Healthpeak Properties (DOC) 10-Q 3 Nov 09 2009 Q3 Quarterly report Financial data

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)
In Thousands	Sep. 30, 2009	Dec. 31, 2008
Real estate:
Buildings and improvements	$7,804,118	$7,747,015
Development costs and construction in progress	273,567	224,337
Land	1,548,845	1,548,248
Accumulated depreciation and amortization	(1,003,177)	(819,980)
Net real estate	8,623,353	8,699,620
Net investment in direct financing leases	634,233	648,234
Loans receivable, net	1,674,329	1,076,392
Investments in and advances to unconsolidated joint ventures	261,364	272,929
Accounts receivable, net of allowance of $17,430 and $18,413, respectively	36,824	33,834
Cash and cash equivalents	144,366	57,562
Restricted cash	31,988	35,078
Intangible assets, net	410,366	505,936
Real estate held for sale, net	3,783	27,058
Other assets, net	517,604	493,183
Total assets	12,338,210	11,849,826
LIABILITIES AND EQUITY
Bank line of credit		150,000
Term loan	200,000	200,000
Bridge loan		320,000
Senior unsecured notes	3,520,577	3,523,513
Mortgage and other secured debt	1,863,404	1,641,734
Other debt	99,487	102,209
Intangible liabilities, net	207,847	232,630
Accounts payable and accrued liabilities	310,493	211,715
Deferred revenue	86,925	60,185
Total liabilities	6,288,733	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; 293,145,064 and 253,601,454 shares issued and outstanding, respectively	293,145	253,601
Additional paid-in capital	5,708,534	4,873,727
Cumulative dividends in excess of earnings	(407,210)	(130,068)
Accumulated other comprehensive loss	(9,838)	(81,162)
Total stockholders' equity	5,869,804	5,201,271
Joint venture partners	7,927	12,912
Non-managing member unitholders	171,746	193,657
Total noncontrolling interests	179,673	206,569
Total equity	6,049,477	5,407,840
Total liabilities and equity	$12,338,210	$11,849,826

1_CONDENSED CONSOLIDATED BALANC

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Thousands, except Share data	Sep. 30, 2009	Dec. 31, 2008
CONDENSED CONSOLIDATED BALANCE SHEETS
Allowance for doubtful accounts, accounts receivable (in dollars)	$17,430	$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)	293,145,064	253,601,454
Common stock, shares outstanding (in shares)	293,145,064	253,601,454

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Thousands, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Revenues:
Rental and related revenues	$218,366	$231,561	$663,044	$650,742
Tenant recoveries	22,464	20,225	67,124	61,817
Income from direct financing leases	13,173	14,543	39,302	43,646
Investment management fee income	1,326	1,523	4,133	4,448
Total revenues	255,329	267,852	773,603	760,653
Costs and expenses:
Depreciation and amortization	82,301	77,292	242,318	232,574
Operating	46,173	49,104	139,812	143,849
General and administrative	22,860	17,077	61,625	55,859
Litigation provision	101,973		101,973
Impairments	15,123	3,710	20,904	5,284
Total costs and expenses	268,430	147,183	566,632	437,566
Other income (expense):
Interest and other income, net	39,962	62,283	93,027	128,344
Interest expense	(74,039)	(82,813)	(226,053)	(264,488)
Total other income (expense)	(34,077)	(20,530)	(133,026)	(136,144)
Income (loss) before income tax (expense) benefit and equity income from unconsolidated joint ventures	(47,178)	100,139	73,945	186,943
Income tax (expense) benefit	322	(853)	(1,406)	(4,327)
Equity income from unconsolidated joint ventures	1,328	1,227	1,993	3,736
Income (loss) from continuing operations	(45,528)	100,513	74,532	186,352
Discontinued operations:
Income (loss) before gain on sales of real estate, net of income taxes	(152)	3,291	1,903	19,158
Impairments			(125)	(8,141)
Gain on sales of real estate, net of income taxes	2,460	27,752	34,357	228,395
Total discontinued operations	2,308	31,043	36,135	239,412
Net income (loss)	(43,220)	131,556	110,667	425,764
Noncontrolling interests' and participating securities' share in earnings	(3,895)	(6,659)	(12,147)	(19,559)
Preferred stock dividends	(5,282)	(5,282)	(15,848)	(15,848)
Net income (loss) applicable to common shares	($52,397)	$119,615	$82,672	$390,357
Basic earnings (loss) per common share:
Continuing operations (in dollars per share)	-0.19	0.36	0.17	0.65
Discontinued operations (in dollars per share)	0.01	0.13	0.14	1.03
Net income (loss) applicable to common shares (in dollars per share)	-0.18	0.49	0.31	1.68
Diluted earnings (loss) per common share:
Continuing operations (in dollars per share)	-0.19	0.36	0.17	0.65
Discontinued operations (in dollars per share)	0.01	0.13	0.14	1.03
Net income (loss) applicable to common shares (in dollars per share)	-0.18	0.49	0.31	1.68
Weighted average shares used to calculate earnings (loss) per common share:
Basic (in shares)	284,812	244,572	267,971	232,199
Diluted (in shares)	284,812	245,482	268,041	233,036
Dividends declared per common share (in dollars per share)	0.46	0.455	1.38	1.365

