LONG BEACH, Calif.--(Business Wire)--
HCP, Inc. (NYSE:HCP):
HIGHLIGHTS
-- Tenet hospital portfolio restructured
-- Raised $1.3 billion through asset dispositions and financing
transactions
-- 2008 FFO guidance raised to $2.27 - $2.35 per diluted common
share and EPS guidance changed to $2.01 - $2.29 per diluted
common share
HCP (the "Company" or "we") (NYSE:HCP) announced results for the
quarter ended June 30, 2008. Funds from operations ("FFO") applicable
to common shares was $119.7 million, or $0.51 per diluted share of
common stock, for the quarter ended June 30, 2008, compared to FFO
applicable to common shares of $120.4 million, or $0.58 per diluted
share of common stock, in the year ago period.
FFO applicable to common shares for the quarter ended June 30,
2008 includes the impact of i) impairments of $0.04 per diluted share
of common stock; ii) a write down in the carrying value of marketable
securities of $0.01 per diluted share of common stock; and iii) an
ineffectiveness charge of $0.01 per diluted share of common stock
relating to the settlement of two forward-starting swaps. FFO
applicable to common shares for the quarter ended June 30, 2007
includes the impact of i) gains from the sale of marketable securities
of $0.02 per diluted share of common stock; and ii) straight-line
rental income of $0.03 per diluted share of common stock resulting
from our change in estimate related to the collectibility of
straight-line rental income from Emeritus Corporation. FFO applicable
to common shares for the quarters ended June 30, 2008 and 2007,
includes the impact of merger-related charges of less than $0.01 per
diluted share of common stock in each period. FFO is a supplemental
non-GAAP financial measure that the Company believes is helpful in
evaluating the operating performance of real estate investment trusts.
Net income applicable to common shares for the quarter ended June
30, 2008 was $227.0 million, or $0.96 per diluted share of common
stock, compared to net income applicable to common shares of $66.0
million, or $0.32 per diluted share of common stock, in the year ago
period. Net income applicable to common shares for the quarter ended
June 30, 2008 includes gain on sales of real estate of $190.3 million,
compared to gains on sales of real estate and real estate interest of
$12.2 million in the year ago period.
INVESTMENT TRANSACTIONS
During the quarter ended June 30, 2008, we sold assets valued at
$496 million, which included the sale of 40 properties for $483
million and other investments for $13 million. These sales were made
from the following segments: (i) 65% hospital, (ii) 17% medical
office, (iii) 14% skilled nursing, and (iv) 4% senior housing. During
the quarter ended June 30, 2008, we funded construction and other
capital projects aggregating $43 million, primarily in our life
science and medical office segments.
Asset sales for the quarter ended June 30, 2008 include the sale
of $11 million of marketable debt securities, which resulted in a gain
of approximately $0.7 million, or less than $0.01 per diluted share of
common stock, compared to the sale of $49 million of marketable debt
securities during the quarter ended June 30, 2007, which resulted in a
gain of approximately $3.9 million, or $0.02 per diluted share of
common stock.
FINANCING TRANSACTIONS
In April 2008, in connection with HCP's addition to the S&P 500
Index, we issued 17 million shares of our common stock. We received
approximately $560 million of net proceeds, which were used to repay a
portion of our outstanding indebtedness under our revolving line of
credit facility.
In May 2008, we placed seven-year mortgage financing on 21 of our
senior housing assets. The assets are cross-collateralized and the
debt has a fixed interest rate of 5.83%. We received approximately
$254 million of net proceeds, which were used to repay outstanding
indebtedness under our revolving line of credit facility and bridge
loan.
During the quarter ended June 30, 2008, we settled two
forward-starting swaps with an aggregate notional amount of $900
million and recognized an ineffectiveness charge of $2.4 million, or
$0.01 per diluted share of common stock, in interest and other income,
net.
OTHER EVENTS
On June 30, 2008, HCP and Tenet Healthcare Corporation ("Tenet")
executed a definitive agreement relating to restructuring our hospital
portfolio leased to Tenet and settling various disputes. The agreement
provides for, among other things, the sale of our hospital in Tarzana,
California, the non-renewal by Tenet of leases with respect to our
hospitals in Irvine, California, and Los Gatos, California, and the
extension of the terms of three other hospitals leased by us to Tenet.
