Healthcare Realty Trust Reports Normalized FFO Of $0.36 Per Share For The Second Quarter

HEALTHCARE REALTY TRUST INCORPORATED

Condensed Consolidated Balance Sheets ⁽¹⁾

(amounts in thousands, except per share data)

(Unaudited)

ASSETS

Real Estate Properties:

6/30/2014

12/31/2013

Land

$183,581

$178,931

Buildings, improvements and lease intangibles

3,014,422

2,861,935

Personal property

9,504

9,267

Land held for development

17,054

17,054

Total real estate properties

3,224,561

3,067,187

Less accumulated depreciation

(675,890)

(632,109)

Total real estate properties, net

2,548,671

2,435,078

Cash and cash equivalents

17,523

8,671

Mortgage notes receivable

4,858

125,547

Assets held for sale and discontinued operations, net

5,759

6,852

Other assets, net

173,299

153,514

Total assets

$2,750,110

$2,729,662

LIABILITIES AND EQUITY

Liabilities:

Notes and bonds payable

$1,397,027

$1,348,459

Accounts payable and accrued liabilities

72,460

73,741

Liabilities of discontinued operations

1,041

1,112

Other liabilities

60,232

61,064

Total liabilities

1,530,760

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; 97,172 and 95,924 shares issued and outstanding at June 30,

2014 and December 31, 2013, respectively

972

959

Additional paid-in capital

2,348,925

2,325,228

Accumulated other comprehensive income

51

51

Cumulative net income attributable to common stockholders

818,185

808,362

Cumulative dividends

(1,948,783)

(1,891,123)

Total stockholders' equity

1,219,350

1,243,477

Noncontrolling interests

—

1,809

Total equity

1,219,350

1,245,286

Total liabilities and equity

$2,750,110

$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 June 30,

Six Months Ended June 30,

2014

2013

2014

2013

Revenues

Rental income

$90,541

$76,883

$178,301

$152,687

Mortgage interest

969

3,427

3,590

6,364

Other operating

1,425

1,508

2,874

2,964

92,935

81,818

184,765

162,015

Expenses

Property operating

34,136

31,235

67,510

60,636

General and administrative

5,666

5,840

11,644

12,380

Depreciation

24,911

21,379

48,990

42,501

Amortization

2,775

2,559

5,534

5,225

Bad debt, net of recoveries

73

19

120

7

67,561

61,032

133,798

120,749

Other Income (Expense)

Loss on extinguishments of debt

—

(29,638)

—

(29,638)

Interest expense

(18,066)

(18,925)

(35,984)

(38,695)

Interest and other income, net

2,036

219

2,136

449

(16,030)

(48,344)

(33,848)

(67,884)

Income (Loss) From Continuing Operations

9,344

(27,558)

17,119

(26,618)

Discontinued Operations

Income (loss) from discontinued operations

(231)

1,537

(619)

3,209

Impairments

(3,105)

—

(6,529)

(3,630)

Gain on sales of real estate properties

3

1,783

3

1,783

Income (Loss) From Discontinued Operations

(3,333)

3,320

(7,145)

1,362

Net Income (Loss)

6,011

(24,238)

9,974

(25,256)

Less: Net (income) loss attributable to noncontrolling interests

(40)

33

(151)

52

Net Income (Loss) Attributable To Common Stockholders

$5,971

($24,205)

$9,823

($25,204)

Basic Earnings (Loss) Per Common Share:

Income (loss) from continuing operations

$0.10

($0.31)

$0.18

($0.30)

Discontinued operations

(0.04)

0.04

(0.08)

0.01

Net income (loss) attributable to common stockholders

$0.06

($0.27)

$0.10

($0.29)

Diluted Earnings (Loss) Per Common Share:

Income (loss) from continuing operations

$0.10

($0.31)

$0.18

($0.30)

Discontinued operations

(0.04)

0.04

(0.08)

0.01

Net income (loss) attributable to common stockholders

$0.06

($0.27)

$0.10

($0.29)

Weighted Average Common Shares Outstanding—Basic

94,508

89,204

94,331

88,056

Weighted Average Common Shares Outstanding—Diluted

95,978

89,204

95,788

88,056

(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 June 30,

2014

2013

Net Income (Loss) Attributable to Common Stockholders

$5,971

($24,205)

Gain on sales of real estate properties

(3)

(1,783)

Impairments

3,105

—

Real estate depreciation and amortization

27,017

24,002

Total adjustments

30,119

22,219

Funds From Operations

$36,090

($1,986)

Acquisition costs

49

124

Refund of prior year overpayment of certain operating expenses

(1,919)

—

Interest incurred related to the timing of insurance/redemption of senior notes

—

667

Loss on extinguishment of debt

—

29,907

Normalized Funds From Operations

$34,220

$28,712

Funds from Operations per Common Share—Diluted

$0.38

($0.02)

Normalized Funds From Operations Per Common Share—Diluted

$0.36

$0.32

FFO Weighted Average Common Shares Outstanding

95,978

89,204

Normalized FFO Weighted Average Common Shares Outstanding

95,978

89,204

(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.

HEALTHCARE REALTY TRUST INCORPORATED

Reconciliation of FAD and Normalized FAD ⁽¹⁾

(amounts in thousands, except per share data)

(Unaudited)

Three Months Ended June 30,

2014

2013

Net Income (Loss) Attributable to Common Stockholders

$5,971

($24,205)

Gain on sales of real estate properties

(3)

(1,783)

Impairments

3,105

—

Depreciation and amortization

28,825

25,723

Provision for bad debt, net

80

19

Straight-line rent receivable

(2,513)

(1,802)

Straight-line rent liability

209

102

Stock-based compensation

1,266

1,137

Provision for deferred post-retirement benefits

14

218

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

30,983

23,614

Funds Available For Distribution

$36,954

($591)

Acquisition costs

49

124

Refund of prior year overpayment of certain operating expenses

(1,919)

—

Interest incurred related to the timing of insurance/redemption of senior notes

—

667

Loss on extinguishment of debt

—

29,907

Normalized Funds Available For Distribution

$35,084

$30,107

Funds Available For Distribution Per Common Share—Diluted

$0.39

Normalized Funds Available For Distribution Per Common Share—Diluted

$0.37

$0.34

FAD Weighted Average Common Shares Outstanding

95,978

88,382

Normalized FAD Weighted Average Common Shares Outstanding

95,978

88,382

(1)

Funds Available For Distribution ("FAD") 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. FAD 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.