HEALTHCARE REALTY TRUST INC - FORM 8-K - EX-99.1 - SECOND QUARTER EARNINGS PRESS RELEASE DATED JULY 31, 2012 - July 31, 2012

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8-K - HEALTHCARE REALTY TRUST INChr-2012630x8k.htm
EX-99.2 - SECOND QUARTER DIVIDEND PRESS RELEASE DATED JULY 31, 2012 - HEALTHCARE REALTY TRUST INCexhibit992.htm
EX-99.3 - SUPPLEMENTAL INFORMATION FOR THE THREE MONTHS ENDED JUNE 30, 2012 - HEALTHCARE REALTY TRUST INCexhibit993.htm


Section 2: EX-99.1 (SECOND QUARTER EARNINGS PRESS RELEASE, DATED JULY 31, 2012)

Exhibit 99.1
Carla Baca
Financial Communications
P: 615.269.8175
News Release
HEALTHCARE REALTY TRUST REPORTS NORMALIZED FFO OF $0.34 PER SHARE FOR THE SECOND QUARTER

NASHVILLE, Tennessee, July 31, 2012 - Healthcare Realty Trust Incorporated (NYSE:HR) today announced results for the second quarter ended June 30, 2012. Normalized FFO and FFO for the three months ended June 30, 2012 totaled $0.34 per diluted common share. Normalized FAD and FAD for the three months ended June 30, 2012 totaled $0.36 per diluted common share.

For the three months ended June 30, 2012, revenues totaled $78.7 million, income from continuing operations totaled $2.4 million, and net income attributable to common stockholders totaled $2.9 million.

Salient highlights include:
•
Healthcare Realty's stabilizing properties ("SIP") are 51% leased, up from 46% last quarter. Occupancy in the SIP portfolio increased to 33% from 28% as tenants' suites were built out. Adjusted NOI for the SIP properties improved by approximately $300,000 compared to the previous quarter.
•
The Company has one property under construction, which is 40% leased, and expects to complete construction in the third quarter of 2012.
•
Including the developments that the Company is funding through construction loans, which are all secured by 100%-leased properties, Healthcare Realty's overall development portfolio is now 62% leased.
•
Healthcare Realty invested $28.5 million during the second quarter of 2012, including $10.7 million in one property acquisition, $15.6 million in two existing construction mortgages, and $2.2 million in one property under construction.
•
Occupancy in the same facility portfolio was 90%, and the occupancy of investments made during the past five quarters, which are not included in the same facility portfolio, was 96%.
•
The multi-tenant same facility NOI increased 3.5% in the second quarter from a year ago, and the overall same facility portfolio NOI increased 2.1% over the same time period.
•
The weighted average increase in lease rates for the Company’s multi-tenant properties remained strong in the second quarter. Contractual rates for in-place leases were up 3.1%, and rate increases on newly executed leases (“cash leasing spreads”) averaged 1.8%.
•
The percentage of Healthcare Realty’s medical office properties that are on or adjacent to hospital campuses increased to 77% in the second quarter of 2012, compared to 66% eight quarters ago, continuing the Company’s strategic shift toward lower-risk, on-campus medical office buildings.
•
A dividend of $0.30 per share was declared for the second quarter of 2012, which is 83% of normalized FAD.



 
 
 
 
 
HEALTHCAREREALTY.COM | PAGE 1 OF 6



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 $2.9 billion in 205 real estate properties and mortgages as of June 30, 2012. The Company's 198 owned real estate properties are located in 28 states and total approximately 13.5 million square feet. The Company provides property management services to approximately 10.3 million square feet nationwide.

The Company directs interested parties to its Internet site, www.healthcarerealty.com, where information is posted regarding this quarter’s operations. 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, 2011 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.