2_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENT 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	99,656				99,656		11,011	110,667
Change in net unrealized gains (losses) on securities:
Unrealized gains	75,180					75,180		75,180
Less reclassification adjustment realized in net income	(2,797)					(2,797)		(2,797)
Change in net unrealized gains (losses) on cash flow hedges:
Unrealized losses	(910)					(910)		(910)
Less reclassification adjustment realized in net income	685					685		685
Change in Supplemental Executive Retirement Plan obligation	66					66		66
Foreign currency translation adjustment	(900)					(900)		(900)
Total comprehensive income	170,980						11,011	181,991
Issuance of common stock, net	870,256		39,639	830,617			(21,873)	848,383
Issuance of common stock, net (in shares)			39,639
Repurchase of common stock	(2,248)		(95)	(2,153)				(2,248)
Repurchase of common stock (in shares)			(95)
Amortization of deferred compensation	11,068			11,068				11,068
Preferred dividends	(15,849)				(15,849)			(15,849)
Common dividends ($1.38 per share)	(360,949)				(360,949)			(360,949)
Distributions to noncontrolling interests							(11,662)	(11,662)
Purchase of noncontrolling interests	(4,725)			(4,725)			(4,372)	(9,097)
Increase (decrease) in stockholders' equity		0
Increase (decrease) in number of shares issued		0
Balance at end of period at Sep. 30, 2009	$5,869,804	$285,173	$293,145	$5,708,534	($407,210)	($9,838)	$179,673	$6,049,477
Shares at end of period at Sep. 30, 2009		11,820	293,145

3_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Parenthetical) (USD $)
	7/1/2009 - 9/30/2009	7/1/2008 - 9/30/2008	1/1/2009 - 9/30/2009	1/1/2008 - 9/30/2008
CONDENSED CONSOLIDATED STATEMENT OF EQUITY
Dividends declared per common share (in dollars per share)	0.46	0.455	1.38	1.365

4_CONDENSED CONSOLIDATED STATEM

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Thousands	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash flows from operating activities:
Net income	$110,667	$425,764
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	242,318	232,574
Depreciation and amortization of real estate, in-place lease and other intangibles: Discontinued operations	266	7,178
Amortization of above and below market lease intangibles, net	(12,657)	(6,020)
Stock-based compensation	11,068	10,637
Amortization of debt premiums, discounts and issuance costs, net	6,187	7,409
Straight-line rents	(38,751)	(28,645)
Interest accretion	(23,813)	(20,134)
Deferred rental revenue	10,507	16,227
Equity income from unconsolidated joint ventures	(1,993)	(3,736)
Distributions of earnings from unconsolidated joint ventures	5,444	3,736
Gain on sales of real estate	(34,357)	(228,395)
Marketable securities (gains) losses, net	(6,420)	2,746
Derivative losses, net	922	1,803
Impairments	21,029	13,425
Changes in:
Accounts receivable	11,310	14,881
Other assets	(2,991)	(4,843)
Accrued liability for litigation provision	101,973
Accounts payable and other accrued liabilities	(10,989)	10,776
Net cash provided by operating activities	389,720	455,383
Cash flows from investing activities:
Acquisitions and development of real estate	(71,009)	(132,436)
Lease commissions and tenant and capital improvements	(27,321)	(44,734)
Proceeds from sales of real estate, net	58,046	629,404
Contributions to unconsolidated joint ventures	(48)	(2,620)
Distributions in excess of earnings from unconsolidated joint ventures	5,775	8,727
Purchase of marketable securities		(26,101)
Proceeds from the sale of marketable securities	119,665	10,700
Proceeds from the sales of interests in unconsolidated joint ventures		2,855
Principal repayments on loans receivable and direct financing leases	8,654	14,590
Investment in loans receivable, net	(165,506)	(2,863)
Decrease (increase) in restricted cash	3,090	(883)
Net cash provided by (used in) investing activities	(68,654)	456,639
Cash flows from financing activities:
Net repayments under bank line of credit	(150,000)	(951,700)
Repayments of bridge loan	(320,000)	(830,000)
Repayments of mortgage debt	(206,329)	(63,740)
Issuance of mortgage debt	1,942	579,078
Repurchase and repayments of senior unsecured notes	(7,735)	(300,000)
Settlement of cash flow hedge		(9,658)
Debt issuance costs	(718)	(10,068)
Net proceeds from the issuance of common stock and exercise of options	846,135	1,060,236
Dividends paid on common and preferred stock	(376,798)	(337,097)
Purchase of noncontrolling interests	(9,097)
Distributions to noncontrolling interests	(11,662)	(28,290)
Net cash used in financing activities	(234,262)	(891,239)
Net increase in cash and cash equivalents	86,804	20,783
Cash and cash equivalents, beginning of period	57,562	96,269
Cash and cash equivalents, end of period	$144,366	$117,052

