HCR ManorCare Acquisition (Tables)

9 Months Ended

Sep. 30, 2011

HCR ManorCare Acquisition

Schedule of total purchase price consideration paid

	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 repaid 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 condensed consolidated statements 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

Assets acquired
Net investments in direct financing leases	$	6,002,074
Cash and cash equivalents	6,996
Intangible assets, net	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

	Three Months Ended September 30,		Nine Months Ended September 30,
	2010		2011		2010
Revenues	$	428,659	$	1,361,900	$	1,250,569
Net income	126,332		580,181		501,218
Net income applicable to HCP, Inc.	122,814		567,521		491,141
Basic earnings per common share	$	0.30	$	1.36	$	1.26
Diluted earnings per common share	0.30		1.35		1.26