Healthcare Realty Trust Reports Normalized FFO Of $0.41 Per Share For The Third Quarter

Nov 04, 2015, 17:02 ET from Healthcare Realty Trust Incorporated

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NASHVILLE, Tenn., Nov. 4, 2015 /PRNewswire/ -- Healthcare Realty Trust Incorporated (NYSE: HR) today announced results for the third quarter ended September 30, 2015.  Normalized FFO for the three months ended September 30, 2015 totaled $0.41 per diluted common share.  Over the same time period, year-over-year revenue grew by $3.1 million to $96.7 million.  The Company reported net income attributable to common stockholders for the quarter of $27.5 million.

Salient highlights include:

  • Normalized FFO for the third quarter grew $4.1 million, or 11.0% year-over-year, to $40.7 million. Over the same time period, normalized FFO per share increased 7.9%.
  • Same store NOI grew 5.9% for the trailing twelve months ended September 30, 2015 over the same period a year ago.
  • The four predictive growth measures in the same store multi-tenant portfolio were:
    • contractual increases for in-place leases ("annual bumps") averaged 2.9%
    • cash leasing spreads were 2.1% on 369,000 square feet renewed: 4% of square feet (<0% spread), 27% (0-3%), 59% (3-4%) and 10% (>4%)
    • tenant retention was 82.4%
    • the average yield on renewed leases increased 40 basis points
  • Same store occupancy increased slightly to 89.6% from a year ago. Same store revenue per average occupied square foot increased 2.1% for the trailing twelve months.
  • In September 2015, the Company acquired a 100% leased, 53,000 square foot medical office property in Seattle, Washington for a purchase price of $28.0 million. The property is located on the campus of Providence Health's Swedish Medical Center, and is adjacent to an 82,000 square foot medical office building the Company purchased in October 2013.
  • Also in September 2015, the Company acquired a 73% leased, 48,000 square foot medical office building in Denver, Colorado for a purchase price of $6.5 million. The property is located in close proximity to Catholic Health Initiatives' St. Anthony Hospital, where the Company previously developed two, on-campus medical office buildings totaling 187,000 square feet. The Company has begun development of a third on-campus medical office building totaling 98,000 square feet.
  • Subsequent to the end of the third quarter, the Company purchased two medical office buildings totaling 145,000 square feet for a total purchase price of $55.8 million. One property is adjacent to MultiCare Health's Tacoma General Hospital campus in Tacoma, Washington and the other is on Sutter Health's Alta Bates Summit Medical Center campus in Oakland, California.
  • During the third quarter, the Company sold four medical office buildings located in Pennsylvania, Florida, Arizona and Missouri totaling 238,000 square feet for $40.7 million.
  • In September 2015, Moody's Investors Services upgraded the Company's senior unsecured debt rating to Baa2.
  • A dividend of $0.30 per common share was declared, which is equal to 73.2% of normalized FFO.

Healthcare Realty Trust is a real estate investment trust that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States.  The Company had investments of approximately $3.2 billion in 195 real estate properties as of September 30, 2015.  The Company's 195 owned real estate properties are located in 30 states and total approximately 14.1 million square feet.  The Company provided leasing and property management services to approximately 9.6 million square feet nationwide.

Additional information regarding the Company, including this quarter's operations, can be found at www.healthcarerealty.com.  Please contact the Company at 615.269.8175 to request a printed copy of this information.

In addition to the historical information contained within, the matters discussed in this press release may contain forward-looking statements that involve risks and uncertainties. These risks are discussed in filings with the Securities and Exchange Commission by Healthcare Realty Trust, including its Annual Report on Form 10-K for the year ended December 31, 2014 under the heading "Risk  Factors," and as updated in its Quarterly Reports on Form 10-Q filed thereafter. Forward-looking statements represent the Company's judgment as of the date of this release.  The Company disclaims any obligation to update forward-looking statements.

