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

NASHVILLE, Tenn., July 30, 2014 /PRNewswire/ -- Healthcare Realty Trust Incorporated (NYSE:HR) today announced results for the second quarter ended June 30, 2014.  Normalized FFO for the three months ended June 30, 2014 totaled $0.36 per diluted common share.  Normalized FAD for the three months ended June 30, 2014 totaled $0.37 per diluted common share.

Salient highlights include:

  • Normalized FFO of $0.36 per share compared to NAREIT FFO of $0.38 per share reflects a cash reimbursement of $1.9 million for certain operating expenses incurred in prior years.
  • Normalized FFO grew $5.5 million, or 19.2% year-over-year, to $34.2 million.  Over the same time period, normalized FFO per share increased 12.5%.
  • In May, Healthcare Realty assumed ownership of the outpatient facility in Oklahoma City, which was previously funded by the Company through a construction loan.  The 200,000 square foot property is 100% leased to "AA-" rated Mercy Health.
  • In June, the Company purchased two on-campus medical office buildings totaling 83,000 square feet for a total purchase price of $15.2 million.  These properties are 97% leased and located in Austin, Texas and Greensboro, North Carolina.
  • In July, the Company acquired a 60,000 square foot medical office building in Minneapolis for a purchase price of $19.9 million.  The property is 100% leased and connected to Unity Hospital, a 220-bed hospital owned by Allina Health.
  • The twelve development conversion properties generated NOI of $3.4 million and would have generated $4.1 million had all occupants been in place and paying rent for the entire quarter.  Occupancy and leasing at these twelve properties increased to 70% and 82%, respectively.
  • Same store NOI grew by 2.1% year-over-year and occupancy remained stable at 91%.
  • Leases totaling 445,000 square feet were signed or renewed during the second quarter with tenant retention increasing to 87%.
  • A dividend of $0.30 per common share was declared for the second quarter of 2014, which is 81.1% of normalized FAD.

For the three months ended June 30, 2014, year-over-year revenue grew by $11.1 million to $92.9 million.  The Company reported net income attributable to common stockholders for the quarter of $6.0 million.

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 202 real estate properties and mortgages as of June 30, 2014.  The Company's 200 owned real estate properties are located in 29 states and total approximately 14.3 million square feet.  The Company provides property management services to approximately 9.7 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, 2013 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:


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



($0.01)


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.

 

SOURCE Healthcare Realty Trust Incorporated

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