Healthcare Realty Trust Reports Normalized FFO Of $0.33 Per Share For The Third Quarter

NASHVILLE, Tenn., Nov. 7, 2012 /PRNewswire/ -- Healthcare Realty Trust Incorporated (NYSE: HR) today announced results for the third quarter ended September 30, 2012. Normalized FFO and FFO for the three months ended September 30, 2012 totaled $0.33 per diluted common share. Normalized FAD and FAD for the three months ended September 30, 2012 totaled $0.35 per diluted common share. 

For the three months ended September 30, 2012, revenues totaled $79.1 million, income from continuing operations totaled $1.8 million, and net income attributable to common stockholders totaled $5.8 million.

Salient highlights for the third quarter include:

  • The multi-tenant same facility NOI increased 5.0% in the third quarter from a year ago, and the overall same facility portfolio NOI increased 4.2% over the same time period.
  • Healthcare Realty's stabilizing properties ("SIP") are 54% leased and remain on target to reach 60% leased by year-end 2012.  Occupancy in the SIP portfolio increased to 37% as tenants' suites were built out.  Adjusted NOI for the SIP properties improved by approximately $497,000 compared to the previous quarter.
  • On September 28, 2012, Healthcare Realty completed the sale of 9.2 million shares of common stock for net proceeds of approximately $201.1 million to fund investment activity.  The use of funds will be accretive as these investments come online over the next two to three quarters.  As a result of this offering, Healthcare Realty's debt-to-EBITDA ratio at the end of the third quarter was 6.2x and the leverage ratio was 41.7%. 
  • Subsequent to the end of the quarter, the Company acquired two MOBs located in Tennessee and Washington for a total investment of $20.4 million.  The buildings total approximately 87,000 square feet and have an average occupancy rate of 94%. 
  • Through September 30, 2012, the Company funded $94.4 million out of a total budget of $203 million toward two, build-to-suit facilities that are fully leased by "AA-" rated Mercy Health.  The Company currently generates mortgage interest income at 6.75% on the funded balances.  Upon completion, Healthcare Realty will assume ownership of the facilities at an initial yield of 8%.
  • Occupancy in the same facility portfolio was 90%, and the occupancy of investments made during the past five quarters, which are not included in the same facility portfolio, was 95%. 
  • The percentage of Healthcare Realty's medical office properties that are on or adjacent to hospital campuses increased to 78% in the third quarter of 2012, compared to 66% eight quarters ago, continuing the Company's strategic shift toward lower-risk, on-campus medical office buildings.
  • A dividend of $0.30 per share was declared for the third quarter of 2012, which is 86% of normalized FAD.

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 $2.9 billion in 201 real estate properties and mortgages as of September 30, 2012.  The Company's 195 owned real estate properties are located in 28 states and total approximately 13.3 million square feet.  The Company provides property management services to approximately 10.2 million square feet nationwide.

The Company directs interested parties to its Internet site, www.healthcarerealty.com, where information is posted regarding this quarter's operations.  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, 2011 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)
(dollars in thousands, except for share data)
(Unaudited)



ASSETS






Real Estate Properties:

9/30/2012


12/31/2011



Land

$ 156,427


$ 162,843



Buildings, improvements, and lease intangibles

2,544,935


2,521,226



Personal property

18,860


18,221



Construction in progress

-


61,152



Land held for development

25,171


25,176



Total real estate properties 

2,745,393


2,788,618



Less accumulated depreciation

(557,951)


(516,747)



Total real estate properties, net

2,187,442


2,271,871



Cash and cash equivalents

8,781


4,738



Mortgage notes receivable

141,107


97,381



Assets held for sale and discontinued operations, net

11,550


28,650



Other assets, net

121,896


118,382



Total assets

$ 2,470,776


$ 2,521,022










LIABILITIES AND EQUITY






Liabilities:






Notes and bonds payable

$ 1,212,615


$ 1,393,537



Accounts payable and accrued liabilities

51,264


72,217



Liabilities of discontinued operations

162


518



Other liabilities

55,668


49,944



Total liabilities

1,319,709


1,516,216



Commitments and contingencies













Equity:






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

-


-



Common stock, $.01 par value; 150,000,000 shares authorized; 87,230,936 and 77,843,883 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively

872


779



Additional paid-in capital

2,099,101


1,894,604



Accumulated other comprehensive loss

(3,332)


