NASHVILLE, Tenn., Feb. 23 /PRNewswire-FirstCall/ -- Healthcare Realty Trust Incorporated today announced results for the fourth quarter ended December 31, 2008. Funds from operations ('FFO') per diluted common share for the three months ended December 31, 2008 totaled $0.49, which includes the net positive effect of certain one-time items totaling $6.5 million, or $0.11 per diluted common share, compared with FFO per diluted common share for the three months ended December 31, 2007, which totaled $0.39. FFO per diluted common share totaled $1.63 for the twelve months ended December 31, 2008, compared with the prior year's $1.51. Funds available for distribution ("FAD") for the three months ended December 31, 2008 totaled $0.54 per diluted common share.
Revenues for the three months ended December 31, 2008 totaled $57.1 million, compared with the prior year's $50.3 million. Revenues for the twelve months ended December 31, 2008 totaled $214.2 million, compared with the prior year's $197.4 million. Income from continuing operations for the three months ended December 31, 2008 totaled $6.8 million, compared with $3.3 million for the three months ended December 31, 2007. Income from continuing operations for the twelve months ended December 31, 2008 totaled $18.2 million, compared with the prior year's $11.2 million.
Net income for the three months ended December 31, 2008 totaled $15.6 million, or $0.27 per diluted common share, versus $4.6 million, or $0.09 per diluted common share, for the three months ended 2007. Net income for the twelve months ended December 31, 2008 totaled $41.7 million, or $0.79 per diluted common share, compared with $60.1 million, or $1.24 per diluted common share for the twelve months ended December 31, 2007. Net income for the twelve months ended December 31, 2008, as compared to 2007, was affected by the disposition of the senior living assets and resulting gain included in discontinued operations in 2007.
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 $2.1 billion in 198 real estate properties and mortgages as of December 31, 2008, excluding assets classified as held for sale and including investments in two unconsolidated joint ventures. The Company's 192 owned real estate properties, excluding assets classified as held for sale, are comprised of six facility types, located in 27 states, totaling approximately 11.7 million square feet. The Company provides property management services to approximately 8.5 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, 2008 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 Consolidated Statements of Income (1) (Dollars in thousands, except per share data) Three Months Ended Twelve Months Ended December 31, December 31, 2008 2007 2008 2007 (Unaudited) REVENUES Master lease rent $14,743 $14,141 $58,412 $56,401 Property operating 37,052 31,433 136,745 121,644 Straight-line rent 709 279 622 934 Mortgage interest 561 536 2,207 1,752 Other operating 4,009 3,908 16,255 16,640 57,074 50,297 214,241 197,371 EXPENSES General and administrative 5,588 4,889 23,514 20,619 Property operating 23,204 18,344 82,420 71,671 Impairment - - 1,600 - Bad debts, net of recoveries 1,478 92 1,833 222 Depreciation 13,043 11,419 48,283 42,254 Amortization 930 931 2,849 4,528 44,243 35,675 160,499 139,294 OTHER INCOME (EXPENSE) Gain on extinguishment of debt, net 2,079 - 4,102 - Interest expense (9,748) (11,488) (42,126) (48,307) Interest and other income, net 1,632 133 2,440 1,459 (6,037) (11,355) (35,584) (46,848) INCOME FROM CONTINUING OPERATIONS 6,794 3,267 18,158 11,229 DISCONTINUED OPERATIONS (2) Income from discontinued operations 8,917 2,615 14,577 15,517 Impairments (857) (240) (886) (7,089) Gain on sales of real estate properties 745 (1,054) 9,843 40,405 INCOME FROM DISCONTINUED OPERATIONS 8,805 1,321 23,534 48,833 NET INCOME $15,599 $4,588 $41,692 $60,062 BASIC EARNINGS PER COMMON SHARE Income from continuing operations per common share $0.12 $0.07 $0.35 $0.24 Discontinued operations per common share 0.15 0.02 0.46 1.02 Net income per common share $0.27 $0.09 $0.81 $1.26 DILUTED EARNINGS PER COMMON SHARE Income from continuing operations per common share $0.12 $0.06 $0.35 $0.23 Discontinued operations per common share 0.15 0.03 0.44 1.01 Net income per common share $0.27 $0.09 $0.79 $1.24 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC 57,765,614 49,488,943 51,547,279 47,536,133 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED 58,705,348 50,348,217 52,564,944 48,291,330 (1)The 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 Consolidated Statements of Income. HEALTHCARE REALTY TRUST INCORPORATED Consolidated Statements of Cash Flows (1) (Dollars in