HEALTHCARE REALTY TRUST INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - February 17, 2015

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Carla Baca
Director of Corporate Communications
P: 615.269.8175
News Release
HEALTHCARE REALTY TRUST REPORTS NORMALIZED FFO OF $0.38 PER SHARE FOR THE FOURTH QUARTER

NASHVILLE, Tennessee, February 17, 2015 - Healthcare Realty Trust Incorporated (NYSE:HR) today announced results for the fourth quarter ended December 31, 2014. Normalized FFO for the three months ended December 31, 2014 totaled $0.38 per diluted common share. Over the same time period, year-over-year revenue grew by $6.4 million to $95.0 million. The Company reported net income attributable to common stockholders for the quarter of $18.1 million.

Salient highlights include:
•
Normalized FFO for the fourth quarter grew $3.0 million, or 8.8% year-over-year, to $37.6 million. Over the same time period, normalized FFO per share increased 5.6%.
•
For the full year of 2014, normalized FFO grew by $19.6 million, or 16.1% year-over-year, to $141.3 million. Over the same time period, normalized FFO per share increased 10.6%.
•
NOI grew in 2014 by $35.5 million, or 19.2%, to $220.9 million.
•
In the same store multi-tenant portfolio, contractual increases for in-place leases averaged 2.9% and cash leasing spreads for renewals averaged 4.0% in the fourth quarter. Revenue per occupied square foot in 2014 increased 2.1% over 2013. Including incremental invested capital, the spread on re-leasing yields was positive for the quarter and year. Same store occupancy was 90.5%, with the multi-tenant properties remaining stable at 88.3% in the fourth quarter.
•
Leases totaling 342,000 square feet commenced or renewed at the Company's multi-tenant properties during the fourth quarter, including 271,000 square feet in the same store portfolio where tenant retention was 89%.
•
Acquisitions totaled $83.1 million for 2014, with an average leased percentage of 97%. During the fourth quarter, the Company purchased two on-campus medical office buildings totaling 129,000 square feet for a total purchase price of $40.1 million. These properties are collectively 97% leased.
•
In January 2015, the Company acquired a 111,000 square foot medical office building in California for a total purchase price of $39.3 million. The property is located adjacent to two hospital campuses and is 97% leased.
•
For the year, the Company disposed of nine properties totaling $34.9 million, including eight off-campus medical office buildings.
•
The twelve development conversion properties are 83% leased, with occupancy increasing to 80% at year-end. Quarterly NOI for these properties was $4.2 million and is expected to be $5.1 million when all occupants are in place and paying rent for an entire quarter.
•
A dividend of $0.30 per common share was declared, which is 78.9% 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 199 real estate properties and mortgages as of December 31, 2014. The Company's 198 owned real estate properties are located in 30 states and total approximately 14.2 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
Consolidated Balance Sheets (1) 
(amounts in thousands, except per share data)

 
ASSETS
 
 
 
 
Real Estate Properties:
 
12/31/2014

 
12/31/2013

Land
 

$183,060

 

$178,931

Buildings, improvements and lease intangibles
 
3,048,251

 
2,861,935

Personal property
 
9,914

 
9,267

Land held for development
 
17,054

 
17,054

Total real estate properties
 
3,258,279

 
3,067,187

Less accumulated depreciation
 
(700,671
)
 
(632,109
)
Total real estate properties, net
 
2,557,608

 
2,435,078

Cash and cash equivalents
 
3,519

 
8,671

Mortgage notes receivable
 
1,900

 
125,547

Assets held for sale and discontinued operations, net
 
9,146

 
6,852

Other assets, net
 
185,337

 
153,514

Total assets
 

$2,757,510

 

$2,729,662

 
 
 
 
 
LIABILITIES AND EQUITY
 
 
 
 
Liabilities:
 
 
 
 
Notes and bonds payable
 

$1,403,692

 

$1,348,459

Accounts payable and accrued liabilities
 
70,240

 
73,741

Liabilities of discontinued operations
 
372

 
1,112

Other liabilities
 
62,152

 
61,064

Total liabilities
 
1,536,456

 
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; 98,828 and 95,924 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively
 
988

 
959

Additional paid-in capital
 
2,389,830

 
2,325,228

Accumulated other comprehensive income
 
(2,519
)
 
51

Cumulative net income attributable to common stockholders
 
840,249

 
808,362

Cumulative dividends
 
(2,007,494
)
 
