Healthcare Realty Trust 8-K Healthcare Realty Trust Announces Fourth Quarter Results

Exhibit 99.1

N e w s     R e l e a s e

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

HEALTHCARE REALTY TRUST ANNOUNCES FOURTH QUARTER RESULTS

     NASHVILLE, Tennessee February 9, 2006 — Healthcare Realty Trust Incorporated (NYSE:HR) today announced results for the fourth quarter that ended December 31, 2005. Revenues for the fourth quarter totaled $66.9 million, compared with the prior year’s $61.3 million. Net income for the period was $11.7 million, or $0.25 per diluted common share, versus $11.6 million, or $0.25 per diluted common share, for the fourth quarter of 2004.

     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, totaled $26.2 million for the fourth quarter of 2005, compared with $27.4 million for the same period in 2004. FFO per diluted common share for the fourth quarter of 2005 totaled $0.55, compared with $0.58 for the fourth quarter of 2004.

     Net income and FFO for the three months ended December 31, 2005 include the impact of a non-cash provision to increase a receivable allowance by $1.2 million related to a new master lease transaction with a new lessee, and an adjustment of approximately $1.0 million as part of a partner/lessee settlement related to the allocation of prior distributions on a single property. Before these items, FFO per diluted common share for the fourth quarter of 2005 would have been $0.60.

     Revenues for the twelve months ended December 31, 2005 totaled $254.5 million compared with the prior year’s $222.7 million. Net income for the twelve-month period was $52.7 million, or $1.11 per diluted common share, versus $55.5 million, or $1.24 per diluted common share, for the same period in 2004. FFO totaled $107.9 million for the twelve months ended December 31, 2005, compared with $110.2 million for the same period ended December 31, 2004. FFO per diluted common share for the twelve months ended December 31, 2005 was $2.28, versus $2.47 for the same period in 2004.

     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, 2005, the Company had investments of approximately $2.0 billion in 249 real estate properties and mortgages. The Company’s real estate portfolio was comprised of six major facility types, located in 27 states, totaling approximately 12.6 million square feet. The Company provided property management services to approximately 7.3 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 (1)
(Unaudited)
(Dollars in thousands, except per share data)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2005			2004			2005		2004
Revenues:
Master lease rental income	$	19,095		$	17,921		$	73,444	$	69,928
Property operating income		33,922			32,588			135,375		108,806
Straight-line rent		1,402			769			259		1,487
Mortgage interest income		2,827			1,180			9,103		8,766
Other operating income (2)		9,643			8,817			36,355		33,727
		66,889			61,275			254,536		222,714
Expenses:
General and administrative		4,084			4,121			16,090		13,687
Property operating expenses		19,232			18,289			72,841		57,360
Other operating expenses (2)		4,058			3,801			15,937		14,517
Bad debt expense		1,177			103			1,308		(212	)
Interest		13,049			11,388			48,969		43,899
Depreciation		11,515			11,588			50,058		43,122
Amortization (3)		2,981			3,152			12,190		8,155
		56,096			52,442			217,393		180,528
Income from continuing operations		10,793			8,833			37,143		42,186
Discontinued operations:
Operating income from discontinued operations		897			3,416			8,755		14,557
Gain on sale of real estate properties and impairments, net		(3	)		(607	)		6,770		(1,210	)
		894			2,809			15,525		13,347
Net income	$	11,687		$	11,642		$	52,668	$	55,533
Basic earnings per common share:
Income from continuing operations per common share	$	0.23		$	0.19		$	0.80	$	0.97
Discontinued operations per common share	$	0.02		$	0.06		$	0.33	$	0.30
Net income per common share	$	0.25		$	0.25		$	1.13	$	1.27
Diluted earnings per common share:
Income from continuing operations per common share	$	0.23		$	0.19		$	0.78	$	0.94
Discontinued operations per common share	$	0.02		$	0.06		$	0.33	$	0.30
Net income per common share	$	0.25		$	0.25		$	1.11	$	1.24
Weighted average common shares outstanding — Basic		46,488,468			46,377,130			46,465,215		43,706,528
Weighted average common shares outstanding — Diluted		47,429,525			47,348,772			47,406,798		44,627,475

(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.
(3)	Financial Accounting Standards Board (“FASB”) Statement No. 141 requires that the purchase price of real estate operations be allocated between the land, the physical building as if the building was vacant when acquired, the lease intangible assets, the goodwill, and the customer relationship assets acquired. The purchase price allocated to the lease intangible assets is amortized over the remaining lease term, typically one to five years, compared to the estimated depreciable life of the building of 39 years.

