HCR ManorCare Acquisition (Tables)

6 Months Ended

Jun. 30, 2012

HCR ManorCare Acquisition

Schedule of total purchase price consideration paid

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)At closing, the Company recognized a gain of approximately $23 million, included in interest income, which represented 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 these amounts to certain taxing authorities or the seller.

(3)Represents estimated fees and costs of $15.5 million (general and administrative) and the write-off of unamortized bridge loan fees of $11.3 million (interest expense) upon its termination that were expensed in 2010 and 2011, 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 June 30, 2011		Six Months Ended June 30, 2011
Revenues	$	472,186	$	911,959
Net income	219,335		409,372
Net income applicable to HCP, Inc.	213,842		399,988
Basic earnings per common share	$	0.51	$	0.96
Diluted earnings per common share	0.51		0.96