(1,891,123
)
Total stockholders’ equity
 
1,221,054

 
1,243,477

Noncontrolling interests
 
—

 
1,809

Total equity
 
1,221,054

 
1,245,286

Total liabilities and equity
 

$2,757,510

 

$2,729,662

 
(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 5


HEALTHCARE REALTY TRUST INCORPORATED
Consolidated Statements of Operations (1) 
(amounts in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
 
Twelve Months Ended December 31,
 
 
 
2014

 
2013

 
2014

 
2013

Revenues
 
 
 
 
 
 
 
 
Rental income
 

$93,649

 

$84,825

 

$361,525

 

$312,322

Mortgage interest
 
32

 
2,411

 
3,665

 
12,701

Other operating
 
1,320

 
1,386

 
5,665

 
5,926

 
 
95,001

 
88,622

 
370,855

 
330,949

Expenses
 
 
 
 
 
 
 
 
Property operating
 
33,386

 
31,227

 
134,057

 
122,571

General and administrative
 
5,990

 
5,758

 
22,808

 
23,704

Depreciation
 
25,881

 
23,074

 
99,384

 
86,239

Amortization
 
2,630

 
2,826

 
10,820

 
10,645

Bad debt, net of recoveries
 
(92
)
 
61

 
31

 
172

 
 
67,795

 
62,946

 
267,100

 
243,331

Other Income (Expense)
 
 
 
 
 
 
 
 
Loss on extinguishments of debt
 
—

 
—

 
—

 
(29,638
)
Interest expense
 
(18,237
)
 
(17,772
)
 
(72,413
)
 
(73,511
)
Gain on sale of cost method investment in real estate
 
—

 
1,492

 
—

 
1,492

Interest and other income, net
 
91

 
260

 
2,637

 
947

 
 
(18,146
)
 
(16,020
)
 
(69,776
)
 
(100,710
)
 
 
 
 
 
 
 
 
 
Income (Loss) From Continuing Operations
 
9,060

 
9,656

 
33,979

 
(13,092
)
 
 
 
 
 
 
 
 
 
Discontinued Operations
 
 
 
 
 
 
 
 
Income from discontinued operations
 
728

 
52

 
967

 
5,246

Impairments
 
(995
)
 
—

 
(12,029
)
 
(9,889
)
Gain on sales of real estate properties
 
9,280

 
2,748

 
9,283

 
24,718

Income (Loss) From Discontinued Operations
 
9,013

 
2,800

 
(1,779
)
 
20,075

 
 
 
 
 
 
 
 
 
Net Income
 
18,073

 
12,456

 
32,200

 
6,983

Less: Net (income) attributable to noncontrolling interests
 
—

 
(72
)
 
(313
)
 
(37
)
Net Income Attributable To Common Stockholders
 

$18,073

 

$12,384

 

$31,887

 

$6,946

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

$0.09

 

$0.10

 

$0.35

 

($0.14
)
Discontinued operations
 
0.10

 
0.03

 
(0.02
)
 
0.22

Net income attributable to common stockholders
 

$0.19

 

$0.13

 

$0.33

 

$0.08

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

$0.09

 

$0.10

 

$0.35

 

($0.14
)
Discontinued operations
 
0.09

 
0.03

 
(0.02
)
 
0.22

Net income attributable to common stockholders
 

$0.18

 

$0.13

 

$0.33

 

$0.08

Weighted Average Common Shares Outstanding—Basic
 
96,566

 
94,114

 
95,279

 
90,941

Weighted Average Common Shares Outstanding—Diluted
 
98,086

 
95,485

 
96,759

 
90,941

(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 5


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,
 
 
 
2014

 
2013

Net Income Attributable to Common Stockholders
 

$18,073

 

$12,384

Gain on sales of real estate properties
 
(9,280
)
 
(2,748
)
Impairments
 
995

 
—

Real estate depreciation and amortization
 
27,897

 
25,776

Total adjustments
 
19,612

 
23,028

Funds From Operations (3)
 

$37,685

 

$35,412

Acquisition costs
 
471

 
681

Reversal of restricted stock amortization upon director resignation
 
(115
)
 
—

Security deposit recognized upon sale
 
(407
)
 
—

Gain on sale of cost method investment in real estate
 
—

 
(1,492
)
Normalized Funds From Operations
 

$37,634

 

$34,601

Funds from Operations per Common Share—Diluted
 

$0.38

 

$0.37

Normalized Funds From Operations Per Common Share—Diluted
 

$0.38

 

$0.36

FFO Weighted Average Common Shares Outstanding
 
98,086

 
95,485



(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.
(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.










 
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