HEALTHCARE REALTY TRUST INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - February 19, 2014

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Carla Baca
Financial Communications
P: 615.269.8175
News Release
HEALTHCARE REALTY TRUST REPORTS NORMALIZED FFO OF $0.36 PER SHARE FOR THE FOURTH QUARTER

NASHVILLE, Tennessee, February 19, 2014 - Healthcare Realty Trust Incorporated (NYSE:HR) today announced results for the fourth quarter ended December 31, 2013. Normalized FFO for the three months ended December 31, 2013 totaled $0.36 per diluted common share. Normalized FAD for the three months ended December 31, 2013 totaled $0.37 per diluted common share.

Salient highlights include:
•
The twelve development properties currently in conversion are 80% leased, with occupancy increasing to 63% at year-end, and would have resulted in NOI of $3.4 million had all occupants been in place and paying rent for the entire quarter.
•
Acquisitions totaled $212.6 million for 2013, with an average leased percentage of 93%. During the fourth quarter, the Company purchased five properties totaling 374,000 square feet for a total purchase price of $102.6 million. The buildings are 94% leased and are located in markets where Healthcare Realty already has a presence including Seattle, Denver, Charlotte and Austin.
•
Dispositions totaled $20.5 million in the fourth quarter and $101.9 million for the year. 2013 dispositions include eight off-campus medical office buildings, four inpatient rehab facilities, and one land parcel.
•
Leases totaling 1,242,000 square feet were signed or renewed during the year with an average retention rate of 80%, and the Company maintained occupancy at 91% at its same store properties at year-end.
•
The leverage ratio was 42.0% and debt-to-EBITDA and fixed-charge coverage improved to 6.4 and 2.8 times, respectively.
•
A dividend of $0.30 per common share was declared for the fourth quarter of 2013, which is 81.1% of normalized FAD.
For the three months ended December 31, 2013, year-over-year revenues grew by $11.9 million to $90.1 million. The Company reported net income attributable to common stockholders for the quarter of $12.4 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 December 31, 2013. The Company's 198 owned real estate properties are located in 28 states and total approximately 13.9 million square feet. The Company provides property management services to approximately 10.3 million square feet nationwide.
__________________________________________________________________________________________________________


 
 
 
HEALTHCAREREALTY.COM  | PAGE 1 OF 6



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.


 
HEALTHCAREREALTY.COM  | PAGE 2 OF 6


HEALTHCARE REALTY TRUST INCORPORATED
Consolidated Balance Sheets (1) 
(amounts in thousands, except for share data)

 
ASSETS
 
 
 
 
Real Estate Properties:
 
12/31/2013

 
12/31/2012

Land
 

$178,931

 

$161,875

Buildings, improvements and lease intangibles
 
2,861,935

 
2,625,538

Personal property
 
9,267

 
8,739

Land held for development
 
17,054

25.176

25,171

Total real estate properties
 
3,067,187

 
2,821,323

Less accumulated depreciation
 
(632,109
)
 
(580,617
)
Total real estate properties, net
 
2,435,078

 
2,240,706

Cash and cash equivalents
 
8,671

 
6,776

Mortgage notes receivable
 
125,547

 
162,191

Assets held for sale and discontinued operations, net
 
6,852

 
3,337

Other assets, net
 
153,514

 
126,962

Total assets
 

$2,729,662

 

$2,539,972

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Liabilities:
 
 
 
 
Notes and bonds payable
 

$1,348,459

 

$1,293,044

Accounts payable and accrued liabilities
 
73,741

 
65,678

Liabilities of discontinued operations
 
1,112

 
131

Other liabilities
 
61,064

 
60,175

Total liabilities
 
1,484,376

 
1,419,028

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; 95,924 and 87,514 shares issued and outstanding at December 31, 2013 and December 31, 2012, respectively
 
959

 
875

Additional paid-in capital
 
2,325,228

 
2,100,297

Accumulated other comprehensive income (loss)
 
51

 
(2,092
)
Cumulative net income attributable to common stockholders
 
808,362

 
801,416

Cumulative dividends
 
(1,891,123
)
 
(1,779,552
)
Total stockholders’ equity
 
1,243,477

 
1,120,944

Noncontrolling interests
 
1,809

 
—

Total equity
 
1,245,286

 
1,120,944

Total liabilities and equity
 

$2,729,662

 

$2,539,972

 
(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.


 
HEALTHCAREREALTY.COM  | PAGE 3 OF 6


HEALTHCARE REALTY TRUST INCORPORATED
Consolidated Statements of Operations (1) 
(amounts in thousands, except for share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
Twelve Months Ended December 31,
 
 
 
2013

 
2012

 
2013

 
2012

Revenues
 
 
 
 
 
 
 
 
Rental income
 

$86,318

 

$74,197

 

$318,294

 

$288,787

Mortgage interest
 
2,411

 
2,611

 
12,701

 
9,186

Other operating
 
1,387

 
1,442

 
5,931

 
6,101

 
 
90,116

 
78,250

 
336,926

 
304,074

Expenses
 
 
 
 
 
 
 
 
Property operating
 
31,945

 
29,841

 
125,565

 
116,470

General and administrative
 
5,764

 
6,395

 
23,729

 
20,905

Depreciation
 
23,608

 
21,632

 
88,380

 
81,966

Amortization
 
2,826

 
2,900

 
10,645

 
10,418

Bad debt, net of recoveries
 
66

 
92

 
184

 
241

 
 
