Healthcare Realty Trust Announces Third Quarter Results

HEALTHCARE REALTY TRUST INCORPORATED

Condensed Consolidated Statements of Operations (1)

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2010

2009

2010

2009

REVENUES

Master lease rent

$      14,054

$      13,833

$      43,309

$      41,609

Property operating

47,714

45,024

140,000

132,825

Straight-line rent

626

704

1,952

1,452

Mortgage interest

601

658

1,708

2,126

Other operating

2,128

2,110

6,399

8,623

65,123

62,329

193,368

186,635

EXPENSES

General and administrative

4,243

5,107

12,513

17,397

Property operating

26,671

23,537

75,089

69,518

Bad debt, net

39

(133)

(438)

425

Depreciation

17,115

15,499

50,000

45,556

Amortization

1,237

1,236

3,869

4,063

49,305

45,246

141,033

136,959

OTHER INCOME (EXPENSE)

Loss on extinguishment of debt

-

-

(480)

-

Re-measurement gain of equity interest upon acquisition

-

-

-

2,701

Interest expense

(15,923)

(9,535)

(47,803)

(29,531)

Interest and other income, net

187

292

1,800

675

(15,736)

(9,243)

(46,483)

(26,155)

INCOME FROM CONTINUING OPERATIONS

82

7,840

5,852

23,521

DISCONTINUED OPERATIONS

Income (loss) from discontinued operations

(121)

1,115

1,060

3,098

Impairments

(7,361)

-

(7,361)

(22)

Gain on sales of real estate properties

4,092

84

8,313

20,136

INCOME (LOSS) FROM DISCONTINUED OPERATIONS

(3,390)

1,199

2,012

23,212

NET INCOME (LOSS)

(3,308)

9,039

7,864

46,733

Less:  Net (income) loss attributable to noncontrolling interests

60

65

(44)

(12)

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$      (3,248)

$        9,104

$        7,820

$      46,721

BASIC EARNINGS (LOSS) PER COMMON SHARE

Income from continuing operations

$          0.00

$          0.13

$          0.10

$          0.40

Discontinued operations

(0.05)

0.03

0.03

0.40

Net income (loss) attributable to common stockholders

$        (0.05)

$          0.16

$          0.13

$          0.80

DILUTED EARNINGS (LOSS) PER COMMON SHARE

Income from continuing operations

$          0.00

$          0.13

$          0.10

$          0.40

Discontinued operations

(0.05)

0.02

0.03

0.39

Net income (loss) attributable to common stockholders

$        (0.05)

$          0.15

$          0.13

$          0.79

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC

62,369,773

58,174,482

61,232,810

58,150,024

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED

63,424,706

59,064,066

62,269,413

58,950,870

(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

Nine Months Ended

September 30,

September 30,

2010

2009

2010

2009

Cash flows from operating activities:

Net income (loss)

$   (3,308)

$  9,039

$    7,864

$ 46,733

Non-cash items:

Depreciation and amortization - real estate

18,202

16,801

53,202

50,375

Depreciation and amortization - other

1,358

870

4,282

2,514

Provision for bad debt, net

39

(137)

(418)

429

Impairments

7,361

-

7,361

22

Straight-line rent receivable

(604)

(676)

(1,923)

(1,348)

Straight-line rent liability

103

112

309

336

Stock-based compensation

525

985

1,845

3,286

Provision for deferred post-retirement benefits

385

476

1,167

2,443

Re-measurement gain of equity interest upon acquisition

-

-

-

(2,701)

Other non-cash items

-

254

(542)

761

  Total non-cash items

27,369

18,685

65,283

56,117

Other items:

Accounts payable and accrued liabilities

4,183

15,183

9,861

11,984

Other liabilities

2,056

(5,006)

1,568

(8,352)

Other assets

(6,762)

(1,137)

(6,923)

(1,003)

Gain on sales of real estate properties

(4,092)

(84)

(8,313)

(20,136)

Loss on extinguishment of debt

-

-

480

-

Payment of partial pension settlement

-

-

(342)

(2,300)

State income taxes paid, net of refunds

(12)

(93)

(503)

(662)

  Total other items

(4,627)

8,863

(4,172)

(20,469)

Net cash provided by operating activities

19,434

36,587

68,975

82,381

Cash flows from investing activities:

Acquisition and development of real estate properties

(129,596)

(37,462)

(183,653)

(99,253)

Funding of mortgages and notes receivable

(11,031)

(4,367)

(13,921)

(13,183)

Investment in unconsolidated joint ventures

-

(35)

-

(184)

Proceeds from sales of real estate

9,698

563

33,321

83,441

Proceeds from mortgages and notes receivable repayments

7,316

107

7,385

205

Net cash used in investing activities

(123,613)

(41,194)

(156,868)

(28,974)

Cash flows from financing activities:

Net borrowings on unsecured credit facilities

111,000

35,000

81,000

44,000

Repayments on notes and bonds payable

(648)

(1,071)

(1,759)

(22,640)

Repurchase of notes payable

-

-

(8,556)

-

Quarterly dividends paid

(19,111)

(22,852)

(56,481)

(68,530)

Proceeds from issuance of common stock

19,998

186

79,467

534

Equity issuance costs

(3)

-

(23)

-

Common stock redemption

-

(8)

-

(8)

Debt issuance and assumption costs

(201)

(7,393)

(716)

(7,393)

Capital contributions received from noncontrolling interest holders

16

1,242

686

1,771

Distributions to noncontrolling interests

(150)

(116)

(399)

(191)

Net cash provided by (used in) financing activities

110,901

4,988

93,219

(52,457)

Increase in cash and cash equivalents

6,722

381

5,326

950

Cash and cash equivalents, beginning of period

4,455

4,707

5,851

4,138

Cash and cash equivalents, end of period

$  11,177

$  5,088

$  11,177

$   5,088

(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

Nine Months Ended

September 30,

September 30,

2010

2009

2010

2009

Net Income (Loss) Attributable to Common Stockholders

$     (3,248)

$     9,104

$       7,820

$     46,721

  Gain on sales of real estate properties

(4,092)

(84)

(8,313)

(20,136)

  Real estate depreciation and amortization

18,075

16,801

52,843

50,387

  Total adjustments

13,983

16,717

44,530

30,251

Funds From Operations

$     10,735

$    25,821

$     52,350

$     76,972

Funds From Operations Per Common Share - Basic

$         0.17

$      0.44

$         0.85

$         1.32

Funds From Operations Per Common Share - Diluted

$         0.17

$      0.44

$         0.84

$         1.31

Weighted Average Common Shares Outstanding - Basic

62,369,773

58,174,482

61,232,810

58,150,024

Weighted Average Common Shares Outstanding - Diluted

63,424,706

59,064,066

62,269,413

58,950,870

RECONCILIATION OF FUNDS AVAILABLE FOR DISTRIBUTION (2):

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

September 30, 2010

Net Loss Attributable to Common Stockholders

$              (3,248)

  Gain on sales of real estate properties

(4,092)

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

27,369

Funds Available For Distribution

$             20,029

Funds Available For Distribution Per Common Share - Diluted

$                 0.32

Weighted Average Common Shares Outstanding - Diluted

63,424,706

(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 (loss) 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.