HEALTHCARE REALTY TRUST INC - FORM 8-K - EX-99.2 - EXHIBIT - SUPPLEMENTAL INFORMATION

Attached files

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8-K - 8-K - HEALTHCARE REALTY TRUST INC	a4q2012earningsform8-k.htm
EX-99.1 - EXHIBIT - EARNINGS PRESS RELEASE - HEALTHCARE REALTY TRUST INC	exhibit991fourthquarter201.htm

Section 4: EX - 99.2 (SUPPLEMENTAL INFORMATION FOR THE THREE MONTHS ENDED DECEMBER 31, 2012)

Exhibit 99.2

4Q | 2012

Supplemental Information

FURNISHED AS OF FEBRUARY 20, 2013 (UNAUDITED)

Table of Contents




3	SCHEDULE 1 -	Corporate Information

5	SCHEDULE 2 -	Historical Reconciliation of FFO

6	SCHEDULE 3 -	Selected Financial Statement Information

7	SCHEDULE 4 -	Investment Progression

8	SCHEDULE 5 -	Investment Activity

9	SCHEDULE 6 -	Investment by Type and Geographic Location

10	SCHEDULE 7 -	Square Feet Owned and/or Managed

12	SCHEDULE 8 -	Lease and Occupancy Information

15	SCHEDULE 9 -	Same Store Properties

16	SCHEDULE 10 -	Components of Net Asset Value

17	SCHEDULE 11 -	Components of Expected 2013 FFO

Copies of this report may be obtained at www.healthcarerealty.com or by contacting Investor Relations at 615.269.8175 or communications@healthcarerealty.com.

Forward looking statements and risk factors:

This Supplemental Information report contains disclosures that are “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words and phrases such as “can,” “may,” “payable,” “indicative,” “annualized,” “expect,” “expected,” “future cash or NOI,” “deferred revenue,” “rent increases,” “range of expectations,” “components of expected 2013 FFO,” and other comparable terms and in this report. These forward-looking statements are made as of the date of this report and are not guarantees of future performance. These statements are based on the current plans and expectations of Company management and are subject to a number of unknown risks, uncertainties, assumptions and other factors that could cause actual results to differ materially from those described in this release or implied by such forward-looking statements. Such risks and uncertainties include, among other things, the following: changes in the economy; increases in interest rates; the availability and cost of capital at expected rates; changes to facility-related healthcare regulations; competition for quality assets; negative developments in the operating results or financial condition of the Company's tenants, including, but not limited to, their ability to pay rent and repay loans; the Company's ability to reposition or sell facilities with profitable results; the Company's ability to re-lease space at similar rates as vacancies occur; the Company's ability to renew expiring long-term single-tenant net leases; the Company's ability to timely reinvest proceeds from the sale of assets at similar yields; government regulations affecting tenants' Medicare and Medicaid reimbursement rates and operational requirements; unanticipated difficulties and/or expenditures relating to future acquisitions and developments; changes in rules or practices governing the Company's financial reporting; the Company may be required under purchase options to sell properties and may not be able to reinvest the proceeds from such sales at rates of return equal to the return received on the properties sold; uninsured or underinsured losses related to casualty or liability; the incurrence of impairment charges on its real estate properties or other assets; and other legal and operational matters. Other risks, uncertainties and factors that could cause actual results to differ materially from those projected are detailed under the heading “Risk Factors,” in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) for the year ended December 31, 2012 and other risks described from time to time thereafter in the Company's SEC filings. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.





HEALTHCARE REALTY I 2		4Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 1

Corporate Information

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 $3.0 billion in 207 real estate properties and mortgages as of December 31, 2012. The Company’s 202 owned real estate properties are located in 28 states and total approximately 13.6 million square feet. The Company provided property management services to approximately 10.1 million square feet nationwide.



A \|	Corporate Headquarters

Healthcare Realty Trust Incorporated

3310 West End Avenue, Suite 700

Nashville, Tennessee 37203

Phone: 615.269.8175

Fax: 615.269.8461

E-mail: communications@healthcarerealty.com

Website: www.healthcarerealty.com



B \|	Executive Officers




		David R. Emery		Chairman of the Board and Chief Executive Officer
		John M. Bryant, Jr.		Executive Vice President and General Counsel
		Scott W. Holmes		Executive Vice President and Chief Financial Officer
		Todd J. Meredith		Executive Vice President - Investments
		B. Douglas Whitman, II		Executive Vice President - Corporate Finance



C \|	Board of Directors




		David R. Emery		Chairman of the Board and Chief Executive Officer, Healthcare Realty Trust Incorporated

		Errol L. Biggs, Ph.D.		Director, Graduate Programs in Health Administration, University of Colorado

		C. Raymond Fernandez, M.D.		Former Chief Executive Officer, Piedmont Clinic (Retired)

		Batey M. Gresham, Jr.		Founder, Gresham Smith & Partners (Retired)

		Edwin B. Morris III		Managing Director, Morris & Morse Company, Inc.

