable interest entity or upon the occurrence of a qualifying reconsideration event. Qualifying reconsideration events include, but are not limited to, the modification of contractual arrangements that affect the characteristics or adequacy of the entitys equity investments at risk and the disposal of all or a portion of an interest held by the primary beneficiary. At June30, 2009, the Company did not consolidate any significant variable interest entities. Th

Real Estate Property Investment

Real Estate Property Investments
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Real Estate Property Investments	(3) Real Estate Property Investments During the six months ended June30, 2009, the Company funded an aggregate of $55million for construction, tenant and other capital projects primarily in the life science segment. During the six months ended June30, 2008, the Company acquired a senior housing facility for $11 million and funded an aggregate of $92million for construction, tenant and capital improvement projects primarily in the life science and medical office segments.

Dispositions of Real Estate, Re

Dispositions of Real Estate, Real Estate Interests and Discontinued Operations
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Dispositions of Real Estate, Real Estate Interests and Discontinued Operations	(4) Dispositions of Real Estate, Real Estate Interests and Discontinued Operations Dispositions of Real Estate During the three months ended June30, 2009, the Company sold two hospitals for approximately $46 million and recognized a gain on sales of real estate of $31 million. The hospitals sold included the Companys hospital located in Los Gatos, California, for $45 million, which resulted in a gain on sale of real estate of $31 million. During the six months ended June30, 2009, the Company sold nine properties for $52 million and recognized gain on sales of real estate of $32 million, primarily from the hospital and medical office segments. During the three months ended June30, 2008, the Company sold 40 properties for approximately $483 million and recognized gain on sales of real estate of approximately $191 million. During the six months ended June30, 2008, the Company sold 44 properties for approximately $513 million and recognized gain on sales of real estate of approximately $201 million. The Companys sales of properties during the six months ended June30, 2008 were made from the following segments: (i)61% hospital, (ii)19% skilled nursing, (iii)17% medical office and (iv)3% senior housing. Properties Held for Sale At December31, 2008, the Company held for sale nine properties with an aggregate carrying amount of $20 million. No properties were held for sale at June30, 2009. Results from Discontinued Operations The following table summarizes operating income from discontinued operations and gains on sales of real estate included in discontinued operations (dollars in thousands): ThreeMonthsEnded June30, SixMonthsEnded June30, 2009 2008 2009 2008 Rental and related revenues $ 1,226 $ 10,502 $ 2,009 $ 28,111 Other revenues 236 236 24 1,462 10,502 2,245 28,135 Depreciation and amortization expenses 23 1,827 84 6,553 Operating expenses 1,830 5,085 Other costs and expenses 166 525 229 787 Income before gain on sales of real estate, net of income taxes $ 1,273 $ 6,320 $ 1,932 $ 15,710 Impairments $ $ 8,141 $ $ 8,141 Gain on sales of real estate $ 30,540 $ 190,505 $ 31,897 $ 200,643 Number of properties held for sale 16 16 Number of properties sold 2 40 9 44 Number of properties included in discontinued operations 2 56 9 60

Net Investment in Direct Financ

Net Investment in Direct Financing Leases
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Net Investment in Direct Financing Leases	(5) Net Investment in Direct Financing Leases The components of net investment in DFLs consists of the following (dollars in thousands): June30, December31, 2009 2008 Minimum lease payments receivable $ 1,348,924 $ 1,373,283 Estimated residual values 467,248 467,248 Unearned income (1,167,308 ) (1,192,297 ) Net investment in direct financing leases $ 648,864 $ 648,234 Properties subject to direct financing leases 30 30 The DFLs were acquired in the Companys merger with CRP. CRP determined that these leases were DFLs, and the Company is required to carry forward CRPs accounting conclusions after the acquisition date relative to their assessment of these leases, provided that the Company does not believe CRPs accounting to be in error. The Company believes that its accounting for the leases is the appropriate accounting in accordance with GAAP. Certain leases contain provisions that allow the tenants to elect to purchase the properties during or at the end of the lease terms for the aggregate initial investment amount plus adjustments, if any, as defined in the lease agreements. Certain leases also permit the Company to require the tenants to purchase the properties at the end of the lease terms. Lease payments due to the Company relating to three land-only DFLs with a carrying value of $55million at June30, 2009, are subordinate to and, along with the land, serve as collateral for first mortgage construction loans entered into by the tenants to fund development costs related to the properties. During the three months ended December31, 2008, the Company determined that two of these DFLs were impaired and began recognizing income on a cost-recovery basis. At June30, 2009, no allowance has been provided based on the value of the collateral underlying the DFLs. At June30, 2009, the carrying value of these two DFLs was $35 million.