thousands) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2008 2007 2008 2007 Cash flows from operating activities: Net income $15,599 $4,588 $41,692 $60,062 Non-cash items: Depreciation and amortization - real estate 13,769 13,081 52,069 51,692 Depreciation and amortization - other 811 551 2,679 2,232 Provision for bad debt, net of recoveries 1,478 83 1,904 198 Impairments 857 240 2,486 7,089 Straight-line rent receivable (718) (308) (643) (1,043) Straight-line rent liability 276 46 423 954 Equity in (income) losses from unconsolidated joint ventures (1,114) 250 (1,021) 309 Consolidated losses from variable interest entities - 24 - 700 Stock-based compensation (707) 1,002 2,780 4,678 Provision for deferred post- retirement benefits 2,510 779 4,992 2,323 Other non-cash items (13) 87 559 195 Total non-cash items 17,149 15,835 66,228 69,327 Other items: Accounts payable and accrued liabilities (6,556) (235) 3,097 (2,065) Other liabilities 3,812 3,897 3,740 4,445 Other assets 1,765 1,407 6,794 (307) Gain on sales of real estate properties (745) 1,054 (9,843) (40,405) Gain on sale of land (384) - (384) - Gain on extinguishment of debt (2,079) - (4,102) - State income taxes paid, net of refunds 39 (30) (612) (137) Total other items (4,148) 6,093 (1,310) (38,469) Net cash provided by operating activities 28,600 26,516 106,610 90,920 Cash flows from investing activities: Acquisition and development of real estate properties (245,250) (24,084) (383,702) (130,799) Funding of mortgages and notes receivable (24,451) (10,739) (36,970) (14,759) Distributions received from unconsolidated joint ventures - 287 882 1,414 Partial redemption of preferred equity investment in unconsolidated joint ventures - - 5,546 - Proceeds from sales of real estate 12,452 14,586 37,133 311,927 Proceeds from mortgages and notes receivable repayments 5,602 27 8,236 65,572 Net cash provided by (used in) investing activities (251,647) (19,923) (368,875) 233,355 Cash flows from financing activities: Net borrowings (repayments) on unsecured credit facility 261,000 6,000 193,000 (54,000) Borrowings on notes and bonds payable - - - 1,840 Repayments on notes and bonds payable (1,093) (884) (3,813) (7,440) Repurchase of notes payable (14,222) - (45,460) - Special dividend paid - - - (227,157) Quarterly dividends paid (22,692) (19,514) (81,301) (101,137) Proceeds from issuance of common stock 193 220 197,255 70,780 Equity issuance costs (357) (16) (389) (206) Common stock redemption - - (282) (386) Credit facility amendment and extension fees (800) - (1,126) - Net cash provided by (used in) financing activities 222,029 (14,194) 257,884 (317,706) Increase (decrease) in cash and cash equivalents (1,018) (7,601) (4,381) 6,569 Cash and cash equivalents, beginning of period 5,156 16,120 8,519 1,950 Cash and cash equivalents, end of period $4,138 $8,519 $4,138 $8,519 (1)The 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) (2): (Dollars in thousands, except per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2008 2007 2008 2007 Net Income $15,599 $4,588 $41,692 $60,062 Gain on sales of real estate properties (1,129) 1,054 (10,227) (40,405) Real estate depreciation and amortization 14,094 13,764 53,972 53,499 Total adjustments 12,965 14,818 43,745 13,094 Funds From Operations - Basic and Diluted $28,564 $19,406 $85,437 $73,156 Funds From Operations Per Common Share - Basic $0.49 $0.39 $1.66 $1.54 Funds From Operations Per Common Share - Diluted $0.49 $0.39 $1.63 $1.51 Weighted Average Common Shares Outstanding - Basic 57,765,614 49,488,943 51,547,279 47,536,133 Weighted Average Common Shares Outstanding - Diluted 58,705,348 50,348,217 52,564,944 48,291,330 RECONCILIATION OF FUNDS AVAILABLE FOR DISTRIBUTION (2): (Dollars in thousands, except per share data) (Unaudited) Three Months Ended December 31, 2008 Net Income $15,599 Gain on sales of real estate properties (1,129) Total non-cash items included in cash flows from operating activities (3) 17,149 Funds Available For Distribution $31,619 Funds Available For Distribution Per Common Share - Diluted $0.54 Weighted Average Common Shares Outstanding - Diluted 58,705,348
(1)Funds from operations ('FFO') is calculated according to the definition
of the National Association of Real Estate Investment Trusts and is comprised primarily of net income and depreciation from real estate, but is not adjusted for certain non-cash income and expense items. Gains on the sale of real estate properties are excluded from FFO and FFO per share, while impairments are included in FFO and FFO per share. (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 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. (3)See the Consolidated Statements of Cash Flows that are included in this earnings release.