Business

Business
	9 Months Ended Sep. 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
	9 Months Ended Sep. 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 nine months ended September30, 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) as updated by the Companys Current Report on Form 8-K filed with the SEC on May4, 2009. 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. At inception of joint venture transactions, the Company identifies entities for which control is achieved through means other than voting rights (variable interest entities or VIEs) and determines 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 VIE 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 September30, 2009, the Company did not consolidate any significant variable interest entities. The Company uses qualitative and quantitative approaches when determining whether it is (or is not) the primary bene

Real Estate Property Investment

Real Estate Property Investments
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Real Estate Property Investments	(3) Real Estate Property Investments During the nine months ended September 30, 2009, the Company funded an aggregate of $86 million for construction, tenant and other capital improvement projects primarily in the life science segment. During the nine months ended September 30, 2008, the Company acquired a senior housing facility for $11 million, purchased a joint venture interest valued at $29 million and funded an aggregate of $126 million for construction, tenant and capital improvement projects primarily in the life science and medical office segments.

Dispositions of Real Estate and

Dispositions of Real Estate and Discontinued Operations
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Dispositions of Real Estate and Discontinued Operations	(4) Dispositions of Real Estate and Discontinued Operations Dispositions of Real Estate During the three months ended September 30, 2009, the Company sold two medical office buildings (MOBs) for approximately $6 million and recognized gain on sales of real estate of $2.5 million. During the three months ended September 30, 2008, the Company sold three hospitals for approximately $116 million and recognized gain on sales of real estate of approximately $28 million. The hospitals sold in 2008 included a hospital located in Tarzana, California, which was sold for $89 million resulting in a gain on sale of real estate of $18 million. During the nine months ended September 30, 2009, the Company sold 11 properties for $58 million and recognized gain on sales of real estate of $34.4 million. The Companys sales of properties during the nine months ended September 30, 2009 were made from the following segments: (i) 81% hospital; (ii) 18% medical office; and (iii) 1% senior housing. During the nine months ended September 30, 2008, the Company sold 47 properties for approximately $629 million and recognized gain on sales of real estate of approximately $228 million. The Companys sales of properties during the nine months ended September 30, 2008 were made from the following segments: (i) 68% hospital; (ii) 15% skilled nursing; (iii) 14% medical office; and (iv) 3% senior housing. Properties Held for Sale At September 30, 2009, the Company held for sale one property with a carrying value of $4 million. At December 31, 2008, the Company held for sale 12 properties with an aggregate carrying value of $27 million. Results from Discontinued Operations The following table summarizes operating income from discontinued operations and gain on sales of real estate included in discontinued operations (dollars in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2009 2008 2009 2008 Rental and related revenues $ 150 $ 5,912 $ 2,836 $ 34,792 Other revenues 29 51 150 5,941 2,836 34,843 Depreciation and amortization expenses 56 414 266 7,178 Operating expenses 225 1,282 617 6,687 Other costs and expenses 21 954 50 1,820 Income (loss) before gain on sales of real estate, net of income taxes $ (152 ) $ 3,291 $ 1,903 $ 19,158 Impairments $ $ $ 125 $ 8,141 Gain on sales of real estate $ 2,460 $ 27,752 $ 34,357 $ 228,395 Number of properties held for sale 1 16 1 16 Number of properties sold 2 3 11 47 Number of properties included in discontinued operations 3 19 12 63

Net Investment in Direct Financ

Net Investment in Direct Financing Leases
	9 Months Ended Sep. 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 consist of the following (dollars in thousands): September 30, December 31, 2009 2008 Minimum lease payments receivable $ 1,330,836 $ 1,373,283 Estimated residual values 467,248 467,248 Allowance for DFL losses (impairments) (15,123 ) Unearned income (1,148,728 ) (1,192,297 ) Net investment in direct financing leases $ 634,233 $ 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 appropriate and 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 DFLs with a carrying value of $38 million at September 30, 2009, are subordinate to, and along with the Companys interest in 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 December 31, 2008, the Company determined that two of these DFLs were impaired and began recognizing income on a cost-recovery basis. During the three months ended September 30, 2009, the Company recognized provisions for DFL losses of $15.1 million, which reduces the carrying value of these DFLs to $19 million. These provisions for DFL losses reflect the anticipated restructure of these leases resulting from the bankruptcy of the lessee. On October 19, 2009, the lessees of all three DFLs filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. The Company includes provisions for DFL losses in impairments in its consolidated statements of operations.

