2015 table of contents HCP OVERVIEW 2 STRATEGY AND RESULTS - - PowerPoint PPT Presentation

THREE DECADES STRONG

THREE DECADES STRONG

• STRATEGY. EXECUTION. RESULTS.

2015

2

table of contents

HCP OVERVIEW STRATEGY AND RESULTS PORTFOLIO OVERVIEW OUR LEADERSHIP

HCP OVERVIEW 20 20 40 40 60 60 80 80 10 100 0% 0% 5% 5% 10 10% 15 15% 20% 0% 25% 5% 19 1980 1990 990 200 000 201 010 20 2020 20 20 2030 30 204 040 205 050 % 8 85+ 5+ % 7 % 75-8

• 84

% 6 % 65-7

• 74

65+ 5+ P Pop

• pulation
• n

(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. This Decade

• verview

»

Invests in multiple segments of healthcare real estate through different investment products  Diverse, well–balanced portfolio of 1,200 properties  $24 billion Investment Portfolio(1)

»

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 3

Strong U.S. Demographics

Population in Millions

Senior Housing 38% Post-Acute/Skilled 24% Life Science 14% MOB 14% Hospital 5% International 5%

$1.9B

Portfolio Income(1)

Best–in–class Operating Partners

% of U.S. Population

4

» 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  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

2015 YTD highlights

STRATEGY AND RESULTS (1) Announced in 2015 year-to-date as presented at our Investor Day on 5/11/15.

5

Debt Investment 21% Development 10% RIDEA JV 45% Triple-net Leased 24%

7.4%

Blended Going-in Cash Yield

HCP’ s opportunistic & disciplined capital allocation(1)

By Investment Type By Sector

Senior Housing 52% International 27% MOB 15% 6%

$3.4B

Accretive Acquisitions Since 2014

Life Science

(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

30

YEARS

STRONG

STRONG SAME-STORE GROWTH from diversified portfolio

2012 2013 2011 2010 2014

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

HCP’S O S OVE VERAL ALL C CASH SH SAM AME-STOR ORE NOI NOI G GROWTH

4.2% 3.1% 4.0% 4.8% 3.3% 2015F(1) 0.25%

Post-acute/Skilled 3.7% Hospital 9.9% Senior Housing 6.6% Life Science 7.0% Hospital 3.7% Senior Housing 8.6% Hospital 4.6% Senior Housing 5.1% Medical Office 2.7% Medical Office 2.8% Hospital 3.6% Post-acute/Skilled 3.5% Post-acute/Skilled 2.6% Senior Housing 3.5% Medical Office 2.3% Life Science 0.5% Life Science 1.1% Medical Office 2.7% Life Science (1.6%) Post-acute/Skilled 1.4% Hospital 3.1% Senior Housing 3.6% Post-acute/Skilled 3.5% Medical Office 2.0% Life Science 3.4% Hospital 1.0% Senior Housing 4.0% Post-acute/Skilled (7.2%) Medical Office 2.0% Life Science 5.0%

(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. STRATEGY AND RESULTS

6

83% IN 2010

Improved Payout Ratio(2)

97% IN 2010

84% 4%

IN 2015

72% 2%

IN 2015

FA FAD FFO FFO a as adjuste usted

HCP HAS grown significantly AND profitably SINCE 2010

$1.92 $2.16 $2.23 $2.54 $2.57 $2.69

2010 2011 2012 2013 2014 2015F

FAD

FAD/share Dividend/share

$1.86 $1.92 $2.00 $2.10 $2.18 $2.26

• ne-time items

$200M $20M

FAD in excess of dividends 3.3% average same store Cash NOI growth(1) 70% expansion of investment portfolio

Balance sheet upgrade Baa3 BBB Baa1 BBB+

7.0% FAD/Share CAGR

(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

7

HCR ManorCare Master Lease 30%

Higher Lower Growth Potential Smaller Larger Size

Fixed-rate leverage expected to increase FAD per share growth to 4.5% to 5.0%

Life Science RIDEA

Continued organic Cash NOI growth from diversified portfolio that has averaged 3.3%(1) Additional upside opportunities:

• Refinancing tailwinds
• Accretive acquisitions

RIDEA Life Science MOB International Triple-net Leases

Triple-net leases and debt investments Operating business

HCP’S attractive growth outlook

(1) Represents HCP’s average same store Cash NOI growth from 2010-2015F. STRATEGY AND RESULTS

8

(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.

