Healthcare Realty Trust 8K Announces Quarterly and Year-to-date Results | SEC 1 Dec 05

Exhibit 99.1

News Release

Contact: Scott W. Holmes, Senior Vice President and Chief Financial Officer, (615) 269-8175

HEALTHCARE REALTY TRUST ANNOUNCES QUARTERLY
AND YEAR-TO-DATE RESULTS

NASHVILLE, Tennessee November 30, 2005 — Healthcare Realty Trust Incorporated (NYSE:HR) today announced its results for the first, second and third quarters of 2005 and the nine months ended September 30, 2005.

Revenues for the first quarter ended March 31, 2005 totaled $61.7 million, compared with the prior year’s $48.8 million. Net income for the first quarter of 2005 was $20.7 million, or $0.44 per diluted common share, which includes a gain on sale of $6.1 million, versus $14.8 million, or $0.35 per diluted common share, for the first quarter of 2004. Funds from operations (“FFO”), calculated according to the definition of the National Association of Real Estate Investment Trusts and comprised primarily of net income and depreciation from real estate, totaled $29.4 million for the first quarter of 2005, compared with $26.1 million for the same period in 2004. FFO per diluted common share for the first quarter of 2005 totaled $0.62, compared with $0.61 for the first quarter of 2004. A reconciliation of FFO to net income follows.

Revenues for the second quarter ended June 30, 2005 totaled $61.7 million, compared with the prior year’s $55.9 million. Net income for the second quarter of 2005 was $11.6 million, or $0.24 per diluted common share, versus $14.2 million, or $0.33 per diluted common share, for the second quarter of 2004. FFO totaled $25.3 million for the second quarter of 2005, compared with $27.6 million for the same period in 2004. FFO per diluted common share for the second quarter of 2005 totaled $0.53, compared with $0.65 for the second quarter of 2004. Net income and FFO for the three months ended June 30, 2005 include the impact of the reversal of straight line rent receivables totaling $2.1 million, impairment charges totaling $0.7 million related to the sale of properties, and additional audit costs totaling $0.6 million. Before these items, FFO per diluted common share for the second quarter of 2005 would have been $0.61.

Revenues for the third quarter ended September 30, 2005 totaled $67.0 million, compared with the prior year’s $59.8 million. Net income for the third quarter of 2005 was $8.7 million, or $0.18 per diluted common share, which includes the impact of a $2.7 million allowance related to property damage from hurricane Katrina, versus $14.9 million, or $0.32 per diluted common share, for the third quarter of 2004. FFO totaled $26.6 million for the third quarter of 2005, compared with $29.7 million for the same period in 2004. FFO per diluted common share for the third quarter of 2005 totaled $0.56, compared with $0.65 for the third quarter of 2004. Net income and FFO for the third quarter of 2005 include $0.7 million of severance costs related to departmental realignments and $0.9 million of additional unusual expenses, including bank fees, certain project costs and accrual adjustments. Before these items, FFO per diluted common share for the third quarter of 2005 would have been $0.60.

Revenues for the nine months ended September 30, 2005 totaled $189.6 million compared with the prior year’s $163.8 million. Net income for the nine-month period was $41.0 million, or $0.86 per diluted common share, versus $43.9 million, or $1.00 per diluted common share, for the first nine months of 2004. FFO totaled $81.2 million for the first nine months ended September 30, 2005, compared with $83.4 million for the same period ended September 30, 2004. FFO per diluted common share for the first nine months of 2005 was $1.71, versus $1.91 for the same period in 2004. Were it not for the unusual items described above, FFO per diluted common share for the first nine months ended September 30, 2005 would have been $1.82.

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 September 30, 2005, the Company had investments of approximately $1.9 billion in 246 real estate properties or mortgages, totaling approximately 12.9 million square feet. The Company’s portfolio was comprised of six major facility types, located in 29 states. The Company provided property management services to approximately 7.6 million square feet nationwide.

The Company directs interested parties to its Internet page site, www.healthcarerealty.com,
where material 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, 2004.
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.