Loans Receivable

Loans Receivable
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Loans Receivable	(6) Loans Receivable The following table summarizes the Companys loans receivable (in thousands): June30, 2009 December31, 2008 RealEstate Secured Other Total RealEstate Secured Other Total Mezzanine $ $ 999,891 $ 999,891 $ $ 999,891 $ 999,891 Joint venture partners 778 778 7,055 7,055 Other 70,427 78,050 148,477 71,224 76,725 147,949 Unamortized discounts, feesand costs (70,728 ) (70,728 ) (78,262 ) (78,262 ) Loan loss allowance (241 ) (241 ) $ 70,427 $ 1,007,991 $ 1,078,418 $ 71,224 $ 1,005,168 $ 1,076,392 On October5, 2006, through its merger with CRP, the Company assumed an agreement to provide an affiliate of the Cirrus Group, LLC with an interest-only, senior secured term loan. The loan provided for a maturity date of December31, 2008, with a one-year extension period at the option of the borrower, subject to certain conditions, under which amounts were borrowed to finance the acquisition, development, syndication and operation of new and existing surgical partnerships. This loan accrues interest at a rate of 14.0%, of which 9.5% is payable monthly and the balance of 4.5% is deferred until maturity. The loan is subject to equity contribution requirements, borrower financial covenants, is collateralized by assets of the borrower (comprised primarily of interests in partnerships operating surgical facilities, some of which are on the premises of properties owned by HCP Ventures IV or the Company) and is guaranteed up to $37.4 million through a combination of (i)a personal guarantee of up to $9.7 million by a principal of Cirrus, and (ii)a guarantee of the balance by other principals of Cirrus under arrangements for recourse limited to their pledged interests in certain entities owning real estate. At December31, 2008, the borrower did not meet the conditions necessary to exercise its extension option and could not repay the loan upon maturity. On April22, 2009, new terms for extending the loan were reached, including the payment of a $1.1 million extension fee, and the maturity was extended to December31, 2010. At June30, 2009 and December31, 2008, the carrying value of this loan was $80 million and $79 million, respectively, including accrued interest of $3 million. The Company issued a notice of default in July 2009, for the borrowers failure to make two interest payments during the three months ended June 30, 2009. The Company expects to collect all amounts due under the loan agreement based on the value of the collateral and guarantees supporting the loan. On December21, 2007, the Company made an investment in mezzanine loans having an aggregate face value of $1.0billion, for approximately $900million, as part of the financing for The Carlyle Groups $6.3billion purchase of HCR ManorCare. These interest-only loans mature in January2013 and bear interest on their face amounts at a floating rate of one-month London Interbank Offered Rate (LIBOR) plus 4.0%. These loans are mandatorily pre-payable in January2012 unless the bo

Investments in and Advances to

Investments in and Advances to Unconsolidated Joint Ventures
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Investments in and Advances to Unconsolidated Joint Ventures	(7) Investments in and Advances to Unconsolidated Joint Ventures The Company owns interests in the following entities which are accounted for under the equity method at June30, 2009 (dollars in thousands): Entity(1) Properties Investment(2) Ownership% HCP Ventures II 25 senior housing facilities $ 139,851 35 HCP Ventures III,LLC 13 medical office buildings (MOBs) 11,501 30 HCP Ventures IV,LLC 54 MOBs and 4 hospitals 42,989 20 HCP Life Science(3) 4 life science facilities 63,735 50 - 63 Suburban Properties,LLC 1 MOB 3,875 67 Advances to unconsolidated joint ventures, net 2,395 $ 264,346 Edgewood Assisted Living Center, LLC(4)(5) 1 senior housing facility $ (875 ) 45 Seminole Shores Living Center, LLC(4)(5) 1 senior housing facility (451 ) 50 $ (1,326 ) (1) These joint ventures are not consolidated since the Company does not control, through voting rights or other means, the joint ventures. See Note2 regarding the Companys policy on consolidation. (2) Represents the carrying value of the Companys investment in the unconsolidated joint venture. See Note2 regarding the Companys policy for accounting for joint venture interests. (3) Includes three unconsolidated joint ventures between the Company and an institutional capital partner for which the Company is the managing member. HCP Life Science includes the following partnerships: (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 Companys purchase of Slough Estates USA Inc. on August1, 2007. (4) As of June30, 2009, the Company has guaranteed in the aggregate $4million of a total of $8million of notes payable for these joint ventures. No amounts have been recorded related to these guarantees at June30, 2009. (5) Negative investment amounts are included in accounts payable and accrued liabilities. Summarized combined financial information for the Companys unconsolidated joint ventures follows (in thousands): June30, December31, 2009 2008 Real estate, net $ 1,673,694 $ 1,703,308 Other assets, net 190,518 184,297 Total assets $ 1,864,212 $ 1,887,605 Notes payable $ 1,166,261 $ 1,172,702 Accounts payable 41,744 39,883 Other partners capital 475,029 488,860 HCPs capital(1) 181,178 186,160 Total liabilities and partners capital $ 1,864,212 $ 1,887,605 (1) Aggregate basis difference of the Companys investments in these joint ventures of $79million, as of June30, 2009, is primarily attributable to real estate and related intangible assets. ThreeMonthsEnded June30,(1) SixMonthsEnded June30,(1) 2009 2008 2009 2008 Total revenues $ 45,998 $ 46,102 $ 92,600 $ 92,416 Net income (loss) 75 1,623 (1,095 ) 3,793 HCPs equity income 1,127 1,221 665 2,509 Fees earned by HCP 1,369 1,457

