Exhibit 99.1
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HCP Announces Results for the Quarter Ended September 30, 2017
IRVINE, Calif., Nov. 2, 2017 /PRNewswire/ -- HCP, Inc. (NYSE:HCP) announced results for the quarter ended September 30, 2017.
THIRD QUARTER 2017 AND RECENT HIGHLIGHTS
EPS, FFO and FFO as adjusted per share, were ($0.02), $0.33 and $0.48, respectively
Achieved year-over-year three-month SPP Cash NOI growth of 3.2%, including 5.3% in the SHOP portfolio
Entered into transactions which provide a path to reduce Brookdale concentration to approximately 15.7%
Reentering the Boston life science market with $228 million acquisition of the Hayden Research Campus, bringing our year-to-date announced acquisitions and developments to $447 million
Announced launch of sales process for remaining UK holdings
As previously announced, repurchased $500 million of our 5.375% senior notes due 2021
Promoted Tom Klaritch to Chief Operating Officer and appointed Shawn Johnston as Chief Accounting Officer
Increased 2017 FFO as adjusted guidance range and reaffirmed aggregate 2017 SPP Cash NOI growth guidance
 
Three Months Ended September 30, 2017
 
Three Months Ended September 30, 2016
 
 
(in thousands, except per share amounts)
Amount
 
Diluted Per Share
 
Amount
 
Diluted Per Share
 
Per Share Change
Net income (loss)
$
(7,788
)
 
$
(0.02
)
 
$
150,924

 
$
0.32

 
$
(0.34
)
FFO
$
155,248

 
$
0.33

 
$
304,387

 
$
0.65

 
$
(0.32
)
Other impairments (recoveries), net(1)
2,738

 
0.01

 

 

 
0.01

Severance and related charges(2)
3,889

 
0.01

 
14,464

 
0.03

 
(0.02
)
Loss on debt extinguishments(3)
54,227

 
0.11

 

 

 
0.11

Transaction-related items
580

 

 
17,568

 
0.04

 
(0.04
)
Casualty-related charges (recoveries), net(4)
8,925

 
0.02

 

 

 
0.02

Other(5)
2,162

 

 
94

 

 

FFO as adjusted
$
227,769

 
$
0.48

 
$
336,513

 
$
0.72

 
$
(0.24
)
FFO as adjusted from QCP

 

 
(101,549
)
 
(0.22
)
 
0.22

Comparable FFO as adjusted(6)
$
227,769

 
$
0.48

 
$
234,964

 
$
0.50

 
$
(0.02
)
FAD
$
202,407

 
 
 
$
317,540

 
 
 
 
_______________________________________
(1)
Relates to the impairment of our Tandem Health Care Loan.
(2)
For the three months ended September 30, 2017, primarily relates to the departure of our former Executive Vice President and Chief Accounting Officer. For the three months ended September 30, 2016, primarily relates to the departure of our former President and Chief Executive Officer.
(3)
Represents the premium associated with the prepayment of $500 million of senior unsecured notes.
(4)
Includes $11 million of casualty-related charges and a $2 million deferred income tax benefit.
(5)
Includes $2 million of litigation costs.
(6)
Represents FFO as adjusted excluding FFO as adjusted from QCP and interest expense related to debt repaid using proceeds from the spin-off, assuming these transactions occurred at the beginning of the earliest period presented. Comparable FFO as adjusted allows management to evaluate the performance of our remaining real estate portfolio following the completion of the QCP spin-off.
FFO, FFO as adjusted, FAD, Comparable FFO as adjusted, SPP Cash NOI and SPP NOI are supplemental non-GAAP financial measures that we believe are useful in evaluating the operating performance of real estate investment trusts. See “Discussion and Reconciliation of Non-GAAP Financial Measures” for the quarter ended September 30, 2017 for definitions, discussions of their uses and inherent limitations, and reconciliations to the most directly comparable financial measures calculated and presented in accordance with GAAP on the Investor Relations section of our website at http://ir.hcpi.com/financial-reconciliation.
SAME PROPERTY PORTFOLIO OPERATING SUMMARY
The table below outlines the three-month same property portfolio operating results for the quarter:
 
Year-Over-Year
 
Occupancy
 
SPP Growth
 
3Q17
 
3Q16
 
NOI
 
Cash NOI
Senior housing triple-net
85.5%
 
87.1%
 
3.0%
 
2.7%
Senior housing operating portfolio ("SHOP")(1)
86.3%
 
88.8%
 
3.9%
 
5.3%
Life science
96.3%
 
97.1%
 
2.2%
 
4.0%
Medical office
91.7%
 
92.2%
 
1.5%
 
2.5%
Other non-reportable segments ("Other")(2)
N/A
 
N/A
 
1.7%
 
1.3%
Total Portfolio
 
 
 
 
2.5%
 
3.2%
_______________________________________
(1)
SHOP SPP Cash NOI growth consists of the following components: Assisted Living / Independent Living 4.4% and CCRC joint venture 12.0%.
(2)
Other primarily includes our hospitals and U.K. real estate investments. See our Supplemental Report for additional details.
BROOKDALE TRANSACTIONS
We have reached agreements to sell six assets to Brookdale Senior Living, Inc. ("Brookdale") for $275 million and purchase Brookdale’s 10% interest in two joint ventures for $99 million. Additionally, HCP and Brookdale have agreed to terminate management agreements on 36 senior housing operating properties and leases on 32 triple-net leased communities. Brookdale has agreed to waive fees on all management agreement terminations and we have agreed to modify the rent on the remaining Brookdale triple-net portfolio, providing a $5 million annual rent reduction. We intend to either transition to other operators or sell the aforementioned 68 properties during 2018. The anticipated sales are expected to generate $600 million to $900 million of net proceeds to us depending on the mix of asset sales versus transitions to new operators.
We have also agreed to sell our remaining investments in the RIDEA II senior housing joint venture ("RIDEA II") to an investor group led by Columbia Pacific Advisors, LLC ("CPA") for $332 million. RIDEA II owns 49 communities, of which 46 are managed by Brookdale.
Combined, these transactions provide a path to reduce our Brookdale concentration, on a pro forma basis, from 27.0% of Cash NOI and Interest Income (excluding the previously announced planned sale or transition of 25 Brookdale assets) to approximately 15.7%. We intend to use the proceeds from the dispositions primarily to repay debt and for general corporate purposes.
A copy of the corresponding press release and investor presentation with additional details is available on the Investor Relations section of our website at http://ir.hcpi.com.
REENTERING BOSTON LIFE SCIENCE MARKET
In October, we entered into definitive agreements to acquire a $228 million value-add life science campus known as the Hayden Research Campus located in the Boston suburb of Lexington, Massachusetts. The Hayden acquisition allows us to reenter the Boston life science market with immediate scale and align with a leading local developer, owner and operator, King Street Properties (“King Street”). We will own an interest in this campus through a consolidated joint venture with King Street. The campus includes two existing buildings totaling 400,000 square feet and is currently 66% leased, anchored by major life science tenants including Shire US, Inc., a subsidiary of Shire plc, and Merck, Sharp and Dohme, a subsidiary of Merck and Co., Inc. Additionally, King Street is currently seeking approvals for the joint venture to develop 209,000 square feet of life science space on the campus.

Page 1 of 9

The following information was filed by Hcp, Inc. (HCP) on Thursday, November 2, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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