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HEALTHCARE REALTY TRUST INCORPORATED
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except per share data)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
Revenues:
Master lease rental income	$	18,908		$	18,065		$	56,254		$	54,351
Property operating income		35,441			29,844			101,133			76,195
Straight line rent (1)		267			329			(1,143	)		718
Mortgage interest income		2,624			1,953			6,276			7,586
Other operating income		9,735			9,593			27,050			24,911

		66,975			59,784			189,570			163,761

Expenses:
General and administrative		4,682			3,105			12,006			9,566
Property operating expenses		19,108			15,277			53,609			39,072
Other operating expenses		4,291			3,566			11,879			10,716
Interest		12,318			11,735			35,920			32,511
Depreciation		15,013			11,312			38,858			31,850
Amortization		3,063			2,775			9,208			5,003

		58,475			47,770			161,480			128,718


Income from continuing operations		8,500			12,014			28,090			35,043

Discontinued operations:
Operating income from discontinued operations		171			2,879			6,118			9,452
Gain (loss) on sale of real estate properties and (impairments), net		(6	)		(37	)		6,773			(604	)

		165			2,842			12,891			8,848


Net income	$	8,665		$	14,856		$	40,981		$	43,891


Basic earnings per common share:
Income from continuing operations per common share	$	0.18		$	0.27		$	0.60		$	0.82

Discontinued operations per common share	$	0.01		$	0.06		$	0.28		$	0.21

Net income per common share	$	0.19		$	0.33		$	0.88		$	1.03


Diluted earnings per common share:
Income from continuing operations per common share	$	0.18		$	0.26		$	0.59		$	0.80

Discontinued operations per common share	$	0.00		$	0.06		$	0.27		$	0.20

Net income per common share	$	0.18		$	0.32		$	0.86		$	1.00


Weighted average common shares outstanding — Basic		46,484,410			44,958,369			46,457,378			42,809,829


Weighted average common shares outstanding — Diluted		47,443,704			45,866,536			47,399,383			43,711,648


(1)		A straight line rent receivable totaling $2.1 million on three properties leased to one operator was reversed during the three months ended June 30, 2005, due to the restructuring of a lease.

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HEALTHCARE REALTY TRUST INCORPORATED
Consolidated Statements of Income
(Unaudited)
(Dollars in thousands, except per share data)


	Three Months Ended				Three Months Ended
	March 31,				June 30,
	2005		2004		2005			2004
Revenues:
Master lease rental income	$	18,291	$	17,814	$	19,106		$	18,521
Property operating income		33,326		21,454		32,995			25,559
Straight line rent (1)		242		118		(1,653	)		271
Mortgage interest income		1,337		2,814		2,315			2,819
Other operating income		8,468		6,594		8,934			8,774

		61,664		48,794		61,697			55,944

Expenses:
General and administrative		3,260		3,455		4,064			3,006
Property operating expenses		16,845		10,829		17,900			13,187
Other operating expenses		3,740		3,260		3,850			3,891
Interest		11,924		8,959		11,678			11,817
Depreciation		11,832		9,990		12,173			10,696
Amortization		3,072		662		3,073			1,566

		50,673		37,155		52,738			44,163


Income from continuing operations		10,991		11,639		8,959			11,781

Discontinued operations:
Operating income from discontinued operations		3,621		3,179		1,966			3,002
Gain (loss) on sale of real estate properties and (impairments), net		6,136		0		642			(567	)

		9,757		3,179		2,608			2,435


Net income	$	20,748	$	14,818	$	11,567		$	14,216


Basic earnings per common share:
Income from continuing operations per common share	$	0.24	$	0.28	$	0.19		$	0.28

Discontinued operations per common share	$	0.21	$	0.08	$	0.06		$	0.06

Net income per common share	$	0.45	$	0.36	$	0.25		$	0.34


Diluted earnings per common share:
Income from continuing operations per common share	$	0.23	$	0.27	$	0.19		$	0.28

Discontinued operations per common share	$	0.21	$	0.08	$	0.05		$	0.05

Net income per common share	$	0.44	$	0.35	$	0.24		$	0.33


Weighted average common shares outstanding — Basic		46,410,524		41,706,133		46,476,389			41,741,375


Weighted average common shares outstanding — Diluted		47,347,587		42,633,861		47,403,316			42,612,274


(1)		A straight line rent receivable totaling $2.1 million on three properties leased to one operator was reversed during the three months ended June 30, 2005, due to the restructuring of a lease.

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HEALTHCARE REALTY TRUST INCORPORATED
Reconciliation of Funds From Operations (1)
(Unaudited)
(Dollars in thousands, except per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2005		2004		2005			2004

Net income (2)	$	8,665	$	14,856	$	40,981		$	43,891
Net (gain) loss on sale of real estate properties		6		37		(7,483	)		604
Real estate depreciation and amortization		17,889		14,782		47,721			38,871

Total adjustments		17,895		14,819		40,238			39,475


Funds from operations — Basic and Diluted	$	26,560	$	29,675	$	81,219		$	83,366


Funds from operations per common share — Basic	$	0.57	$	0.66	$	1.75		$	1.95


Funds from operations per common share — Diluted	$	0.56	$	0.65	$	1.71		$	1.91


Weighted average common shares outstanding — Basic		46,484,410		44,958,369		46,457,378			42,809,829


Weighted average common shares outstanding — Diluted		47,443,704		45,866,536		47,399,383			43,711,648


(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.”

