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

April 27, 2010 | About:
10qk

10qk

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Health Care Property Investors Inc. (HCP) filed Quarterly Report for the period ended 2010-03-31.

Health Care Property Investors Inc. has a market cap of $9.89 billion; its shares were traded at around $33.66 with a P/E ratio of 19.5 and P/S ratio of 8.5. The dividend yield of Health Care Property Investors Inc. stocks is 5.5%.HCP is in the portfolios of Paul Tudor Jones of The Tudor Group, Manning & Napier Advisors, Inc, Stanley Druckenmiller of Duquesne Capital Management, LLC, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC.

Highlight of Business Operations:

For the three months ended March 31, 2010, interest income increased $8.5 million to $35.3 million. This increase was primarily related to additional interest income of $12 million earned from the $720 million participation in the first mortgage debt of HCR ManorCare purchased in August 2009, which was partially offset by a $3 million decrease of interest earned from marketable debt securities that were sold during 2009. For a more detailed description of our participation in the first mortgage debt of HCR ManorCare (see Note 6 to the Condensed Consolidated Financial Statements). Our exposure to income fluctuations related to our variable rate loans is partially mitigated by our variable rate indebtedness. For a more detailed discussion of our interest rate risk, see Quantitative and Qualitative Disclosures About Market Risk in Item 3.

Depreciation and amortization expense decreased $2.1 million to $78.1 million for the three months ended March 31, 2010. The decrease in depreciation and amortization expense is primarily related to assets which became fully depreciated during 2009 and 2010, which resulted in a $3.8 million decrease in depreciation and amortization expense. This decrease was partially offset by a $1.7 million increase in depreciation expense due to three life science development assets placed in service on January 1, 2010.

General and administrative expenses increased $6.4 million to $24.9 million for the three months ended March 31, 2010. The increase in general and administrative expenses was primarily due to an increase in legal fees associated with litigation matters, which increased by $6.5 million to $9.4 million for the three months ended March 31, 2010. See the information set forth under the heading Legal Proceedings of Note 11 to the Condensed Consolidated Financial Statements.

For the three months ended March 31, 2010, other income, net increased $2.8 million to $0.4 million. The increase in other income net is primarily due to: (i) a $0.6 million net increase in gains on marketable securities, (ii) a 2009 $1.4 million impairment related to goodwill, and (iii) a 2009 $0.8 million impairment related to investments in unconsolidated joint ventures.

Interest expense decreased $0.7 million to $76.0 million for the three months ended March 31, 2010. The decrease was primarily due to: (i) $1.3 million from the repayment of the outstanding balance under our bridge loan in May 2009 and (ii) a $1.0 million decrease in interest expense resulting from the benefit of an interest-rate swap (pay float and receive fixed) that was placed on $250 million of our unsecured senior notes in June 2009. These decreases in interest expense were partially offset by a $1.3 million charge related to unamortized issuance costs which were written-off as a result of the early repayment of our term loan in March 2010.

The decrease of $2.8 million in income from discontinued operations to $79,000 for the three months ended March 31, 2010 is primarily due to a decrease in income from discontinued operations of $1.4 million and gains on real estate dispositions of $1.4 million. Discontinued operations for the three months ended March 31, 2010 included one property compared to 15 properties for the three months ended March 31, 2009. During the three months ended March 31, 2009, we sold seven properties for $6.0 million. We did not sell any properties during the three months ended March 31, 2010.

Read the The complete Report

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