The restructure and settlement are expected to be effective by
September 30, 2008 and are contingent on the closing of the sale by
Tenet of the hospital in Tarzana, California, which closing is subject
to customary conditions and regulatory approvals. On the effective
date of the settlement, we expect to recognize income ranging from $41
million to $46 million, of which $23 million to $28 million is
expected to be included in FFO.
On July 30, 2008, we received and recognized lease termination
fees of $18 million from a tenant in connection with the early
termination of three leases representing 149,000 square feet of our
life science segment. On July 30, 2008, we recognized an impairment of
$4 million related to intangible assets associated with these leases,
which resulted in net FFO of $14 million.
DIVIDENDS
On July 31, 2008, we announced that our Board of Directors
declared a quarterly common stock cash dividend of $0.455 per share.
The dividend will be paid on August 21, 2008 to stockholders of record
as of the close of business on August 11, 2008.
FUTURE OPERATIONS
For the full year 2008, we presently expect net income applicable
to common shares to range between $2.01 and $2.29 per diluted common
share, FFO applicable to common shares to range between $2.27 and
$2.35 per diluted common share, and FFO applicable to common shares,
before giving effect to merger-related charges and impairments, to
range between $2.35 and $2.43 per diluted common share. Our estimate
for the full year 2008 net income applicable to common shares includes
the net impact of the lease termination fees and related impairments
of $0.06 per diluted common share and the impact of the Tenet
restructuring and settlement ranging between $0.17 and $0.19 per
diluted common share. Our estimate for the full year 2008 FFO
applicable to common shares, before giving effect to merger-related
charges and impairments, includes the impact of lease termination fees
of $0.07 per diluted common share and the impact of the Tenet
restructuring and settlement ranging between $0.09 and $0.11 per
diluted common share.
COMPANY INFORMATION
HCP has scheduled a conference call and webcast for Tuesday,
August 5, 2008 at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) in
order to present the Company's performance and operating results for
the quarter ended June 30, 2008. The conference call is accessible by
dialing (800) 329-9097 (U.S.) or (617) 614-4929 (International). The
participant pass code is 62137358. The webcast is accessible via the
Company's website at www.hcpi.com. The link can be found on the "Event
Calendar" page, which is under the "Investor Relations" tab. A webcast
replay of the conference call will be available after 11:00 a.m.
Pacific Time (2:00 p.m. Eastern Time) on August 5, 2008 through August
19, 2008 on the Company's website. The Company's supplemental
information package for the current period will also be available on
the Company's website in the "Presentations" section of the "Investor
Relations" tab.
ABOUT HCP
HCP, Inc., an S&P 500 company, is a Real Estate Investment Trust
(REIT) that, together with its consolidated subsidiaries, invests
primarily in real estate serving the healthcare industry in the United
States. As of June 30, 2008, the Company's portfolio of properties,
excluding assets held for sale but including mortgage loans and
properties owned by unconsolidated joint ventures, totaled 706
properties among the following segments: 267 senior housing, 107 life
science, 256 medical office, 25 hospital and 51 skilled nursing. For
more information, visit the Company's website at www.hcpi.com.
FORWARD-LOOKING STATEMENTS
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: The statements contained in this release which are
not historical facts are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements include among other
things the Company's estimates of: expected impact of the Tenet
restructuring and settlement, net income applicable to common shares
on a diluted basis, FFO applicable to common shares on a diluted
basis, FFO applicable to common shares on a diluted basis before
giving effect to merger-related charges and impairment, gain on sales
of real estate, real estate depreciation and amortization, joint
venture adjustments, merger-related charges and impairments for the
full year of 2008. These statements are made as of the date hereof and
are subject to known and unknown risks, uncertainties, assumptions and
other factors--many of which are out of the Company's control and
difficult to forecast--that could cause actual results to differ
materially from those set forth in or implied by forward-looking
statements. These risks and uncertainties include but are not limited
to: the Company's ability to access external sources of capital when
desired and on reasonable terms; the Company's ability to manage its
indebtedness levels; the Company's ability to maintain its credit
ratings; the Company's ability to achieve its expected benefits from
acquisitions, including integrating and preserving the goodwill of
those companies; competition for lessees and mortgagors (including new
leases and mortgages and the renewal or rollover of existing leases);
continuing reimbursement uncertainty in the skilled nursing segment;
competition in the senior housing segment specifically and in the
healthcare industry in general; the Company's ability to acquire, sell
or lease facilities and the timing of acquisitions, sales and
leasings; the Company's ability to realize the benefits of its
mezzanine investments; changes in the financial condition of the
Company's lessees and obligors; changes in healthcare laws and
regulations and other changes in the healthcare industry which affect
the operations of the Company's lessees or obligors; changes in the
Company's management; litigation claims and developments; costs of
compliance with building regulations; changes in tax laws and
regulations; changes in rules governing financial reporting, including
new accounting pronouncements; changes in economic conditions,
including changes in interest rates and the availability and cost of
capital, which affect opportunities for profitable investments; and
other risks described from time to time in the Company's Securities
and Exchange Commission filings. The Company assumes no, and hereby
disclaims any, obligation to update any of the foregoing or any other
forward-looking statements as a result of new information or new or
future developments, except as otherwise required by law.