Intangibles

Intangibles
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Intangibles	(8) Intangibles At June30, 2009 and December31, 2008, intangible lease assets, comprised of lease-up intangibles, above market tenant lease intangibles, below market ground lease intangibles and intangible assets related to non-compete agreements, were $617million and $680 million, respectively. At June30, 2009 and December31, 2008, the accumulated amortization of intangible assets was $183 million and $174million, respectively. At June30, 2009 and December31, 2008, below market lease intangibles and above market ground lease intangibles were $289 million and $294 million, respectively. At June30, 2009 and December31, 2008, the accumulated amortization of intangible liabilities was $73 million and $61 million, respectively. On October5, 2006, the Company acquired CRP in a merger and through the purchase method of accounting it allocated $35 million of above-market lease intangibles related to 15 senior housing facilities, that are operated by Sunrise Senior Living,Inc. In June2009, in a subsequent review of the related calculations of the relative fair value of these lease intangibles, the Company noted valuation errors, which resulted in an aggregate overstatement of the above-market lease intangible assets and an understatement of building and improvements of $28 million. In the periods from October5, 2006 through March31, 2009, these errors resulted in an understatement of rental and related revenues and depreciation expense of approximately $6 million and $2 million, respectively. The Company recorded the related corrections in the three months ended June30, 2009, and determined that such misstatements to the Companys results of operations or financial position during the periods from October5, 2006 through June30, 2009, were immaterial.

Other Assets

Other Assets
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Other Assets	(9) Other Assets The Companys other assets consisted of the following (in thousands): June30, December31, 2009 2008 Marketable debt securities $ 300,106 $ 228,660 Marketable equity securities 3,990 3,845 Goodwill 50,346 51,746 Straight-line rent assets, net 137,872 112,038 Deferred debt issuance costs, net 20,963 23,512 Other 73,317 73,005 Total other assets $ 586,594 $ 492,806 The cost or amortized cost, estimated fair value and gross unrealized gains and losses on marketable securities follows (in thousands): Unrealized Cost(1) FairValue Losses June30, 2009 Debt securities $ 305,553 $ 300,106 $ (5,447 ) Equity securities 3,701 3,990 289 Total investments $ 309,254 $ 304,096 $ (5,158 ) Unrealized Cost(1) FairValue Losses December31, 2008 Debt securities $ 295,138 $ 228,660 $ (66,478 ) Equity securities 4,181 3,845 (336 ) Total investments $ 299,319 $ 232,505 $ (66,814 ) (1) Represents the original cost basis of the marketable securities adjusted for discount accretion and other-than-temporary impairments recorded through earnings, if any. Marketable securities with unrealized losses at June30, 2009 are not considered to be other-than-temporarily impaired as the Company has the intent and ability to hold these investments for a period of time sufficient to allow for an anticipated recovery in fair value. In addition, it is not likely that the Company will be required to sell its marketable debt securities prior to the recovery of their amortized cost basis. At June30, 2009, $286 million of the Companys marketable debt securities accrue interest at 9.625% and mature in November2016 and $20 million accrue interest at 9.25% and mature in May2017. The issuers of these notes may elect to pay interest in cash or by issuing additional notes for all or a portion of the interest payments. In November2008, the issuer of the Companys 9.625% debt securities elected to make interest payments by issuing additional notes, and in May2009, the Company received $14 million of additional debt securities in lieu of its cash interest payment. In May2009, the issuer of the Companys 9.625% debt securities elected to make its next interest payment in cash. During the three and six months ended June30, 2009 and 2008, the Company sold debt securities with a cost basis of $4 million and $10 million, which resulted in gains of approximately $0.8 million and $0.7 million, respectively. During the three and six months ended June30, 2008, the Company recognized a $3.5 million loss related to an other-than-temporary impairment on marketable equity securities with a carrying value of $7.3 million. Realized gains and losses and other-than-temporary impairment losses related to available-for-sale marketable securities are included in interest and other income, net in each respective period.