		J. Knox Singleton		President and Chief Executive Officer, Inova Health System

		Bruce D. Sullivan		Former Audit Partner, Ernst & Young LLP (Retired)

		Roger O. West		Former General Counsel, Healthcare Realty Trust Incorporated (Retired)

		Dan S. Wilford		Former President and Chief Executive Officer, Memorial Hermann Healthcare System (Retired)





HEALTHCARE REALTY I 3		4Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 1 (CONTINUED)

Corporate Information



D \|	Professional Services

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

BDO USA, LLP

414 Union Street, Suite 1800, Nashville, Tennessee 37219

TRANSFER AGENT

Wells Fargo N.A., Shareowner Services

1110 Centre Pointe Curve, Suite 101, Mendota Heights, MN 55120-4100



E \|	Stock Exchange, Symbol and CUSIP Number




SECURITY DESCRIPTION	STOCK EXCHANGE	SYMBOL	CUSIP NUMBER
Common Stock	NYSE	HR	421946104
Senior Notes due 2014	OTC	HR	421946AF1
Senior Notes due 2017	OTC	HR	42225BAA4
Senior Notes due 2021	OTC	HR	421946AG9



F \|	Dividend Reinvestment Plan

Through the Company’s transfer agent, Wells Fargo, named shareholders of record can re-invest dividends in shares at a 5% discount and may also purchase up to $60,000 of HR common stock per calendar year without a service or sales charge. For information, write Wells Fargo Shareowner Services, P.O. Box 64856, St. Paul, MN 55164-0856, or call 1.800.468.9716. Information may also be obtained at the transfer agent’s website, www.shareowneronline.com.



G \|	Direct Deposit of Dividends

Direct deposit of dividends is offered as a convenience to shareholders of record. For information, write Wells Fargo Shareowner Services, P.O. Box 64856, St. Paul, MN 55164-0856, or call 1.800.468.9716. Information may also be obtained at the transfer agent’s website, www.shareowneronline.com.



H \|	Dividends Declared

On January 29, 2013, the Company declared a dividend of $0.30 per share, payable on March 1, 2013 to stockholders of record on February 14, 2013.



I \|	Analyst Coverage




		BMO Capital Markets Corp.		KeyBanc Capital Markets Inc.

		Cowen & Co. LLC		RBC Capital Markets Corp

		Davenport & Co. LLC		Sandler O’Neil & Partners LP

		Deutsche Bank Securities Inc.		Stifel Nicolaus & Co

		Green Street Advisors, Inc.		SunTrust Robinson Humphrey

		J.J.B. Hilliard W.L. Lyons LLC		UBS Investment Bank

		J.P. Morgan Securities LLC		Wells Fargo Securities LLC

		JMP Securities LLC





HEALTHCARE REALTY I 4		4Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 2

Historical Reconciliation of FFO ^(1) (2)

(dollars in thousands, except for share data)



	2012												2011
	Q4			Q3			Q2			Q1			Q4
Net Income (Loss) Attributable to Common Stockholders	$	(6,391	)	$	5,815		$	2,908		$	3,134		$	2,916
Gain on sales of real estate properties	(1,177		)	(6,265		)	(3		)	(3,428		)	(5,642		)
Impairments	7,712			2,860			167			4,170			4,999
Real estate depreciation and amortization	24,932			23,336			23,467			23,428			23,062
Total adjustments	31,467			19,931			23,631			24,170			22,419
Funds From Operations	$	25,076		$	25,746		$	26,539		$	27,304		$	25,335
Amounts paid in settlement of a brokerage claim on a 2010 real estate aquisition	1,100			—			—			—			—
Acquisition costs	385			—			—			109			199
Termination fee received upon disposal of a real estate asset	—			—			—			(1,500		)	—
Write-off of deferred financing costs upon renewal of line of credit facility	—			—			—			—			393
Normalized Funds From Operations	$	26,561		$	25,746		$	26,539		$	25,913		$	25,927
Funds From Operations Per Common Share—Diluted	$	0.29		$	0.33		$	0.34		$	0.35		$	0.33
Normalized Funds From Operations Per Common Share—Diluted	$	0.31		$	0.33		$	0.34		$	0.33		$	0.33
Weighted Average Common Shares Outstanding—Diluted	87,049,034			78,020,971			77,712,493			77,641,042			77,474,951

(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 principals generally accepted in the United States of America and are not necessarily indicative of cash available to fund cash needs. FFO 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.





HEALTHCARE REALTY I 5		4Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 3

Selected Financial Statement Information

(dollars in thousands)

SELECTED BALANCE SHEET INFORMATION

	2012								2011
	Q4		Q3		Q2		Q1		Q4		Q3
Real estate properties, gross ⁽¹⁾	$	2,831,684	$	2,745,393	$	2,768,273	$	2,792,768	$	2,788,618	$	2,770,741
Real estate properties, net ⁽¹⁾	2,244,959		2,187,442		2,222,596		2,252,407		2,271,871		2,264,397
Construction in progress	—		—		9,009		10,864		61,152		134,716
Land held for development	25,171		25,171		25,171		25,171		25,176		20,773
Mortgage notes receivable	162,191		141,107		118,059		112,767		97,381		94,588
Assets held for sale and discontinued operations, net	3,337		11,550		12,921		13,762		28,650		16,519
Total assets	2,539,972		2,470,776		2,472,324		2,503,654		2,521,022		2,487,573
Notes and bonds payable	1,293,044		1,212,615		1,395,600		1,418,571		1,393,537		1,349,882
Total stockholders' equity	1,120,944		1,151,067		966,195		985,727		1,004,806		1,022,578