72%

65% 70% 75% 80% 85% 90% 95% 100% 105%

Annual Dividend 1985 – 2015(1)

Dividend per share FFO as adjusted payout ratio

$2.26(1)

• 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

HCP is the only REIT in the

S&P 500 Dividend Aristocrats Index

STRATEGY AND RESULTS

9

10

30

YEARS

STRONG

32% 12% 9% 12% 2% 1% 32%

$725M

65% Triple-net

Leased Portfolio

33% RIDEA

Investments

2% “in-the-money”

development loans

a b a b c d a b c d a

b

Portfolio Income(1)

a b c d

(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.

» $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

Senior Housing portfolio

PORTFOLIO OVERVIEW

10

11

30

YEARS

STRONG

73%

$530M

Portfolio Income(1)

17%

Hospital

83%

Post-acute

HCR ManorCare Tandem Debt Tenet HCA Hoag Other 5% 3% 5% 4% 5%

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

Other 5%

HCR’s Heartland of Dublin, OH 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. PORTFOLIO OVERVIEW

11

12

Four Seasons Health Care Maria Mallaband Care Group Debt Investment & Sale-Leaseback Date July 2012 June 2014 Nov 2014/Feb 2015 April 2015 Investment Type Debt Real Estate (23 assets) Debt Real Estate (36 assets) Size (millions) £139 £88 £502(2)(3) £174(3) Tranche

• Sr. Unsecured

–-

• Sr. Whole Loan

–- Yield(1) 12.5% 7.6% 8.2% 7.3% Term 8 Years 15 Years(4) 5 Years 15 Years(4) Private Equity Sponsor Terra Firma –- Formation, Safanad

(1) Represents yield to maturity for debt investments, and Year 1 lease yield for equity investments. (2) Includes a £395 million initial investment (including £32 million in committed capital) and a £108 million follow-on investment. (3) In 2Q15, we converted £174 million of the £502 million HC-One debt investment into fee simple ownership of 36 care homes. (4) The portfolio of care homes located throughout the U.K. is subject to triple-net leases with initial terms of 15 years.

Expanding U.K. investment platform

PORTFOLIO OVERVIEW

• ne-third to

Increased our international platform to over $1 Billion while developing relationships with the pre-eminent care home operators and financial sponsors in the U.K.

»

HCP was the FIRST healthcare REIT to expand into Europe in 2012

»

$1.1 billion current investment portfolio:  $410 million invested through sale-leasebacks in 59 care homes (36% of total U.K. portfolio)

• Long-term NNN leases with EBITDARM coverages of 1.6x and cash yields of 7.4%

 $700 million debt investments

• Weighted average yield of 9.5% and remaining term of 5 years

13

30

YEARS

STRONG

» 283 properties across 32 states » $3.5B investments and $255M portfolio income » 80% on-campus; 95% affiliated with 200+

health systems

» Strong occupancy above 90% » Average retention rate of 78% over past 3 years » Re/development pipeline consists of 5 projects

representing over $160M

(1) Based on Investment Portfolio as of 3/31/15 and annualized 1Q 2015 Portfolio Income, adjusted to reflect pro forma impact from the acquisition of the Chestnut MOB, on the campus of Thomas Jefferson University Hospital. See Appendix for details regarding these pro forma adjustments. (2) Based on Medical Office portfolio square footage as of 3/31/15, adjusted to include the Chestnut MOB acquisition.