Debt

Debt
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Debt	(10) Debt Bank Line of Credit and Bridge and Term Loans The Companys revolving line of credit facility with a syndicate of banks provides for an aggregate borrowing capacity of $1.5 billion and matures on August1, 2011. This revolving line of credit facility accrues interest at a rate per annum equal to LIBOR plus a margin ranging from 0.325% to 1.00%, depending upon the Companys debt ratings. The Company pays a facility fee on the entire revolving commitment ranging from 0.10% to 0.25%, depending upon its debt ratings. Based on the Companys debt ratings at June30, 2009, the margin on the revolving line of credit facility was 0.55% and the facility fee was 0.15%. At June30, 2009, the Company had $100million outstanding under this revolving line of credit facility with a weighted-average effective interest rate of 1.31%. At June30, 2009, the outstanding balance of the Companys term loan was $200 million and matures on August1, 2011. The term loan accrues interest at a rate per annum equal to LIBOR plus a margin ranging from 1.825% to 2.375%, depending upon the Companys debt ratings (weighted-average effective interest rate of 2.78% at June30, 2009). Based on the Companys debt ratings at June30, 2009, the margin on the term loan was 2.00%. The Companys revolving line of credit facility and term loan contain certain financial restrictions and other customary requirements, including cross-default provisions to other indebtedness. Among other things, these covenants, using terms defined in the agreement (i)limit the ratio of Consolidated Total Indebtedness to Consolidated Total Asset Value to 60%, (ii)limit the ratio of Unsecured Debt to Consolidated Unencumbered Asset Value to 65%, (iii)require a Fixed Charge Coverage ratio of 1.75times, and (iv)require a formula-determined Minimum Consolidated Tangible Net Worth of $4.5billion at June30, 2009. At June30, 2009, the Company was in compliance with each of these restrictions and requirements of the revolving line of credit facility and term loan. On May8, 2009, the Company repaid the remaining $320 million outstanding balance under its bridge loan credit facility with proceeds received from the issuance of shares of common stock. Senior Unsecured Notes At June30, 2009, the Company had $3.5 billion in aggregate principal amount of senior unsecured notes outstanding. Interest rates on the notes ranged from 1.53% to 7.07%. The weighted-average effective interest rate on the senior unsecured notes at June30, 2009 was 6.13%. Discounts and premiums are amortized to interest expense over the term of the related debt. The senior unsecured notes contain certain covenants including limitations on debt, cross-acceleration provisions and other customary terms. At June30, 2009, the Company was in compliance with these covenants. Mortgage Debt At June30, 2009, the Company had $1.6billion in mortgage debt secured by 186 healthcare facilities with a carrying amount of $2.8billion. Interest rates on the mortgage notes ranged from 0.36% to 8.63% with a weighted average effective rate of 5.97% at June30, 2009. Mortgage debt generally requires monthly principal and interest paymen