SUMMARY OF INDEBTEDNESS

	Quarterly Interest Expense			Balance as of 12/31/2012		Months to Maturity	Effective Interest Rate
Senior Notes due 2014, net of discount	$	3,431		$	264,522	15	5.19	%
Senior Notes due 2017, net of discount	4,942			298,728		49	6.62	%
Senior Notes due 2021, net of discount	5,815			397,307		97	5.86	%
Total Senior Notes Outstanding	14,188			960,557		53	5.91	%
Unsecured credit facility due 2017	270			110,000		52	1.72	%
Mortgage notes payable, net	3,602			222,487		53	6.22	%
Total Outstanding Notes and Bonds Payable	$	18,060		$	1,293,044	53	5.61	%
Interest cost capitalization	(239		)
Deferred financing costs	792
Unsecured credit facility fee	626
Total Quarterly Interest Expense	$	19,239

REVENUES AND PROPERTY OPERATING EXPENSES⁽²⁾

	2012								2011
	Q4		Q3		Q2		Q1		Q4		Q3
Property operating income	$	62,135	$	60,798	$	60,475	$	58,494	$	58,025	$	56,064
Single-tenant net lease	13,977		13,505		13,476		12,851		12,828		13,277
Straight-line rent	1,095		1,459		1,190		1,600		1,173		1,083
Rental income	77,207		75,762		75,141		72,945		72,026		70,424
Mortgage interest	2,611		2,244		2,039		2,292		1,723		1,776
Other operating	1,442		1,522		1,371		1,774		1,510		2,060
Total Revenues	$	81,260	$	79,528	$	78,551	$	77,011	$	75,259	$	74,260

Property operating expense	$	30,154	$	29,969	$	29,224	$	28,336	$	28,217	$	30,087


(1)	Includes construction in progress and land held for development.


(2)	Prior periods have been restated to conform to the current period presentation for assets classified as held for sale and discontinued operations.





HEALTHCARE REALTY I 6		4Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 4

Investment Progression ⁽¹⁾

(dollars in thousands)

CONSTRUCTION IN PROGRESS



	Number of Properties	Three Months Ended 12/31/2012		Number of Properties		Twelve Months Ended 12/31/2012
Balance at beginning of period ⁽²⁾	—	$	—	3		$	61,152
Fundings on projects in existence at the beginning of the period	—	—		—		5,608
Deconsolidation of variable interest entity	—	—		(1	)	(38,193		)
Completions	—	—		(2	)	(28,567		)
Balance at end of period	0	$	—	0		$	—

REAL ESTATE PROPERTIES



	Number of Properties		Three Months Ended 12/31/2012			Number of Properties		Twelve Months Ended 12/31/2012
Balance at beginning of period ⁽²⁾	195		$	2,745,393		198		$	2,727,466
Acquisitions ⁽³⁾	4		71,666			7		103,685
Land purchased on ground leased building	—		—			—		1,125
Additions/Improvements	—		19,496			—		57,261
Completions (CIP)	—		—			2		28,567
Dispositions ⁽⁴⁾	(3	)	(21,765		)	(11	)	(103,314		)
Assets previously classified as held for sale reclassified to held for use ⁽⁵⁾	6		16,894			6		16,894
Balance at end of period	202		$	2,831,684		202		$	2,831,684

MORTGAGE NOTES RECEIVABLE



	Number of Properties		Three Months Ended 12/31/2012			Number of Properties		Twelve Months Ended 12/31/2012
Balance at beginning of period	5		$	141,107		7		$	97,381
Fundings of new seller-financed mortgages	—		—			3		11,200
Fundings on mortgages in existence at the beginning of the period	—		24,034			—		78,297
Repayments ⁽⁶⁾	(1	)	(2,950		)	(5	)	(14,812		)
Principal reduction due to acquisition	—		—			(1	)	(9,859		)
Scheduled principal payments	—		—			—		(16		)
Balance at end of period	4		$	162,191		4		$	162,191


(1)	Balances exclude investments in one unconsolidated joint venture and properties classified as held for sale.


(2)	Land held for development was reclassified to real estate properties from construction in progress.


(3)	During the fourth quarter of 2012, the Company acquired medical office buildings in Iowa, Tennessee and Washington and an inpatient rehabilitation facility in Texas.


(4)	During the fourth quarter of 2012, the Company disposed of a medical office building in Florida and two medical office buildings located in Iowa none of which were classified as held for sale prior to the sales.


(5)	During the fourth quarter of 2012, the Company reclassified six properties from held for sale to held for use.


(6)	During the fourth quarter of 2012, a mortgage note receivable secured by a medical office building located in Texas was repaid in full.





HEALTHCARE REALTY I 7		4Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 5

Investment Activity

(dollars in thousands)

2012 Investment Activity⁽¹⁾



Location	Property Type	Investment Type	Closing	Investment at Acquisition		Approximate Square Feet	Aggregate Leased %
Aberdeen, SD	MOB	Acquisition	1/20/2012	$	14,984	58,285	100	%
Charlotte, NC	MOB	Acquisition	2/10/2012	6,353		23,312	100	%
Monroeville, PA	Land	Acquisition	3/16/2012	1,125		NA	NA
San Antonio, TX	MOB	Acquisition	5/23/2012	10,682		76,484	100	%
Germantown, TN	MOB	Acquisition	10/9/2012	10,950		39,345	100	%
Edmonds, WA	MOB	Acquisition	10/12/2012	9,410		47,225	89	%
Austin, TX	IRF	Acquisition	12/20/2012	30,640		66,095	100	%
West Des Moines, IA	MOB	Acquisition	12/21/2012	20,666		83,318	100	%
Total				$	104,810	394,064	99	%

