Healthcare Realty Trust Reports Normalized FFO Of $0.37 Per Share For The Third Quarter

HEALTHCARE REALTY TRUST INCORPORATED

Condensed Consolidated Balance Sheets ⁽¹⁾

(amounts in thousands, except per share data)

(Unaudited)

ASSETS

Real Estate Properties:

9/30/2014

12/31/2013

Land

$183,991

$178,931

Buildings, improvements and lease intangibles

3,030,960

2,861,935

Personal property

9,535

9,267

Land held for development

17,054

17,054

Total real estate properties

3,241,540

3,067,187

Less accumulated depreciation

(693,517)

(632,109)

Total real estate properties, net

2,548,023

2,435,078

Cash and cash equivalents

1,684

8,671

Mortgage notes receivable

1,900

125,547

Assets held for sale and discontinued operations, net

11,479

6,852

Other assets, net

178,238

153,514

Total assets

$2,741,324

$2,729,662

LIABILITIES AND EQUITY

Liabilities:

Notes and bonds payable

$1,403,379

$1,348,459

Accounts payable and accrued liabilities

60,017

73,741

Liabilities of discontinued operations

508

1,112

Other liabilities

57,913

61,064

Total liabilities

1,521,817

1,484,376

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; 98,119 and 95,924 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively

981

959

Additional paid-in capital

2,374,345

2,325,228

Accumulated other comprehensive income

51

51

Cumulative net income attributable to common stockholders

822,176

808,362

Cumulative dividends

(1,978,046)

(1,891,123)

Total stockholders' equity

1,219,507

1,243,477

Noncontrolling interests

—

1,809

Total equity

1,219,507

1,245,286

Total liabilities and equity

$2,741,324

$2,729,662

(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 per share data)

(Unaudited)

Three Months Ended
September 30,

Nine Months Ended
September 30,

2014

2013

2014

2013

Revenues

Rental income

$92,987

$78,161

$270,513

$230,094

Mortgage interest

44

3,926

3,634

10,290

Other operating

1,475

1,579

4,349

4,542

94,506

83,666

278,496

244,926

Expenses

Property operating

34,678

32,244

102,077

92,742

General and administrative

5,190

5,582

16,834

17,961

Depreciation

25,660

21,716

74,408

63,970

Amortization

2,656

2,595

8,190

7,819

Bad debt, net of recoveries

3

109

123

116

68,187

62,246

201,632

182,608

Other Income (Expense)

Loss on extinguishments of debt

—

—

—

(29,638)

Interest expense

(18,192)

(17,043)

(54,176)

(55,738)

Interest and other income, net

410

237

2,545

686

(17,782)

(16,806)

(51,631)

(84,690)

Income (Loss) From Continuing Operations

8,537

4,614

25,233

(22,372)

Discontinued Operations

Income (loss) from discontinued operations

121

1,241

(75)

4,818

Impairments

(4,505)

(6,259)

(11,034)

(9,889)

Gain on sales of real estate properties

—

20,187

3

21,970

Income (Loss) From Discontinued Operations

(4,384)

15,169

(11,106)

16,899

Net Income (Loss)

4,153

19,783

14,127

(5,473)

Less: Net (income) loss attributable to noncontrolling interests

(162)

(18)

(313)

34

Net Income (Loss) Attributable To Common Stockholders

$3,991

$19,765

$13,814

($5,439)

Basic Earnings (Loss) Per Common Share:

Income (loss) from continuing operations

$0.09

$0.05

$0.27

($0.25)

Discontinued operations

(0.05)

0.16

(0.12)

0.19

Net income (loss) attributable to common stockholders

$0.04

$0.21

$0.15

($0.06)

Diluted Earnings (Loss) Per Common Share:

Income (loss) from continuing operations

$0.09

$0.05

$0.26

($0.25)

Discontinued operations

(0.05)

0.16

(0.12)

0.19

Net income (loss) attributable to common stockholders

$0.04

$0.21

$0.14

($0.06)

Weighted Average Common Shares Outstanding—Basic

95,858

93,443

94,846

89,871

Weighted Average Common Shares Outstanding—Diluted

97,329

94,836

96,310

89,871

(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,

2014

2013

Net Income Attributable to Common Stockholders

$3,991

$19,765

Gain on sales of real estate properties

—

(20,187)

Impairments

4,505

6,259

Real estate depreciation and amortization

27,697

24,214

Total adjustments

32,202

10,286

Funds From Operations

$36,193

$30,051

Acquisition costs

188

504

Reversal of restricted stock amortization upon officer resignation

(445)

—

Normalized Funds From Operations

$35,936

$30,555

Funds from Operations per Common Share—Diluted

$0.37

$0.32

Normalized Funds From Operations Per Common Share—Diluted

$0.37

$0.32

FFO Weighted Average Common Shares Outstanding

97,329

94,836

(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 does not represent cash generated from operating activities determined in accordance with accounting principles generally accepted in the United States of America and is not necessarily indicative of cash available to fund cash needs. FFO should not be considered an alternative to net income attributable to common stockholders as an indicator of the Company's operating performance or as an alternative to cash flow as a measure of liquidity.