Investments in and Advances to Unconsolidated Joint Ventures (Tables)

6 Months Ended

Jun. 30, 2013

Investments in and Advances to Unconsolidated Joint Ventures

Company owned interests in entities, accounted under equity method

The Company owns interests in the following entities that are accounted for under the equity method at June 30, 2013 (dollars in thousands):

Entity(1)	Properties/Segment	Investment(2)			Ownership%
HCR ManorCare	post-acute/skilled nursing operations	$	88,018		9.5(3)
HCP Ventures III, LLC	13 medical office	7,335			30
HCP Ventures IV, LLC	54 medical office and 4 hospital	31,049			20
HCP Life Science(4)	4 life science	68,779			50-63
Horizon Bay Hyde Park, LLC	1 senior housing	6,496			72
Suburban Properties, LLC	1 medical office	6,950			67
Advances to unconsolidated joint ventures, net		251
		$	208,878
Edgewood Assisted Living Center, LLC	1 senior housing	$	(387	)	45
Seminole Shores Living Center, LLC	1 senior housing	(634		)	50
		$	(1,021	)

(1) These entities are not consolidated because the Company does not control, through voting rights or other means, the joint ventures.

(2) Represents the carrying value of the Company’s investment in the unconsolidated joint venture.

(3) Presented after adjusting the Company’s 9.9% ownership for the dilution of certain of HCR ManorCare’s outstanding employee equity awards.

(4) Includes three unconsolidated joint ventures between the Company and an institutional capital partner for which the Company is the managing member. HCP Life Science includes the following partnerships: (i) Torrey Pines Science Center, LP (50%); (ii) Britannia Biotech Gateway, LP (55%); and (iii) LASDK, LP (63%).

Summarized combined financial information for unconsolidated joint ventures

Summarized combined financial information for the Company’s unconsolidated joint ventures follows (in thousands):

	June 30,		December 31,
	2013		2012
Real estate, net	$	3,690,920	$	3,731,740
Goodwill and other assets, net	5,807,180		5,734,318
Total assets	$	9,498,100	$	9,466,058
Capital lease obligations and mortgage debt	$	6,813,884	$	6,875,932
Accounts payable	1,047,460		971,095
Other partners’ capital	1,452,467		1,435,885
HCP’s capital(1)	184,289		183,146
Total liabilities and partners’ capital	$	9,498,100	$	9,466,058

(1) The combined basis difference of the Company’s investments in these joint ventures of $23 million, as of June 30, 2013, is primarily attributable to goodwill, real estate, capital lease obligations, deferred tax assets and lease related net intangibles.

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
Total revenues	$	1,059,412	$	1,093,873	$	2,152,863	$	2,138,519
Net income	10,122		16,124		20,494		17,267
HCP’s share in earnings (1)	15,585		15,732		30,386		29,407
Fees earned by HCP	499		470		942		963
Distributions received by HCP	1,157		1,278		2,528		3,407

(1) The Company’s joint venture interest in HCR ManorCare is accounted for using the equity method and results in an ongoing reduction of DFL income, proportional to HCP’s ownership in HCR ManorCare. The Company recorded a reduction of $15 million for both the three months ended June 30, 2013 and 2012. The Company recorded a reduction of $31 million and $30 million for the six months ended June 30, 2013 and 2012, respectively. Further, the Company’s share of earnings from HCR ManorCare (equity income) increases for the corresponding reduction of related lease expense recognized at the HCR ManorCare level.