Historical Investment Activity



	Acquisitions⁽²⁾			Mortgage Funding			Construction Mortgage Funding			Development Funding			Total
2008	$	315,665		$	—		$	36,970		$	74,085		$	426,720
2009	70,664			9,900			10,616			85,120			176,300
2010	301,600			3,700			20,740			63,301			389,341
2011	150,312			40,000			61,931			79,375			331,618
2012	94,951			—			78,297			5,608			178,856
Total	$	933,192		$	53,600		$	208,554		$	307,489		$	1,502,835
% of Total	62.1		%	3.6		%	13.9		%	20.4		%	100.0		%

Development Properties



	Properties	Amount Funded 4Q 2012		Total Amount Funded Through 12/31/2012		Approximate Square Feet	Aggregate Leased %		4Q 2012 Adjusted Aggregate NOI /Interest ⁽³⁾		Estimated Remaining Fundings
Construction mortgage loans	2	$	24,034	$	118,441	386,000	100	%	$	1,751	$	84,173
Stabilization in progress	12	10,447		405,941		1,282,716	60	%	895		$35 - $45,000
Construction in progress	—	—		—		—	—		—
Total	14	$	34,481	$	524,382	1,668,716	69	%	$	2,646


(1)	Refer to 2012 Form 10-K Footnote 4 for more information on the Company’s acquisitions.


(2)	Net of mortgage notes receivable payoffs upon acquisition.

(3)

Aggregate NOI and adjusted NOI for the fourth quarter of 2012 for the properties in stabilization was approximately $0.9 million. Had all of the occupants that were in-place in December 2012 been in-place for the entire quarter, NOI would have been $1.0 million. Adjusted aggregate NOI for the third quarter of 2012 was $0.3 million. Adjusted aggregate NOI excludes the effects of items recorded for real estate taxes and operating expense billings associated with prior periods.





HEALTHCARE REALTY I 8		4Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 6

Investment by Type and Geographic Location ⁽¹⁾

(dollars in thousands)



	MOB/Outpatient (82.4%)												Inpatient (14.6%)									Other (3.0%)
	Stabilized Properties			Development Properties						Mortgages			Rehab			Surgical			Mortgages			Other			Mortgages			Total			% of Total
				SIP			CIP
Texas	$	566,647		$	80,355		$	—		$	—		$	54,191		$	92,000		$	—		$	—		$	—		$	793,193		26.6	%
Virginia	191,660																					11,839						203,499			6.8	%
Tennessee	175,247																					7,874						183,121			6.1	%
North Carolina	151,319																											151,319			5.1	%
Washington	68,972			78,772																								147,744			5.0	%
Indiana	100,104															43,406						3,790						147,300			4.9	%
Iowa	99,795																								40,000			139,795			4.7	%
Colorado	50,089			85,128																								135,217			4.5	%
Pennsylvania	10,798												120,422															131,220			4.4	%
California	114,521												12,688															127,209			4.3	%
Hawaii	23,580			94,817																								118,397			4.0	%
Florida	97,936									3,750			11,703															113,389			3.8	%
Missouri	43,557																		61,599									105,156			3.5	%
Arizona	35,253			40,570									16,012															91,835			3.1	%
Illinois	37,542			26,299																								63,841			2.1	%
Oklahoma										56,842																		56,842			1.9	%
Alabama	21,562												17,722									9,782						49,066			1.6	%
Michigan	22,445																					13,105						35,550			1.2	%
Washington, DC	29,846																											29,846			1.0	%
Other (10 states)	130,128																											130,128			4.5	%
Sub-total	$	1,971,001		$	405,941		$	—		$	60,592		$	232,738		$	135,406		$	61,599		$	46,390		$	40,000		$	2,953,667		99.1	%
Land held for development																												25,171			0.9	%
Total Investments	$	1,971,001		$	405,941		$	—		$	60,592		$	232,738		$	135,406		$	61,599		$	46,390		$	40,000		$	2,978,838		100.0	%
Percent of $ Invested	66.6		%	13.7		%	—		%	2.1		%	7.9		%	4.6		%	2.1		%	1.6		%	1.4		%	100.0		%
Number of Investments	165			12			0			2			13			2			1			10			1			206


(1)	Excludes gross assets held for sale totaling $9.6 million, one unconsolidated joint venture totaling $1.3 million and corporate property totaling $15.0 million.





HEALTHCARE REALTY I 9		3Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 7

Square Feet Owned and/or Managed ⁽¹⁾

BY STATE, OWNED PROPERTIES



	Number of Properties	Managed by HR	Managed by Third Party	Development Properties SIP ⁽²⁾	Development Properties CIP	Single-Tenant Net Leases	Total	Percent
Texas	49	3,017,770	302,094	343,570		323,126	3,986,560	29.3	%
Tennessee	17	1,299,605				75,000	1,374,605	10.1	%
Virginia	15	553,532	136,427			334,454	1,024,413	7.5	%
North Carolina	15	747,603					747,603	5.5	%
Indiana	6		382,695			205,499	588,194	4.3	%
Florida	10	256,302	206,139			108,330	570,771	4.2	%
California	10	488,955				63,000	551,955	4.1	%
Colorado	7	192,280		347,771			540,051	4.0	%
Pennsylvania	7					532,520	532,520	3.9	%
Washington	6	120,773		191,051		159,071	470,895	3.5	%
Arizona	10	202,082		179,963		51,903	433,948	3.2	%
Iowa	8	233,413				178,267	411,680	3.0	%
Illinois	4	148,055		95,436		110,000	353,491	2.6	%
Alabama	6	120,192	139,887			82,000	342,079	2.5	%
Michigan	8	199,749				121,672	321,421	2.4	%
Hawaii	3	173,502		124,925			298,427	2.2	%
Missouri	5	177,039				13,478	190,517	1.4	%
Washington, DC	2	182,836					182,836	1.3	%
Louisiana	2		136,155				136,155	1.0	%
Other (9 states)	12	339,067	131,361			79,034	549,462	4.0	%
Total	202	8,452,755	1,434,758	1,282,716	—	2,437,354	13,607,583	100.0	%

