NASHVILLE, Tenn., Feb. 26 /PRNewswire-FirstCall/ -- Healthcare Realty Trust Incorporated today announced results for the fourth quarter that ended December 31, 2006. Revenues for the fourth quarter totaled $65.8 million, compared with the prior year's $66.2 million. Net income for the fourth quarter was $7.7 million, or $0.16 per diluted common share, versus $11.7 million, or $0.25 per diluted common share, for the fourth quarter of 2005.
Funds from operations ("FFO"), calculated according to the definition of the National Association of Real Estate Investment Trusts ("NAREIT") and comprised primarily of net income and depreciation from real estate, but not adjusted for certain non-cash income and expense items, totaled $24.8 million compared with $26.2 million for the same period in 2005. FFO per diluted common share totaled $0.52 compared with $0.55 for the fourth quarter of 2005. A reconciliation of FFO to net income follows.
Net income and FFO for the three months ended December 31, 2006 include the impact of non-cash impairment charges totaling $1.8 million. Before these charges, FFO per diluted common share for the fourth quarter of 2006 would have been $0.56.
Revenues for the twelve months ended December 31, 2006 totaled $264.9 million compared with the prior year's $251.8 million. Net income for the twelve-month period was $39.7 million, or $0.84 per diluted common share, versus $52.7 million, or $1.11 per diluted common share, for the twelve months ended December 31, 2005. FFO totaled $101.1 million for the twelve months ended December 31, 2006, compared with $107.9 million for the same period in 2005. FFO, per diluted common share, for the twelve months ended December 31, 2006 totaled $2.13, versus $2.28 for the same period in 2005.
Funds available for distribution for the fourth quarter of 2006 totaled $0.61 per diluted common share. A reconciliation of funds available for distribution to net income follows.
Healthcare Realty Trust is a real estate investment trust that integrates owning, managing and developing income-producing real estate properties associated with the delivery of healthcare services throughout the United States. As of December 31, 2006, the Company had investments of approximately $2.0 billion in 249 real estate properties and mortgages, including investments in unconsolidated limited liability companies. The Company's 237 owned real estate properties are comprised of six facility types, located in 28 states, totaling approximately 12.9 million square feet. The Company provides property management services to approximately 6.8 million square feet nationwide.
The Company directs interested parties to its Internet page site, http://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 a 10-K filed with the SEC by Healthcare Realty Trust for the year ended December 31, 2005. Forward-looking statements represent the Company's judgment as of the date of this release. The Company disclaims any obligation to update forward-looking material.
HEALTHCARE REALTY TRUST INCORPORATED
Consolidated Statements of Income (1)
(Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
Revenues:
Master lease rental income $21,553 $18,472 $83,251 $70,983
Property operating income 32,358 33,856 127,200 135,035
Straight-line rent 93 1,422 2,358 295
Mortgage interest income 1,918 2,827 11,014 9,103
Other operating income (2) 9,898 9,644 41,059 36,356
65,820 66,221 264,882 251,772
Expenses:
General and administrative 3,862 4,083 16,867 16,089
Property operating expenses 17,041 19,209 70,449 72,677
Other operating expenses (2) 4,209 4,058 17,209 15,938
Impairments 1,800 0 5,611 0
Bad debt expense, net 5 1,177 1,256 1,308
Interest 13,900 12,911 53,553 48,395
Depreciation 15,456 11,331 54,492 49,321
Amortization 1,890 2,972 9,938 12,153
58,163 55,741 229,375 215,881
Income from continuing
operations 7,657 10,480 35,507 35,891
Discontinued operations:
Net income (loss) from
discontinued operations (2) 1,210 1,010 10,007
Gain on sales of real
state properties, net
of impairments 0 (3) 3,202 6,770
(2) 1,207 4,212 16,777
Net income $7,655 $11,687 $39,719 $52,668
Basic earnings per
common share:
Income from continuing
operations per common
share $0.16 $0.22 $0.76 $0.77
Discontinued operations
per common share $0.00 $0.03 $0.09 $0.36
Net income per common share $0.16 $0.25 $0.85 $1.13
Diluted earnings per
common share:
Income from continuing
operations per common share $0.16 $0.22 $0.75 $0.76
Discontinued operations per
common share $0.00 $0.03 $0.09 $0.35
Net income per common share $0.16 $0.25 $0.84 $1.11
Weighted average common
shares outstanding
- Basic 46,542,450 46,488,468 46,527,857 46,465,215
Weighted average common
shares outstanding
- Diluted 47,562,122 47,429,525 47,498,937 47,406,798
(1) The income statements do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements.
(2) Includes the operations of the properties consolidated in the
Company's consolidated financial statements as required in FIN 46(R) as
variable interest entities.