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HCP, Inc.
Summary of Information
In thousands, except per share data
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
------------------- -------------------
2008 2007 2008 2007
-------- -------- -------- --------
Revenues $251,372 $206,846 $497,858 $414,913
Net income applicable to
common shares $227,012 $ 66,001 $272,141 $206,006
Basic earnings per common
share $ 0.97 $ 0.32 $ 1.20 $ 1.01
-------- -------- -------- --------
Diluted earnings per common
share $ 0.96 $ 0.32 $ 1.20 $ 1.00
-------- -------- -------- --------
Weighted average shares used
to calculate diluted
earnings per common share 236,467 207,024 227,065 206,470
-------- -------- -------- --------
Funds from operations
applicable to common shares
(1) $119,687 $120,405 $241,720 $222,843
-------- -------- -------- --------
Diluted funds from
operations applicable to
common shares (1) $122,083 $125,257 $248,883 $230,324
-------- -------- -------- --------
Basic funds from operations
per common share (1) $ 0.51 $ 0.59 $ 1.07 $ 1.09
-------- -------- -------- --------
Diluted funds from
operations per common share
(1) $ 0.51 $ 0.58 $ 1.06 $ 1.07
-------- -------- -------- --------
Weighted average shares used
to calculate diluted funds
from operations per common
share (1) 241,682 217,130 234,433 214,468
-------- -------- -------- --------
Impact of merger-related
charges and impairments:
Merger-related charges
(2) $ 1,141 $ 1,677 $ 2,330 $ 8,979
Impairments 9,715 - 9,715 -
-------- -------- -------- --------
$ 10,856 $ 1,677 $ 12,045 $ 8,979
-------- -------- -------- --------
Per common share impact of
merger-related charges and
impairments on diluted
funds from operations $ 0.04 $ - $ 0.05 $ 0.05
-------- -------- -------- --------
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___________________________________________________
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(1) The Company believes that funds from operations applicable to
common shares, diluted funds from operations applicable to common
shares and basic and diluted funds from operations per common
share are important supplemental measures of operating
performance for a real estate investment trust. Because the
historical cost accounting convention used for real estate assets
requires straight-line depreciation (except on land), such
accounting presentation implies that the value of real estate
assets diminishes predictably over time. Since real estate values
instead have historically risen and fallen with market
conditions, presentations of operating results for a real estate
investment trust that uses historical cost accounting for
depreciation could be less informative. The term funds from
operations ("FFO") was designed by the real estate investment
trust industry to address this issue.
FFO is defined as net income applicable to common shares (computed
in accordance with U.S. generally accepted accounting
principles), excluding gains or losses from real estate
dispositions, plus real estate depreciation and amortization,
with adjustments for joint ventures. Adjustments for joint
ventures are calculated to reflect FFO on the same basis. FFO
does not represent cash generated from operating activities in
accordance with U.S. generally accepted accounting principles, is
not necessarily indicative of cash available to fund cash needs
and should not be considered an alternative to net income. The
Company's computation of FFO may not be comparable to FFO
reported by other real estate investment trusts that do not
define the term in accordance with the current National
Association of Real Estate Investment Trusts' ("NAREIT")
definition or that have a different interpretation of the current
NAREIT definition from the Company. A reconciliation of net
income applicable to common shares to FFO applicable to common
shares is provided herein.