BY MARKET



		Square Feet	Percent				Square Feet	Percent
1	Dallas-Ft. Worth, TX	2,314,184	17.0	%	12	Des Moines, IA	411,680	3.0	%
2	Nashville, TN	812,608	6.0	%	13	Seattle-Bellevue, WA	379,334	2.8	%
3	Charlotte, NC	787,404	5.8	%	14	Chicago, IL	353,491	2.6	%
4	San Antonio, TX	689,764	5.1	%	15	Honolulu, HI	298,427	2.2	%
5	Houston, TX	649,392	4.8	%	16	Phoenix, AZ	288,511	2.1	%
6	Indianapolis, IN	558,694	4.1	%	17	Austin, TX	272,220	2.0	%
7	Richmond, VA	558,209	4.1	%	18	Washington, DC	241,739	1.8	%
8	Los Angeles, CA	551,955	4.1	%	19	Miami, FL	215,980	1.6	%
9	Denver-Colorado Springs, CO	540,051	4.0	%	20	Detriot, MI	211,057	1.6	%
10	Roanoke, VA	466,204	3.4	%		Other (35 Markets)	2,543,028	18.5	%
11	Memphis, TN	463,651	3.4	%		Total	13,607,583	100.0	%

ON/OFF CAMPUS

	2012								2011
	4Q		3Q		2Q		1Q		4Q		3Q
On/adjacent	78	%	78	%	77	%	75	%	74	%	72	%
Off ⁽³⁾	22	%	22	%	23	%	25	%	26	%	28	%
	100	%	100	%	100	%	100	%	100	%	100	%


(1)	Mortgage notes receivable, an investment in one unconsolidated joint venture and assets classified as held for sale are excluded.


(2)	Includes 1,185,863 square feet managed by HR.


(3)	Approximately 42% of the off-campus suare feet are anchored by a hospital system.





HEALTHCARE REALTY I 10		3Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 7 (CONTINUED)

Square Feet Owned and/or Managed ⁽¹⁾

BY FACILITY TYPE

	Managed by HR		Managed by Third Party		Stabilization in Progress ⁽²⁾		Construction in Progress		Single-Tenant Net Leases		Total		Percent of Total		Third Party Managed by HR	Total
Medical office/outpatient	8,452,755		1,179,037		1,282,716				1,025,840		11,940,348		87.7	%	443,886	12,384,234
Inpatient Rehab									895,172		895,172		6.6	%		895,172
Inpatient Surgical									273,770		273,770		2.0	%		273,770
Other			255,721						242,572		498,293		3.7	%		498,293
Total Square Feet	8,452,755		1,434,758		1,282,716		0		2,437,354		13,607,583		100.0	%	443,886	14,051,469
Percent of Total Square Footage	62.1	%	10.5	%	9.4	%	—	%	18.0	%	100.0	%
Total Number of Properties	129		19		12		0		42		202

BY PROVIDERS

Top Providers	Credit Rating	Associated Buildings ⁽³⁾	Associated SF ⁽³⁾	% of Total SF ⁽⁴⁾		Leased SF Total	% of Total SF
Baylor Health Care System	AA-/Aa2	25	2,168,819	15.9	%	1,016,856	7.5	%
Ascension Health Care System	AA+/Aa1	15	1,021,838	7.5	%	373,809	2.7	%
HCA	B+/B1	15	877,918	6.5	%	422,227	3.1	%
Carolinas Healthcare System	--/Aa3	16	787,404	5.8	%	622,243	4.6	%
Catholic Health Initiatives	AA-/Aa3	12	740,723	5.4	%	451,182	3.3	%
HealthSouth	BB-/Ba3	9	647,560	4.8	%	647,560	4.8	%
Bon Secours	A-/A3	7	548,209	4.0	%	226,612	1.7	%
Tenet Healthcare	B/B2	8	481,077	3.5	%	138,822	1.0	%
Baptist Memorial Health Care	AA/--	5	424,306	3.1	%	41,242	0.3	%
Indiana University Health	AAA/A1	3	382,695	2.8	%	192,929	1.4	%
Vanguard Health	B/B2	3	278,007	2.0	%	38,743	0.3	%
Advocate Health Care	AA/Aa2	2	238,391	1.8	%	58,157	0.4	%
Medstar Health	A-/A2	3	241,739	1.8	%	111,901	0.8	%
Memorial Hermann Health Care	A+/A1	4	206,090	1.5	%	82,686	0.6	%
Scott & White	A/A1	2	206,125	1.5	%	186,761	1.4	%
Overlake Hospital	A-/A3	1	191,051	1.4	%	24,529	0.2	%
St. Luke's Episcopal Health	AA-/--	2	192,857	1.4	%	18,715	0.1	%
Hawaii Pacific Health	A-/A3	2	173,502	1.3	%	37,362	0.3	%
OrthoIndy	N/R	2	175,999	1.3	%	175,999	1.3	%
Univ. of Colorado Health	A+/A1	2	161,099	1.2	%	44,000	0.3	%
Other- Credit Rated		14	658,821	4.8	%
Total - Credit Rated		150	10,628,231	78.1	%
Total		202	13,607,583	100.0	%

BY BUILDING SQUARE FEET

Size Range by Square Feet	% of Total		Total Square Footage	Average Square Feet	Number of Properties
>100,000	42.0	%	5,718,915	139,486	41
<100,000 and >75,000	24.3	%	3,306,035	84,770	39
<75,000 and >50,000	18.4	%	2,500,197	62,505	40
<50,000	15.3	%	2,082,436	25,396	82
Total	100.0	%	13,607,583	67,364	202


(1)	Excludes mortgage notes receivable, an investment in one unconsolidated joint venture and assets classified as held for sale.