 
 
 
 
 
HEALTHCAREREALTY.COM | PAGE 2 OF 6



HEALTHCARE REALTY TRUST INCORPORATED
Condensed Consolidated Balance Sheets (1) 
(dollars in thousands, except per share data)
(Unaudited)
 
 
 
6/30/2012
 
12/31/2011
Assets
 
 
 
 
REAL ESTATE PROPERTIES:
 
 
 
 
Land
 
$
163,211

 
$
162,843

Buildings, improvements, and lease intangibles
 
2,552,106

 
2,521,226

Personal property
 
18,776

 
18,221

Construction in progress
 
34,180

 
86,328

Total real estate properties
 
2,768,273

 
2,788,618

Less accumulated depreciation
 
(545,677
)
 
(516,747
)
Total real estate properties, net
 
2,222,596

 
2,271,871

Cash and cash equivalents
 
3,103

 
4,738

Mortgage notes receivable
 
118,059

 
97,381

Assets held for sale and discontinued operations, net
 
12,921

 
28,650

Other assets, net
 
115,645

 
118,382

Total assets
 
$
2,472,324

 
$
2,521,022

Liabilities and Equity
 
 
 
 
LIABILITIES:
 
 
 
 
Notes and bonds payable
 
$
1,395,600

 
$
1,393,537

Accounts payable and accrued liabilities
 
57,785

 
72,217

Liabilities of discontinued operations
 
174

 
518

Other liabilities
 
52,570

 
49,944

Total liabilities
 
1,506,129

 
1,516,216

Commitments and contingencies
 
 
 
 
EQUITY:
 
 
 
 
Preferred stock, $.01 par value; 50,000,000 shares authorized; none issued and outstanding
 
—

 
—

Common stock, $.01 par value; 150,000,000 shares authorized; 78,002,812 and 77,843,883 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively
 
780

 
779

Additional paid-in capital
 
1,896,735

 
1,894,604

Accumulated other comprehensive loss
 
(3,332
)
 
(3,332
)
Cumulative net income attributable to common stockholders
 
801,993

 
795,951

Cumulative dividends
 
(1,729,981
)
 
(1,683,196
)
Total stockholders’ equity
 
966,195

 
1,004,806

Total liabilities and equity
 
$
2,472,324

 
$
2,521,022

 
(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.








 
 
 
 
 
HEALTHCAREREALTY.COM | PAGE 3 OF 6


HEALTHCARE REALTY TRUST INCORPORATED
Condensed Consolidated Statements of Operations (1)
(dollars in thousands, except per share data)
(Unaudited)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2012
 
2011
 
2012
 
2011
REVENUES
 
 
 
 
 
 
 
 
Property operating
 
$
60,948

 
$
53,320

 
$
119,913

 
$
105,141

Single-tenant net lease
 
12,833

 
13,459

 
25,092

 
27,503

Straight-line rent
 
1,542

 
1,076

 
3,449

 
2,364

Mortgage interest
 
2,039

 
1,825

 
4,331

 
3,474

Other operating
 
1,374

 
2,047

 
3,146

 
4,345

 
 
78,736

 
71,727

 
155,931

 
142,827

EXPENSES
 
 
 
 
 
 
 
 
Property operating
 
29,457

 
27,773

 
58,039

 
55,210

General and administrative
 
4,519

 
5,157

 
9,782

 
10,938

Depreciation
 
21,311

 
18,487

 
42,333

 
36,756

Amortization
 
2,540

 
1,778

 
5,077

 
3,555

Bad debt, net
 
149

 
93

 
109

 
271

 
 
57,976

 
53,288

 
115,340

 
106,730

OTHER INCOME (EXPENSE)
 
 
 
 
 
 
 
 
Loss on extinguishment of debt
 
—

 
—

 
—

 
(1,986
)
Interest expense
 
(18,530
)
 
(17,343
)
 
(36,909
)
 
(39,617
)
Interest and other income, net
 
203

 
196

 
508

 
418

 
 
(18,327
)

(17,147
)
 
(36,401
)
 
(41,185
)
INCOME (LOSS) FROM CONTINUING OPERATIONS
 
2,433

 
1,292

 
4,190

 
(5,088
)
DISCONTINUED OPERATIONS
 
 
 
 
 
 
 
 
Income from discontinued operations
 
659

 
719

 
2,777

 
1,448

Impairments
 
(167
)
 
—

 
(4,336
)
 