HEALTHCARE REALTY TRUST INCORPORATED
Consolidated Statement of Cash Flows
(Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
Cash flows from operating
activities:
Net income $7,655 $11,687 $39,719 $ 52,668
Non-cash items:
Depreciation and
amortization
- real estate 17,023 14,236 63,397 61,842
Depreciation and
amortization
- other 664 372 1,877 1,437
Amortization of
deferred loan fees 0 8 255 250
Provision for bad debt,
net of recoveries 5 1,177 1,256 1,308
Impairments 1,800 0 5,611 0
Increase in straight-
line rent receivable (93) (1,404) (1,736) (99)
Equity in (income) losses
from unconsolidated LLCs 147 (161) 307 90
Consolidated losses from
variable interest
entities 286 290 1,110 3,183
Impairments due to sale
of real estate 0 3 73 713
Stock-based compensation
expense 943 842 4,002 3,677
Provision for deferred
post-retirement benefits 487 514 2,072 1,254
Other non-cash items 55 119 52 (67)
Total non-cash items 21,317 15,996 78,276 73,588
Other items:
Decrease in accounts
payable and accrued
liabilities (8,626) (19,651) (1,780) (3,906)
Increase (decrease) in
other liabilities (333) 1,234 (2,389) (861)
(Increase) decrease in
other assets (2,960) 321 (1,463) (12,401)
Gain on sale of real
estate, net 0 0 (3,275) (7,483)
Total other items (11,919) (18,096) (8,907) (24,651)
Net cash provided by
operating activities 17,053 9,587 109,088 101,605
Cash flows from investing
activities:
Acquisition and develop-
ment of real estate
properties (18,805) (5,978) (126,347) (87,399)
Funding of mortgages
and notes receivable (1,315) (11,660) (22,794) (76,636)
Investment in unconsol-
idated LLCs (340) 0 (10,654) (11,135)
Distributions from
unconsolidated LLCs 262 0 988 326
Proceeds from sales of
real estate 0 0 32,706 124,879
Proceeds from mortgage
and note receivable
collections 3,573 3,082 72,553 14,095
Net cash used in
investing activities (16,625) (14,556) (53,548) (35,870)
Cash flows from financing
activities:
Borrowings on notes and
bonds payable 54,000 87,100 364,000 250,348
Repayments on notes and
bonds payable (24,852) (49,016) (287,048) (187,296)
Interest rate swap
termination 0 0 (10,127) 0
Dividends paid (31,549) (31,520) (126,205) (125,342)
Debt issuance costs 0 0 (1,333) 0
Common stock redemption 0 0 (481) 0
Proceeds from issuance
of common stock 176 56 567 909
Net cash provided by
(used in) financing
activities (2,225) 6,620 (60,627) (61,381)
Increase (decrease) in
cash and cash equivalents (1,797) 1,651 (5,087) 4,354
Cash and cash equivalents,
beginning of period 3,747 5,386 7,037 2,683
Cash and cash equivalents,
end of period $1,950 $7,037 $1,950 $7,037
Reconciliation of funds available for distribution (1) :
Three Months Ended
December 31, 2006
Net income $7,655
Less: Gain on sale of real estate -
Plus: Total non-cash items included
in cash flows from operating activities (2) 21,317
Funds available for distribution $28,972
Funds available for distribution per common
share - Diluted $0.61
Weighted average common shares outstanding
- Diluted 47,562,122
(1) Funds available for distribution does not represent cash generated
from operating activities determined in accordance with accounting
principles generally accepted in the United States and is not necessarily
indicative of cash available to fund cash needs. Funds available for
distribution should not be considered an alternative to net income as an
indicator of the Company's operating performance or as an alternative to
cash flow as a measure of liquidity.
(2) See Consolidated Statement of Cash Flows included in this press
release.
HEALTHCARE REALTY TRUST INCORPORATED
Reconciliation of Funds From Operations (1)
(Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
Net income (2) $7,655 11,687 $39,719 52,668
Gain on sale of real
estate properties, net 0 0 (3,275) (7,483)
Real estate depreciation
and amortization 17,189 14,559 64,662 62,758
Total adjustments 17,189 14,559 61,387 55,275
Funds from operations
- Basic and Diluted 24,844 26,246 101,106 107,943
Funds from operations
per common share - Basic 0.53 0.56 2.17 2.32
Funds from operations
per common share - Diluted
0.52 0.55 2.13 2.28
Weighted average common
shares outstanding
- Basic 46,542,450 46,488,468 46,527,857 46,465,215
Weighted average common
shares outstanding
- Diluted 47,562,122 47,429,525 47,498,937 47,406,798
(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
generally accepted accounting principles), excluding gains (or losses)
from sales of property plus depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures."
Impairments are not added back to net income to measure FFO.
Management uses FFO and FFO per share to compare and evaluate its own
operating results from period to period, and to monitor the operating
results of the Company's peers in the REIT industry. The Company
reports FFO and FFO per share because these measures are observed by
management to also be the predominant measures used by the REIT
industry and by industry analysts to evaluate REITs. However, FFO does
not represent cash generated from operating activities determined in
accordance with accounting principles generally accepted in the United
States and is not necessarily indicative of cash available to fund
cash needs. FFO should not be considered an alternative to net income
as an indicator of the Company's operating performance or as an
alternative to cash flow as a measure of liquidity.
(2) See the Consolidated Statement of Cash Flows for a reconciliation of
non-cash items included in net income. Net income for the three- and
twelve-month periods ended December 31, 2006 includes non-cash
impairment charges totaling $1.8 million and $5.6 million,
respectively. Before these charges, FFO per diluted common share for
the three months ended December 31, 2006 would have been $0.56.
Healthcare Realty Trust maintains a website: http://www.healthcarerealty.com/ to
provide corporate, investor and financial information.