(2)	Includes 1,185,863 square feet managed by HR.


(3)	Associated buildings and square footage refers to on-campus, adjacent or off-campus/affiliated properties associated with these healthcare providers.


(4)	Based on square footage, 78.1% of HR's portfolio is affiliated with a credit rated healthcare provider and 59.7% is affiliated with an investment-grade rated healthcare provider.





HEALTHCARE REALTY I 11		4Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 8

Lease and Occupancy Information⁽¹⁾

(dollars in thousands)

LEASE MATURITY SCHEDULE



			Number of Leases
	Annualized Minimum Rents⁽²⁾		Multi- Tenant Properties	Single- Tenant Net Lease Properties	Percentage of Revenues		Total Sq. Ft.
2013	$	49,118	443	6	18.8	%	1,858,239
2014	46,217		399	10	17.7	%	1,864,567
2015	29,003		286	—	11.1	%	1,139,552
2016	24,976		207	5	9.6	%	929,068
2017	28,810		183	5	11.0	%	1,246,360
2018	14,250		106	—	5.5	%	649,530
2019	9,178		50	1	3.5	%	356,253
2020	11,289		38	1	4.3	%	419,451
2021	9,199		42	3	3.5	%	405,025
2022	13,447		48	3	5.2	%	557,061
Thereafter	25,294		46	8	9.8	%	1,004,402

LEASE TYPE (EXCLUDES CIP AND UNCONSOLIDATED JV)




Owned	Number of Properties	Investment		Square Feet
Multi-Tenant	160	$	2,196,359	11,170,229
Single-Tenant Net Lease	42	595,117		2,437,354
Mortgages	4	162,191		—
	206	$	2,953,667	13,607,583

AVERAGE TENANT SIZE



	Number of Leases
Square Footage	Multi-Tenant Properties⁽³⁾	Single-Tenant Net Lease Properties
0 - 2,500	967	—
2,501 - 5,000	486	—
5,001 - 7,500	147	1
7,501 - 10,000	77	2
10,001 +	171	39
Total Leases	1,848	42


(1)	Excludes mortgage notes receivable, construction in progress, an investment in one unconsolidated joint venture, corporate property and assets classified as held for sale unless otherwise noted.


(2)	Represents the annualized minimum rents on leases in-place, excluding the impact of potential lease renewals, future step-ups in rent, or sponsor support payments under financial support agreements and straight-line rent.


(3)	The average lease size in the multi-tenant properties is 4,325 square feet.





HEALTHCARE REALTY I 12		4Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 8 (CONTINUED)

Lease and Occupancy Information⁽¹⁾

^{(dollars in thousands)}

OCCUPANCY BY FACILITY TYPE

				2012								2011
Facility Type	Investment at 12/31/2012		Square Feet at 12/31/12	Q4		Q3		Q2		Q1		4Q
Medical office/outpatient	$	1,971,001	10,657,632	86.5	%	86.1	%	85.5	%	86.2	%	86.0	%
Inpatient	368,144		1,168,942	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Other	46,390		498,293	83.4	%	76.2	%	76.2	%	76.2	%	76.2	%
Stabilized Occupancy ⁽²⁾	$	2,385,535	12,324,867	87.7	%	87.1	%	86.6	%	87.2	%	87.0	%
Stabilization in Progress Occupancy ⁽³⁾	$	405,941	1,282,716	41.2	%	37.3	%	32.5	%	27.9	%	20.6	%

OCCUPANCY ⁽²⁾

				2012								2011
	Investment at 12/31/12		Square Feet at 12/31/12	Q4		Q3		Q2		Q1		Q4
Multi-Tenant
Same store ⁽⁴⁾	$	1,586,046	8,753,434	87.9	%	87.7	%	87.1	%	88.7	%	88.8	%
Acquisitions	55,862		259,691	96.5	%	95.7	%	95.7	%	95.1	%	90.6	%
Reposition	148,510		874,388	47.5	%	47.9	%	41.5	%	43.0	%	40.4	%
Total	$	1,790,418	9,887,513	84.6	%	84.5	%	83.7	%	84.4	%	84.2	%

Single-Tenant Net lease
Same store ⁽⁴⁾	$	518,029	2,165,742	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Acquisitions	66,290		207,698	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%
Reposition	10,798		63,914	100.0	%	—		—		—		—
Total	$	595,117	2,437,354	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

Total
Same store ⁽⁴⁾	$	2,104,075	10,919,176	90.3	%	90.1	%	89.6	%	91.0	%	90.9	%
Acquisitions	122,152		467,389	98.0	%	96.0	%	95.5	%	92.2	%	91.2	%
Reposition	159,308		938,302	51.1	%	47.9	%	41.6	%	43.0	%	40.4	%
Total	$	2,385,535	12,324,867	87.7	%	87.1	%	86.6	%	87.2	%	87.0	%

# of Properties
Same store ⁽⁴⁾				162		154		159		162		158
Acquisitions				9		10		10		9		12
Reposition				19		19		17		19		18
Total				190		183		186		190		188


(1)	Excludes mortgage notes receivable, construction in progress, an investment in one unconsolidated joint venture, corporate property and assets classified as held for sale.