		Management believes FFO and FFO per share to be supplemental measures of a REIT’s performance because they provide an understanding of the operating performance of the Company’s properties without giving effect to significant non-cash items, primarily depreciation of real estate. 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; furthermore, because FFO per share is consistently and regularly reported, discussed and compared by research analysts in their notes and publications about REITs; and finally, because research analysts publish their earnings estimates and consensus estimates for healthcare REITs only in terms of fully-diluted FFO per share and not in terms of net income or earnings per share. For these reasons, management has deemed it appropriate to disclose and discuss FFO and FFO per share.

		However, FFO does not represent cash generated from operating activities determined in accordance with accounting principles generally accepted in the United States (“GAAP”) 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)		Net income includes non-cash deferred compensation of $1.1 million and $0.9 million, respectively, for the three months ended September 30, 2005 and 2004, and $2.8 million and $2.7 million, respectively, for the nine months ended September 30, 2005 and 2004.

HEALTHCARE REALTY TRUST INCORPORATED
Reconciliation of Funds From Operations (1)
(Unaudited)
(Dollars in thousands, except per share data)


	Three Months Ended					Three Months Ended
	March 31,					June 30,
	2005			2004		2005			2004

Net income (2)	$	20,748		$	14,818	$	11,567		$	14,216
Net (gain) loss on sale of real estate properties		(6,161	)		—		(1,325	)		567
Real estate depreciation and amortization		14,822			11,237		15,010			12,853

Total adjustments		8,661			11,237		13,685			13,420


Funds from operations — Basic and Diluted	$	29,409		$	26,055	$	25,252		$	27,636


Funds from operations per common share — Basic	$	0.63		$	0.62	$	0.54		$	0.66


Funds from operations per common share — Diluted	$	0.62		$	0.61	$	0.53		$	0.65


Weighted average common shares outstanding — Basic		46,410,524			41,706,133		46,476,389			41,741,375


Weighted average common shares outstanding — Diluted		47,347,587			42,633,861		47,403,316			42,612,274


(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.”

		Management believes FFO and FFO per share to be supplemental measures of a REIT’s performance because they provide an understanding of the operating performance of the Company’s properties without giving effect to significant non-cash items, primarily depreciation of real estate. 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; furthermore, because FFO per share is consistently and regularly reported, discussed and compared by research analysts in their notes and publications about REITs; and finally, because research analysts publish their earnings estimates and consensus estimates for healthcare REITs only in terms of fully-diluted FFO per share and not in terms of


		net income or earnings per share. For these reasons, management has deemed it appropriate to disclose and discuss FFO and FFO per share.

		However, FFO does not represent cash generated from operating activities determined in accordance with accounting principles generally accepted in the United States (“GAAP”) 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)		Net income includes non-cash deferred compensation of $0.9 million and $0.9 million, respectively, for the three months ended March 31, 2005 and 2004, and $0.9 million and $0.9 million, respectively, for the three months ended June 30, 2005 and 2004.

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HEALTHCARE REALTY TRUST INCORPORATED
Consolidated Statement of Cash Flows
(Unaudited)
(Dollars in thousands, except per share data)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2005			2004			2005			2004
OPERATING ACTIVITIES
Net income	$	8,665		$	14,856		$	40,981		$	43,891

Non-cash adjustments:
Depreciation and amortization — real estate		17,889			14,782			47,721			38,871
Depreciation and amortization — other		(67	)		298			1,161			686
Net (gain) loss on sales of real estate and impairments		6			37			(6,773	)		604
Deferred compensation amortization		1,064			888			2,835			2,663
(Increase) decrease in straight line rent		(267	)		257			1,305			(232	)

Other items:
Increase in other liabilities		1,987			1,478			588			3,921
Increase in other assets		(4,166	)		(726	)		(8,938	)		(5,128	)
Increase in accounts payable and accrued liabilities		19,257			13,677			16,682			17,449

Net cash provided by operating activities	$	44,368		$	45,547		$	95,562		$	102,725