(2) Merger-related charges in the periods ended June 30, 2008 include
the amortization of fees associated with our acquisition
financing for Slough Estates USA Inc. ("SEUSA"), as well as other
SEUSA integration costs. Merger-related charges in the periods
ended June 30, 2007 include the amortization and write-off of
fees associated with our acquisition financing for CNL Retirement
Properties, Inc. ("CRP"), severance and retention-related
compensation, as well as other CRP integration costs.
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HCP, Inc.
Consolidated Statements of Income
In thousands, except per share data
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
------------------- ---------------------
2008 2007 2008 2007
-------- -------- --------- ---------
Revenues:
Rental and related
revenues $215,616 $175,735 $ 424,210 $ 348,889
Tenant recoveries 20,170 11,676 41,621 25,360
Income from direct
financing leases 14,129 15,215 29,103 30,205
Investment management
fee income 1,457 4,220 2,924 10,459
-------- -------- --------- ---------
Total revenues 251,372 206,846 497,858 414,913
-------- -------- --------- ---------
Costs and expenses:
Depreciation and
amortization 78,308 56,666 156,369 113,811
Operating 47,580 37,212 97,000 77,668
General and
administrative 18,840 17,290 39,371 37,395
Impairments 9,715 - 9,715 -
-------- -------- --------- ---------
Total costs and
expenses 154,443 111,168 302,455 228,874
-------- -------- --------- ---------
Other income (expense):
Gain on sale of real
estate interest - 10,141 - 10,141
Interest and other
income, net 30,739 18,722 66,066 33,186
Interest expense (85,509) (72,973) (181,835) (150,756)
-------- -------- --------- ---------
Total other income
(expense) (54,770) (44,110) (115,769) (107,429)
-------- -------- --------- ---------
Income before income
taxes, equity income
from unconsolidated
joint ventures and
minority interests'
share in earnings 42,159 51,568 79,634 78,610
Income taxes (1,274) 395 (3,519) 152
Equity income from
unconsolidated joint
ventures 1,221 1,302 2,509 2,516
Minority interests'
share in earnings (5,536) (6,739) (11,252) (11,974)
-------- -------- --------- ---------
Income from continuing
operations 36,570 46,526 67,372 69,304
-------- -------- --------- ---------
Discontinued operations:
Income before gain on
sales of real estate,
net of income taxes 5,469 22,687 14,941 41,152
Gain on sales of real
estate 190,256 2,071 200,394 106,116
-------- -------- --------- ---------
Total discontinued
operations 195,725 24,758 215,335 147,268
-------- -------- --------- ---------
Net income 232,295 71,284 282,707 216,572
Preferred stock
dividends (5,283) (5,283) (10,566) (10,566)
-------- -------- --------- ---------
Net income applicable to
common shares $227,012 $ 66,001 $ 272,141 $ 206,006
-------- -------- --------- ---------
Basic earnings per common
share:
Continuing operations $ 0.13 $ 0.20 $ 0.25 $ 0.29
Discontinued
operations 0.84 0.12 0.95 0.72
-------- -------- --------- ---------
Net income applicable
to common shares $ 0.97 $ 0.32 $ 1.20 $ 1.01
-------- -------- --------- ---------
Diluted earnings per
common share:
Continuing operations $ 0.13 $ 0.20 $ 0.25 $ 0.28
Discontinued
operations 0.83 0.12 0.95 0.72
-------- -------- --------- ---------
Net income applicable
to common shares $ 0.96 $ 0.32 $ 1.20 $ 1.00
-------- -------- --------- ---------
Weighted average shares
used to calculate
earnings per common
share:
Basic 235,117 205,755 225,945 204,882
-------- -------- --------- ---------
Diluted 236,467 207,024 227,065 206,470
-------- -------- --------- ---------
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HCP, Inc.
