THREE DECADES STRONG THREE DECADES STRONG STRATEGY. EXECUTION. RESULTS. 2015
table of contents HCP OVERVIEW 2 STRATEGY AND RESULTS PORTFOLIO OVERVIEW OUR LEADERSHIP
overview » Invests in multiple segments of healthcare real estate Strong U.S. Demographics through different investment products Diverse, well–balanced portfolio of 1,200 properties 25% 5% 10 100 This Decade Population in Millions $24 billion Investment Portfolio (1) 20% 0% 80 80 % of U.S. Population 15% 15 60 60 Hospital International 5% 10% 10 40 40 5% 5% 5% 20 20 MOB Senior 0% 0% 0 $1.9B 14% Housing 19 1980 1990 990 200 000 201 010 20 2020 20 20 2030 30 204 040 205 050 3 38% Portfolio % 8 85+ 5+ % 75-8 % 7 -84 % 6 % 65-7 -74 65+ 5+ P Pop opulation on Life Income (1) Science 14% Best–in–class Operating Partners Post-Acute/Skilled 24% » Strong balance sheet with BBB+ investment grade credit ratings » Compound annual shareholder return of 15.6% (2) since IPO in 1985 30 years of consecutive dividend growth – the only REIT in the S&P 500 Dividend Aristocrats index (1) Based on Investment Portfolio as of 3/31/15 and annualized 1Q 2015 Portfolio Income, each adjusted to reflect pro forma impact from significant transactions including HCR lease amendment, sale of 50 HCR non-strategic assets and pending Chartwell acquisition. See Appendix for details regarding these pro forma adjustments. (2) Through 3/31/15 and assumes re–investment of dividends. HCP OVERVIEW
2015 YTD highlights » Announced $1.5 billion of accretive investments (1) , including: $849 million acquisition of private pay senior housing portfolio from Chartwell in a RIDEA structure with Brookdale Expanded relationship with HC-One via a £108 million follow-on debt investment (bringing total to £502 million) to facilitate their acquisition of Meridian Healthcare, growing our U.K. portfolio to over £0.7 billion ($1 billion) Broke ground on Phase I of The Cove life science and MOB development projects » Strengthened the Master Lease on our HCR ManorCare portfolio: Amended and extended the Master Lease, and marketing for sale 50 non-strategic assets; expected to improve pro forma fixed charge coverage to approximately 1.3x 4 HCR first quarter EBITDAR increased 3.6% year-over-year » Converted £174 million, one-third of HC-One debt investment, into ownership of 36 care homes under NNN leases; in addition, converted 2 senior housing development loans into real estate » Raised $1.7 billion of 10-year debt at a blended rate of 3.4% to fund our investments and address all 2015 debt maturities » Executed 537,000 sq. ft. of leasing in our life science and medical office portfolios and achieved an all-time high life science occupancy of 96.5% » Increased 2015 dividend by 3.7%, representing 30 years of consecutive dividend growth (1) Announced in 2015 year-to-date as presented at our Investor Day on 5/11/15. STRATEGY AND RESULTS
s opportunistic & disciplined capital allocation (1) HCP’ By Sector By Investment Type Life Science 6% Debt Triple-net Investment MOB Leased 21% 15% 24% 7.4% 5 $3.4B Senior Development Accretive Blended Housing 10% Acquisitions Going-in 52% Since 2014 Cash Yield International 27% RIDEA JV 45% (1) Reflects acquisitions and developments since January 2014, inclusive of the $1.5B announced in 2015 YTD as presented at our Investor Day on 5/11/15. STRATEGY AND RESULTS
STRONG SAME-STORE GROWTH from diversified portfolio HCP’S O S OVE VERAL ALL C CASH SH SAM AME-STOR ORE NOI NOI G GROWTH 2015F (1) 2010 2011 2012 2013 2014 4.8% 4.0% 4.2% 3.1% 3.3% 0.25% S A M E A M E - S T O R E G R G R O W T H T H B Y S E S E G M G M E N T N T Hospital Senior Housing Life Science Senior Housing Senior Housing Life Science 9.9% 6.6% 7.0% 5.1% 3.6% 5.0% 6 Senior Housing Hospital Post-acute/Skilled Hospital Post-acute/Skilled Senior Housing 8.6% 4.6% 3.7% 3.7% 3.5% 4.0% Medical Office Medical Office Hospital Post-acute/Skilled Life Science Medical Office 2.7% 2.8% 3.6% 3.5% 3.4% 2.0% Post-acute/Skilled Post-acute/Skilled Senior Housing Medical Office Hospital Hospital 1.4% 2.6% 3.5% 2.3% 3.1% 1.0% Life Science Life Science Medical Office Life Science Medical Office Post-acute/Skilled 0.5% 1.1% 2.7% (1.6%) 2.0% (7.2%) (1) 2015 projections based on the mid-point of the Company’s guidance discussed on our earnings call on 5/5/15 and presented at our Investor Day on 5/11/15. 30 YEARS STRATEGY AND RESULTS STRONG