 

HEALTHCARE REALTY TRUST INCORPORATED

Condensed Consolidated Balance Sheets (1)

(amounts in thousands, except per share data)

(Unaudited)

 

ASSETS

Real estate properties:

9/30/2015

12/31/2014

Land

$186,108

$183,060

Buildings, improvements and lease intangibles

3,042,367

3,048,251

Personal property

9,833

9,914

Construction in progress

15,455

Land held for development

17,475

17,054

Total real estate properties

3,271,238

3,258,279

Less accumulated depreciation and amortization

(737,398)

(700,671)

Total real estate properties, net

2,533,840

2,557,608

Cash and cash equivalents

8,497

3,519

Mortgage notes receivable

1,900

Assets held for sale and discontinued operations, net

6,380

9,146

Other assets, net

192,969

185,337

Total assets

$2,741,686

$2,757,510

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Notes and bonds payable

$1,381,285

$1,403,692

Accounts payable and accrued liabilities

65,839

70,240

Liabilities of discontinued operations

216

372

Other liabilities

65,648

62,152

Total liabilities

1,512,988

1,536,456

Commitments and contingencies

Stockholders' equity:

Preferred stock, $.01 par value; 50,000 shares authorized; none issued and outstanding

Common stock, $.01 par value; 150,000 shares authorized; 100,477 and 98,828 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively

1,005

988

Additional paid-in capital

2,435,849

2,389,830

Accumulated other comprehensive income

(1,611)

(2,519)

Cumulative net income attributable to common stockholders

891,027

840,249

Cumulative dividends

(2,097,572)

(2,007,494)

Total stockholders' equity

1,228,698

1,221,054

Total liabilities and stockholders' equity

$2,741,686

$2,757,510

(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,

2015

2014

2015

2014

Revenues

Rental income

$95,383

$92,095

$285,867

$267,877

Mortgage interest

29

44

91

3,634

Other operating

1,313

1,474

3,931

4,345

96,725

93,613

289,889

275,856

Expenses

Property operating

35,247

34,204

103,437

100,671

General and administrative

6,258

5,185

19,709

16,818

Depreciation

26,571

25,345

79,511

73,503

Amortization

2,386

2,656

7,528

8,190

Bad debts, net of recoveries

(21)

3

(202)

123

70,441

67,393

209,983

199,305

Other Income (Expense)

Gain on sales of properties

5,915

47,464

Interest expense

(15,113)

(18,192)

(50,649)

(54,176)

Loss on extinguishment of debt

(27,998)

Pension termination

(5,260)

Impairment of real estate assets

(310)

(3,638)

Impairment of internally-developed software

(654)

Interest and other income, net

72

409

311

2,545

(9,436)

(17,783)

(40,424)

(51,631)

Income From Continuing Operations

16,848

8,437

39,482

24,920

Discontinued Operations

Income from discontinued operations

61

221

725

238

Impairments of real estate assets

(4,505)

(11,034)

Gain on sale of property

10,571

10,571

3

Income (Loss) From Discontinued Operations

10,632

(4,284)

11,296

(10,793)

Net Income

27,480

4,153

50,778

14,127

Less: Net income attributable to noncontrolling interests

(162)

(313)

Net Income Attributable To Common Stockholders

$27,480

$3,991

$50,778

$13,814

Basic Earnings (Loss) Per Common Share:

Income from continuing operations

$0.17

$0.09

$0.40

$0.26

Discontinued operations

0.11

(0.05)

0.11

(0.11)

Net income attributable to common stockholders

$0.28

$0.04

$0.51

$0.15

Diluted Earnings (Loss) Per Common Share:

Income from continuing operations

$0.17

$0.09

$0.40

$0.26

Discontinued operations

0.10

(0.05)

0.11

(0.12)

Net income attributable to common stockholders

$0.27

$0.04

$0.51

$0.14

Weighted Average Common Shares Outstanding—Basic

99,337

95,858

98,994

94,846

Weighted Average Common Shares Outstanding—Diluted

99,997

97,329

99,694

96,310

(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,

2015

2014

Net Income Attributable to Common Stockholders

$27,480

$3,991

Gain on sales of properties

(16,486)

Impairments of real estate assets

310

4,505

Leasing commission amortization (3)

879

753

Real estate depreciation and amortization

28,438

27,697

Total adjustments

13,141

32,955

Funds From Operations Attributable to Common Stockholders

$40,621

$36,946

Acquisition costs

121

188

Reversal of restricted stock amortization upon director / officer resignation

(445)

Normalized Funds From Operations Attributable to Common Stockholders

$40,742

$36,689

Funds from Operations per Common Share—Diluted

$0.41

$0.38

Normalized Funds From Operations Per Common Share—Diluted

$0.41

$0.38

FFO Weighted Average Common Shares Outstanding

99,997

97,329

(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.

(3)       In the third quarter of 2015, the Company began including an add-back for leasing commission amortization in order to provide a better basis for comparing its results of operations with those of others in the industry, consistent with the NAREIT definition of FFO.   All periods presented have been adjusted.

SOURCE Healthcare Realty Trust Incorporated



RELATED LINKS

http://www.healthcarerealty.com