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

HEALTHCARE REALTY TRUST INCORPORATED

Consolidated Balance Sheets ⁽¹⁾

(amounts in thousands, except per share data)

ASSETS

Real estate properties:

12/31/2015

12/31/2014

Land

$198,585

$183,060

Buildings, improvements and lease intangibles

3,135,893

3,048,251

Personal property

9,954

9,914

Construction in progress

19,024

—

Land held for development

17,452

17,054

Total real estate properties

3,380,908

3,258,279

Less accumulated depreciation and amortization

(761,926)

(700,671)

Total real estate properties, net

2,618,982

2,557,608

Cash and cash equivalents

4,102

3,519

Mortgage notes receivable

—

1,900

Assets held for sale and discontinued operations, net

724

9,146

Other assets, net

192,918

185,337

Total assets

$2,816,726

$2,757,510

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Notes and bonds payable

$1,431,494

$1,403,692

Accounts payable and accrued liabilities

75,489

70,240

Liabilities of discontinued operations

33

372

Other liabilities

66,963

62,152

Total liabilities

1,573,979

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; 101,517 and 98,828 shares
issued and outstanding at December 31, 2015 and December 31, 2014, respectively

1,015

988

Additional paid-in capital

2,461,376

2,389,830

Accumulated other comprehensive income

(1,569)

(2,519)

Cumulative net income attributable to common stockholders

909,685

840,249

Cumulative dividends

(2,127,760)

(2,007,494)

Total stockholders' equity

1,242,747

1,221,054

Total liabilities and stockholders' equity

$2,816,726

$2,757,510

(1)       The 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

Consolidated Statements of Income ⁽¹⁾

(amounts in thousands, except per share data)

(Unaudited)

Three Months Ended
December 31,

Twelve Months Ended
December 31,

2015

2014

2015

2014

Revenues

Rental income

$97,466

$93,648

$383,333

$361,525

Mortgage interest

—

32

91

3,665

Other operating

1,116

1,320

5,047

5,665

98,582

95,000

388,471

370,855

Expenses

Property operating

36,758

33,386

140,195

134,057

General and administrative

7,216

5,990

26,925

22,808

Depreciation

27,019

25,881

106,530

99,384

Amortization

2,556

2,630

10,084

10,820

Bad debts, net of recoveries

9

(92)

(193)

31

73,558

67,795

283,541

267,100

Other Income (Expense)

Gain on sales of real estate properties

9,138

—

56,602

—

Interest expense

(14,885)

(18,237)

(65,534)

(72,413)

Loss on extinguishment of debt

—

—

(27,998)

—

Pension termination

—

—

(5,260)

—

Impairment of real estate assets

(1)

—

(3,639)

—

Impairment of internally-developed software

—

—

(654)

—

Interest and other income, net

78

91

389

2,637

(5,670)

(18,146)

(46,094)

(69,776)

Income From Continuing Operations

19,354

9,059

58,836

33,979

Discontinued Operations

Income from discontinued operations

(10)

729

715

967

Impairments of real estate assets

(686)

(995)

(686)

(12,029)

Gain on sales of real estate properties

—

9,280

10,571

9,283

Income (Loss) From Discontinued Operations

(696)

9,014

10,600

(1,779)

Net Income

18,658

18,073

69,436

32,200

Less: Net income attributable to noncontrolling interests

—

—

—

(313)

Net Income Attributable To Common Stockholders

$18,658

$18,073

$69,436

$31,887

Basic Earnings (Loss) Per Common Share:

Income from continuing operations

$0.19

$0.09

$0.59

$0.35

Discontinued operations

0.00

0.10

0.11

(0.02)

Net income attributable to common stockholders

$0.19

$0.19

$0.70

$0.33

Diluted Earnings (Loss) Per Common Share:

Income from continuing operations

$0.19

$0.09

$0.59

$0.35

Discontinued operations

0.00

0.09

0.11

(0.02)

Net income attributable to common stockholders

$0.19

$0.18

$0.70

$0.33

Weighted Average Common Shares Outstanding—Basic

99,699

96,566

99,171

95,279

Weighted Average Common Shares Outstanding—Diluted

100,474

98,086

99,880

96,759

HEALTHCARE REALTY TRUST INCORPORATED

Reconciliation of FFO and Normalized FFO ^(1) (2)

(amounts in thousands, except per share data)

(Unaudited)

THREE MONTHS ENDED DECEMBER 31

2015

2014

Net Income Attributable to Common Stockholders

$18,658

$18,073

Gain on sales of real estate properties

(9,138)

(9,280)

Impairments of real estate assets

687

995

Leasing commission amortization (3)

886

810

Real estate depreciation and amortization

29,021

27,897

Total adjustments

21,456

20,422

Funds From Operations Attributable to Common Stockholders

$40,114

$38,495

Acquisition costs

1,068

471

Reversal of restricted stock amortization upon director / officer resignation

(40)

(115)

Security deposit recognized upon sale

—

(407)

Normalized Funds From Operations Attributable to Common Stockholders

$41,142

$38,444

Funds from Operations per Common Share—Diluted

$0.40

$0.39

Normalized Funds From Operations Per Common Share—Diluted

$0.41

$0.39

FFO Weighted Average Common Shares Outstanding

100,474

98,086

TWELVE MONTHS ENDED DECEMBER 31

2015

2014

Net Income Attributable to Common Stockholders

$69,436

$31,887

Gain on sales of real estate properties

(67,172)

(9,283)

Impairments of real estate assets

4,325

12,029

Leasing commission amortization (3)

3,449

3,000

Real estate depreciation and amortization

114,533

108,860

Total adjustments

55,135

114,606

Funds From Operations Attributable to Common Stockholders

$124,571

$146,493

Acquisition costs

1,394

708

Severance expense

141

—

Loss on extinguishment of debt

27,998

—

Refund of prior year overpayment of certain operating expenses

—

(1,919)

Pension termination

5,260

—

Impairment of internally-developed software

654

—

Reversal of restricted stock amortization upon director / officer resignation

(40)

(560)

Security deposit recognized upon sale

—

(407)

Normalized Funds From Operations Attributable to Common Stockholders

$159,978

$144,315

Funds from Operations per Common Share—Diluted

$1.25

$1.51

Normalized Funds From Operations Per Common Share—Diluted

$1.60

$1.49

FFO Weighted Average Common Shares Outstanding

99,880

96,759

(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 (including amortization of leasing commissions), 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.