Funds From Operations Information
In thousands, except per share data
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- ---------------------
2008 2007 2008 2007
--------- -------- --------- ---------
Net income applicable to
common shares $ 227,012 $ 66,001 $ 272,141 $ 206,006
Depreciation and
amortization of real
estate, in-place lease
and other intangibles:
Continuing operations 78,308 56,666 156,369 113,811
Discontinued
operations 1,380 6,537 5,677 13,765
Gains on sales of real
estate and real estate
interest (190,256) (12,212) (200,394) (116,257)
Equity income from
unconsolidated joint
ventures (1,221) (1,302) (2,509) (2,516)
FFO from unconsolidated
joint ventures 5,108 5,518 11,728 9,632
Minority interests'
share in earnings 5,536 6,739 11,252 11,974
Minority interests'
share in FFO (6,180) (7,542) (12,544) (13,572)
--------- -------- --------- ---------
Funds from operations
applicable to common
shares (1) $ 119,687 $120,405 $ 241,720 $ 222,843
--------- -------- --------- ---------
Distributions on
convertible units $ 2,396 $ 4,852 $ 7,163 $ 7,481
--------- -------- --------- ---------
Diluted funds from
operations applicable
to common shares (1) $ 122,083 $125,257 $ 248,883 $ 230,324
--------- -------- --------- ---------
Basic funds from
operations per common
share (1) $ 0.51 $ 0.59 $ 1.07 $ 1.09
--------- -------- --------- ---------
Diluted funds from
operations per common
share (1) $ 0.51 $ 0.58 $ 1.06 $ 1.07
--------- -------- --------- ---------
Weighted average shares
used to calculate
diluted funds from
operations per common
share 241,682 217,130 234,433 214,468
--------- -------- --------- ---------
Impact of merger-related
charges and
impairments:
Merger-related
charges (2) $ 1,141 $ 1,677 $ 2,330 $ 8,979
Impairments 9,715 _ 9,715 _
--------- -------- --------- ----------
$ 10,856 $ 1,677 $ 12,045 $ 8,979
--------- -------- --------- ---------
Per common share impact
of merger-related
charges and impairments
on diluted funds from
operations $ 0.04 $ - $ 0.05 $ 0.05
--------- -------- --------- ---------
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(1) The Company believes that funds from operations applicable to
common shares, diluted funds from operations applicable to common
shares and basic and diluted funds from operations per common
share are important supplemental measures of operating
performance for a real estate investment trust. Because the
historical cost accounting convention used for real estate assets
requires straight-line depreciation (except on land), such
accounting presentation implies that the value of real estate
assets diminishes predictably over time. Since real estate values
instead have historically risen and fallen with market
conditions, presentations of operating results for a real estate
investment trust that uses historical cost accounting for
depreciation could be less informative. The term funds from
operations was designed by the real estate investment trust
industry to address this issue.
FFO is defined as net income applicable to common shares (computed
in accordance with U.S. generally accepted accounting
principles), excluding gains or losses from real estate
dispositions, plus real estate depreciation and amortization,
with adjustments for joint ventures. Adjustments for joint
ventures are calculated to reflect FFO on the same basis. FFO
does not represent cash generated from operating activities in
accordance with U.S. generally accepted accounting principles, is
not necessarily indicative of cash available to fund cash needs
and should not be considered an alternative to net income. The
Company's computation of FFO may not be comparable to FFO
reported by other real estate investment trusts that do not
define the term in accordance with the current NAREIT definition
or that have a different interpretation of the current NAREIT
definition from the Company.
(2) Merger-related charges in the periods ended June 30, 2008 include
the amortization of fees associated with our acquisition
financing for Slough Estates USA Inc. ("SEUSA"), as well as other
SEUSA integration costs. Merger-related charges in the periods
ended June 30, 2007 include the amortization and write-off of
fees associated with our acquisition financing for CNL Retirement
Properties, Inc. ("CRP"), severance and retention-related
compensation, as well as other CRP integration costs.
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HCP, Inc.
