NASHVILLE, Tenn., May 5 /PRNewswire-FirstCall/ -- Healthcare Realty Trust Incorporated today announced results for the first quarter ended March 31, 2008. Revenues for the first quarter of 2008 totaled $55.0 million, compared with the prior year's $52.6 million. Income from continuing operations for the first quarter of 2008 totaled $5.7 million, compared with the prior year's $2.7 million.
In the first quarter of 2007, the Company recorded a $30.4 million gain related to the disposal of its senior living assets. The comparability of reported revenues and income from continuing operations for the first quarter of 2008 and 2007 is not impacted by the disposition of the senior living assets because the operations of the divested assets are classified in discontinued operations in the Condensed Consolidated Statements of Income for both periods. However, the period-over-period comparisons of net income, net income per share, funds from operations, and funds from operations per share are impacted by the reduced asset base and the gain on sale in 2007. Net income for the first quarter of 2008 was $6.8 million, or $0.13 per diluted common share, versus $36.3 million, or $0.76 per diluted common share, for the first quarter of 2007.
Funds from operations ("FFO") is calculated according to the definition of the National Association of Real Estate Investment Trusts ("NAREIT") and is comprised primarily of net income and depreciation from real estate, but is not adjusted for certain non-cash income and expense items. Also, the gain on the senior living disposition in 2007 is excluded from FFO and FFO per share. FFO totaled $19.4 million, or $0.39 per diluted common share, for the first quarter ended March 31, 2008, compared with $20.3 million, or $0.43 per diluted common share, for the same period in 2007.
Funds available for distribution for the first quarter of 2008 totaled $0.44 per diluted common share.
Healthcare Realty Trust is a real estate investment trust that integrates owning, managing 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 $1.8 billion in 186 real estate properties and mortgages as of March 31, 2008, excluding assets classified as held for sale and including investments in three unconsolidated limited liability companies. The Company's 179 owned real estate properties, excluding assets classified as held for sale, are comprised of six facility types, located in 24 states, totaling approximately 11.0 million square feet. The Company provides property management services to approximately 7.3 million square feet nationwide.
The Company directs interested parties to its Internet 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 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, 2007 under the heading "Risk Factors," and as may be 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 material.
HEALTHCARE REALTY TRUST INCORPORATED Condensed Consolidated Statements of Income (1) (Dollars in thousands, except per share data) (Unaudited) Three Months Ended March 31, 2008 2007 REVENUES Master lease rent $16,268 $15,691 Property operating 34,039 31,540 Straight-line rent (64) 61 Mortgage interest 525 352 Other operating 4,237 4,997 55,005 52,641 EXPENSES General and administrative 6,045 6,175 Property operating 19,028 17,985 Bad debts, net of recoveries 218 5 Interest 11,286 13,514 Depreciation 12,181 10,813 Amortization 594 1,415 49,352 49,907 INCOME FROM CONTINUING OPERATIONS 5,653 2,734 DISCONTINUED OPERATIONS (2) Income from discontinued operations 538 6,013 Impairments (29) (2,792) Gain on sales of real estate properties 637 30,389 INCOME FROM DISCONTINUED OPERATIONS 1,146 33,610 NET INCOME $6,799 $36,344 BASIC EARNINGS PER COMMON SHARE Income from continuing operations per common share $0.11 $0.06 Discontinued operations per common share $0.03 $0.72 Net income per common share $0.14 $0.78 DILUTED EARNINGS PER COMMON SHARE Income from continuing operations per common share $0.11 $0.06 Discontinued operations per common share $0.02 $0.70 Net income per common share $0.13 $0.76 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC 49,413,058 46,547,152 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED 50,407,119 47,598,736 (1) The Condensed Consolidated Statements of Income do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. (2) In accordance with SFAS No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets," the Company reports real estate properties and related assets and liabilities to be sold as held for sale and includes the results of operations of real estate properties sold or held for sale in discontinued operations on the Company's Condensed Consolidated Statements of Income. During 2007, the Company sold its senior living assets portfolio resulting in a $30.4 million gain recorded in the first quarter of 2007. Also, during 2007, the Company recorded an impairment charge on four properties classified as held for sale. HEALTHCARE REALTY TRUST INCORPORATED Condensed Consolidated Statements of Cash Flows (1) (Dollars in thousands) (Unaudited) Three Months Ended March 31, 2008 2007 Cash flows from operating activities: Net income $6,799 $36,344 Non-cash items: Depreciation and amortization - real estate 12,731 14,005 Depreciation and amortization - other 388 569 Provision for bad debt, net of recoveries 217 5 Impairments 29 2,792 Straight-line rent receivable 64 (61) Straight-line rent liability 43 810 Equity in losses from unconsolidated LLCs 264 97 Consolidated losses from variable interest entities - 206 Stock-based compensation 1,296 1,712 Provision for deferred post-retirement benefits 836 516 Other non-cash items 306 45 Total non-cash items 16,174 20,696 Other items: Accounts payable and accrued liabilities 3,779 1,725 Other liabilities (734) 172 Other assets 6,374 (69) Gain on sales of real estate properties (637) (30,389) Total other items 8,782 (28,561) Net cash provided by operating activities 31,755 28,479 Cash flows from investing activities: Acquisition and development of real estate properties (19,560) (17,806) Funding of mortgages and notes receivable (1,265) (3,926) Distributions received from unconsolidated LLCs 423 262 Proceeds from sales of real estate 3,415 110,205 Proceeds from mortgage and notes receivable repayments 36 13,007 Net cash provided by (used in) investing activities (16,951) 101,742 Cash flows from financing activities: Borrowings on notes and bonds payable 26,000 72,839 Repayments on notes and bonds payable (18,907) (169,873) Dividends paid (19,533) (31,563) Proceeds from issuance of common stock 185 273 Common stock redemption - (14) Net cash used in financing activities (12,255) (128,338) Increase in cash and cash equivalents 2,549 1,883 Cash and cash equivalents, beginning of period 8,519 1,950 Cash and cash equivalents, end of period $11,068 $3,833 (1) The Condensed Consolidated Statements of Cash Flows do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. RECONCILIATION OF FUNDS FROM OPERATIONS (1): (Dollars in thousands, except per share data) (Unaudited) Three Months Ended March 31, 2008 2007 Net Income $6,799 $36,344 Gain on sales of real estate properties (637) (30,389) Real estate depreciation and amortization 13,273 14,371 Total adjustments 12,636 (16,018) Funds From Operations - Basic and Diluted $19,435 $20,326 Funds From Operations Per Common Share - Basic $0.39 $0.44 Funds From Operations Per Common Share - Diluted $0.39 $0.43 Weighted Average Common Shares Outstanding - Basic 49,413,058 46,547,152 Weighted Average Common Shares Outstanding - Diluted 50,407,119 47,598,736 RECONCILIATION OF FUNDS AVAILABLE FOR DISTRIBUTION (1): (Dollars in thousands, except per share data) (Unaudited) Three Months Ended March 31, 2008 Net Income $6,799 Gain on sales of real estate properties (637) Total non-cash items included in cash flows from operating activities (2) 16,174 Funds Available For Distribution $22,336 Funds Available For Distribution Per Common Share - Diluted $0.44 Weighted Average Common Shares Outstanding - Diluted 50,407,119 (1) Funds From Operations ("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 and are not necessarily indicative of cash available to fund cash needs. FFO and FAD should not be considered alternatives to net income as indicators of the Company's operating performance or as alternatives to cash flow as measures of liquidity. (2) See Condensed Consolidated Statements of Cash Flows that is included in this earnings release.
