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

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.