Medical Office portfolio(1)

HCA 40% Other 30% 10 Major Health Systems 30%

19M

• Sq. Ft.(2)

Major Health Systems Recent Expansions and New Investment Grade Relationships

PORTFOLIO OVERVIEW

13

14

30

YEARS

STRONG

»

115 properties in 4 states

»

$3.7B operating portfolio representing 7.6 million sq. ft.

»

Largest life science portfolio and development pipeline on West Coast

»

88% concentrated in 2 of the top 3 life science markets: San Francisco and San Diego

»

88% of NOI from public or well-established private companies

»

Strong occupancy at an all-time high of 96.5%

»

Broke ground on Phase I of The Cove in S. San Francisco, a LEED Silver development project featuring a state-of-the-art amenities

Amgen 17% Genentech 17% Rigel 6% LinkedIn 5% Exelixis 5% Google 4% Myriad 3% Takeda 3% General Atomics 2% Other 38%

Recent Expansions and New Investment Grade Relationships

$260M

Cash NOI(1)

(1) Percentages are based on annualized revenues for the Life Science segment.

Life Science portfolio

PORTFOLIO OVERVIEW

14

15

Outcome Tandem Health Care Jul 2012 65% & 80% Senior & Junior Angelo Gordon Barchester Healthcare May 2013 £129 Junior n/a 7 Years Lydian $202 Junior 87% 5 Years Formation, JER, HCR ManorCare HCR ManorCare HCA 7 Years Formation Four Seasons Health Care Jul 2012 £139

• Sr. Unsecured

62% 8 Years Terra Firma Genesis HealthCare Sep 2010 $328 Carlyle Dec 2007 $1,000 Junior 85% 5 Years Carlyle Aug 2009 $720 Senior Secured 33% 5 Years Tranche LTV % Term Private Equity Date Size (in millions) KKR, Bain Capital Monetized at Nov 2006 $300 Junior 61% 10 Years Sponsor Significant gain from par payoff premium to par Ongoing Ongoing Facilitated recapitalization through the $6.1 billion purchase of PropCo Significant gain from early par payoff HC-One / into sale-leaseback

• f 36 care homes

n/a 5 Years Formation, Safanad Converted £174M Meridian Nov 2014 & Feb 2015 £502

• Sr. Whole Loan

HCP HCP is is an an expe perie ienced de d debt bt investor with a h a lo long ng–term rm outloo look: Invest sts s in si size a across ss the e capit apital al st stack, , an and h d has as achieved su successf ssful outcom

• mes

$3.8 Billion debt investment track record

U.S. Investments U.K. Investments

PORTFOLIO OVERVIEW

16

Developments provide attractive risk-adjusted return

Location Segment Affiliation Estimated Completion Capacity Estimated Total Investment ($M) Dev evel elop

• pmen

ent

The Cove – Phase 1

• S. San Francisco, CA

Life Science TBD 3Q 2016 253k sq. ft. $177 Deer Park Deer Park, IL Senior Housing Formation Capital 4Q 2015 180 units $48 Pearland Pearland, TX MOB Memorial Hermann 1Q 2016 98k sq. ft. $19 Cypress Cypress, TX MOB Memorial Hermann 4Q 2016 165k sq. ft. $36 Sky Ridge Medical Center Lone Tree, CO MOB HCA 1Q 2016 118k sq. ft. $29 Vintage Houston, TX Senior Housing Formation Capital 2Q 2016 117 units $29 5 Development Loans Various Senior Housing Formation Capital 3Q 2015 – 4Q 2016 424 units $93

Red edev evel elop

• pmen

ent

Bayfront

• St. Petersburg, FL

MOB TBD 4Q 2015 120k sq. ft. $19 Folsom Sacramento, CA MOB UC Davis 4Q 2015 92k sq. ft. $59

$509M

» Developments represent an attractive risk-adjusted return in an environment where acquisition pricing has

become aggressive

» Life Science fundamentals have been strong, particularly in the Bay Area, driven in part by biotech

companies’ access to capital

» Our phased development projects focus on class “A” real estate in strong markets with proven developers

and operators, with appropriate levels of pre-leasing

Total

PORTFOLIO OVERVIEW

17

HCP’ s development projects

The Cove, S. San Francisco, CA (life science) Roseland, NJ (senior housing) Olney, MD (senior housing) Sky Ridge MOB III, Lone Tree, CO (rendering)