Commitments and Contingencies

Commitments and Contingencies
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Commitments and Contingencies	(11) Commitments and Contingencies Legal Proceedings From time to time, the Company is a party to legal proceedings, lawsuits and other claims that arise in the ordinary course of the Companys business. Regardless of their merits, these matters may force the Company to expend significant financial resources. Except as described in this Note 11, the Company is not aware of any other legal proceedings or claims that it believes may have, individually or taken together, a material adverse effect on the Companys business, prospects, financial condition or results of operations. The Companys policy is to accrue legal expenses as they are incurred. On May3, 2007, Ventas,Inc. (Ventas) filed a complaint against the Company in the United States District Court for the Western District of Kentucky asserting claims of tortious interference with contract and tortious interference with prospective business advantage. The complaint alleges, among other things, that the Company interfered with Ventas purchase agreement with Sunrise Senior Living Real Estate Investment Trust (Sunrise REIT that the Company interfered with Ventas prospective business advantage in connection with the Sunrise REIT transaction; and that the Companys actions caused Ventas to suffer damages. As set forth in Ventas court filings, Ventas claims damages of approximately $100 million representing the difference between the price it initially agreed to pay for Sunrise REIT and the price it ultimately paid, additional claimed damages for alleged financing and other costs, and punitive damages. The Company believes that Ventas claims are without merit and intends to vigorously defend against Ventas lawsuit. As part of the same litigation, the Company filed counterclaims against Ventas as successor to Sunrise REIT. On March25, 2009, the District Court issued an order dismissing the Companys counterclaims. On April8, 2009, the Company filed a motion for leave to file amended counterclaims. On May26, 2009, the District Court denied the Companys motion. On May14, 2009, the Company moved for summary judgment on Ventas claims, and Ventas moved for partial summary judgment on elements of its claims and HCPs affirmative defenses. On July16, 2009, the Court granted the parties summary judgment motions in part and denied them in part. Among other things, the court dismissed Ventas claim of tortious interference with contract and dismissed Ventas claimed damages for alleged financing and other costs. The Court has set a trial date of August18, 2009. The Company expects that defending its interests will require it to expend significant funds. The Company is unable to estimate probability of loss or the ultimate aggregate amount of loss or financial impact with respect to these matters as of June30, 2009. Development Commitments As of June30, 2009, the Company was committed under the terms of contracts to complete the construction of properties undergoing development at a remaining aggregate cost of approximately $18.3 million. Concentration of Credit Risk Concentrations of credit risks arise when a number of operators, tenants or obligors related to the Companys inv

Equity

Equity
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Equity	(12) Equity Preferred Stock At June30, 2009, the Company had two series of preferred stock outstanding, SeriesE and SeriesF preferred stock. The SeriesE and SeriesF preferred stock have no stated maturity, are not subject to any sinking fund or mandatory redemption and are not convertible into any other securities of the Company. Holders of each series of preferred stock generally have no voting rights, except under limited conditions, and all holders are entitled to receive cumulative preferential dividends based upon each series respective liquidation preference. To preserve the Companys status as a REIT, each series of preferred stock is subject to certain restrictions on ownership and transfer. Dividends are payable quarterly in arrears on the last day of March, June, Septemberand December. The SeriesE and SeriesF preferred stock is currently redeemable at the Companys option. The following table lists the SeriesE cumulative redeemable preferred stock cash dividends made by the Company during the six months ended June30, 2009: DeclarationDate RecordDate Amount PerShare Dividend PayableDate February2 March16 $ 0.45313 March31 April23 June15 $ 0.45313 June30 The following table lists the SeriesF cumulative redeemable preferred stock cash dividends made by the Company during the six months ended June30, 2009: DeclarationDate RecordDate Amount PerShare Dividend PayableDate February2 March16 $ 0.44375 March31 April23 June15 $ 0.44375 June30 On July29, 2009, the Company announced that its Board declared a quarterly cash dividend of $0.45313 per share on its SeriesE cumulative redeemable preferred stock and $0.44375 per share on its SeriesF cumulative redeemable preferred stock. These dividends will be paid on September30, 2009 to stockholders of record as of the close of business on September15, 2009. Common Stock During the six months ended June30, 2009 and 2008, the Company issued 73,000 and 285,000shares of common stock, respectively, under its Dividend Reinvestment and Stock Purchase Plan (DRIP). The Company issued 525,000 and 1.8 million shares of common stock upon the conversion of DownREIT units during the six months ended June30, 2009 and 2008, respectively. The Company also issued 481,000 shares upon exercise of stock options during the six months ended June30, 2008. No stock options were exercised during the six months ending June30, 2009. During the six months ended June30, 2009 and 2008, the Company issued 291,000 and 138,000 shares of restricted stock, respectively, under the Companys 2000 Stock Incentive Plan, as amended, and the Companys 2006 Performance Incentive Plan. The Company also issued 182,000 and 131,000 shares upon the vesting of performance restricted stock units during the six months ended June30, 2009 and 2008, respectively. On May8, 2009, the Company completed a $440 million public offering of 20.7 million shares of common stock at a price per share of $21.25. The Company received net proceeds of $422 million, which were used to repay all amounts of indebtedness outstanding under the b

