Healthcare Realty Trust Announces Second Quarter Results

HEALTHCARE REALTY TRUST INCORPORATED

Condensed Consolidated Statements of Income (1)

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2010

2009

2010

2009

REVENUES

Master lease rent

$      14,752

$      14,023

$      29,683

$      28,742

Property operating

47,350

45,866

93,496

88,771

Straight-line rent

733

345

1,315

715

Mortgage interest

469

978

1,107

1,468

Other operating

2,102

3,006

4,272

6,515

65,406

64,218

129,873

126,211

EXPENSES

General and administrative

3,545

5,329

8,276

12,295

Property operating

24,710

23,566

49,381

46,919

Bad debt, net

(258)

127

(457)

562

Depreciation

16,817

15,418

33,387

30,559

Amortization

1,332

1,346

2,633

2,827

46,146

45,786

93,220

93,162

OTHER INCOME (EXPENSE)

Loss on extinguishment of debt

-

-

(480)

-

Re-measurement gain of equity interest upon acquisition

-

-

-

2,701

Interest expense

(15,569)

(9,985)

(31,880)

(19,996)

Interest and other income, net

1,356

228

1,793

383

(14,213)

(9,757)

(30,567)

(16,912)

INCOME FROM CONTINUING OPERATIONS

5,047

8,675

6,086

16,137

DISCONTINUED OPERATIONS

Income (loss) from discontinued operations

(58)

696

866

1,528

Impairment

-

-

-

(22)

Gain on sales of real estate properties

1,525

7,443

4,221

20,051

INCOME FROM DISCONTINUED OPERATIONS

1,467

8,139

5,087

21,557

NET INCOME

6,514

16,814

11,173

37,694

Less:  Net income attributable to noncontrolling interests

(40)

(62)

(105)

(77)

NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS

$        6,474

$      16,752

$      11,068

$      37,617

BASIC EARNINGS PER COMMON SHARE

Income from continuing operations

$          0.08

$          0.15

$          0.10

$          0.28

Discontinued operations

0.03

0.14

0.08

0.37

Net income attributable to common stockholders

$          0.11

$          0.29

$          0.18

$          0.65

DILUTED EARNINGS PER COMMON SHARE

Income from continuing operations

$          0.08

$          0.15

$          0.10

$          0.27

Discontinued operations

0.02

0.13

0.08

0.37

Net income attributable to common stockholders

$          0.10

$          0.28

$          0.18

$          0.64

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC

61,340,739

58,128,489

60,654,907

58,153,637

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED

62,382,409

58,899,618

61,690,322

58,897,895

(1)

The Condensed Consolidated Statements of Income 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

Six Months Ended

June 30,

June 30,

2010

2009

2010

2009

Cash flows from operating activities:

Net income

$  6,514

$ 16,814

$ 11,173

$ 37,694

Non-cash items:

Depreciation and amortization - real estate

17,563

16,703

35,000

33,574

Depreciation and amortization - other

1,513

835

2,924

1,644

Provision for bad debt, net

(258)

129

(457)

566

Impairments

-

-

-

22

Straight-line rent receivable

(734)

(319)

(1,319)

(672)

Straight-line rent liability

103

111

206

224

Stock-based compensation

566

1,013

1,320

2,301

Provision for deferred post-retirement benefits

346

475

782

1,967

Re-measurement gain of equity interest upon acquisition

-

-

-

(2,701)

Other non-cash items

(542)

253

(542)

507

  Total non-cash items

18,557

19,200

37,914

37,432

Other items:

Accounts payable and accrued liabilities

633

(4,409)

5,678

(3,200)

Other liabilities

(1,484)

(4,327)

(488)

(3,346)

Other assets

(692)

(1,066)

(162)

134

Gain on sales of real estate properties

(1,525)

(7,443)

(4,221)

(20,051)

Loss on extinguishment of debt

-

-

480

-

Payment of partial pension settlement

(342)

-

(342)

(2,300)

State income taxes paid, net of refunds

(497)

(503)

(491)

(569)

  Total other items

(3,907)

(17,748)

454

(29,332)

Net cash provided by operating activities

21,164

18,266

49,541

45,794

Cash flows from investing activities:

Acquisition and development of real estate properties

(28,789)

(28,715)

(54,057)

(61,791)

Funding of mortgages and notes receivable

(800)

(5,365)

(2,890)

(8,816)

Investment in unconsolidated joint ventures

-

(149)

-

(149)

Proceeds from sales of real estate

4,035

18,971

23,623

82,878

Proceeds from mortgages and notes receivable repayments

33

60

69

98

Net cash provided by (used in) investing activities

(25,521)

(15,198)

(33,255)

12,220

Cash flows from financing activities:

Net (borrowings) repayments on unsecured credit facilities

(27,000)

13,000

(30,000)

9,000

Repayments on notes and bonds payable

(587)

(1,021)

(1,111)

(21,569)

Repurchase of notes payable

-

-

(8,556)

-

Quarterly dividends paid

(18,953)

(22,849)

(37,370)

(45,678)

Proceeds from issuance of common stock

44,424

165

59,469

348

Equity issuance costs

(20)

-

(20)

-

Debt issuance costs

-

-

(515)

-

Capital contributions received from noncontrolling interest holders

37

-

670

529

Distributions to noncontrolling interests

(134)

(32)

(249)

(75)

Net cash used in financing activities

(2,233)

(10,737)

(17,682)

(57,445)

Increase (decrease) in cash and cash equivalents

(6,590)

(7,669)

(1,396)

569

Cash and cash equivalents, beginning of period

11,045

12,376

5,851

4,138

Cash and cash equivalents, end of period

$  4,455

$   4,707

$   4,455

$   4,707

(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.

RECONCILIATION OF FUNDS FROM OPERATIONS (1) (2):

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

2010

2009

2010

2009

Net Income Attributable to Common Stockholders

$       6,474

$                  16,752

$     11,068

$     37,617

  Gain on sales of real estate properties

(1,525)

(7,443)

(4,221)

(20,051)

  Real estate depreciation and amortization

17,435

16,703

34,768

33,585

  Total adjustments

15,910

9,260

30,547

13,534

Funds From Operations

$     22,384

$                  26,012

$     41,615

$     51,151

Funds From Operations Per Common Share - Basic

$         0.36

$                      0.45

$         0.69

$         0.88

Funds From Operations Per Common Share - Diluted

$         0.36

$                      0.44

$         0.67

$         0.87

Weighted Average Common Shares Outstanding - Basic

61,340,739

58,128,489

60,654,907

58,153,637

Weighted Average Common Shares Outstanding - Diluted

62,382,409

58,899,618

61,690,322

58,897,895

RECONCILIATION OF FUNDS AVAILABLE FOR DISTRIBUTION (2):

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

June 30, 2010

Net Income Attributable to Common Stockholders

$                     6,474

  Gain on sales of real estate properties

(1,525)

  Partial pension settlement

(342)

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

18,557

Funds Available For Distribution

$                   23,164

Funds Available For Distribution Per Common Share - Diluted

$                       0.37

Weighted Average Common Shares Outstanding - Diluted

62,382,409

(1)

Funds from operations (“FFO”) is calculated according to the definition of the National Association of Real Estate Investment Trusts and is comprised primarily of net income attributable to common stockholders and depreciation from real estate, but is not adjusted for certain non-cash income and expense items.  Gains on the sale of real estate properties are excluded from FFO and FFO per share, while impairments are included in FFO and FFO per share.

(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.