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Health Care Property Investors Inc. Reports Operating Results (10-Q)

July 31, 2012 | About:
Magic Diligence

10qk

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Health Care Property Investors Inc. (HCP) filed Quarterly Report for the period ended 2012-06-30.

Hcp, Inc. has a market cap of $20.19 billion; its shares were traded at around $47.14 with a P/E ratio of 17 and P/S ratio of 11.7. The dividend yield of Hcp, Inc. stocks is 4.2%.

Highlight of Business Operations:

The assets and liabilities of the Companys investments related to HCR ManorCare and the related results of operations are included in the condensed consolidated financial statements from the April 7, 2011 acquisition date. The Company recognized revenues and earnings from its investments related to HCR ManorCare of $143 million and $158 million, respectively, for the three months ended June 30, 2012, and $285 million and $313 million, respectively, for the six months ended June 30, 2012. The Company recognized revenues and earnings from its investments related to HCR ManorCare of $130 million and $145 million, respectively, for both the three and six months ended June 30, 2011.

(3) The Companys joint venture interest in HCR ManorCare is accounted for using the equity method and results in an ongoing reduction of DFL income, proportional to HCPs ownership in HCR ManorCare. The Company recorded a reduction of $14.8 million and $29.5 million for the three and six months ended June 30, 2012, respectively, and a reduction of $13.3 million for both the three and six months ended June 30, 2011. Further, the Companys share of earnings from HCR ManorCare (equity income) increases for the corresponding reduction of related lease expense recognized at the HCR ManorCare level.

(2) As of June 30, 2012 and December 31, 2011, Brookdale percentages exclude $685.5 and $682.7 million, respectively, of senior housing assets related to 21 senior housing facilities that Brookdale operates on the Companys behalf under a RIDEA structure. Assuming that these assets were attributable to Brookdale, the percentage of segment and total assets for Brookdale would be 27% and 9% respectively, as of both June 30, 2012 and December 31, 2011. For the three and six months ended June 30, 2012, Brookdale percentages exclude $35.6 million and $70.7 million, respectively, of senior housing revenues related to these facilities. Assuming that these revenues were attributable to Brookdale, the percentage of segment and total revenues for Brookdale would be 39% and 13% respectively, for both the three months and six months ended June 30, 2012.

Under the provisions of RIDEA, a REIT may lease qualified healthcare properties on an arms length basis to a taxable REIT subsidiary if the property is operated on behalf of such subsidiary by a person who qualifies as an eligible independent contractor. The three months ended June 30, 2012 include $35.6 million and $22.7 million in revenues and operating expenses, respectively, and the six months ended June 30, 2012 include $70.7 million and $43.4 million in revenues and operating expenses, respectively, as a result of reflecting the facility-level results for the 21 RIDEA facilities operated by Brookdale beginning September 1, 2011.

During the six months ended June 30, 2012, we sold one property for $7 million, realizing a gain of $2.9 million. There were no sales of properties during the six months ended June 30, 2011.

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