Loans Receivable

Loans Receivable
	9 Months Ended Sep. 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): September 30, 2009 December 31, 2008 Real Estate Secured Other Total Real Estate Secured Other Total Mezzanine $ $ 999,118 $ 999,118 $ $ 999,891 $ 999,891 Joint venture partners 778 778 7,055 7,055 Other 785,636 83,700 869,336 71,224 81,725 152,949 Unamortized discounts, fees and costs (123,920 ) (70,983 ) (194,903 ) (83,262 ) (83,262 ) Loan loss allowance (241 ) (241 ) $ 661,716 $ 1,012,613 $ 1,674,329 $ 71,224 $ 1,005,168 $ 1,076,392 On October 5, 2006, through its merger with CRP, the Company acquired an interest-only, senior secured term loan made to an affiliate of the Cirrus Group, LLC (Cirrus). The loan had a maturity date of December 31, 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. The 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 collateralized by all of the 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 supported in part by limited guarantees made by certain principals of Cirrus. Recourse under certain of these guarantees is limited to the guarantors respective interests in certain entities owning real estate that are pledged to secure such guarantees. At December 31, 2008, the borrower did not meet the conditions necessary to exercise its extension option and did not repay the loan upon maturity. On April 22, 2009, new terms for extending the maturity date of the loan were agreed to, including the payment of a $1.1 million extension fee, and the maturity was extended to December 31, 2010. At September 30, 2009 and December 31, 2008, the carrying value of this loan, including accrued interest of $3 million and $0.6 million, respectively, was $85 million and $80 million, respectively. In July 2009, the Company issued a notice of default for the borrowers failure to make interest payments. Through September 30, 2009 the borrower has failed to make four of its contractual payments. However, at September 30, 2009, the Company continues to maintain this loan on accrual status as the Company believes it is reasonably assured it will collect all amounts outstanding under the loan, including accrued but unpaid interest, based on the estimated fair value of underlying collateral and guarantees supporting the loan. During the three and nine months ended September 30, 2009, the Company recognized interest income from this loan of $3.2 million and $9.1 million, respectively, and received cash payments from this borrower of $0.6 million

Investments in and Advances to

Investments in and Advances to Unconsolidated Joint Ventures
	9 Months Ended Sep. 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 September 30, 2009 (dollars in thousands): Entity(1) Properties Investment(2) Ownership% HCP Ventures II 25 senior housing facilities $ 139,064 35 HCP Ventures III, LLC 13 MOBs 11,092 30 HCP Ventures IV, LLC 54 MOBs and 4 hospitals 41,284 20 HCP Life Science(3) 4 life science facilities 63,991 50 - 63 Suburban Properties, LLC 1 MOB 3,727 67 Advances to unconsolidated joint ventures, net 2,206 $ 261,364 Edgewood Assisted Living Center, LLC(4)(5) 1 senior housing facility $ (488 ) 45 Seminole Shores Living Center, LLC(4)(5) 1 senior housing facility (888 ) 50 $ 259,988 (1) These joint ventures are not consolidated since the Company does not control, through voting rights or other means, the joint ventures. See Note 2 regarding the Companys policy on consolidation. (2) Represents the carrying value of the Companys investment in the unconsolidated joint venture. See Note 2 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%). (4) As of September 30, 2009, the Company has guaranteed in the aggregate $4 million of a total of $8 million of notes payable for these joint ventures. No amounts have been recorded related to these guarantees at September 30, 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): September 30, December 31, 2009 2008 Real estate, net $ 1,659,879 $ 1,703,308 Other assets, net 192,210 184,297 Total assets $ 1,852,089 $ 1,887,605 Notes payable $ 1,162,994 $ 1,172,702 Accounts payable 44,526 39,883 Other partners capital 465,557 488,860 HCPs capital(1) 179,012 186,160 Total liabilities and partners capital $ 1,852,089 $ 1,887,605 (1) Aggregate basis difference of the Companys investments in these joint ventures of $79 million, as of September 30, 2009, is primarily attributable to real estate and related intangible assets. Three Months Ended September 30, Nine Months Ended September 30, 2009 2008 2009 2008(1) Total revenues $ 46,366 $ 46,522 $ 138,833 $ 138,938 Net income (loss) 2 1,615 (1,093 ) 5,408 HCPs equity income 1,328 1,227 1,993 3,736 Fees earned by HCP 1,326