INVESTING ACTIVITIES
Acquisition and development of real estate properties		(17,478	)		(146,674	)		(89,825	)		(338,760	)
Funding of mortgages and notes receivable		(1,290	)		(1,354	)		(65,316	)		(2,907	)
Proceeds from sales of real estate		—			287			130,079			5,189
Proceeds from mortgage and notes repayments		1,713			21,852			5,674			30,096

Net cash used in investing activities	$	(17,055	)	$	(125,889	)	$	(19,388	)	$	(306,382	)


FINANCING ACTIVITIES
Borrowings on notes and bonds payable		41,000			55,000			163,248			508,494
Repayments on notes and bonds payable		(32,964	)		(102,870	)		(143,690	)		(378,798	)
Dividends paid		(31,521	)		(30,509	)		(93,822	)		(84,941	)
Debt issuance costs		—			(29	)		—			(2,566	)
Proceeds from issuance of common stock		(76	)		159,119			793			160,616

Net cash provided by (used in) financing activities	$	(23,561	)	$	80,711		$	(73,471	)	$	202,805


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		3,752			369			2,703			(852	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		1,634			3,696			2,683			4,917

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	5,386		$	4,065		$	5,386		$	4,065


Net cash provided by operating activities	$	44,368		$	45,547		$	95,562		$	102,725
Weighted average common shares outstanding — Basic		46,484,410			44,958,369			46,457,378			42,809,829
Weighted average common shares outstanding — Diluted		47,443,704			45,866,536			47,399,383			43,711,648
Dividends declared and paid in the period	$	0.660		$	0.640		$	1.965		$	1.905
Dividend payout percentage		69	%		63	%		96	%		79	%

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HEALTHCARE REALTY TRUST INCORPORATED
Consolidated Statement of Cash Flows
(Unaudited)
(Dollars in thousands, except per share data)


	Three Months Ended						Three Months Ended
	March 31,						June 30,
	2005			2004			2005			2004
OPERATING ACTIVITIES
Net income	$	20,748		$	14,818		$	11,567		$	14,216

Non-cash adjustments:
Depreciation and amortization — real estate		14,822			11,237			15,010			12,853
Depreciation and amortization — other		643			193			586			194
Net (gain) loss on sales of real estate and impairments		(6,136	)		—			(642	)		567
Deferred compensation amortization		901			887			869			887
(Increase) decrease in straight line rent		(239	)		(182	)		1,811			(307	)

Other items:
Increase (decrease) in other liabilities		(648	)		2,545			(751	)		(102	)
(Increase) decrease in other assets		(2,205	)		(15,628	)		(2,567	)		11,227
Increase (decrease) in accounts payable and accrued liabilities		5,853			3,300			(8,428	)		473

Net cash provided by operating activities	$	33,739		$	17,170		$	17,455		$	40,008


INVESTING ACTIVITIES
Acquisition and development of real estate properties		(7,354	)		(58,003	)		(64,993	)		(134,083	)
Funding of mortgages and notes receivable		(50,445	)		(379	)		(13,581	)		(1,174	)
Proceeds from sales of real estate		62,233			479			67,846			4,423
Proceeds from mortgage and notes repayments		498			290			3,463			7,954

Net cash provided by (used in) investing activities	$	4,932		$	(57,613	)	$	(7,265	)	$	(122,880	)


FINANCING ACTIVITIES
Borrowings on notes and bonds payable		18,000			378,494			104,248			75,000
Repayments on notes and bonds payable		(22,479	)		(255,731	)		(88,247	)		(20,197	)
Dividends paid		(31,024	)		(27,095	)		(31,277	)		(27,337	)
Debt issuance costs		—			(1,951	)		—			(586	)
Proceeds from issuance of common stock		597			972			272			525

Net cash provided by (used in) financing activities	$	(34,906	)	$	94,689		$	(15,004	)	$	27,405


INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		3,765			54,246			(4,814	)		(55,467	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		2,683			4,917			6,448			59,163

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	6,448		$	59,163		$	1,634		$	3,696


Net cash provided by operating activities	$	33,739		$	17,170		$	17,455		$	40,008
Weighted average common shares outstanding — Basic		46,410,524			41,706,133			46,476,389			41,741,375
Weighted average common shares outstanding — Diluted		47,347,587			42,633,861			47,403,316			42,612,274
Dividends declared and paid in the period	$	0.650		$	0.630		$	0.655		$	0.635
Dividend payout percentage		89	%		153	%		174	%		66	%

Healthcare Realty Trust maintains a website: www.healthcarerealty.com to provide general corporate, investor and financial information.

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Healthcare Realty Trust 8-KHealthcare Realty Trust Announces Quarterly and Year-to-date Results