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Healthcare Realty Trust Reports Normalized FFO Of $0.32 Per Share For The Second Quarter

July 30, 2013

NASHVILLE, Tenn., July 30, 2013 /PRNewswire/ — Healthcare Realty Trust Incorporated (NYSE:HR) today announced results for the second quarter ended June 30, 2013. Normalized FFO for the three months ended June 30, 2013 totaled $0.32 per diluted common share. Normalized FAD for the three months ended June 30, 2013 totaled $0.33 per diluted common share.

Salient highlights include:

  • The Company has four MOB investments under contract and a signed letter of intent to acquire a fifth. The total purchase price for the five properties is approximately $156 million. These properties total 528,000 square feet, are 95% leased and are on or adjacent to hospital campuses in several markets where the Company already has a presence. The Company intends to close these transactions later in the third quarter.
  • The upcoming acquisitions were pre-funded with proceeds from equity raised under its ATM program throughout the second quarter and a follow-on offering in July.
  • At the end of the second quarter, the Company prepaid a mortgage with a 7.25% interest rate for $94 million.
  • The Company redeemed its 5.125% 2014 unsecured senior notes in April 2013, in conjunction with the issuance of its 2023 senior notes in the first quarter.
  • The twelve development properties currently in stabilization (SIP) were 69% leased at the end of the second quarter, with occupancy increasing to 48%.
  • During the second quarter, the Company sold five smaller properties totaling 158,000 square feet for $12.0 million.
  • A dividend of $0.30 per common share was declared for the second quarter of 2013, which is 90.9% of normalized FAD.

For the three months ended June 30, 2013, year-over-year revenues grew by $6.5 million to $84.1 million. The Company recognized a net loss for the quarter of $24.2 million, including the effects of a $29.6 million loss incurred on the repayment of debt.

Healthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. The Company had investments of approximately $3.0 billion in 204 real estate properties and mortgages as of June 30, 2013. The Company’s 198 owned real estate properties are located in 28 states and total approximately 13.5 million square feet. The Company provides property management services to approximately 10.1 million square feet nationwide.

Additional information regarding the Company, including this quarter’s operations, can be found at www.healthcarerealty.com. Please contact the Company at 615.269.8175 to request a printed copy of this information.

In addition to the historical information contained within, the matters discussed in this press release may contain forward-looking statements that involve risks and uncertainties. These risks are discussed in filings with the Securities and Exchange Commission by Healthcare Realty Trust, including its Annual Report on Form 10-K for the year ended December 31, 2012 under the heading “Risk Factors,” and as updated in its Quarterly Reports on Form 10-Q filed thereafter. Forward-looking statements represent the Company’s judgment as of the date of this release. The Company disclaims any obligation to update forward-looking statements.

                                                                    HEALTHCARE REALTY TRUST INCORPORATED

                                                               Condensed Consolidated Balance Sheets (1)

                                                           (amounts in thousands, except for share data)

                                                                                             (Unaudited)

    ASSETS

    Real Estate Properties:                                       6/30/2013                      12/31/2012
                                                                  ---------                      ----------

    Land                                                           $164,673                        $161,875

    Buildings, improvements and
     lease intangibles                                            2,637,030                       2,625,538

    Personal property                                                 9,168                           8,739

    Land held for development                                        17,054                          25,171
                                                                     ------                          ------

    Total real estate properties                                  2,827,925                       2,821,323

    Less accumulated depreciation                                  (613,882)                       (580,617)
                                                                   --------                        --------

    Total real estate properties,
     net                                                          2,214,043                       2,240,706

    Cash and cash equivalents                                         1,152                           6,776

    Mortgage notes receivable                                       212,313                         162,191

    Assets held for sale and
     discontinued operations, net                                    18,688                           3,337

    Other assets, net                                               151,194                         126,962
                                                                    -------                         -------

    Total assets                                                 $2,597,390                      $2,539,972
    ------------                                                 ----------                      ----------

    LIABILITIES AND EQUITY

    Liabilities:

    Notes and bonds payable                                      $1,301,387                      $1,293,044

    Accounts payable and accrued
     liabilities                                                     58,833                          65,678

    Liabilities of discontinued
     operations                                                         280                             131

    Other liabilities                                                58,722                          60,175
                                                                     ------                          ------

    Total liabilities                                             1,419,222                       1,419,028

    Commitments and contingencies

    Equity:

    Preferred stock, $.01 par
     value; 50,000 shares
     authorized; none issued and
     outstanding                                                          -                               -

    Common stock, $.01 par value;
     150,000 shares authorized;
     92,497 and 87,514 shares
     issued and outstanding at June
     30, 2013 and December 31,
     2012, respectively                                                 925                             875

    Additional paid-in capital                                    2,235,403                       2,100,297

    Accumulated other comprehensive
     loss                                                            (2,092)                         (2,092)

    Cumulative net income
     attributable to common
     stockholders                                                   776,212                         801,416

    Cumulative dividends                                         (1,833,613)                     (1,779,552)
                                                                 ----------                      ----------

    Total stockholders' equity                                    1,176,835                       1,120,944

    Noncontrolling interests                                          1,333                               -
                                                                      -----                             ---

    Total equity                                                  1,178,168                       1,120,944
    ------------                                                  ---------                       ---------

    Total liabilities and equity                                 $2,597,390                      $2,539,972
    ----------------------------                                 ----------                      ----------

    (1) The Condensed Consolidated Balance Sheets do not include all of the information
     and footnotes required by

          accounting principles generally accepted in the United States of America for complete
           financial statements.