Segment Disclosures

Segment Disclosures
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Segment Disclosures	(13) Segment Disclosures The Company evaluates its business and makes resource allocations based on its five business segments: (i)senior housing, (ii)life science, (iii)medical office, (iv)hospital, and (v)skilled nursing. Under the senior housing, life science, hospital and skilled nursing segments, the Company invests primarily in single operator or tenant properties through acquisition and development of real estate, secured financing and marketable debt securities of operators in these sectors. Under the medical office segment, the Company invests through acquisition of MOBs that are primarily leased under gross or modified gross leases, generally to multiple tenants, and which generally require a greater level of property management. The accounting policies of the segments are the same as those described under Summary of Significant Accounting Policies (see Note2). There were no intersegment sales or transfers during the six months ended June30, 2009 and 2008. The Company evaluates performance based upon property net operating income from continuing operations (NOI) of the combined properties in each segment. Non-segment assets consist primarily of real estate held for sale and corporate assets including cash, restricted cash, accounts receivable, net and deferred financing costs. Interest expense, depreciation and amortization and non-property specific revenues and expenses are not allocated to individual segments in determining the Companys performance measure. See Note11 for other information regarding concentrations of credit risk. Summary information for the reportable segments follows (in thousands): For the three months ended June30, 2009: Segments Rentaland Related Revenues Tenant Recoveries Income From DFLs Investment Management Fees Total Revenues NOI(1) Interest andOther Senior housing $ 79,777 $ $ 13,204 $ 738 $ 93,719 $ 91,981 $ 250 Life science 53,488 9,523 1 63,012 51,755 Medical office 66,077 11,048 630 77,755 44,906 Hospital 22,899 464 23,363 22,633 11,921 Skilled nursing 9,487 9,487 9,487 15,673 Total segments 231,728 21,035 13,204 1,369 267,336 220,762 27,844 Non-segment 888 Total $ 231,728 $ 21,035 $ 13,204 $ 1,369 $ 267,336 $ 220,762 $ 28,732 For the three months ended June30, 2008: Segments Rentaland Related Revenues Tenant Recoveries Income From DFLs Investment Management Fees Total Revenues NOI(1) Interest andOther Senior housing $ 69,453 $ $ 14,129 $ 793 $ 84,375 $ 81,034 $ 286 Life science 46,300 8,285 1 54,586 44,493 Medical office 65,723 11,417 663 77,803 44,311 Hospital 22,546 466 23,012 22,029 11,686 Skilled nursing 8,999 8,999 8,999 20,801 Total segments 213,021 20,168 14,129 1,457 248,775 200,866 32,773 Non-segment (2,034

Derivative Instruments

Derivative Instruments
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Derivative Instruments	(14) Derivative Instruments The Company uses derivative instruments to mitigate the affects of interest rate fluctuations on specific forecasted transactions and recognized obligations. The Company does not use derivative instruments for speculative or trading purposes. The primary risks associated with derivative instruments are market and credit risk. Market risk is defined as the potential for loss in value of the derivative instruments due to adverse changes in market prices (interest rates). Utilizing derivative instruments allows the Company to effectively manage the risk of increasing interest rates with respect to the potential effects these fluctuations could have on future earnings, changes in fair value of recognized obligations, and forecasted cash flows. Credit risk is the risk that one of the parties to a derivative contract fails to perform or meet their financial obligation. The Company does not obtain collateral associated with its derivative instruments, but monitors the credit standing of its counterparties on a regular basis. Should a counterparty fail to perform, the Company would incur a financial loss to the extent that the associated derivative contract was in an asset position. At June30, 2009, the Company does not anticipate non-performance by the counterparties to its outstanding derivative contracts. The Company has three interest rate swap contracts outstanding at June30, 2009, which hedge fluctuations in interest payments on variable rate secured debt. At June30, 2009, these interest rate swap contracts had an aggregate notional amount of $45.6 million and estimated fair value of $2.3 million included in accounts payable and accrued liabilities. During the three and six months ended June30, 2009, there was no ineffective portion related to the hedging relationship. On June12, 2009, the Company executed an interest rate swap contract (pay float and receive fixed), which is designated as hedging the changes in fair value of fixed-rate senior unsecured notes due to fluctuations in the underlying benchmark interest rate. The fair value hedge terminates in September2011, has a notional amount of $250 million, and hedges approximately 86% of the $292 million of outstanding senior unsecured notes maturing in September2011. The estimated fair value of the contract at June30, 2009 was $0.8 million and is included in other assets, net. During the six months ended June30, 2009, there was no ineffective portion related to the hedge. During Octoberand November2007, the Company entered into two forward-starting interest rate swap contracts with notional amounts aggregating $900million and settled the contracts during the 3 month period ended June30, 2008. The interest rate swap contracts were designated as qualifying, cash flow hedging relationships, to hedge the Companys exposure to fluctuations in the benchmark interest rate component of interest payments on forecasted, unsecured, fixed-rate debt expected to be issued in 2010. At June30, 2009, the Company expects that the hedged forecasted transactions remain probable of occurring. The following table summarizes the Companys outstanding interest ra