(3,332)



Cumulative net income attributable to common stockholders

807,808


795,951



Cumulative dividends

(1,753,382)


(1,683,196)



Total stockholders' equity

1,151,067


1,004,806



Total liabilities and equity

$ 2,470,776


$ 2,521,022









     (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)
(dollars in thousands, except for share data)
(Unaudited)






















































Three Months Ended 
September 30,


Nine Months Ended 
September 30,









2012


2011


2012


2011




Revenues














Rental income



$ 75,305


$ 70,004


$ 222,479


$ 203,446




Mortgage interest 



2,244


1,776


6,575


5,250




Other operating 



1,523


2,061


4,664


6,400









79,072


73,841


233,718


215,096



















Expenses














Property operating 



30,115


30,070


87,970


85,108




General and administrative



4,732


5,530


14,514


16,467




Depreciation



21,172


19,150


63,098


55,496




Amortization



2,554


2,222


7,631


5,777




Bad debt, net 



40


(353)


149


(82)









58,613


56,619


173,362


162,766



















Other Income (Expense)













Loss on extinguishment of debt


-


-


-


(1,986)




Interest expense



(18,905)


(17,928)


(55,814)


(57,546)




Interest and other income, net


204


199


711


618









(18,701)


(17,729)


(55,103)


(58,914)



















Income (Loss) From Continuing Operations

1,758


(507)


5,253


(6,584)



















Discontinued Operations













Income from discontinued operations


672


1,352


4,145


3,789




Impairments



(2,860)


(1,551)


(7,197)


(1,698)




Gain on sales of real estate properties


6,265


1,357


9,696


1,393




Income From Discontinued Operations


4,077


1,158


6,644


3,484



















Net Income (Loss)



5,835


651


11,897


(3,100)




Less:  Net income attributable to noncontrolling interests

(20)


(4)


(40)


(31)



















Net Income (Loss) Attributable to Common Stockholders 

$ 5,815


$ 647


$ 11,857


$ (3,131)



















Basic Earnings (Loss) Per Common Share 












Income (loss) from continuing operations

$ 0.02


$ (0.01)


$ 0.07


$ (0.09)




Discontinued operations 



0.06


0.02


0.08


0.05




Net income (loss) attributable to common stockholders

$ 0.08


$ 0.01


$ 0.15


$ (0.04)



















Diluted Earnings (Loss) Per Common Share











Income (loss) from continuing operations

$ 0.02


$ (0.01)


$ 0.07


$ (0.09)




Discontinued operations 



0.05


0.02


0.08


0.05




Net income (loss) attributable to common stockholders

$ 0.07


$ 0.01


$ 0.15


$ (0.04)



















Weighted Average Common Shares Outstanding - Basic

76,712,594


76,139,055


76,534,508


71,478,463



















Weighted Average Common Shares Outstanding - Diluted

78,020,971


76,139,055


77,799,291


71,478,463



















     (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
Condensed Consolidated Statements of Cash Flows(1)
(dollars in thousands)
(Unaudited)














































Three Months Ended
September 30,

Nine Months Ended
September 30,







2012


2011


2012


2011




Cash flows from operating activities:










Net income (loss)

$ 5,835


$ 651


$ 11,897


$ (3,100)





NON-CASH ITEMS:












Depreciation and amortization - real estate

23,336


21,709


70,231


62,300





Depreciation and amortization - other

1,590


1,757


4,457


5,084





Provision for bad debt, net 

39


(352)


147


(65)





Gain on sales of real estate properties

(6,265)


(1,357)


(9,696)


(1,393)





Impairments

2,860


1,551


7,197


1,698





Straight-line rent receivable

(1,481)


(1,098)


(4,926)


(3,493)





Straight-line rent liability

110


123


312


369





Stock-based compensation

935


670


2,588


2,272





Provision for deferred post-retirement benefits

266


465


798


1,383





    Total non-cash items

21,390


23,468


71,108


68,155


















OTHER ITEMS:












Accounts payable and accrued liabilities

(3,654)


(4,030)


(13,228)


(1,380)





Other liabilities

3,005


(182)


5,546


6,117





Other assets

(7,080)


844


(3,051)


(4,532)





Loss on extinguishment of debt

-


-


-


1,986





    Total other items

(7,729)


(3,368)


(10,733)