                                                                                                                                                                                           HEALTHCARE REALTY TRUST INCORPORATED

                                                                                                                                                                            Condensed Consolidated Statements of Operations (1)

                                                                                                                                                                                  (amounts in thousands, except for share data)

                                                                                                                                                                                                                    (Unaudited)

                                                                                                                                       Three Months
                                                                                                                                              Ended                            Six Months Ended
                                                                                                                                           June 30,                                    June 30,

                                                                                                                                               2013                            2012                      2013                     2012
                                                                                                                                               ----                            ----                      ----                     ----

    Revenues

    Rental income                                                                                                                           $79,119                         $74,184                  $157,148                 $146,122

    Mortgage interest                                                                                                                         3,427                           2,039                     6,364                    4,331

    Other operating                                                                                                                           1,508                           1,370                     2,965                    3,144
                                                                                                                                              -----                           -----                     -----                    -----

                                                                                                                                             84,054                          77,593                   166,477                  153,597

    Expenses

    Property operating                                                                                                                       31,732                          29,150                    61,535                   57,409

    General and administrative                                                                                                                5,841                           4,520                    12,382                    9,781

    Depreciation                                                                                                                             22,069                          20,733                    43,881                   41,172

    Amortization                                                                                                                              2,571                           2,515                     5,249                    5,026

    Bad debt, net of recoveries                                                                                                                  19                             150                         7                      109
                                                                                                                                                ---                             ---                       ---                      ---

                                                                                                                                             62,232                          57,068                   123,054                  113,497

    Other Income (Expense)

    Loss on extinguishments of debt                                                                                                         (29,638)                              -                   (29,638)                       -

    Interest expense                                                                                                                        (18,925)                       (18,506)                   (38,695)                 (36,860)

    Interest and other income, net                                                                                                              219                             201                       449                      414
                                                                                                                                                ---                             ---                       ---                      ---

                                                                                                                                            (48,344)                       (18,305)                   (67,884)                 (36,446)
                                                                                                                                            -------                         -------                   -------                  -------

    Income (Loss) From Continuing Operations                                                                                                (26,522)                          2,220                   (24,461)                   3,654

    Discontinued Operations

    Income from discontinued operations                                                                                                         501                             872                     1,052                    3,313

    Impairments                                                                                                                                   -                            (167)                   (3,630)                  (4,336)

    Gain on sales of real estate properties                                                                                                   1,783                               3                     1,783                    3,431

    Income (Loss) From Discontinued Operations                                                                                                2,284                             708                      (795)                   2,408
                                                                                                                                              -----                             ---                      ----                    -----

    Net Income (Loss)                                                                                                                       (24,238)                          2,928                   (25,256)                   6,062

    Less: Net (income) loss attributable to                                                                                                      33                             (20)                       52                      (20)
      noncontrolling interests

    Net Income (Loss) Attributable To Common                                                                                               ($24,205)                         $2,908                  ($25,204)                  $6,042
      Stockholders
      ------------

    Basic Earnings (Loss) Per Common Share:

    Income (loss) from continuing operations                                                                                                 ($0.30)                          $0.03                    ($0.28)                   $0.05

    Discontinued operations                                                                                                                    0.03                            0.01                     (0.01)                    0.03
                                                                                                                                               ----                            ----                     -----                     ----

    Net income (loss) attributable to common                                                                                                 ($0.27)                          $0.04                    ($0.29)                   $0.08
      stockholders

    Diluted Earnings (Loss) Per Common Share:

    Income (loss) from continuing operations                                                                                                 ($0.30)                          $0.03                    ($0.28)                   $0.05

    Discontinued operations                                                                                                                    0.03                            0.01                     (0.01)                    0.03
                                                                                                                                               ----                            ----                     -----                     ----

    Net income (loss) attributable to common                                                                                                 ($0.27)                          $0.04                    ($0.29)                   $0.08
      stockholders

    Weighted Average Common Shares                                                                                                           89,204                          76,462                    88,056                   76,444
      Outstanding-Basic
      -----------------

    Weighted Average Common Shares                                                                                                           89,204                          77,712                    88,056                   77,678
      Outstanding-Diluted
      -------------------

    (1) The Condensed Consolidated Statements of Operations do not include all of the information and footnotes

          required by accounting principles generally accepted in the United States of America for complete financial

          statements.