64,209

 
60,860

 
248,503

 
230,000

Other Income (Expense)
 
 
 
 
 
 
 
 
Loss on extinguishments of debt
 
—

 
—

 
(29,638
)
 
—

Interest expense
 
(17,772
)
 
(19,215
)
 
(73,511
)
 
(74,955
)
Gain on sale of cost method investment in real estate
 
1,492

 
—

 
1,492

 
—

Interest and other income, net
 
261

 
358

 
966

 
976

 
 
(16,019
)
 
(18,857
)
 
(100,691
)
 
(73,979
)
 
 
 
 
 
 
 
 
 
Income (Loss) From Continuing Operations
 
9,888

 
(1,467
)
 
(12,268
)
 
95

 
 
 
 
 
 
 
 
 
Discontinued Operations
 
 
 
 
 
 
 
 
Income from discontinued operations
 
(180
)
 
1,640

 
4,422

 
9,474

Impairments
 
—

 
(7,712
)
 
(9,889
)
 
(14,908
)
Gain on sales of real estate properties
 
2,748

 
1,177

 
24,718

 
10,874

Income From Discontinued Operations
 
2,568

 
(4,895
)
 
19,251

 
5,440

 
 
 
 
 
 
 
 
 
Net Income (Loss)
 
12,456

 
(6,362
)
 
6,983

 
5,535

Less: Net (income) attributable to noncontrolling interests
 
(72
)
 
(29
)
 
(37
)
 
(70
)
Net Income (Loss) Attributable To Common Stockholders
 

$12,384

 

($6,391
)
 

$6,946

 

$5,465

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

$0.11

 

($0.01
)
 

($0.13
)
 

$0.00

Discontinued operations
 
0.02

 
(0.06
)
 
0.21

 
0.07

Net income (loss) attributable to common stockholders
 

$0.13

 

($0.07
)
 

$0.08

 

$0.07

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

$0.10

 

($0.01
)
 

($0.13
)
 

$0.00

Discontinued operations
 
0.03

 
(0.06
)
 
0.21

 
0.07

Net income (loss) attributable to common stockholders
 

$0.13

 

($0.07
)
 

$0.08

 

$0.07

Weighted Average Common Shares Outstanding—Basic
 
94,114

 
85,726

 
90,941

 
78,845

Weighted Average Common Shares Outstanding—Diluted
 
95,485

 
85,726

 
90,941

 
80,128

(1)
The 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
Reconciliation of FFO and Normalized FFO (1) (2) 
(amounts in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
 
2013

 
2012

Net Income Attributable to Common Stockholders
 

$12,384

 

($6,391
)
Gain on sales of real estate properties
 
(2,748
)
 
(1,177
)
Impairments
 
—

 
7,712

Real estate depreciation and amortization
 
25,776

 
24,932

Total adjustments
 
23,028

 
31,467

Funds From Operations (3)
 

$35,412

 

$25,076

Gain on sale of cost method investment in real estate
 
(1,492
)
 
 
Acquisition costs
 
681

 
385

Amounts paid in settlement of a brokerage claim on a 2010 real estate acquisition
 
—

 
1,100

Normalized Funds From Operations
 

$34,601

 

$26,561

Funds from Operations per Common Share—Diluted
 

$0.37

 

$0.29

Normalized Funds From Operations Per Common Share—Diluted
 

$0.36

 

$0.31

FFO Weighted Average Common Shares Outstanding
 
95,485

 
87,049

Normalized FFO Weighted Average Common Shares Outstanding
 
95,485

 
87,049



(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 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)
FFO for the fourth quarter of 2013 includes the impact of a gain recognized on the sale of a cost method investment in an unconsolidated limited liability company.








 
HEALTHCAREREALTY.COM  | PAGE 5 OF 6


HEALTHCARE REALTY TRUST INCORPORATED
Reconciliation of FAD and Normalized FAD (1) 
(amounts in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
 
2013

 
2012

Net Income Attributable to Common Stockholders
 

$12,384

 

($6,391
)
Gain on sales of real estate properties
 
(2,748
)
 
(1,177
)
Impairments
 
—

 
7,712

Depreciation and amortization
 
27,590

 
26,511

Provision for bad debt, net
 
66

 
93

Straight-line rent receivable
 
(2,954
)
 
(1,087
)
Straight-line rent liability
 
115

 
106

Stock-based compensation
 
1,079

 
904

Provision for deferred post-retirement benefits
 
218

 
266

Total non-cash items included in cash flows from operating activities
 
23,366

 
33,328

Funds Available For Distribution
 

$35,750

 

$26,937

Gain on sale of cost method investment in real estate
 
(1,492
)
 
 
Acquisition costs
 
681

 
385

Amounts paid in settlement of a brokerage claim on a 2010 real estate acquisition
 
—

 
1,100

Normalized Funds Available For Distribution
 

$34,939

 

$28,422

Funds Available For Distribution Per Common Share—Diluted
 

$0.37



$0.31

Normalized Funds Available For Distribution Per Common Share—Diluted
 

$0.37

 

$0.33

FAD Weighted Average Common Shares Outstanding
 
95,485

 
87,049

Normalized FAD Weighted Average Common Shares Outstanding
 
95,485

 
87,049



(1)
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.

 
HEALTHCAREREALTY.COM  | PAGE 6 OF 6

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