HEALTHCARE REALTY TRUST INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 5, 2015

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Carla Baca
Director of Corporate Communications
P: 615.269.8175
News Release
HEALTHCARE REALTY TRUST REPORTS NORMALIZED FFO OF $0.39 PER SHARE FOR THE SECOND QUARTER

NASHVILLE, Tennessee, August 5, 2015 - Healthcare Realty Trust Incorporated (NYSE:HR) today announced results for the second quarter ended June 30, 2015. Normalized FFO for the three months ended June 30, 2015 totaled $0.39 per diluted common share. Over the same time period, year-over-year revenue grew by $5.0 million to $96.7 million. The Company reported net income attributable to common stockholders for the quarter of $17.9 million.

Salient highlights include:
•
Normalized FFO for the second quarter grew $4.8 million, or 13.9% year-over-year, to $39.0 million. Over the same time period, normalized FFO per share increased 8.3%.
•
Same store NOI grew 6.7% for the trailing twelve months ended June 30, 2015 over the same period a year ago.
•
The four predictive growth measures in the same store multi-tenant portfolio were:
◦
contractual increases for in-place leases ("annual bumps") averaged 3.1%
◦
cash leasing spreads for renewals averaged 5.0%
◦
tenant retention was 87.3%
◦
the average yield on renewed leases increased 100 basis points
•
Same store occupancy improved to 89.5% from 87.8% a year ago. Same store revenue per average occupied square foot increased 2.1% for the trailing twelve months.
•
In June 2015, the Company acquired a 93% leased, 35,600 square foot medical office property in Seattle for a total purchase price of $13.9 million.  The property is located on Catholic Health Initiatives' Highline Medical Center campus and is adjacent to a 60,200 square foot on-campus medical office building the Company purchased in December 2014.  This increases our Seattle market portfolio size to 557,000 square feet and a total investment of $206.1 million.
•
During the quarter, the Company commenced two new on-campus developments in Austin and Denver totaling 110,900 square feet with a combined investment of $31.7 million.
•
In June 2015, the Company sold two single-tenant net lease properties in Indiana totaling 176,000 square feet for $97.0 million. The properties include a 117,500 square foot orthopedic inpatient surgical hospital and an attached 58,500 square foot medical office building. In May 2015, the Company disposed of an off-campus 5,300 square foot building in Virginia for $1.0 million.
•
The Company completed the redemption of its 6.5% $300 million notes due 2017 with proceeds from the 3.875% $250 million notes due 2025 together with the proceeds from dispositions.
•
A dividend of $0.30 per common share was declared, which is equal to 76.9% of normalized FFO.



 
 
 
HEALTHCAREREALTY.COM  | PAGE 1 OF 5


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 197 real estate properties and mortgages as of June 30, 2015. The Company's 196 owned real estate properties are located in 30 states and total approximately 14.1 million square feet. The Company provided leasing and property management services to approximately 9.5 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, 2014 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 5


HEALTHCARE REALTY TRUST INCORPORATED
Condensed Consolidated Balance Sheets (1) 
(amounts in thousands, except per share data)
(Unaudited)
 
ASSETS
 
 
 
 
Real estate properties:
 
6/30/2015

 
12/31/2014

Land
 

$186,231

 

$183,060

Buildings, improvements and lease intangibles
 
3,033,213

 
3,048,251

Personal property
 
9,970

 
9,914

Construction in progress
 
8,284

 
—

Land held for development
 
16,952

 
17,054

Total real estate properties
 
3,254,650

 
3,258,279

Less accumulated depreciation and amortization
 
(730,125
)
 
(700,671
)
Total real estate properties, net
 
2,524,525

 
2,557,608

Cash and cash equivalents
 
8,431

 
3,519

Mortgage notes receivable
 
1,900

 
1,900

Assets held for sale and discontinued operations, net
 
14,192

 
9,146

Other assets, net
 
191,524

 
185,337

Total assets
 

$2,740,572

 

$2,757,510

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
Liabilities:
 
 
 
 
Notes and bonds payable
 

$1,388,797

 

$1,403,692

Accounts payable and accrued liabilities
 
57,143

 
70,240

Liabilities of discontinued operations
 
168

 
372

Other liabilities
 
66,035

 
62,152

Total liabilities
 
1,512,143

 
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; 100,418 and 98,828 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively
 
1,004

 
988

Additional paid-in capital
 
2,432,979

 
2,389,830

Accumulated other comprehensive income
 
(1,653
)
 
(2,519
)
Cumulative net income attributable to common stockholders
 
863,547

 
840,249

Cumulative dividends
 
(2,067,448
)
 
(2,007,494
)
Total stockholders' equity
 
1,228,429

 
1,221,054

Total liabilities and stockholders' equity
 

$2,740,572

 

