Healthcare Realty Trust Announces First Quarter Results

HEALTHCARE REALTY TRUST INCORPORATED

Condensed Consolidated Statements of Operations (1)

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

March 31,

2011

2010

REVENUES

Master lease rent

$            15,019

$            14,059

Property operating

52,353

45,531

Straight-line rent

1,286

600

Mortgage interest

1,649

638

Other operating

2,305

2,169

72,612

62,997

EXPENSES

General and administrative

5,781

4,728

Property operating

28,095

24,199

Bad debt, net

180

(199)

Depreciation

18,895

16,203

Amortization

1,770

1,301

54,721

46,232

OTHER INCOME (EXPENSE)

Loss on extinguishment of debt

(1,986)

(480)

Interest expense

(22,274)

(16,311)

Interest and other income, net

228

437

(24,032)

(16,354)

INCOME (LOSS) FROM CONTINUING OPERATIONS

(6,141)

411

DISCONTINUED OPERATIONS

Income from discontinued operations

490

1,551

Impairment

(147)

-

Gain on sales of real estate properties

36

2,696

INCOME FROM DISCONTINUED OPERATIONS

379

4,247

NET INCOME (LOSS)

(5,762)

4,658

Less:  Net income attributable to noncontrolling interests

(27)

(64)

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$             (5,789)

$              4,594

BASIC EARNINGS (LOSS) PER COMMON SHARE

Income (loss) from continuing operations

$               (0.09)

$                0.01

Discontinued operations

0.00

0.07

Net income (loss) attributable to common stockholders

$               (0.09)

$                0.08

DILUTED EARNINGS (LOSS) PER COMMON SHARE

Income (loss) from continuing operations

$               (0.09)

$                0.01

Discontinued operations

0.00

0.07

Net income (loss) attributable to common stockholders

$               (0.09)

$                0.08

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC

66,151,426

59,961,455

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED (2)

66,151,426

60,969,730

(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.

(2)

Restricted stock and options under the employee stock purchase plan to purchase the Company's stock were excluded from the calculation of the diluted loss per common share for the three months ended March 31, 2011 because the effect was anti-dilutive due to the net loss from continuing operations incurred for the period.

HEALTHCARE REALTY TRUST INCORPORATED

Condensed Consolidated Statements of Cash Flows (1)

(Dollars in thousands)

(Unaudited)

Three Months Ended

March 31,

2011

2010

Cash flows from operating activities:

Net income (loss)

$   (5,762)

$   4,658

Non-cash items:

Depreciation and amortization - real estate

20,182

17,437

Depreciation and amortization - other

1,673

1,411

Provision for bad debt, net

195

(199)

Impairment

147

-

Straight-line rent receivable

(1,286)

(584)

Straight-line rent liability

97

103

Stock-based compensation

941

754

Provision for deferred post-retirement benefits

459

436

  Total non-cash items

22,408

19,358

Other items:

Accounts payable and accrued liabilities

(6,418)

5,052

Other liabilities

1,217

997

Other assets

(3,721)

488

Gain on sales of real estate properties

(36)

(2,696)

Loss on extinguishment of debt

1,986

480

  Total other items

(6,972)

4,321

Net cash provided by operating activities

9,674

28,337

Cash flows from investing activities:

Acquisition and development of real estate properties

(25,537)

(25,268)

Funding of mortgages and notes receivable

(48,780)

(2,090)

Proceeds from sales of real estate

3,775

19,588

Proceeds from mortgages and notes receivable repayments

18

36

Net cash used in investing activities

(70,524)

(7,734)

Cash flows from financing activities:

Net borrowings (repayments) on unsecured credit facility

164,000

(3,000)

Repayments on notes and bonds payable

(806)

(524)

Repurchase of notes payable

(280,201)

(8,556)

Quarterly dividends paid

(20,245)

(18,417)

Proceeds from issuance of common stock

90,073

15,044

Equity issuance costs

(61)

-

Purchase of noncontrolling interests

(1,591)

-

Common stock redemptions

(51)

-

Debt issuance costs

(356)

(474)

Capital contributions received from noncontrolling interest holders

-

633

Distributions to noncontrolling interest holders

(226)

(115)

Net cash used in financing activities

(49,464)

(15,409)

Increase (decrease) in cash and cash equivalents

(110,314)

5,194

Cash and cash equivalents, beginning of period

113,321

5,851

Cash and cash equivalents, end of period

$    3,007

$ 11,045

(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

March 31,

2011

2010

Net Income (Loss) Attributable to Common Stockholders

$     (5,789)

$          4,594

  Gain on sales of real estate properties

(36)

(2,696)

  Real estate depreciation and amortization

20,054

17,333

  Total adjustments

20,018

14,637

Funds From Operations

$     14,229

$        19,231

Funds From Operations Per Common Share - Basic

$         0.22

$            0.32

Funds From Operations Per Common Share - Diluted

$         0.21

$            0.32

Weighted Average Common Shares Outstanding - Basic

66,151,426

59,961,455

Weighted Average Common Shares Outstanding - Diluted

67,264,517

60,969,730

RECONCILIATION OF FUNDS AVAILABLE FOR DISTRIBUTION (2):

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

March 31, 2011

Net Loss Attributable to Common Stockholders

$           (5,789)

  Gain on sales of real estate properties

(36)

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

22,408

Funds Available For Distribution

$          16,583

Funds Available For Distribution Per Common Share - Diluted

$              0.25

Weighted Average Common Shares Outstanding - Diluted

67,264,517

(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.