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

HEALTHCARE REALTY TRUST INCORPORATED

Condensed Consolidated Balance Sheets ⁽¹⁾

(amounts in thousands, except for share data)

(Unaudited)

ASSETS

Real Estate Properties:

9/30/2013

12/31/2012

Land

$165,325

$161,875

Buildings, improvements and lease intangibles

2,765,055

2,625,538

Personal property

9,217

8,739

Land held for development

17,054

25,171

Total real estate properties

2,956,651

2,821,323

Less accumulated depreciation

(610,402)

(580,617)

Total real estate properties, net

2,346,249

2,240,706

Cash and cash equivalents

7,160

6,776

Mortgage notes receivable

126,409

162,191

Assets held for sale and discontinued operations, net

9,084

3,337

Other assets, net

155,961

126,962

Total assets

$2,644,863

$2,539,972

LIABILITIES AND EQUITY

Liabilities:

Notes and bonds payable

$1,268,194

$1,293,044

Accounts payable and accrued liabilities

57,610

65,678

Liabilities of discontinued operations

1,024

131

Other liabilities

59,706

60,175

Total liabilities

1,386,534

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; 95,873 and 87,514 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively

959

875

Additional paid-in capital

2,324,140

2,100,297

Accumulated other comprehensive loss

(2,092)

(2,092)

Cumulative net income attributable to common stockholders

795,977

801,416

Cumulative dividends

(1,862,367)

(1,779,552)

Total stockholders' equity

1,256,617

1,120,944

Noncontrolling interests

1,712

—

Total equity

1,258,329

1,120,944

Total liabilities and equity

$2,644,863

$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
September 30,

Nine Months Ended
September 30,

2013

2012

2013

2012

Revenues

Rental income

$79,256

$73,174

$233,319

$215,937

Mortgage interest

3,926

2,244

10,290

6,575

Other operating

1,579

1,519

4,544

4,659

84,761

76,937

248,153

227,171

Expenses

Property operating

32,652

29,737

93,911

86,937

General and administrative

5,583

4,729

17,965

14,510

Depreciation

22,080

20,348

65,065

60,626

Amortization

2,607

2,529

7,856

7,555

Bad debt, net of recoveries

111

40

118

149

63,033

57,383

184,915

169,777

Other Income (Expense)

Loss on extinguishments of debt

—

—

(29,638)

—

Interest expense

(17,043)

(18,881)

(55,738)

(55,741)

Interest and other income, net

256

203

705

618

(16,787)

(18,678)

(84,671)

(55,123)

Income (Loss) From Continuing Operations

4,941

876

(21,433)

2,271

Discontinued Operations

Income from discontinued operations

914

1,554

3,879

7,127

Impairments

(6,259)

(2,860)

(9,889)

(7,197)

Gain on sales of real estate properties

20,187

6,265

21,970

9,696

Income From Discontinued Operations

14,842

4,959

15,960

9,626

Net Income (Loss)

19,783

5,835

(5,473)

11,897

Less: Net (income) loss attributable to noncontrolling interests

(18)

(20)

34

(40)

Net Income (Loss) Attributable To Common Stockholders

$19,765

$5,815

($5,439)

$11,857

Basic Earnings (Loss) Per Common Share:

Income (loss) from continuing operations

$0.05

$0.01

($0.24)

$0.03

Discontinued operations

0.16

0.07

0.18

0.12

Net income (loss) attributable to common stockholders

$0.21

$0.08

($0.06)

$0.15

Diluted Earnings (Loss) Per Common Share:

Income (loss) from continuing operations

$0.05

$0.01

($0.24)

$0.03

Discontinued operations

0.16

0.06

0.18

0.12

Net income (loss) attributable to common stockholders

$0.21

$0.07

($0.06)

$0.15

Weighted Average Common Shares Outstanding—Basic

93,443

76,713

89,871

76,535

Weighted Average Common Shares Outstanding—Diluted

94,836

78,021

89,871

77,799

(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 September 30,

2013

2012

Net Income Attributable to Common Stockholders

$19,765

$5,815

Gain on sales of real estate properties

(20,187)

(6,265)

Impairments

6,259

2,860

Real estate depreciation and amortization

24,214

23,336

Total adjustments

10,286

19,931

Funds From Operations

$30,051

$25,746

Acquisition costs

504

—

Normalized Funds From Operations

$30,555

$25,746

Funds from Operations per Common Share—Diluted

$0.32

$0.33

Normalized Funds From Operations Per Common Share—Diluted

$0.32

$0.33

FFO Weighted Average Common Shares Outstanding

94,836

78,021

Normalized FFO Weighted Average Common Shares Outstanding

94,836

78,021

(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 September 30,

2013

2012

Net Income Attributable to Common Stockholders

$19,765

$5,815

Gain on sales of real estate properties

(20,187)

(6,265)

Impairments

6,259

2,860

Depreciation and amortization

26,103

24,926

Provision for bad debt, net

112

39

Straight-line rent receivable

(2,162)

(1,481)

Straight-line rent liability

107

110

Stock-based compensation

1,146

935

Provision for deferred post-retirement benefits

218

266

Total non-cash items included in cash flows from operating activities

11,596

21,390

Funds Available For Distribution

$31,361

$27,205

Acquisition costs

504

—

Normalized Funds Available For Distribution

$31,865

$27,205

Funds Available For Distribution Per Common Share—Diluted

$0.33

$0.35

Normalized Funds Available For Distribution Per Common Share—Diluted

$0.34

$0.35

FAD Weighted Average Common Shares Outstanding

94,836

78,021

Normalized FAD Weighted Average Common Shares Outstanding

94,836

78,021

(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.