Health Care Property Investors Inc. (HCP) filed Quarterly Report for the period ended 2009-09-30.
Health Care Property Investors Inc. is a real estate investment trust. The company invests in health care related real estate located throughout the United States including long-term care facilities congregate care and assisted living facilities acute care and rehabilitation hospitals medical office buildings physician group practice clinics and psychiatric facilities. Health Care Property Investors Inc. has a market cap of $8.79 billion; its shares were traded at around $29.97 with a P/E ratio of 12.9 and P/S ratio of 8.6. The dividend yield of Health Care Property Investors Inc. stocks is 6.1%. Health Care Property Investors Inc. had an annual average earning growth of 3.1% over the past 10 years. GuruFocus rated Health Care Property Investors Inc. the business predictability rank of 4-star.
Highlight of Business Operations:
During the nine months ended September 30, 2009, we purchased the remaining interests in three senior housing joint ventures for $9 million, which included $14 million of real estate encumbered by $5 million of mortgage debt, and funded $86 million for construction and other capital projects primarily in our life science segment.
On August 3, 2009, we purchased a $720 million participation in first mortgage debt of HCR ManorCare, at a discount of $130 million, for approximately $590 million. The $720 million participation bears interest at the London Interbank Offer Rate (“LIBOR”) plus 1.25% and represents 45% of the $1.6 billion most senior tranche of HCR ManorCare’s mortgage debt incurred as part of the financing for The Carlyle Group’s acquisition of Manor Care, Inc. in December 2007. The mortgage debt matures in January 2012, with a one-year extension available at the borrower’s option subject to certain performance conditions, and was secured by a first lien on 331 facilities located in 30 states at closing. We obtained favorable financing to fund 72% of the purchase price, resulting in a net cash payment by HCP of $166 million.
For the three months ended September 30, 2009, interest and other income, net decreased $22.3 million to $40.0 million. This decrease was primarily related to: (i) $28.6 million of income in 2008 related to the settlement of litigation with Tenet Healthcare Corporation (“Tenet”), (ii) a $5.1 million decrease in interest earned on variable-rate loans related to a decline in LIBOR and (iii) a decrease in interest income earned from cash and cash equivalents. The decrease was partially offset by: (i) gain on sales of marketable debt securities of $6.1 million during the three months ended September 30, 2009 and (ii) additional interest income of $7.7 million from the $720 million participation in first mortgage debt of HCR ManorCare purchased in August 2009.
Interest expense decreased $8.8 million to $74 million for the three months ended September 30, 2009. The decrease was primarily due to (i) $5.5 million from the repayment of the outstanding balance under our bridge loan and revolving line of credit facility, (ii) a $2.0 million decrease resulting from the repayment of $300 million senior unsecured floating rate notes in September 2008 and (iii) $1.1 million from higher capitalized interest related to assets placed in re-development. This decrease in interest expense was partially offset by a $1.0 million increase in interest expense from the net impact of mortgage debt placed on senior housing assets in 2008 and the repayment and prepayment of mortgage debt.
The decrease of $28.7 million in income from discontinued operations to $2.3 million for the three months ended September 30, 2009 compared to $31.0 million for the comparable period in the prior year is primarily due to a decrease in gains on real estate dispositions of $25.3 million. During the three months ended September 30, 2009 and 2008, we sold two properties for $5.8 million and three properties for $116 million, respectively. Discontinued operations for the three months ended September 30, 2009 included three properties compared to 19 properties for the three months ended September 30, 2008.
For the three months ended September 30, 2009, noncontrolling interests’ and participating securities’ share in earnings decreased $2.8 million to $3.9 million. This decrease was primarily due to (i) a $1.0 million decrease related to the conversions of 3.3 million of our noncontrolling interest DownREIT units into 4.2 million shares of our common stock from January 1, 2008 to September 30, 2009 and (ii) a $1.6 million decrease related to our purchase of other non-controlling interests.
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