x

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended March 31, 2003.

o

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______________ to _______________

HEALTH CARE PROPERTY INVESTORS, INC.

(Exact name of registrant as specified in its charter)

Maryland

33-0091377

(State or other jurisdiction of incorporation of organization)

(I.R.S. Employer Identification No.)

4675 MacArthur Court, Suite 900

Newport Beach, California 92660

(Address of principal executive offices)

(949) 221-0600

(Registrant’s telephone number, including area code)

Yes   x

No   o

Yes   x

No   o

PART I.  FINANCIAL INFORMATION

Item 1.

Financial Statements:

Condensed Consolidated Balance Sheets
March 31, 2003 and December 31, 2002

2

Condensed Consolidated Statements of Income
Three Months Ended March 31, 2003 and 2002

3

Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 2003 and 2002

4

Notes to Condensed Consolidated Financial Statements

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

14

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

27

Item 4.

Controls and Procedures

28

PART II.  OTHER INFORMATION

Item 6.

Exhibits and Reports on Form 8-K

30

Signatures

35

Certifications

36

March 31, 2003

December 31, 2002

(Unaudited)

Assets

Real Estate Investments:

Buildings and Improvements

$

2,519,266

$

2,514,876

Accumulated Depreciation

(439,558

)

(424,788

)

2,079,708

2,090,088

Construction in Progress

11,624

6,873

Land

275,034

274,450

2,366,366

2,371,411

Loans Receivable

312,660

300,165

Investments in and Advances to Joint Ventures

32,217

32,664

Accounts Receivable, Net of Allowance for Doubtful Accounts of $4,474 and $2,918 as of March 31, 2003 and December 31, 2002, respectively.

19,319

22,382

Other Assets

10,955

13,300

Cash and Cash Equivalents

13,440

8,495

Total Assets

$

2,754,957

$

2,748,417

Liabilities and Stockholders’ Equity

Bank Notes Payable

$

102,200

$

267,800

Senior Notes Payable

1,050,840

888,126

Mortgage Notes Payable

176,517

177,922

Accounts Payable, Accrued Expenses and Deferred Income

75,393

62,145

Minority Interests in Joint Ventures

12,826

13,017

Minority Interests in Convertible into Common Stock

54,540

58,518

Stockholders’ Equity:

Preferred Stock

274,487

274,487

Common Stock

60,288

59,470

Additional Paid-In Capital

1,239,299

1,211,551

Other Equity

(10,433

)

(11,705

)

Cumulative Net Income

1,048,128

1,020,464

Cumulative Dividends

(1,329,128

)

(1,273,378

)

Total Stockholders’ Equity

1,282,641

1,280,889

Total Liabilities and Stockholders’ Equity

$

2,754,957

$

2,748,417

Three Months
Ended March 31,

2003

2002

Revenue

Rental Income, Triple Net Properties

$

58,385

$

52,774

Rental Income, Managed Properties

23,529

21,421

Interest and Other Income

10,142

5,509

92,056

79,704

Expense

Interest Expense

22,000

17,469

Real Estate Depreciation

19,549

17,552

Managed Properties Operating Expenses

9,003

7,288

General and Administrative Expenses

5,242

4,145

55,794

46,454

Income From Operations

36,262

33,250

Minority Interests

(1,995

)

(1,999

)

Income Before Discontinued Operations

34,267

31,251

Discontinued Operations (including net loss on real estate dispositions of $6,263 and $1,319 for the quarter ended March 31, 2003 and 2002, respectively)

(6,603

)

(842

)

Net Income

27,664

30,409

Dividends to Preferred Stockholders

(6,225

)

(6,225

)

Net Income Applicable to Common Shares

$

21,439

$

24,184

Basic Earnings Per Common Share

$

0.36

$

0.43

Diluted Earnings Per Common Share

$

0.36

$

0.42

Weighted Average Shares Outstanding – Basic

59,815

56,737

Weighted Average Shares Outstanding – Diluted

59,986

57,025

Three Months
Ended March 31,

2003

2002

Cash Flows From Operating Activities:

Net Income

$

27,664

$

30,409

Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:

Real Estate Depreciation

19,549

17,552

Real Estate Depreciation in Discontinued Operations

214

573

Amortization of Deferred Compensation and Debt Costs

1,508

1,312

Joint Venture Adjustments

241

283

Loss on sale of Real Estate Properties

6,263

1,319

Changes in:

Accounts Receivable

3,063

(243

)

Operating Assets

2,466

833

Accounts Payable, Accrued Expenses and Deferred Income

11,189

(285

)

Net Cash Provided By Operating Activities

72,157

51,753

Cash Flows From Investing Activities:

Acquisition of Real Estate

(29,220

)

(125,572

)

Proceeds from the Sale of Real Estate Properties, Net

6,043

8,630

Investments in Joint Ventures and Loans Receivable

(10,206

)

7,855

Net Cash Used In Investing Activities

(33,383

)

(109,087

)

Cash Flows From Financing Activities:

Net Change in Bank Notes Payable

(165,600

)

201,300

Repayment of Senior Notes Payable

(35,000

)

(111,000

)

Issuance of Senior Notes

197,536

—  

Cash Proceeds from Issuing Common Stock

25,028

19,420

Final and Periodic Payments on Mortgages

(1,405

)

(3,340

)

Dividends Paid

(55,750

)

(51,531

)

Other Financing Activities

1,362

694

Net Cash Provided By (Used In) Financing Activities

(33,829

)

55,543

Net Increase (Decrease) In Cash And Cash Equivalents

4,945

(1,791

)

Cash And Cash Equivalents, Beginning Of Period

8,495

8,408

Cash And Cash Equivalents, End Of Period

$

13,440

$

6,617

Capitalized Interest

161

274

(1)

SIGNIFICANT ACCOUNTING POLICIES