Consolidated Balance Sheets
In thousands, except share and per share data
June 30, December 31,
2008 2007
----------- ------------
Assets (unaudited)
Real estate:
Buildings and improvements $ 7,626,209 $ 7,526,015
Development costs and construction in
progress 308,169 372,527
Land 1,560,756 1,571,427
Less accumulated depreciation and
amortization (725,751) (623,234)
----------- ------------
Net real estate 8,769,383 8,846,735
----------- ------------
Net investment in direct financing leases 645,079 640,052
Loans receivable, net 1,072,811 1,065,485
Investments in and advances to
unconsolidated joint ventures 278,479 248,894
Accounts receivable, net of allowance of
$17,316 and $23,109, respectively 31,920 44,892
Cash and cash equivalents 216,789 96,269
Restricted cash 32,387 36,427
Intangible assets, net 582,088 623,271
Real estate held for sale, net 90,668 403,614
Other assets, net 504,126 516,133
----------- ------------
Total assets $12,223,730 $12,521,772
----------- ------------
Liabilities and Stockholders' Equity
Bank line of credit $ - $ 951,700
Bridge loan 1,150,000 1,350,000
Senior unsecured notes 3,821,786 3,819,950
Mortgage debt 1,516,380 1,278,280
Mortgage debt on assets held for sale - 2,481
Other debt 105,264 108,496
Intangible liabilities, net 260,435 278,553
Accounts payable and accrued liabilities 223,389 233,342
Deferred revenue 65,786 55,990
----------- ------------
Total liabilities 7,143,040 8,078,792
----------- ------------
Minority interests:
Joint venture partners 31,557 33,436
Non-managing member unitholders 241,479 305,835
----------- ------------
Total minority interests 273,036 339,271
----------- ------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $1.00 par value:
50,000,000 shares authorized; 11,820,000
shares issued and outstanding,
liquidation preference of $25.00 per
share 285,173 285,173
Common stock, $1.00 par value:
750,000,000 shares authorized
236,512,480 and 216,818,780 shares
issued and outstanding, respectively 236,512 216,819
Additional paid-in capital 4,349,399 3,724,739
Cumulative dividends in excess of
earnings (55,232) (120,920)
Accumulated other comprehensive loss (8,198) (2,102)
----------- ------------
Total stockholders' equity 4,807,654 4,103,709
----------- ------------
Total liabilities and stockholders'
equity $12,223,730 $12,521,772
----------- ------------
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HCP, Inc.
Projected Funds From Operations (1)
(Unaudited)
PROJECTED FUTURE OPERATIONS (Full Year 2008): 2008
------------------
Low High
------- -------
Diluted earnings per common share $ 2.01 $ 2.29
Gain on sales of real estate and real estate
interest (1.09) (1.29)
Real estate depreciation and amortization 1.28 1.28
Joint venture adjustments 0.07 0.07
------- -------
Diluted funds from operations per common share (2) 2.27 2.35
Merger-related charges (3) 0.02 0.02
Impairments 0.06 0.06
------- -------
Diluted funds from operations per common share
before merger-related charges and impairments $ 2.35 $ 2.43
------- -------
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(1) Except as otherwise noted above, the foregoing projections reflect
management's view of current and future market conditions,
including assumptions with respect to rental rates, occupancy
levels, development activities, property dispositions and the
earnings impact of the events referenced in this release. These
estimates include the expected impact resulting from lease
termination fees and related impairments and the Tenet
restructuring and settlement, as discussed herein. Expect as
otherwise noted, these estimates do not reflect the potential
impact of future property acquisitions, impairments, realized
gains or losses on marketable securities, ineffectiveness related
to our cash flow hedges, offerings of debt or equity securities
or existing and future litigation matters. By definition, FFO
does not include real estate-related depreciation and
amortization or gains and losses associated with real estate
disposition activities, but does include impairments. There can
be no assurance that the Company's actual results will not differ
materially from the estimates set forth above. The aforementioned
ranges represent management's best estimate of results based upon
the underlying assumptions as of the date of this press release.
(2) The Company believes that diluted funds from operations per common
share is an important supplemental measure of operating
performance for a real estate investment trust. Because the
historical cost accounting convention used for real estate assets
requires straight-line depreciation (except on land), such
accounting presentation implies that the value of real estate
assets diminishes predictably over time. Since real estate values
instead have historically risen and fallen with market
conditions, presentations of operating results for a real estate
investment trust that uses historical cost accounting for
depreciation could be less informative. The term FFO was designed
by the real estate investment trust industry to address this
issue.
FFO is defined as net income (computed in accordance with U.S.
generally accepted accounting principles), excluding gains or
losses from real estate dispositions, plus real estate
depreciation and amortization, with adjustments for joint
ventures. Adjustments for joint ventures are calculated to
reflect FFO on the same basis. FFO does not represent cash
generated from operating activities in accordance with U.S.
generally accepted accounting principles, is not necessarily
indicative of cash available to fund cash needs and should not be
considered an alternative to net income. The Company's
computation of FFO may not be comparable to FFO reported by other
real estate investment trusts that do not define the term in
accordance with the current NAREIT definition or that have a
different interpretation of the current NAREIT definition from
the Company.
(3) Merger-related charges primarily include amortization of fees
associated with the Company's bridge loan and integration costs.
*T
HCP, Inc.
Mark A. Wallace
Executive Vice President -
Chief Financial Officer and Treasurer
(562) 733-5100
Copyright Business Wire 2008