PORTFOLIO OVERVIEW

GRI Sustainability Report

• Published 1st Combined Annual + Sustainability Report
• 4th year to publish in accordance with the GRI G4 framework

CDP Survey

Named to Climate Disclosure Leadership Index for 2nd consecutive year

Global Real Estate Sustainability Benchmark Survey

Named Global Healthcare Sector Leader for 3rd consecutive year

Dow Jones Sustainability Index Assessment

Named to the DJSI North America Index for 2nd consecutive year

FTSE4Good Index Assessment

Named to the FTSE4Good Index for 3rd consecutive year

HCP IS A LEADER IN sustainability

OUR LEADERSHIP

18

19

30

YEARS

STRONG

WHAT MAKES HCP compelling

WE ARE: WE HAVE: WE GROW: the value of our cash flows from our portfolio, via

long-term ownership in healthcare real estate that

is strategic to our operating partners

• A disciplined and creative capital allocator
• A strong capital partner with BBB+ balance

sheet and excellent liquidity

• An S&P 500 Dividend Aristocrat
• A global Sustainability leader
• 300+ healthcare relationships
• Multiple avenues to achieve growth
• Deep industry expertise across healthcare

sectors

• A uniquely diversified portfolio: robust Life

Science and sector–leading CCRC Platforms

OUR LEADERSHIP

19

20

This presentation is being presented solely for your information, is subject to change and speaks only as of the date hereof. This presentation and comments made by management do not constitute an offer to sell or the solicitation of an offer to buy any securities of HCP or any investment interest in any business ventures of HCP. This presentation is not complete and is only a summary of the more detailed information included elsewhere, including in HCP’s Securities and Exchange Commission

• filings. No representation or warranty, expressed or implied is made and no reliance should be placed on the accuracy, fairness or completeness of the information
• presented. HCP, its affiliates, advisers and representatives accept no liability whatsoever for any losses arising from any information contained in this presentation.

FORWARD-LOOKING STATEMENTS The statements in this presentation, as well as statements made by management, which are not historical facts, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and HCP intends such “forward-looking statements” to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, among other things, statements regarding FFO, FAD, income and other financial projections and assumptions; future business strategies; and the ability to accelerate dividend growth. These statements are made as of the date hereof, are not guarantees of future performance and are subject to known and unknown risks, uncertainties, assumptions and other factors — many of which are out of HCP’s control and difficult to forecast — that could cause actual results to differ materially from those set forth in or implied by such forward-looking statements. These risks and uncertainties include but are not limited to: the risk that HCP may not be able to achieve the benefits of the HCR ManorCare, Inc. (“HCR”) asset sales or the HCR Master Lease amendment within expected time-frames or at all; HCP’s ability to fully evaluate HCR’s ability to meet its contractual obligations under the master lease amendment and risks related to the impact of the Department of Justice lawsuit against HCR, including the possibility of larger than expected litigation costs, adverse results and related developments; HCP’s reliance on a concentration of a small number of tenants and

• perators for a significant portion of its revenues; the financial weakness of tenants and operators, including potential bankruptcies, significant litigation exposure and

downturns in their businesses; the ability of HCP’s tenants and operators to conduct their respective businesses in a manner sufficient to maintain or increase their revenues and to generate sufficient income to make rent and loan payments to HCP; competition for tenants and operators; availability of suitable properties to acquire at favorable prices and the competition for the acquisition and financing of those properties; HCP’s ability to negotiate the same or better terms with new tenants or