(147
)
Gain on sales of real estate properties
 
3

 
—

 
3,431

 
36

INCOME FROM DISCONTINUED OPERATIONS
 
495

 
719

 
1,872

 
1,337

NET INCOME (LOSS)
 
2,928

 
2,011

 
6,062

 
(3,751
)
Less: Net income attributable to noncontrolling interests
 
(20
)
 
—

 
(20
)
 
(27
)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
 
$
2,908

 
$
2,011

 
$
6,042

 
$
(3,778
)
BASIC EARNINGS (LOSS) PER COMMON SHARE
 
 
 
 
 
 
 
 
Income (loss) from continuing operations
 
$
0.03

 
$
0.02

 
$
0.05

 
$
(0.07
)
Discontinued operations
 
0.01

 
0.01

 
0.03

 
0.02

Net income (loss) attributable to common stockholders
 
$
0.04

 
$
0.03

 
$
0.08

 
$
(0.05
)
DILUTED EARNINGS (LOSS) PER COMMON SHARE
 
 
 
 
 
 
 
 
Income (loss) from continuing operations
 
$
0.03

 
$
0.02

 
$
0.05

 
$
(0.07
)
Discontinued operations
 
0.01

 
0.01

 
0.03

 
0.02

Net income (loss) attributable to common stockholders
 
$
0.04

 
$
0.03

 
$
0.08

 
$
(0.05
)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—BASIC
 
76,462,266

 
72,035,154

 
76,444,487

 
69,109,543

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—DILUTED
 
77,712,493

 
73,149,232

 
77,678,362

 
69,109,543

(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.

 
 
 
 
 
HEALTHCAREREALTY.COM | PAGE 4 OF 6


HEALTHCARE REALTY TRUST INCORPORATED
Condensed Consolidated Statements of Cash Flows (1) 
(dollars in thousands)
(Unaudited) 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2012
 
2011
 
2012
 
2011
Cash flows from operating activities:
 
 
 
 
 
 
 
 
Net income (loss)
 
$
2,928

 
$
2,011

 
$
6,062

 
$
(3,751
)
NON-CASH ITEMS:
 
 
 
 
 
 
 
 
Depreciation and amortization—real estate
 
23,467

 
20,410

 
46,896

 
40,592

Depreciation and amortization—other
 
1,563

 
1,654

 
2,866

 
3,327

Provision for bad debt, net
 
150

 
93

 
108

 
287

Gain on sales of real estate properties
 
(3
)
 
—

 
(3,431
)
 
(36
)
Impairments
 
167

 
—

 
4,336

 
147

Straight-line rent receivable
 
(1,545
)
 
(1,109
)
 
(3,445
)
 
(2,395
)
Straight-line rent liability
 
112

 
149

 
202

 
246

Stock-based compensation
 
721

 
661

 
1,653

 
1,602

Provision for deferred post-retirement benefits
 
266

 
459

 
532

 
918

Total non-cash items
 
24,898

 
22,317

 
49,717

 
44,688

OTHER ITEMS:
 
 
 
 
 
 
 
 
Accounts payable and accrued liabilities
 
11,055

 
9,067

 
(9,573
)
 
2,649

Other liabilities
 
219

 
5,081

 
2,541

 
6,299

Other assets
 
2,760

 
(1,655
)
 
4,050

 
(5,376
)
Loss on extinguishment of debt
 
—

 
—

 
—

 
1,986

Total other items
 
14,034

 
12,493

 
(2,982
)
 
5,558

Net cash provided by operating activities
 
41,860

 
36,821

 
52,797

 
46,495

Cash flows from investing activities:
 
 
 
 
 
 
 
 
Acquisition and development of real estate properties
 
(17,196
)
 
(57,574
)
 
(61,522
)
 
(83,111
)
Funding of mortgages and notes receivable
 
(15,772
)
 
(34,361
)
 
(28,550
)
 
(83,141
)
Proceeds from sales of real estate
 
29,485

 
—

 
36,109

 
3,775

Proceeds from mortgage repayment by consolidated variable interest entity
 
—

 
—

 
35,057

 
—

Proceeds from mortgages and notes receivable repayments
 
4,507

 
40

 
9,232

 
58

Net cash provided by (used in) investing activities
 
1,024

 
(91,895
)
 