Intangibles

Intangibles
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Intangibles	(8) Intangibles At September 30, 2009 and December 31, 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 $617 million and $680 million, respectively. At September 30, 2009 and December 31, 2008, the accumulated amortization of intangible assets was $207 million and $174 million, respectively. At September 30, 2009 and December 31, 2008, below market lease intangibles and above market ground lease intangibles were $289 million and $294 million, respectively. At September 30, 2009 and December 31, 2008, the accumulated amortization of intangible liabilities was $81 million and $61 million, respectively. On October 5, 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 were operated by Sunrise Senior Living, Inc. and its subsidiaries (Sunrise). In June 2009, 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 October 5, 2006 through March 31, 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 June 2009, and determined that such misstatements to the Companys results of operations or financial position during the periods from October 5, 2006 through June 30, 2009 were immaterial.

Other Assets

Other Assets
	9 Months Ended Sep. 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): September 30, December 31, 2009 2008 Marketable debt securities $ 201,163 $ 228,660 Marketable equity securities 3,931 3,845 Straight-line rent assets, net 151,132 112,038 Deferred debt issuance costs, net 19,909 23,512 Goodwill 50,346 51,746 Other 91,123 73,382 Total other assets $ 517,604 $ 493,183 The cost or amortized cost, estimated fair value and gross unrealized gains and losses on marketable securities follows (in thousands): Gross Unrealized Cost Basis (1) Fair Value Gains Losses September 30, 2009: Debt securities $ 195,830 $ 201,163 $ 7,033 $ (1,700 ) Equity securities 3,695 3,931 417 (181 ) Total investments $ 199,525 $ 205,094 $ 7,450 $ (1,881 ) December 31, 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. At September 30, 2009, $176 million of the Companys marketable debt securities accrue interest at 9.625% and mature in November 2016 and $20 million accrue interest at 9.25% and mature in May 2017. 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 November 2008, the issuer of the Companys 9.625% debt securities elected to make its next interest payment by issuing additional notes, and in May 2009, the Company received $14 million of additional debt securities in lieu of its cash interest payment. In May 2009, the issuer of the Companys 9.625% debt securities elected to make its next interest payment in cash. Marketable securities with unrealized losses at September 30, 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. During the three months ended September 30, 2008, the Company purchased $26 million of senior secured notes with an aggregate par value of $27 million that accrue interest at 9.625% and mature in November 2016. During the three months ended September 30, 2009, the Company sold marketable debt securities for $115 million, which resulted in gains of approximately $6 million. During the nine months ended September 30, 2009 and 2008, the Company sold debt securities for $120 million and $11 million, respectively, which resulted in gains of approximately $7 million a

Debt

Debt
	9 Months Ended Sep. 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 August 1, 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 September 30, 2009, the margin on the revolving line of credit facility was 0.55% and the facility fee was 0.15%. At September 30, 2009, the Company had no outstanding amounts under this revolving line of credit facility. At September 30, 2009, the outstanding balance of the Companys term loan was $200 million and matures on August 1, 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 2.73% at September 30, 2009). Based on the Companys debt ratings at September 30, 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 1.75 times, and (iv) require a formula-determined Minimum Consolidated Tangible Net Worth of $4.9 billion at September 30, 2009. At September 30, 2009, the Company was in compliance with each of these restrictions and requirements of the revolving line of credit facility and term loan. On May 8, 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 its common stock. Senior Unsecured Notes At September 30, 2009, the Company had $3.5 billion in aggregate principal amount of senior unsecured notes outstanding. Interest rates on the notes ranged from 1.20% to 7.07%. The weighted-average effective interest rate on the senior unsecured notes at September 30, 2009 was 6.13%. Discounts and premiums are amortized to interest expense over the term of the related notes. The senior unsecured notes contain certain covenants including limitations on debt, cross-acceleration provisions and other customary terms. At September 30, 2009, the Company was in compliance with these covenants. Mortgage and Other Secured Debt At September 30, 2009, the Company had $1.9 billion in mortgage debt secured by 168 healthcare facilities with a carrying value of $2.4 billion. Interest rates on the mortgage notes ranged from 0.33% to 8.63% with a weighted average effective rate of 5.10% at September 30, 2009. On August 3, 2