• perators if existing leases are not renewed or HCP exercises its right to replace an existing tenant or operator upon default; the risks associated with HCP’s

investments in joint ventures and unconsolidated entities; the risk that HCP may not be able to achieve the benefits of investments within expected time frames or at all, or within expected cost projections; the potential impact of future litigation matters; the effect on healthcare providers of legislation addressing entitlement programs and related services, including Medicare and Medicaid, which may result in future reductions in reimbursements; changes in federal, state or local laws and regulations; volatility or uncertainty in the capital markets; changes in global, national and local economic conditions; changes in the credit ratings on United States (“U.S.”) government debt securities or default or delay in payment by the U.S. of its obligations; HCP’s ability to manage its indebtedness level and changes in the terms

• f such indebtedness; HCP’s ability to maintain its qualification as a real estate investment trust; and other risks described from time to time in HCP’s Securities and

Exchange Commission filings, including its 2014 Annual Report on Form 10-K and the Form 10-Q for the quarter ended March 31, 2015. HCP assumes no, and hereby disclaims any, obligation to update any of the foregoing or any other forward-looking statements as a result of new information or new or future developments, except as otherwise required by law. MARKET DATA This presentation also includes market and industry data that HCP has obtained from market research, publicly available information and industry publications. The accuracy and completeness of such information are not guaranteed. The market and industry data is often based on industry surveys and preparers’ experience in the

• industry. Similarly, although HCP believes that the surveys and market research that others have performed are reliable, HCP has not independently verified this

information. NON-GAAP FINANCIAL MEASURES This presentation contains certain supplemental non-GAAP financial measures. While HCP believes that non-GAAP financial measures are helpful in evaluating its

• perating performance, the use of non-GAAP financial measures in this presentation should not be considered in isolation from, or as an alternative for, a measure of

financial or operating performance as defined by GAAP. You are cautioned that there are inherent limitations associated with the use of each of these supplemental non-GAAP financial measures as an analytical tool. Additionally, HCP’s computation of non-GAAP financial measures may not be comparable to those reported by

• ther REITs. Reconciliations of the non‐GAAP financial measures to the most directly comparable GAAP financial measures can be found on pages 3-4 of the Appendix

hereto and in HCP’s supplemental information packages and earnings releases, which are available on its website at www.hcpi.com in the “Presentations” section of the “Investor Relations” tab.

App ppendix dix

Defin init itio ions

Funds Available for Distribution (“FAD”) Our FAD is defined as FFO as adjusted (as defined below) after excluding the impact of the following: (i) amortization of acquired market lease intangibles, net; (ii) amortization of deferred compensation expense; (iii) amortization of deferred financing costs, net; (iv) straight-line rents; (v) accretion and depreciation related to DFLs and lease incentive amortization (reduction of straight-line rents); and (vi) deferred revenues, excluding amounts amortized into rental income that are associated with tenant funded improvements owned/recognized by us and up-front cash payments made by tenants to reduce their contractual rents. Also, FAD is: (i) computed after deducting recurring capital expenditures, including leasing costs and second generation tenant and capital improvements; and (ii) includes lease restructure payments and adjustments to compute our share of FAD from our unconsolidated joint ventures and those related to CCRC non-refundable entrance fees. Other real estate investment trusts (“REITs”) or real estate companies may use different methodologies for calculating FAD, and accordingly, our FAD may not be comparable to those reported by other REITs. Although our FAD computation may not be comparable to that of other REITs, management believes FAD provides a meaningful supplemental measure of our performance and is frequently used by analysts, investors, and other interested parties in the evaluation of our performance as a REIT. FAD does not represent cash generated from operating activities determined in accordance with U.S. generally accepted accounting principles or “GAAP”, is not necessarily indicative of cash available to fund cash needs, and should not be considered as an alternative to net (loss) income determined in accordance with GAAP. (Slides 7 & 8 – Strategy & Results) Funds From Operations (“FFO”) We believe Funds From Operations (“FFO”) is an important supplemental measure of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets utilizes straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of