HCP HAS grown significantly AND profitably SINCE 2010 3.3% average Balance sheet upgrade 70% expansion of same store Cash NOI Baa3 Baa1 investment portfolio growth (1) BBB BBB+ 7.0% FAD/Share CAGR $2.69 FAD/share $2.57 Improved Payout Ratio (2) $2.54 Dividend/share FFO FFO a as 7 $0.10 favorable one-time items FA FAD adjuste usted 83% 97% $2.23 $2.26 FAD IN 2010 IN 2010 $2.16 $2.18 $2.10 $2.00 $1.92 $1.92 $1.86 72% 2% 84% 4% IN 2015 IN 2015 (2) 2010 2011 2012 2013 2014 2015F $200M $20M FAD in excess of dividends (1) Represents HCP’s average same store Cash NOI growth from 2010-2015F. (2) 2015 FFO as adjusted, FAD and payout ratio projections are based on the mid-point of the Company’s guidance discussed on our earnings call on 5/5/15 and presented at our Investor Day on 5/11/15. Estimated full year 2015 dividend based on current quarterly dividend of $0.565 per share. STRATEGY AND RESULTS
HCP’S attractive growth outlook Higher Operating business Triple-net leases and debt investments RIDEA Life Science RIDEA Continued organic Life Cash NOI growth Science Growth HCR ManorCare Triple-net from diversified Potential Master Lease Leases 30% portfolio that has MOB averaged 3.3% (1) 8 International Lower Smaller Size Larger Fixed-rate leverage expected to Additional upside opportunities: increase FAD per share Refinancing tailwinds growth to 4.5% to 5.0% Accretive acquisitions (1) Represents HCP’s average same store Cash NOI growth from 2010-2015F. STRATEGY AND RESULTS
HCP is the only REIT in the S&P 500 Dividend Aristocrats Index Annual Dividend 1985 – 2015 (1) $2.26 (1) 105% Dividend per share 100% (2) FFO as adjusted payout ratio 95% 90% 85% 9 80% 72% 75% 70% 65% Dividend Aristocrats are S&P 500 companies that have increased dividends every year for at least 25 consecutive years Only 10% of the S&P 500 companies are in this index (1) Estimated full year 2015 dividend based on current quarterly dividend of $0.565 per share. (2) 2015 projected payout ratio based on the Company’s mid-point of FFO as adjusted per share guidance discussed on our earnings call on 5/5/15 and presented at our Investor Day on 5/11/15. STRATEGY AND RESULTS
Senior Housing portfolio » $9.4B portfolio (1) of 479 properties across 44 states » 10 development projects totaling $500M stabilized real estate value 7 participating development loans totaling $140M with HCP’s option to own upon stabilization (2 loans converted to real estate); 3 ground-up projects totaling $110M of development cost 33% RIDEA 65% Triple-net Investments Leased Portfolio 10 a a 32% a 32% a a b b b $725M Portfolio c c Income (1) d 1% d b 2% 12% 12% b 2% “in-the-money” 9% d c development loans (1) Based on Investment Portfolio as of 3/31/15 and annualized 1Q 2015 Portfolio Income, adjusted to reflect pro forma impact from significant transactions including HCR lease amendment, sale of 6 HCR non-strategic assets and pending acquisitions. See Appendix for details regarding these pro forma adjustments. 30 YEARS 10 PORTFOLIO OVERVIEW STRONG
Post-Acute/Skilled and Hospital portfolio » $5.9B post-acute/skilled and hospital portfolio (1) , with average annual lease escalators of 2.7% 266 post-acute/skilled properties across 28 states 20 hospitals across 10 states; >70% NOI from 5 acute-care hospitals 17% 83% Hospital Post-acute 11 Other 5% Hoag HCR 3% 73% HCR’s Heartland of Dublin, OH $530M ManorCare Tenet 4% HCA 5% Portfolio Income (1) 5% Other 5% Tandem Debt Hoag Hospital - Irvine, CA (1) Based on Investment Portfolio as of 3/31/15 and annualized 1Q 2015 Portfolio Income, adjusted to reflect pro forma impact from the HCR lease amendment and sale of 44 HCR non-strategic assets. See Appendix for details regarding these pro forma adjustments. 30 YEARS 11 PORTFOLIO OVERVIEW STRONG
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