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Investments in and Advances to Unconsolidated Joint Ventures
 6 Months Ended
Jun. 30, 2014
Investments in and Advances to Unconsolidated Joint Ventures  
Investments in and Advances to Unconsolidated Joint Ventures

(7)   Investments in and Advances to Unconsolidated Joint Ventures

 

The Company owns interests in the following entities that are accounted for under the equity method at June 30, 2014 (dollars in thousands):

 

Entity(1)

 

Segment

 

Investment(2)

 

Ownership%

 

HCR ManorCare

 

post-acute/skilled nursing

 

$

80,777

 

9.4

 

HCP Ventures III, LLC

 

medical office

 

6,944

 

30

 

HCP Ventures IV, LLC

 

medical office and hospital

 

28,369

 

20

 

HCP Life Science(3) 

 

life science

 

68,329

 

50-63

 

Suburban Properties, LLC

 

medical office

 

5,952

 

67

 

Advances to unconsolidated joint ventures, net

 

 

 

359

 

 

 

 

 

 

 

$

190,730

 

 

 

 

 

 

 

 

 

 

 

Edgewood Assisted Living Center, LLC

 

senior housing

 

$

(384

)

 

 

Seminole Shores Living Center, LLC

 

senior housing

 

(580

)

 

 

 

 

 

 

$

(964

)

 

 

 

 

(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 ventures. Negative balances are recorded in accounts payable and accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. Includes a 72% interest in a senior housing partnership that has a zero investment balance.

(3)     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 (and the Company’s ownership percentage): (i) Torrey Pines Science Center, LP (50%); (ii) Britannia Biotech Gateway, LP (55%); and (iii) LASDK, LP (63%).

 

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

 

 

 

June 30,

 

December 31,

 

 

 

2014

 

2013

 

Real estate, net

 

$

3,627,622

 

$

3,662,450

 

Goodwill and other assets, net

 

5,326,719

 

5,384,553

 

Total assets

 

$

8,954,341

 

$

9,047,003

 

 

 

 

 

 

 

Capital lease obligations and mortgage debt

 

$

6,700,301

 

$

6,768,815

 

Accounts payable

 

1,033,229

 

1,045,260

 

Other partners’ capital

 

1,089,086

 

1,098,228

 

HCP’s capital(1)

 

131,725

 

134,700

 

Total liabilities and partners’ capital

 

$

8,954,341

 

$

9,047,003

 

 

 

(1)     The combined basis difference of the Company’s investments in these joint ventures of $58 million, as of June 30, 2014, 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,

 

 

 

2014

 

2013

 

2014

 

2013

 

Total revenues

 

$

1,064,655

 

$

1,051,012

 

$

2,137,843

 

$

2,135,263

 

Loss from discontinued operations

 

(4,200

)

(3,000

)

(5,600

)

(5,700

)

Net (loss) income

 

(11,834

)

10,122

 

(3,973

)

20,494

 

HCP’s share of earnings(1) 

 

14,692

 

15,585

 

29,220

 

30,386

 

Fees earned by HCP

 

444

 

499

 

893

 

942

 

Distributions received by HCP

 

566

 

1,157

 

3,768

 

2,528

 

 

 

(1)     The Company’s joint venture interest in HCR ManorCare is accounted for using the equity method and results in an ongoing elimination of DFL income proportional to HCP’s ownership in HCR ManorCare. The elimination of the respective proportional lease expense at the HCR ManorCare level in substance results in $16 million and $15 million of DFL income that is recharacterized to the Company’s share of earnings from HCR ManorCare (equity income from unconsolidated joint ventures) for the three months ended June 30, 2014 and 2013, respectively. For both the six months ended June 30, 2014 and 2013, $31 million of DFL income was recharacterized to the Company’s share of earnings from HCR ManorCare.