(2)	The stabilized occupancy assumes that properties under a Property Operating Agreement or Single-tenant Net Leases have 100% occupancy. The average underlying tenant occupancy of the five properties under Property Operating Agreements, as directed by the respective sponsor, was approximately 76%. The stabilized occupancy excludes the twelve development properties currently in stabilization.


(3)	The properties in stabilization are currently 60% leased. The difference between occupied and leased reflects tenants that have signed leases but have not taken occupancy because of buildout to the suite.


(4)	In order to provide meaningful comparisons, same store occupancy excludes properties that were recently acquired or disposed of, properties held for sale, and properties in stabilization or conversion.





HEALTHCARE REALTY I 13		4Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 8 (CONTINUED)

Lease and Occupancy Information⁽¹⁾⁽²⁾

^{(dollars in thousands)}

LEASE STATISTICS ⁽³⁾

	2012								2011
	Q4		Q3		Q2		Q1		Q4
Contractual increases for in-place leases ("annual bumps")
Multi-Tenant properties	3.1	%	3.2	%	3.1	%	3.3	%	3.1	%

Single-Tenant Net Lease properties	2.1	%	2.3	%	2.5	%	3.0	%	5.3	%

Newly executed leases ("cash leasing spreads")	1.0	%	0.4	%	1.8	%	1.8	%	2.5	%

Tenant retention rate, multi-tenant properties	76.4	%	85.1	%	79.7	%	85.4	%	87.4	%

LEASE, TENANT AND OWNERSHIP STATISTICS

	As of 12/31/12			As of 12/31/12
Multi-Tenant Contractual Rental Rate Increases by Type ⁽⁴⁾			Lease Structure
Annual increase	77.6	%	Gross	24.9	%
Non-annual increase	10.2	%	Modified gross	34.5	%
No increase within Remaining Term	12.2	%	Net	40.6	%

Tenant Type			Ownership Type
Multi-Tenant properties			Ground lease	55.0	%
Hospital	39.0	%	Fee simple	45.0	%
Physician and other	61.0	%
Single-Tenant net lease properties
Hospital	88.9	%
Other	11.1	%


(1)	Excludes mortgage notes receivable, construction in progress, an investment in one unconsolidated joint venture, corporate property and assets classified as held for sale.


(2)	All percentages presented are calculated based on total square feet.


(3)	Represents historical rental rate increases and may not be indicative of future increases.


(4)	"Non-annual increase" refers to leases that have a term greater than one year, but do not have rent increases each year. "No Increase within Remaining Term" refers to leases with less than one year remaining or have a term greater than one year, but no increases during the current lease term.





HEALTHCARE REALTY I 14		4Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 9

Same Store Properties

(dollars in thousands)

SAME STORE PROPERTIES ^(1) (2)



							Sequential					Year-Over-Year
	4Q 2012		3Q 2012		4Q 2011		$			Percentage Change		$			Percentage Change
Multi-Tenant
Revenues	$	55,041	$	54,853	$	53,636	$	188		0.3	%	$	1,405		2.6	%
Expenses	23,204		24,621		22,855		(1,417		)	(5.8	)%	349			1.5	%
NOI	$	31,837	$	30,232	$	30,781	$	1,605		5.3	%	$	1,056		3.4	%

Single-Tenant net lease
Revenues	$	13,676	$	13,641	$	13,278	$	35		0.3	%	$	398		3.0	%
Expenses	401		414		591		(13		)	(3.1	)%	(190		)	(32.1	)%
NOI	$	13,275	$	13,227	$	12,687	$	48		0.4	%	$	588		4.6	%

Total
Revenues	$	68,717	$	68,494	$	66,914	$	223		0.3	%	$	1,803		2.7	%
Expenses	23,605		25,035		23,446		(1,430		)	(5.7	)%	159			0.7	%
NOI	$	45,112	$	43,459	$	43,468	$	1,653		3.8	%	$	1,644		3.8	%

RECONCILIATION OF NOI

	4Q 2012			3Q 2012			4Q 2011
Rental income	$	77,207		$	75,762		$	72,026
Rental lease guaranty income ^(a)	1,226			1,286			1,257
Exclude straight-line rent revenue	(1,095		)	(1,459		)	(1,173		)
Revenue	77,338			75,589			72,110
Revenue not included in same store	(8,621		)	(7,095		)	(5,196		)
Same store revenue	$	68,717		$	68,494		$	66,914

Property operating expense	$	30,154		$	29,969		$	28,217
Property operating expense not included in same store	(6,549		)	(4,934		)	(4,771		)
Same store property operating expense	$	23,605		$	25,035		$	23,446

Same store NOI	$	45,112		$	43,459		$	43,468
(a) Other operating income reconciliation:
Rental lease guaranty income	$	1,226		$	1,286		$	1,257
Interest income	124			99			122
Other	92			137			131
Total consolidated other operating income	$	1,442		$	1,522		$	1,510


(1)	Excludes mortgage notes receivable, construction in progress, an investment in one unconsolidated joint venture, corporate property and assets classified as held for sale.


(2)	In order to provide meaningful comparisons, same store NOI is adjusted for certain non-routine items and excludes properties that were recently acquired or disposed of, properties held for sale, and properties in stabilization or conversion.