Supplemental Cash Flow Informat

Supplemental Cash Flow Information
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Supplemental Cash Flow Information	(15) Supplemental Cash Flow Information SixMonthsEndedJune30, 2009 2008 (inthousands) Supplemental cash flow information: Interest paid, net of capitalized interest and other $ 147,686 $ 179,678 Taxes paid 2,101 3,508 Supplemental schedule of non-cash investing activities: Capitalized interest 12,347 16,900 Accrued construction costs 790 2,295 Loan received upon real estate disposition 251 Supplemental schedule of non-cash financing activities: Mortgages assumed with real estate acquisitions 4,892 Restricted stock issued 291 138 Vesting of restricted stock units 182 131 Cancellation of restricted stock (30 ) (29 ) Conversion of non-managing member units into common stock 21,873 63,895 Unrealized gains (losses) on available-for-sale securities and derivatives designated as cash flow hedges 61,885 (11,525 )

Earnings Per Common Share

Earnings Per Common Share
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Earnings Per Common Share	(16) Earnings Per Common Share The following table illustrates the computation of basic and diluted earnings per share (dollars in thousands, except per share and share amounts): ThreeMonthsEndedJune30, SixMonthsEndedJune30, 2009 2008 2009 2008 Numerator Income from continuing operations $ 69,365 $ 49,396 $ 120,058 $ 85,996 Noncontrolling interests and participating securities share in continuing operations (4,111 ) (6,658 ) (8,252 ) (12,664 ) Preferred stock dividends (5,283 ) (5,283 ) (10,566 ) (10,566 ) Income from continuing operations applicable to common shares 59,971 37,455 101,240 62,766 Discontinued operations 31,813 188,684 33,829 208,212 Noncontrolling interests and participating securities share in discontinued operations (249 ) (249 ) Net income applicable to common shares $ 91,784 $ 225,890 $ 135,069 $ 270,729 Denominator Basic weighted average common shares 265,422 235,117 259,412 225,945 Dilutive stock options and restricted stock 120 982 104 800 Diluted weighted average common shares 265,542 236,099 259,516 226,745 Basic earnings per common share Income from continuing operations $ 0.23 $ 0.16 $ 0.39 $ 0.28 Discontinued operations 0.12 0.80 0.13 0.92 Net income applicable to common stockholders $ 0.35 $ 0.96 $ 0.52 $ 1.20 Diluted earnings per common share Income from continuing operations $ 0.23 $ 0.16 $ 0.39 $ 0.28 Discontinued operations 0.12 0.80 0.13 0.91 Net income applicable to common shares $ 0.35 $ 0.96 $ 0.52 $ 1.19 Restricted stock and certain of the Companys performance restricted stock units are considered participating securities which require the use of the two-class method when computing basic and diluted earnings per share. For the three months ended June30, 2009 and 2008, earnings representing nonforfeitable dividends of $0.4 million and $0.5 million, respectively, were allocated to the participating securities. For the six months ended June30, 2009 and 2008, earnings representing nonforfeitable dividends of $0.7 million and $1.1 million, respectively, were allocated to the participating securities. Diluted earnings per common share is calculated by including the effect of dilutive securities. Options to purchase approximately 6.8 million and 0.5 million shares of common stock that had an exercise price in excess of the average market price of the common stock during the three months ended June30, 2009 and 2008, respectively, were not included because they are anti-dilutive. Restricted stock and performance restricted stock units convertible into 0.9 million shares and 0.2 million shares, respectively, of common stock during the three months ended June30, 2009 and 2008, respectively, were not included because they are anti-dilutive. Additionally, 5.9million shares issu