• perating results for a REIT that use historical cost accounting for depreciation could be less informative. The term FFO was developed by the REIT industry to

address this issue. FFO as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) is net (loss) income applicable to common shares (computed in accordance with GAAP), excluding gains or losses from sales of property, impairments of, or related to, depreciable real estate, plus real estate, direct financing lease (“DFL”) and other depreciation and amortization, and after adjustments for joint ventures. Adjustments for joint ventures are calculated to reflect FFO

• n the same basis. FFO does not represent cash generated from operating activities determined in accordance with GAAP, is not necessarily indicative of cash

available to fund cash needs and should not be considered an alternative to net (loss) income. We compute FFO in accordance with the current NAREIT definition; however, other REITs may report FFO differently or have a different interpretation of the current NAREIT definition from ours. FFO as adjusted represents FFO before the impact of severance related charges, litigation settlement charges, preferred stock redemption charges, impairments (recoveries) of non-depreciable assets and transaction-related items (defined below). Transaction-related items include acquisition and pursuit costs (e.g., due diligence and closing) and gains/charges incurred as a result of mergers and acquisitions and lease amendment or termination activities. Management believes that FFO as adjusted provides a meaningful supplemental measurement of our FFO run-rate. This measure is a modification of the NAREIT definition of FFO and should not be used as an alternative to net (loss) income (determined in accordance with GAAP) or NAREIT FFO. (Slides 7 & 9 – Strategy & Results) Investment Portfolio Represents the real estate investments owned by HCP, the carrying amount of debt investments and our pro rata share of the real estate investments held in our unconsolidated joint ventures excluding assets under development and land held for development as of March 31, 2015. Net Operating Income from Continuing Operations (“NOI”) We believe Net Operating Income from Continuing Operations (“NOI”) provides investors relevant and useful information because it reflects only income and operating expense items that are incurred at the property level and presents them on an unleveraged basis. We use NOI and Cash NOI to make decisions about resource allocations, to assess and compare property level performance, and evaluate our same property portfolio (“SPP”). We believe that net (loss) income is the most directly comparable GAAP measure to NOI. NOI should not be viewed as an alternative measure of

• perating performance to net (loss) income (determined in accordance with GAAP) since it excludes certain components from net (loss) income. Further, our NOI

may not be comparable to that of other REITs or real estate companies, as they may use different methodologies for calculating NOI. NOI is defined as rental and related revenues, including tenant recoveries, resident fees and services, and income from DFLs, less property level operating expenses; NOI excludes all of the other financial statement amounts included in net (loss) income. Cash NOI is calculated as NOI after eliminating the effects of straight-line rents, DFL accretion, amortization of market lease intangibles and lease termination fees. Portfolio Income Represents Cash NOI from real estate owned by HCP, interest income from debt investments and our pro rata share of Cash NOI (plus cash non- refundable entrance fees in the case of our CCRC JV) from real estate owned in our unconsolidated joint ventures for the three months ended March 31, 2015. Pro Forma Investment Portfolio Represents Investment Portfolio as of March 31, 2015, pro forma for significant transactions that were announced during the quarter but have not yet closed and transactions that were announced or closed after March 31, 2015. Pro forma adjustments include the following in each respective investment type: (i) ($300) million for the projected sales of 50 HCR non-strategic assets (triple-net leased), (ii) pending $849 million acquisition of assets from the Chartwell portfolio (RIDEA), (iii) $771 million committed and future developments (development), (iv) $161 million acquisition of a medical office building in Philadelphia, PA (office platform) and (v) net $260 million conversion of our £174 million HC-One debt investments to fee ownership in care homes (debt investment to triple-net leased). (Slide 3 – Strategy & Results and Slides 10, 11, and 13 – Portfolio Overview) Pro Forma Portfolio Income Represents Portfolio Income for the three months ended March 31, 2015, presented on an annualized run-rate basis, pro forma for significant transactions that were announced during the quarter but have not yet closed and transactions that were announced or closed after March 31, 2015. Pro forma adjustments include the following in each respective segment/sector: (i) ($12.5) million from the HCR Master Lease Amendment and ($5.8) million from sales