                                                                                                                                     HEALTHCARE REALTY TRUST INCORPORATED

                                                                                                                         Reconciliation of FFO and Normalized FFO (1) (2)

                                                                                                                            (amounts in thousands, except per share data)

                                                                                                                                                              (Unaudited)

                                                                                                                                                             Three Months Ended June 30,

                                                                                                                                                                 2013              2012
                                                                                                                                                                 ----              ----

    Net Income (Loss) Attributable to Common Stockholders                                                                                                    ($24,205)           $2,908

    Gain on sales of real estate properties                                                                                                                    (1,783)               (3)

    Impairments                                                                                                                                                     -               167

    Real estate depreciation and amortization                                                                                                                  24,002            23,467

    Total adjustments                                                                                                                                          22,219            23,631
                                                                                                                                                               ------            ------

    Funds From Operations                                                                                                                                     ($1,986)          $26,539
    ---------------------                                                                                                                                     -------           -------

    Acquisition costs                                                                                                                                             124                 -

    Interest incurred related to the timing of issuance/redemption of senior notes                                                                                667                 -

    Loss on extinguishment of debt                                                                                                                             29,907                 -

    Normalized Funds From Operations                                                                                                                          $28,712           $26,539

    Funds from Operations per Common Share-Diluted                                                                                                             ($0.02)            $0.34

    Normalized Funds From Operations Per Common Share-Diluted                                                                                                   $0.32             $0.34

    FFO Weighted Average Common Shares Outstanding                                                                                                             89,204            77,712

    Normalized FFO Weighted Average Common Shares Outstanding                                                                                                  90,684            77,712
    ---------------------------------------------------------                                                                                                  ------            ------

    (1) Funds from operations ("FFO") and FFO per share are operating performance measures adopted by the National

          Association of Real Estate Investment Trusts, Inc. ("NAREIT"). NAREIT defines FFO as the most commonly

          accepted and reported measure of a REIT's operating performance equal to "net income (computed in

          accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization,

          and after adjustments for unconsolidated partnerships and joint ventures."

    (2) FFO and Funds Available For Distribution ("FAD") do not represent cash generated from operating activities

          determined in accordance with accounting principles generally accepted in the United States of America and are

          not necessarily indicative of cash available to fund cash needs. FFO and FAD should not be considered

          alternatives to net income attributable to common stockholders as indicators of the Company's operating

          performance or as alternatives to cash flow as measures of liquidity.

                                                                                                                           HEALTHCARE REALTY TRUST INCORPORATED

                                                                                                                   Reconciliation of FAD and Normalized FAD (1)

                                                                                                                  (amounts in thousands, except per share data)

                                                                                                                                                    (Unaudited)

                                                                                                                                                Three Months Ended June 30,

                                                                                                                                                       2013              2012
                                                                                                                                                       ----              ----

    Net Income (Loss) Attributable to Common Stockholders                                                                                          ($24,205)           $2,908

    Gain on sales of real estate properties                                                                                                          (1,783)               (3)

    Impairments                                                                                                                                           -               167

    Depreciation and amortization                                                                                                                    25,723            25,030

    Provision for bad debt, net                                                                                                                          19               150

    Straight-line rent receivable                                                                                                                    (1,802)           (1,545)

    Straight-line rent liability                                                                                                                        102               112

    Stock-based compensation                                                                                                                          1,137               721

    Provision for deferred post-retirement benefits                                                                                                     218               266

    Total non-cash items included in cash flows from operating activities                                                                            23,614            24,898

    Funds Available For Distribution                                                                                                                  ($591)          $27,806
    --------------------------------                                                                                                                  -----           -------

    Acquisition costs                                                                                                                                   124                 -

    Interest incurred related to the timing of issuance/redemption of senior notes                                                                      667                 -

    Loss on extinguishment of debt                                                                                                                   29,907                 -

    Normalized Funds Available For Distribution                                                                                                     $30,107           $27,806

    Funds Available For Distribution Per Common Share-Diluted                                                                                         (0.01)            $0.36

    Normalized Funds Available For Distribution Per Common Share-Diluted                                                                              $0.33             $0.36

    FAD Weighted Average Common Shares Outstanding                                                                                                   89,204            77,712

    Normalized FAD Weighted Average Common Shares Outstanding                                                                                        90,684            77,712
    ---------------------------------------------------------                                                                                        ------            ------

    (1) FFO and Funds Available For Distribution ("FAD") do not represent cash generated from operating activities

          determined in accordance with accounting principles generally accepted in the United States of America and are

          not necessarily indicative of cash available to fund cash needs. FFO and FAD should not be considered

          alternatives to net income attributable to common stockholders as indicators of the Company's operating

          performance or as alternatives to cash flow as measures of liquidity.

SOURCE Healthcare Realty Trust Incorporated


Source: PR Newswire