2,191





    Net cash provided by operating activities

19,496


20,751


72,272


67,246

















Cash flows from investing activities:












Acquisition and development of real estate properties

(14,612)


(96,740)


(76,134)


(179,851)





Funding of mortgages and notes receivable

(25,714)


(8,837)


(54,264)


(91,978)





Proceeds from sales of real estate

28,757


1,218


64,866


4,993





Proceeds from mortgage repayment by previously consolidated VIE

-


-


35,057


-





Proceeds from mortgages and notes receivable repayments

2,678


14,930


11,931


14,988





    Net cash used in investing activities

(8,891)


(89,429)


(18,544)


(251,848)

















Cash flows from financing activities:












Net borrowings (repayments) on unsecured credit facility

(182,000)


52,000


(178,000)


175,000





Repayments on notes and bonds payable

(1,242)


(921)


(3,678)


(2,537)





Repurchase of notes payable

-


-


-


(280,201)





Dividends paid

(23,401)


(23,348)


(70,186)


(65,918)





Proceeds from issuance of common stock

201,736


27,791


202,247


251,836





Purchase of noncontrolling interests 

-


-


-


(1,591)





Common stock redemptions

-


-


(45)


(51)





Debt issuance and assumption costs

-


(566)


(3)


(922)





Distributions to noncontrolling interest holders

(20)


-


(20)


(281)





   Net cash provided by (used in) financing activities

(4,927)


54,956


(49,685)


75,335

















Increase (decrease) in cash and cash equivalents

5,678


(13,722)


4,043


(109,267)




Cash and cash equivalents, beginning of period

3,103


17,776


4,738


113,321




Cash and cash equivalents, end of period

$ 8,781


$ 4,054


$ 8,781


$ 4,054

















     (1)  The Condensed Consolidated Statements of Cash Flows 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 Funds from Operations(1) (2)
(dollars in thousands, except per share data)
(Unaudited)













































Three Months Ended 
September 30, 2012 


Three Months Ended 
September 30, 2011




























Net Income Attributable to Common Stockholders

$ 5,815


$ 647












Gain on sales of real estate properties


(6,265)


(1,357)












Impairments


2,860


1,551












Real estate depreciation and amortization

23,336


21,709












Total adjustments


19,931


21,903




























Funds From Operations


$ 25,746


$ 22,550





























Acquisition costs


-


400












Seasonal utilities


-


1,300




























Normalized Funds From Operations


$ 25,746


$ 24,250











Funds From Operations Per Common Share - Diluted

$ 0.33


$ 0.29











Normalized Funds From Operations Per Common Share - Diluted

$ 0.33


$ 0.31











Weighted Average Common Shares Outstanding - Diluted

78,020,971


77,177,114














































Reconciliation of Funds Available for Distribution(2)
(Dollars in thousands, except per share data)
(Unaudited)












































Three Months Ended 
September 30, 2012 


Three Months Ended
September 30, 2011




























Net Income Attributable to Common Stockholders

$ 5,815


$ 647












Gain on sales of real estate properties


(6,265)


(1,357)












Impairments


2,860


1,551












Other non-cash items


24,795


23,274












Total non-cash items included in cash flows from operating activities (3)

21,390


23,468




























Funds Available For Distribution


$ 27,205


$ 24,115





























Acquisition costs


-


400












Seasonal utilities


-


1,300




























Normalized Funds Available For Distribution

$ 27,205


$ 25,815











Funds Available For Distribution Per Common Share - Diluted

$ 0.35


$ 0.31











Normalized Funds Available For Distribution Per Common Share - Diluted

$ 0.35


$ 0.33











Weighted Average Common Shares Outstanding - Diluted

78,020,971


77,177,114






























































(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."  The SEC indicated in 2003 that 




impairment charges (losses) could not be added back to net income attributable to common stockholders in calculating FFO.  However, in late October 2011, NAREIT issued an alert 





indicating that the SEC staff recently advised NAREIT that it currently takes  no position on the matter of whether impairment charges should be added back to net income to compute 




FFO, and NAREIT affirmed its original definition of FFO.  The Company follows the NAREIT definition to exclude impairment charges and all prior periods have been restated to agree 




with current presentation.















(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.











(3)

See the Condensed Consolidated Statements of Cash Flows that are included in this earnings release.






























 

 

SOURCE Healthcare Realty Trust Incorporated



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