Fair Value Measurements

Fair Value Measurements
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Fair Value Measurements	(17) Fair Value Measurements The following tables illustrate the Companys fair value measurements of its financial assets and liabilities measured at fair value in the Companys condensed consolidated financial statements. The second table includes the associated unrealized and realized gains and losses, as well as purchases, sales, issuances, exchanges, settlements (net) or transfers for financial instruments classified as Level 3 instruments within the fair value hierarchy. Recognized gains and losses are recorded in interest and other income, net on the Companys condensed consolidated statements of income. The following is a summary of fair value measurements of financial assets and liabilities at June30, 2009 (in thousands): FinancialInstrument FairValue Level1 Level2 Level3 Marketable debt securities $ 300,106 $ 283,506 $ 16,600 $ Marketable equity securities 3,990 3,990 Interest rate swaps, net(1) (1,447 ) (1,447 ) Warrants(1) 2,235 2,235 $ 304,884 $ 287,496 $ 15,153 $ 2,235 (1) Interest rate swaps and common stock warrants are valued using observable and unobservable market assumptions, as well as standardized derivative pricing models. The following is a reconciliation of fair value measurements classified as Level 3 at June30, 2009 (in thousands): Warrants December31, 2008 $ 1,460 Total gains (realized and unrealized): Included in earnings 185 Included in other comprehensive income Purchases, issuances, exchanges and settlements, net 590 Transfers in and/or out of Level 3 June30, 2009 $ 2,235

Disclosures About Fair Value of

Disclosures About Fair Value of Financial Instruments
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Disclosures About Fair Value of Financial Instruments	(18) Disclosures About Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, restricted cash, receivables, payables, and accrued liabilities are reasonable estimates of fair value because of the short maturities of these instruments. Fair values for loans receivable, bank line of credit, bridge and term loans, mortgage debt and other debt are estimates based on rates currently prevailing for similar instruments of similar maturities. The fair values of the interest rate swaps and warrants were determined based on observable market assumptions and standardized derivative pricing models. The fair values of the senior unsecured notes, marketable equity and debt securities were determined based on market quotes. June30, 2009 December31, 2008 Carrying Amount Fair Value Carrying Amount Fair Value (in thousands) Loans receivable, net $ 1,078,418 $ 1,048,071 $ 1,076,392 $ 981,128 Marketable debt securities 300,106 300,106 228,660 228,660 Marketable equity securities 3,990 3,990 3,845 3,845 Warrants 2,235 2,235 1,460 1,460 Bank line of credit 100,000 100,000 150,000 150,000 Bridge and term loans 200,000 200,000 520,000 520,000 Senior unsecured notes 3,518,147 3,208,027 3,523,513 2,384,488 Mortgage debt 1,592,712 1,573,130 1,641,734 1,538,057 Other debt 98,984 98,984 102,209 102,209 Interest rate swaps-assets 845 845 Interest rate swaps-liabilities 2,292 2,292 2,324 2,324

Impairments

Impairments
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Impairments	(19) Impairments During the three and six months ended June30, 2009, as a result of the anticipated termination of the Sunrise management agreements on 15 senior housing communities effective October1, 2009, intangible assets on 12 of 15 of these communities were determined to be impaired resulting in a charge of $5.9 million. During the three and six months ended June30, 2008, the Company recognized impairments of $9.7 million as follows: (i)$1.6 million related to two senior housing facilities as a result of a decrease in expected cash flows and (ii)$8.1 million, included in discontinued operations, related to the decrease in expected cash flows and anticipated dispositions of two senior housing properties and one hospital.

Subsequent Event

Subsequent Event
	6 Months Ended Jun. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Subsequent Event	(20) Subsequent Event On August3, 2009, the Company purchased a $720 million participation in first mortgage debt of HCR ManorCare at a discount for approximately $590 million. The $720 million participation bears interest at LIBOR plus 1.25% and represents 45% of the $1.6 billion most senior tranche of HCR ManorCares mortgage debt incurred as part of the financing for The Carlyle Groups acquisition of Manor Care,Inc. in December2007. The mortgage debt matures in January2012, with a one-year extension available at the borrowers option subject to certain conditions, and is secured by a first lien on 331 facilities located in 30 states. The Company obtained favorable financing to fund 72% of the purchase price, resulting in a net cash payment by HCP of $165 million. The Company evaluated subsequent events through August 4, 2009, which is the date the condensed consolidated financial statements were issued.

DOCUMENT AND ENTITY INFORMATION

DOCUMENT AND ENTITY INFORMATION (USD $)
In Thousands, except Share data	6 Months Ended Jun. 30, 2009	Jul. 30, 2009	Jun. 30, 2008
Document and Entity Information
Entity Registrant Name	HCP, INC.
Entity Central Index Key	0000765880
Document Type	10-Q
Document Period End Date	2009-06-30
Amendment Flag	false
Amendment Description
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$7,500,000
Entity Common Stock, Shares Outstanding		275,273,367