Commitments and Contingencies

Commitments and Contingencies
	9 Months Ended Sep. 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 May 3, 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 alleged, 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 part of the same litigation, the Company filed counterclaims against Ventas as successor to Sunrise REIT. On March 25, 2009, the District Court issued an order dismissing the Companys counterclaims. On April 8, 2009, the Company filed a motion for leave to file amended counterclaims. On May 26, 2009, the District Court denied the Companys motion. Ventas sought approximately $300 million in compensatory damages plus punitive damages. On July 16, 2009, the District Court dismissed Ventass claim that HCP interfered with Ventass purchase agreement with Sunrise REIT, dismissed claims for compensatory damages based on alleged financing and other costs, and allowed Ventass claim of interference with prospective advantage to proceed to trial. Ventass claim was tried before a jury between August 18, 2009 and September 4, 2009. During the trial, the District Court dismissed Ventass claim for punitive damages. On September 4, 2009, the jury returned a verdict in favor of Ventas in the amount of approximately $102 million in compensatory damages. The District Court entered a judgment against the Company in that amount on September 8, 2009. In relation to the Ventas matter, the Company recorded $102 million as a litigation provision expense during the three months ended September 30, 2009. On September 22, 2009, the Company filed a motion for judgment as a matter of law or for a new trial. Also on September 22, 2009, Ventas filed a motion seeking approximately $20 million in prejudgment interest and approximately $4 million in additional damages to account for changes in currency exchange rates. The District Court has not yet ruled on those motions. The Company intends to continue to defend itself on appeal, including by appealing the adverse judgment. On June 29, 2009, several of the Companys subsidiaries, together with three of its tenants, filed complaints in the Delaware

Equity

Equity
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Equity	(12) Equity Preferred Stock At September 30, 2009, the Company had two series of preferred stock outstanding, Series E and Series F preferred stock. The Series E and Series F 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, September and December. The Series E and Series F preferred stock are currently redeemable at the Companys option. The following table lists the Series E cumulative redeemable preferred stock cash dividends paid and/or declared by the Company during the nine months ended September 30, 2009: Declaration Date Record Date Amount Per Share Dividend Payable Date February 2 March 16 $ 0.45313 March 31 April 23 June 15 0.45313 June 30 July 29 September 15 0.45313 September 30 October 29 December 15 0.45313 December 31 The following table lists the Series F cumulative redeemable preferred stock cash dividends paid and/or declared by the Company during the nine months ended September 30, 2009: Declaration Date Record Date Amount Per Share Dividend Payable Date February 2 March 16 $ 0.44375 March 31 April 23 June 15 0.44375 June 30 July 29 September 15 0.44375 September 30 October 29 December 15 0.44375 December 31 Common Stock During the nine months ended September 30, 2009 and 2008, the Company issued 106,000 and 397,000 shares of common stock, respectively, under its Dividend Reinvestment and Stock Purchase Plan (DRIP). The Company issued 525,000 and 2 million shares of common stock upon the conversion of DownREIT units during the nine months ended September 30, 2009 and 2008, respectively. The Company also issued 26,000 and 623,000 shares upon exercise of stock options during the nine months ended September 30, 2009 and 2008, respectively. During the nine months ended September 30, 2009 and 2008, the Company issued 305,000 and 144,000 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 nine months ended September 30, 2009 and 2008, respectively. On May 8, 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 und

Segment Disclosures

Segment Disclosures
	9 Months Ended Sep. 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 the acquisition and development of real estate, and debt issued by operators in these sectors. Under the medical office segment, the Company invests through the acquisition of MOBs that are primarily leased under gross or modified gross leases, which are generally to multiple tenants, and 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 Note 2). There were no intersegment sales or transfers during the nine months ended September 30, 2009 and 2008. The Company evaluates performance based upon property net operating income from continuing operations (NOI), and interest income of the combined investments 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 Note 11 for other information regarding concentrations of credit risk. Summary information for the reportable segments follows (in thousands): For the three months ended September 30, 2009: Segments Rental and Related Revenues Tenant Recoveries Income From DFLs Investment Management Fees Total Revenues NOI(1) Interest and Other Senior housing $ 68,625 $ $ 13,173 $ 703 $ 82,501 $ 82,050 $ 304 Life science 53,536 9,696 63,232 51,302 Medical office 65,419 12,271 623 78,313 44,117 Hospital 20,986 497 21,483 20,600 16,343 Skilled nursing 9,800 9,800 9,761 23,416 Total segments 218,366 22,464 13,173 1,326 255,329 207,830 40,063 Non-segment (101 ) Total $ 218,366 $ 22,464 $ 13,173 $ 1,326 $ 255,329 $ 207,830 $ 39,962 For the three months ended September 30, 2008: Segments Rental and Related Revenues Tenant Recoveries Income From DFLs Investment Management Fees Total Revenues NOI(1) Interest and Other Senior housing $ 70,554 $ $ 14,543 $ 867 $ 85,964 $ 82,031 $ 311 Life science 65,997 7,513 1 73,511 63,697 Medical office 65,108 12,300 655 78,063 42,025 Hospital 20,752 412 21,164 20,337 11,074 Skilled nursing 9,150 9,150 9