• f 50 HCR non-strategic assets (senior housing and post-acute/skilled), (ii) $14.0 million from the pending acquisition of the Chartwell portfolio (senior housing), (iii)

$1.1 million from 50% investment in unconsolidated joint venture with MBK (senior housing), (iv) $2.7 million from acquisition of a medical office building in Philadelphia, PA (medical office), (v) net $0.8 million from conversion of the HC-One debt investments to fee ownership in care homes (international sector) and (vi) ($4.3) million from one-time interest income (senior housing). (Slide 3 – HCP Overview and Slides 10-11 – Portfolio Overview) Same Property Portfolio (“SPP”) SPP statistics allow management to evaluate the performance of our real estate portfolio under a consistent population, which eliminates the changes in the composition of our portfolio of properties. We identify our SPP as stabilized properties that remained in operations and were consistently reported as leased properties or operating properties (RIDEA) for the duration of the year-over-year comparison periods presented. Accordingly, it takes a stabilized property a minimum of 12 months in operations under a consistent reporting structure to be included in our SPP. SPP NOI excludes certain non-property specific operating expenses that are allocated to each operating segment on a consolidated basis. A property is removed from our SPP when it is sold, placed into redevelopment or contributed to partnerships under a RIDEA structure. (Slide 6 – Strategy & Results)

1

Non

• n-GAAP R

Reconcilia iliatio ions

Certain non-GAAP financial measures are included throughout this presentation. We have provided reconciliations of these measures to the most directly comparable GAAP measures as well as certain related disclosures herein in this Appendix, our Annual Reports on Form 10-K filed with the U.S. Securities and Exchange Commission, and Earnings Releases and Annual Reports, which are available on our website at www.hcpi.com in the “Presentations” section of the “Investor Relations” tab and “Financial Information” section of the “Investor Relations” tab, respectively. The reconciliations incorporated by reference are as follows:

• Annual Report on Form 10-K for the year ended December 31, 2014:
• - FFO as adjusted and FAD for the years ended December 31, 2014, 2013, 2012, 2011 and 2010 (Part II, ITEM 7. Management’s Discussion

and Analysis of Financial Condition and Results of Operations – Non-GAAP Financial Measures); (FAD: Slide 7 – Strategy & Results and FFO as adjusted: Slide 9 – Strategy & Results)

• - NOI and SPP by segment for the years ended December 31, 2014 and 2013 (Part II, ITEM 7. Management’s Discussion and Analysis of

Financial Condition and Results of Operations – Results of Operations); (Slide 6 – Strategy & Results)

• 2010 Annual Report:

FFO as adjusted for the years ended December 31, 2009, 2008, 2007, 2006, 2005, 2004 and 2003 (Reconciliations of Non-GAAP Measures); (Slide 9 – Strategy & Results)

• Earnings Release for the three months ended March 31, 2015:

Projected FFO as adjusted per share and Projected FAD per share for the full year 2015 (Projected Future Operations section); (FAD: Slide 7 – Strategy & Results; FFO as adjusted: Slides 7 and 9 – Strategy & Results)

• Earnings Releases for the years ended December 31, 2010 to 2014:

NOI and SPP for the years ended December 31, 2010 to 2014 (Net Operating Income and Same Property Performance section); (Slide 6 – Strategy & Results) No reconciliation of projected segment SPP Cash NOI growth (Slide 6 – Strategy & Results) or FAD per share growth as a result of fixed-rate leverage (Slide 8 – Strategy & Results) are included in this Appendix because we are unable to quantify certain amounts that would be required to be included in the comparable GAAP financial measure without unreasonable efforts and we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors.

