HCR ManorCare Acquisition (Tables) (HCR ManorCare)

12 Months Ended

Dec. 31, 2012

HCR ManorCare

Acquisition

Schedule of total purchase price consideration paid

The HCR ManorCare Acquisition total purchase price is as follows (in thousands):

	April 7, 2011
Payment of aggregate cash consideration, net of cash acquired	$	3,801,624
HCP's loan investments in HCR ManorCare's debt settled at fair value(1)		1,990,406
Assumed HCR ManorCare accrued liabilities at fair value(2)		224,932
Total purchase consideration	$	6,016,962
Legal, accounting and other fees and costs(3)	$	26,839

(1)

The Company recognized a gain of approximately $23 million, included in interest income, which represents the fair value of the Company's existing mezzanine and mortgage loan investments in HCR ManorCare in excess of its carrying value on the acquisition date.

(2)

In August 2011, the Company paid or refunded these amounts to certain taxing authorities or the seller. These August 2011 cash payments are included in the "cash used in the HCR ManorCare Acquisition, net of cash acquired" that is presented in the 2011 consolidated statement of cash flows under investing activities.

(3)

Represents estimated fees and costs of $15.5 million and $11.3 million that were expensed and included in general and administrative expense and interest expense, respectively. These charges are directly attributable to the transaction and represent non-recurring costs.

Summary of fair values of assets acquired and liabilities assumed

The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date of April 7, 2011 (in thousands):

Assets acquired
Net investments in direct financing leases	$	6,002,074
Cash and cash equivalents		6,996
Intangible assets		14,888
Total assets acquired		6,023,958
Total liabilities assumed		224,932
Net assets acquired	$	5,799,026

Schedule of pro forma results of operations

The following unaudited pro forma consolidated results of operations assume that the HCR ManorCare Acquisition, including the Company's ownership interest in the operations of HCR ManorCare, was completed as of January 1 for each of the periods presented below (in thousands, except per share amounts):

	Year Ended December 31,
	2011		2010
Revenues	$	1,807,355	$	1,690,899
Net income		659,514		745,119
Net income applicable to HCP, Inc.		643,911		731,433
Basic earnings per common share	$	1.53	$	1.86
Diluted earnings per common share		1.52		1.85