Derivative Instruments

Derivative Instruments
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Derivative Instruments	(14) Derivative Instruments The Company uses derivative instruments to mitigate the effects of interest rate fluctuations on specific forecasted transactions as well as recognized obligations or assets. The Company does not use derivative instruments for speculative or trading purposes. The primary risks associated with derivative instruments are market and credit risk. Market risk is defined as the potential for loss in value of a derivative instrument due to adverse changes in market prices (interest rates). Utilizing derivative instruments allows the Company to effectively manage the risk of fluctuations in interest rates with respect to the potential effects these changes could have on future earnings, forecasted cash flows and the fair value of recognized obligations. 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 September 30, 2009, the Company does not anticipate non-performance by the counterparties to its outstanding derivative contracts. On June 12, 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 September 2011, has a notional amount of $250 million, and hedges approximately 86% of the $292 million of outstanding senior unsecured notes maturing in September 2011. The estimated fair value of the contract at September 30, 2009 was $2.5 million and is included in other assets, net. During the nine months ended September 30, 2009, there was no ineffective portion related to the hedge. On August 20, 2009, the Company executed two interest-rate swap contracts (pay float and receive fixed), which are designated as hedging fluctuations in interest receipts on a participation interest in a floating-rate secured mortgage note due to fluctuations in the underlying benchmark interest rate. These cash flow hedges terminate in February and August 2011 and have an aggregate notional amount of $500 million. The aggregate estimated fair value of the contracts at September 30, 2009 was $0.9 million and is included in other assets, net. During the three and nine months ended September 30, 2009, there were no ineffective portions related to the hedges. The Company also had four interest-rate swap contracts outstanding at September 30, 2009, which hedge fluctuations in interest payments on variable-rate secured debt. At September 30, 2009, these interest-rate swap contracts had an aggregate notional amount of $60 million and estimated fair value of $4 million included in accounts payable and accrued liabilities. During the three and nine months ended September 30, 2009, there were no ineffective portions

Supplemental Cash Flow Informat

Supplemental Cash Flow Information
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Supplemental Cash Flow Information	(15) Supplemental Cash Flow Information Nine Months Ended September 30, 2009 2008 (in thousands) Supplemental cash flow information: Interest paid, net of capitalized interest $ 236,905 $ 280,103 Taxes paid 2,101 4,266 Supplemental schedule of non-cash investing activities: Capitalized interest 18,994 22,479 Accrued construction costs (3,359 ) (10,604 ) Loan received upon real estate disposition 251 Supplemental schedule of non-cash financing activities: Mortgages assumed with real estate acquisitions 4,892 Secured debt obtained in purchase of participation in secured loan receivable 425,042 Restricted stock issued 305 144 Vesting of restricted stock units 182 131 Cancellation of restricted stock (34 ) 108 Conversion of non-managing member units into common stock 21,873 74,509 Unrealized gains on available-for-sale securities and derivatives designated as cash flow hedges, net 73,436 32,836

Earnings

Earnings (Loss) Per Common Share
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Earnings (Loss) Per Common Share	(16) Earnings (Loss) 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): Three Months Ended September 30, Nine Months Ended September 30, 2009 2008 2009 2008 Numerator Income (loss) from continuing operations $ (45,528 ) $ 100,513 $ 74,532 $ 186,352 Noncontrolling interests and participating securities share in continuing operations (3,895 ) (6,323 ) (12,147 ) (18,974 ) Preferred stock dividends (5,282 ) (5,282 ) (15,848 ) (15,848 ) Income (loss) from continuing operations applicable to common shares (54,705 ) 88,908 46,537 151,530 Discontinued operations 2,308 31,043 36,135 239,412 Noncontrolling interests share in discontinued operations (336 ) (585 ) Net income (loss) applicable to common shares $ (52,397 ) $ 119,615 $ 82,672 $ 390,357 Denominator Basic weighted average common shares 284,812 244,572 267,971 232,199 Dilutive stock options and restricted stock 910 70 837 Diluted weighted average common shares 284,812 245,482 268,041 233,036 Basic earnings (loss) per common share Income (loss) from continuing operations $ (0.19 ) $ 0.36 $ 0.17 $ 0.65 Discontinued operations 0.01 0.13 0.14 1.03 Net income (loss) applicable to common stockholders $ (0.18 ) $ 0.49 $ 0.31 $ 1.68 Diluted (loss) earnings per common share Income (loss) from continuing operations $ (0.19 ) $ 0.36 $ 0.17 $ 0.65 Discontinued operations 0.01 0.13 0.14 1.03 Net income (loss) applicable to common shares $ (0.18 ) $ 0.49 $ 0.31 $ 1.68 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 September 30, 2009 and 2008, earnings representing nonforfeitable dividends of $0.4 million and $0.5 million, respectively, were allocated to the participating securities. For the nine months ended September 30, 2009 and 2008, earnings representing nonforfeitable dividends of $1.1 million and $1.9 million, respectively, were allocated to the participating securities. Options to purchase approximately 7.1 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 September 30, 2009 and 2008, respectively, were not included because they are anti-dilutive. Restricted stock and performance restricted stock units representing 1.5 million and 0.4 million shares of common stock during the three months ended September