2

Non

• n-GAAP R

Reconcilia iliatio ions

In thousands

The following table represents Portfolio Income by sector: Three Months Ended March 31, 2015 Sector Cash NOI Unconsol. JV Cash NOI(1) Interest Income Portfolio Income Pro Forma Adjustments(2) Pro Forma Portfolio Income Annualized Pro Forma Portfolio Income(3) Senior housing(4) (5) $ 147,955 $ 14,278 $ 7,394 $ 169,627 $ 11,200 $ 180,827 $ 723,308 Post-acute/skilled(4) (6) 121,960 — 6,680 128,640 (18,700 ) 109,940 439,760 Medical office 58,187 2,680 — 60,867 2,700 63,567 254,268 Life science(7) 63,777 1,252 — 65,029 — 65,029 260,116 Hospitals(6) 21,457 220 — 21,677 — 21,677 86,708 International(4) 2,517 — 19,188 21,705 800 22,505 90,020 $ 415,853 $ 18,430 $ 33,262 $ 467,545 $ (4,000 ) $ 463,545 $ 1,854,180 The following table reconciles net loss to Cash NOI: Three Months Ended March 31, 2015 Net loss $ (237,503 ) Interest income (33,262 ) Investment management fee income (460 ) Interest expense 116,780 Depreciation and amortization 114,522 General and administrative 24,773 Acquisition and pursuit costs 3,390 Impairments 478,464 Gain on sales of real estate, net of income taxes (6,264 ) Other income, net (1,724 ) Income taxes benefit (77 ) Equity income from unconsolidated joint ventures (13,601 ) NOI $ 445,038 Straight-line rents (9,546 ) DFL accretion (20,304 ) Amortization of market lease intangibles, net (378 ) Lease termination fees 1,043 Cash NOI $ 415,853 The following table reconciles unconsolidated joint venture net (loss) income to HCP’s share of Cash NOI by sector(8): Three Months Ended March 31, 2015 CCRC Senior Housing Medical Office(8) Life Science Net (loss) income $ (3,019 ) $ 888 $ (3,436 ) $ 1,756 Depreciation and amortization 18,606 698 7,564 382 General and administrative — 20 838 7 Interest expense and other 899 346 7,205 — NOI $ 16,486 $ 1,952 $ 12,171 $ 2,145 Non-cash adjustment to NOI 10,692 — (484 ) (120 ) Cash NOI $ 27,178 $ 1,952 $ 11,687 $ 2,025 HCP’s pro rata share of Cash NOI $ 13,317 $ 961 $ 2,900 $ 1,252

3

Non

• n-GAAP R

Reconcilia iliatio ions

Dollars in thousands

The following table reconciles net income to Projected SPP Cash NOI (Projected SPP Cash NOI growth)(9): Projected Full Year 2015 Year Ended December 31, 2014 Net income $ 436,000 $ 936,591 Other income and expenses(10) (183,000 ) (136,436 ) Costs and expenses(11) 1,079,536 999,054 Impairments 478,464 — Impairment of investment in unconsolidated joint venture — 35,913 Total discontinued operations — (29,746 ) NOI $ 1,811,000 $ 1,805,376 Non-cash adjustments to NOI (115,000 ) (158,376 ) Cash NOI $ 1,696,000 $ 1,647,000 Projected Non-SPP Cash NOI (172,200 ) (127,000 ) Projected SPP Cash NOI $ 1,523,800 $ 1,520,000 Projected SPP Cash NOI growth(12) 0.25%

been reclassified from post-acute/skilled nursing to international.

column).

• ccupancy levels, development items and the earnings impact of the events referenced in this release. Except as otherwise noted, these estimates do not reflect the

potential impact of future acquisitions, dispositions, other impairments or recoveries, the future bankruptcy or insolvency of our operators, lessees, borrowers or other

• bligors, the effect of any future restructuring of our contractual relationships with such entities, gains or losses on marketable securities, ineffectiveness related to our

cash flow hedges, or existing and future litigation matters including the possibility of larger than expected litigation costs and related developments. There can be no assurance that our actual results will not differ materially from the estimates set forth above. The aforementioned ranges represent management’s best estimates based upon the underlying assumptions as of the date of this presentation. Except as otherwise required by law, management assumes no, and hereby disclaims any,

• bligation to update any of the foregoing projections as a result of new information or new or future developments.

taxes and equity income from unconsolidated joint ventures.

4