$2,757,510

 
(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 5


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,
 
 
 
2015

 
2014

 
2015

 
2014

Revenues
 
 
 
 
 
 
 
 
Rental income
 

$95,450

 

$89,279

 

$190,484

 

$175,781

Mortgage interest
 
31

 
969

 
62

 
3,590

Other operating
 
1,227

 
1,423

 
2,618

 
2,871

 
 
96,708

 
91,671

 
193,164

 
182,242

Expenses
 
 
 
 
 
 
 
 
Property operating
 
33,927

 
33,635

 
68,189

 
66,466

General and administrative
 
6,713

 
5,661

 
13,451

 
11,633

Depreciation
 
26,552

 
24,491

 
52,940

 
48,158

Amortization
 
2,474

 
2,775

 
5,142

 
5,534

Bad debts, net of recoveries
 
27

 
73

 
(181
)
 
121

 
 
69,693

 
66,635

 
139,541

 
131,912

Other Income (Expense)
 
 
 
 
 
 
 
 
Gain on sales of properties
 
41,549

 
—

 
41,549

 
—

Interest expense
 
(17,213
)
 
(18,066
)
 
(35,536
)
 
(35,984
)
Loss on extinguishment of debt
 
(27,998
)
 
—

 
(27,998
)
 
—

Pension termination
 
(5,260
)
 
—

 
(5,260
)
 
—

Impairment of real estate assets
 
—

 
—

 
(3,328
)
 
—

Impairment of internally-developed software
 
(654
)
 
—

 
(654
)
 
—

Interest and other income, net
 
147

 
2,035

 
239

 
2,136

 
 
(9,429
)
 
(16,031
)
 
(30,988
)
 
(33,848
)
 
 
 
 
 
 
 
 
 
Income From Continuing Operations
 
17,586

 
9,005

 
22,635

 
16,482

 
 
 
 
 
 
 
 
 
Discontinued Operations
 
 
 
 
 
 
 
 
Income from discontinued operations
 
330

 
108

 
663

 
18

Impairments of real estate assets
 
—

 
(3,105
)
 
—

 
(6,529
)
Gain on sale of property
 
—

 
3

 
—

 
3

Income (Loss) From Discontinued Operations
 
330

 
(2,994
)
 
663

 
(6,508
)
 
 
 
 
 
 
 
 
 
Net Income
 
17,916

 
6,011

 
23,298

 
9,974

Less: Net income attributable to noncontrolling interests
 
—

 
(40
)
 
—

 
(151
)
Net Income Attributable To Common Stockholders
 

$17,916

 

$5,971

 

$23,298

 

$9,823

Basic Earnings (Loss) Per Common Share:
 
 
 
 
 
 
 
 
Income from continuing operations
 

$0.18

 

$0.09

 

$0.23

 

$0.17

Discontinued operations
 
0.00

 
(0.03
)
 
0.01

 
(0.07
)
Net income attributable to common stockholders
 

$0.18

 

$0.06

 

$0.24

 

$0.10

Diluted Earnings (Loss) Per Common Share:
 
 
 
 
 
 
 
 
Income from continuing operations
 

$0.18

 

$0.09

 

$0.23

 

$0.17

Discontinued operations
 
0.00

 
(0.03
)
 
0.00

 
(0.07
)
Net income attributable to common stockholders
 

$0.18

 

$0.06

 

$0.23

 

$0.10

Weighted Average Common Shares Outstanding—Basic
 
99,273

 
94,508

 
98,819

 
94,331

Weighted Average Common Shares Outstanding—Diluted
 
99,945

 
95,978

 
99,554

 
95,788

(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 5


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,
 
 
 
2015

 
2014

Net Income Attributable to Common Stockholders
 

$17,916

 

$5,971

Gain on sales of properties
 
(41,549
)
 
(3
)
Impairments of real estate assets
 
—

 
3,105

Real estate depreciation and amortization
 
28,542

 
27,017

Total adjustments
 
(13,007
)
 
30,119

Funds From Operations Attributable to Common Stockholders
 

$4,909

 

$36,090

Acquisition costs
 
167

 
49

Loss on extinguishment of debt
 
27,998

 
—

Pension termination
 
5,260

 
—

Impairment of internally-developed software
 
654

 
—

Refund of prior year overpayment of certain operating expenses
 
—

 
(1,919
)
Normalized Funds From Operations Attributable to Common Stockholders
 

$38,988

 

$34,220

Funds from Operations per Common Share—Diluted
 

$0.05

 

$0.38

Normalized Funds From Operations Per Common Share—Diluted
 

$0.39

 

$0.36

FFO Weighted Average Common Shares Outstanding
 
99,945

 
95,978



(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.











 
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