Fair Value Measurements

Fair Value Measurements
	9 Months Ended Sep. 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 operations. The following is a summary of fair value measurements of financial assets and liabilities at September 30, 2009 (in thousands): Financial Instrument Fair Value Level 1 Level 2 Level 3 Marketable debt securities $ 201,163 $ 182,863 $ 18,300 $ Marketable equity securities 3,931 3,931 Interest-rate swap assets(1) 3,327 3,327 Interest-rate swap liabilities(1) (4,101 ) (4,101 ) Warrants(1) 1,468 1,468 $ 205,788 $ 186,794 $ 17,526 $ 1,468 (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 September 30, 2009 (in thousands): Warrants December 31, 2008 $ 1,460 Total gains (realized and unrealized): Included in earnings (582 ) Included in other comprehensive income Purchases, issuances, exchanges and settlements, net 590 Transfers in and/or out of Level 3 September 30, 2009 $ 1,468

Disclosures About Fair Value of

Disclosures About Fair Value of Financial Instruments
	9 Months Ended Sep. 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 values of cash and cash equivalents, restricted cash, receivables, payables, and accrued liabilities are reasonable estimates of fair value because of the short-term maturities of these instruments. Fair values for loans receivable, bank line of credit, bridge and term loans, mortgage and other secured debt, and other debt are estimates based on rates currently prevailing for similar instruments of similar maturities. The estimated 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 and marketable equity and debt securities were determined based on market quotes. September 30, 2009 December 31, 2008 Carrying Value Fair Value Carrying Value Fair Value (in thousands) Loans receivable, net $ 1,674,329 $ 1,662,685 $ 1,076,392 $ 981,128 Marketable debt securities 201,163 201,163 228,660 228,660 Marketable equity securities 3,931 3,931 3,845 3,845 Warrants 1,468 1,468 1,460 1,460 Bank line of credit 150,000 150,000 Bridge and term loans 200,000 200,000 520,000 520,000 Senior unsecured notes 3,520,577 3,520,482 3,523,513 2,384,488 Mortgage and other secured debt 1,863,404 1,836,879 1,641,734 1,538,057 Other debt 99,487 99,487 102,209 102,209 Interest-rate swap assets 3,327 3,327 Interest-rate swap liabilities (4,101 ) (4,101 ) 2,324 2,324

Impairments

Impairments
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Impairments	(19) Impairments During the three months ended September 30, 2009, the Company recognized impairments of $15.1 million related to two of its DFLs (see Note 5). During the three months ended September 30, 2008, the Company recognized an impairment of $3.7 million related to intangible assets associated with the early termination of three leases in the life science segment. During the nine months ended September 30, 2009, the Company recognized impairments of $21.0 million as a result of (i) $15.1 million related to two of its DFLs and (ii) $5.9 million related to intangible assets on 12 of 15 senior housing communities which were determined to be impaired due to the termination of the Sunrise management agreements effective October 1, 2009. During the nine months ended September 30, 2008, the Company recognized impairments of $13.4 million as follows: (i) $1.6 million related to two senior housing facilities as a result of a decrease in expected cash flows, (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, and (iii) $3.7 million related to intangible assets associated with the early termination of three leases in the life science segment.

Subsequent Events

Subsequent Events
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to the Condensed Consolidated Financial Statements
Subsequent Events	(20) Subsequent Events The Company evaluated subsequent events through November 3, 2009, which is the date the September 30, 2009 condensed consolidated financial statements were issued.

DOCUMENT AND ENTITY INFORMATION

DOCUMENT AND ENTITY INFORMATION (USD $)
In Billions, except Share data	9 Months Ended Sep. 30, 2009	Oct. 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	2009-09-30
Amendment Flag	false
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			7.5
Entity Common Stock, Shares Outstanding		293,138,580