(9,674
)
 
(162,419
)
Cash flows from financing activities:
 
 
 
 
 
 
 
 
Net borrowings (repayments) on unsecured credit facility
 
(22,000
)
 
(41,000
)
 
4,000

 
123,000

Repayments on notes and bonds payable
 
(1,223
)
 
(810
)
 
(2,436
)
 
(1,616
)
Repurchase of notes payable
 
—

 
—

 
—

 
(280,201
)
Dividends paid
 
(23,398
)
 
(22,325
)
 
(46,785
)
 
(42,570
)
Proceeds from issuance of common stock
 
230

 
134,033

 
511

 
224,045

Purchase of noncontrolling interests
 
—

 
—

 
—

 
(1,591
)
Common stock redemptions
 
—

 
—

 
(45
)
 
(51
)
Debt issuance costs
 
—

 
—

 
(3
)
 
(356
)
Distributions to noncontrolling interest holders
 
—

 
(55
)
 
—

 
(281
)
Net cash provided by (used in) financing activities
 
(46,391
)
 
69,843

 
(44,758
)
 
20,379

Increase (decrease) in cash and cash equivalents
 
(3,507
)
 
14,769

 
(1,635
)
 
(95,545
)
Cash and cash equivalents, beginning of period
 
6,610

 
3,007

 
4,738

 
113,321

Cash and cash equivalents, end of period
 
$
3,103

 
$
17,776

 
$
3,103

 
$
17,776

 (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.

 
 
 
 
 
HEALTHCAREREALTY.COM | PAGE 5 OF 6



Reconciliation of Funds from Operations (1) (2):
(dollars in thousands, except per share data)
(Unaudited)
 
 
Three Months Ended June 30,
 
 
2012
 
2011 (4)
Net Income Attributable to Common Stockholders
 
$
2,908

 
$
2,011

Gain on sales of real estate properties
 
(3
)
 
—

Impairments
 
167

 
—

Real estate depreciation and amortization
 
23,467

 
20,410

Total adjustments
 
23,631

 
20,410

Funds From Operations
 
$
26,539

 
$
22,421

        Acquisition costs
 
—

 
299

Normalized Funds From Operations
 
$
26,539

 
$
22,720

Funds From Operations Per Common Share—Diluted
 
$
0.34

 
$
0.31

Normalized Funds From Operations Per Common Share—Diluted
 
$
0.34

 
$
0.31

Weighted Average Common Shares Outstanding—Diluted
 
77,712,493

 
73,149,232

Reconciliation of Funds Available for Distribution (2):
(dollars in thousands, except per share data)
(Unaudited)
 
Three Months Ended June 30,
 
2012
 
2011 (4)
Net Income Attributable to Common Stockholders
$
2,908

 
$
2,011

Gain on sales of real estate properties
(3
)
 
—

Impairments
167

 
—

Other non-cash items
24,734

 
22,317

Total non-cash items included in cash flows from operating activities (3)
24,898

 
22,317

Funds Available For Distribution
$
27,806

 
$
24,328

       Acquisition costs
—

 
299

Normalized Funds Available For Distribution
$
27,806

 
$
24,627

Funds Available For Distribution Per Common Share—Diluted
$
0.36

 
$
0.33

Normalized Funds Available For Distribution Per Common Share - Diluted
$
0.36

 
$
0.34

Weighted Average Common Shares Outstanding—Diluted
77,712,493

 
73,149,232


(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.” The SEC indicated in 2003 that impairment charges (losses) could not be added back to net income attributable to common stockholders in calculating FFO. However, in late October 2011, NAREIT issued an alert indicating that the SEC staff recently advised NAREIT that it currently takes no position on the matter of whether impairment charges should be added back to net income to compute FFO, and NAREIT affirmed its original definition of FFO. The Company follows the NAREIT definition to exclude impairment charges and all prior periods have been restated to agree with the current presentation.
(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.
(4)
Normalization was not previously reported. Adjustments have been reflected in accordance with the current presentation.



 
 
 
 
 
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