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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,
	2005			2004			2005			2004
Cash flows from operating activities
Net income	$	11,687		$	11,642		$	52,668		$	55,533
Non-cash items:
Depreciation and amortization — real estate		14,559			15,767			62,758			54,639
Depreciation and amortization — other		322			2,096			1,544			2,781
Gain on sale of real estate		0			0			(7,483	)		0
Impairments		3			607			713			1,210
Deferred compensation amortization		843			891			3,678			3,554
Increase in deferred post-retirement benefits		546			320			1,254			902
Provision for bad debt		1,177			103			1,308			(212	)
Increase in straight-line rent		(1,404	)		(790	)		(99	)		(1,022	)
Total non-cash items		16,046			18,994			63,673			61,852
Other items:
Increase (decrease) in other liabilities		(111	)		1,169			(231	)		4,508
(Increase) decrease in other assets		(161	)		2,955			(9,708	)		(1,858	)
Increase (decrease) in accounts payable and accrued liabilities		(14,177	)		(11,246	)		2,505			6,203
Total other items		(14,449	)		(7,122	)		(7,434	)		(8,853	)
Net cash provided by operating activities		13,284			23,514			108,907			126,238
Cash flows from investing activities:
Acquisition and development of real estate properties		(12,994	)		(16,711	)		(102,819	)		(355,470	)
Funding of mortgages and notes receivable		(11,320	)		(558	)		(76,636	)		(3,465	)
Proceeds from sales of real estate		0			5,000			130,079			10,189
Proceeds from mortgage and notes repayments		591			18,540			6,265			48,636
Net cash provided by (used in) investing activities		(23,723	)		6,271			(43,111	)		(300,110	)
Cash flows from financing activities:
Borrowings on notes and bonds payable		87,100			57,000			250,348			565,494
Repayments on notes and bonds payable		(43,545	)		(57,891	)		(187,296	)		(436,689	)
Dividends paid		(31,520	)		(30,759	)		(125,342	)		(115,700	)
Debt issuance costs		0			0			0			(2,566	)
Proceeds from issuance of common stock		55			483			848			161,099
Net cash provided by (used in) financing activities		12,090			(31,167	)		(61,442	)		171,638
Increase (decrease) in cash and cash equivalents		1,651			(1,382	)		4,354			(2,234	)
Cash and cash equivalents, beginning of period		5,386			4,065			2,683			4,917
Cash and cash equivalents, end of period	$	7,037		$	2,683		$	7,037		$	2,683

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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				Twelve Months Ended
	December 31,				December 31,
	2005		2004		2005			2004
Net income (2)	$	11,687	$	11,642		52,668		$	55,533
Net gain on sale of real estate properties		0		0		(7,483	)		0
Real estate depreciation and amortization		14,559		15,767		62,758			54,639
Total adjustments		14,559		15,767		55,275			54,639
Funds from operations — Basic and Diluted	$	26,246	$	27,409	$	107,943		$	110,172
Funds from operations per common share — Basic	$	0.56	$	0.59	$	2.32		$	2.52
Funds from operations per common share — Diluted	$	0.55	$	0.58	$	2.28		$	2.47
Weighted average common shares outstanding — Basic		46,488,468		46,377,130		46,465,215			43,706,528
Weighted average common shares outstanding — Diluted		47,429,525		47,348,772		47,406,798			44,627,475

(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 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 (“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)

See Consolidated Statement of Cash Flows for a reconciliation of non-cash items included in net income.

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

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