HEALTHCARE REALTY I 15		4Q I 2012 SUPPLEMENTAL INFORMATION

SCHEDULE 10

Components of Net Asset Value

(dollars in thousands)



Asset Type	Same Store 4Q 2012 NOI ⁽¹⁾		Adjustments ⁽²⁾		Adjusted 4Q 2012 NOI		Annualized Adjusted 4Q 2012 NOI		% of Adjusted NOI
MOB / Outpatient	$	35,378	$	1,826	$	37,204	$	148,816	78.4	%
Inpatient rehab	5,430		486		5,916		23,664		12.5	%
Inpatient surgical	2,936		—		2,936		11,744		6.2	%
Other	1,368		—		1,368		5,472		2.9	%
Subtotal	$	45,112	$	2,312	$	47,424	$	189,696	100.0	%

TOTAL SHARES OUTSTANDING ⁽³⁾ 88,846,951




+	ADD: DEVELOPMENT PROPERTIES AND MORTGAGES⁽⁴⁾
	Land held for development	$	25,171
	Stabilization in progress	405,941
	Mortgage notes receivable	162,191

	Subtotal	$	593,303


+	ADD: OTHER ASSETS
	Assets held for sale ⁽⁵⁾	$	3,337
	Properties not in Same Store NOI ⁽⁶⁾	106,589
	Cash and other assets ⁽⁷⁾	71,654

	Subtotal	$	181,580


-	SUBTRACT: DEBT
	Unsecured credit facility ⁽⁸⁾	$	110,000
	Senior notes ⁽⁸⁾	964,737
	Mortgage notes payable ⁽⁸⁾	225,242
	Other liabilities ⁽⁹⁾	91,107

	Subtotal	$	1,391,086


(1)	See Schedule 9 for details on same store NOI.


(2)	Same store NOI is adjusted to reflect a full quarter of NOI from properties acquired during the prior five quarters.


(3)	Total shares outstanding as of January 31, 2013.


(4)	Land held for development, stabilization in progress, and mortgage notes receivable reflect gross book value.


(5)	Assets held for sale are excluded from same store NOI and reflect net book value.


(6)	Reflects net carrying amount of certain properties not included in same store NOI, which comprises 938,302 square feet and generated NOI of approximately $1.0 million for 4Q 2012.

(7)

Includes cash of $6.8 million and other assets of $64.9 million that are expected to generate future cash or NOI and assets that are currently causing non-cash reductions to NOI. Other assets include prepaid assets of $50.8 million, above-market intangible assets (net) of $12.7 million, equity investment in an unconsolidated joint venture of $1.3 million, and notes receivable (net) of $0.1 million. See Footnote 7 to the Consolidated Financial Statements of the Company’s Form 10-K for a detail of other assets.


(8)	Outstanding principal balances as described in Footnote 9 to the Consolidated Financial Statements of the Company’s Form 10-K.

(9)

Includes only liabilities that are expected to reduce future cash or NOI and that are currently producing non-cash benefits to NOI. Included are accounts payable and accrued liabilities of $65.8 million, pension plan liability of $15.2 million, security deposits of $4.8 million, market-rate lease intangibles of $4.6 million, and deferred operating expense reimbursements of $0.7 million. Also, excludes deferred revenue of $34.9 million.

SCHEDULE 11





HEALTHCARE REALTY I 16		4Q I 2012 SUPPLEMENTAL INFORMATION

Components of Expected 2013 FFO

(dollars in thousands, except per square foot data)



		RANGE OF EXPECTATIONS
		Low		High
Occupancy
	Multi-Tenant
	Same Store	87.0	%	88.0	%
	Reposition	40.0	%	50.0	%
	Single-Tenant Net Lease	95.0	%	100.0	%

Same Store Revenue per Occupied Square Foot
	Multi-Tenant	$28.00		$30.25
	Single-Tenant Net Lease	$24.00		$26.25

Same Store Multi-Tenant NOI Margin		52.0	%	58.0	%

Multi-Tenant Contractual Rent Increases by Type (% of SF)
	Annual Increase	75.0	%	80.0	%
	Non-annual Increase	7.5	%	12.0	%
	No Increase within Remaining Term	12.0	%	15.0	%

Contractual Annual Rent Increases
	Multi-Tenant	3.0	%	3.5	%
	Single-Tenant Net Lease	2.0	%	3.0	%

Multi-Tenant Cash Releasing Spreads		0.5	%	3.0	%

Multi-Tenant Lease Retention Rate		75.0	%	85.0	%

Same Store Multi-Tenant NOI Growth		2.0	%	4.0	%

Stabilization in Process ("SIP")
	Year-End 2013 Lease Percentage	75.0	%	85.0	%
	Year-End 2013 Occupancy Percentage	65.0	%	70.0	%

G&A per quarter		$5,000		$5,500

Funding Activity
	SIP Funding (tenant improvements)	$15,000		$25,000
	Construction Mortgage Funding	$84,000		$85,000
	Acquisitions	$100,000		$200,000
	Dispositions (2)	$40,000		$60,000

Cap/Interest Rate
	Construction Mortgage Funding	6.75	%	8.00	%
	Acquisitions	6.00	%	8.00	%
	Dispositions	6.00	%	8.00	%

Leverage (Debt/Cap)		40.0	%	50.0	%





HEALTHCARE REALTY I 17		4Q I 2012 SUPPLEMENTAL INFORMATION

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