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

Exhibit 99.1

News Release

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

HEALTHCARE REALTY TRUST ANNOUNCES SECOND QUARTER RESULTS

     NASHVILLE, Tennessee August 4, 2008 — Healthcare Realty Trust Incorporated (NYSE:HR) today announced results for the second quarter ended June 30, 2008. Revenues for the three months ended June 30, 2008 totaled $55.1 million, compared with the prior year’s $51.5 million. Revenues for the six months ended June 30, 2008 totaled $109.2 million, compared with the prior year’s $103.3 million. Income from continuing operations for the three months ended June 30, 2008 totaled $4.8 million, compared with the prior year’s $3.8 million. Income from continuing operations for the six months ended June 30, 2008 totaled $9.9 million, compared with the prior year’s $5.9 million.

     Net income for the second quarter of 2008 totaled $13.8 million, or $0.27 per diluted common share, versus $13.6 million, or $0.29 per diluted common share, for the second quarter of 2007.  Net income for the six months ended June 30, 2008 totaled $20.6 million, or $0.41 per diluted common share, compared with $50.0 million, or $1.05 per diluted common share for the six months ended June 30, 2007. Net income for the three and six months ended June 30, 2008, as compared to 2007, was affected by the disposition of the senior living assets and resulting gain in 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. Gains on the sale of real estate properties are excluded from FFO and FFO per share. FFO totaled $19.2 million, or $0.38 per diluted common share, for the second quarter ended June 30, 2008, compared with $18.9 million, or $0.40 per diluted common share, for the same period in 2007. FFO totaled $38.6 million, or $0.77 per diluted common share for the six months ended June 30, 2008, compared with the prior year’s $39.2 million, or $0.82 per diluted common share.

     Funds available for distribution for the second quarter of 2008 totaled $0.43 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 181 real estate properties and mortgages as of June 30, 2008, excluding assets classified as held for sale and including investments in three unconsolidated limited liability companies. The Company’s 174 owned real estate properties, excluding assets classified as held for sale, are comprised of six facility types, located in 24 states, totaling approximately 10.8 million square feet. The Company provides property management services to approximately 7.2 million square feet nationwide.

The Company directs interested parties to its Internet site,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					Six Months Ended
	June 30,					June 30,
	2008			2007		2008			2007
REVENUES
Master lease rent	$	14,787		$	14,456	$	30,238		$	29,354
Property operating		34,886			31,803		68,911			63,343
Straight-line rent		(137	)		9		(204	)		43
Mortgage interest		542			460		1,067			812
Other operating		4,990			4,786		9,226			9,782
		55,068			51,514		109,238			103,334
EXPENSES
General and administrative		5,863			5,220		11,908			11,395
Property operating		20,112			18,179		39,135			36,163
Bad debts, net of recoveries		115			77		333			82
Interest		11,209			12,153		22,407			25,558
Depreciation		12,385			10,883		24,430			21,567
Amortization		575			1,204		1,169			2,620
		50,259			47,716		99,382			97,385
INCOME FROM CONTINUING OPERATIONS		4,809			3,798		9,856			5,949
DISCONTINUED OPERATIONS (2)
Income from discontinued operations		1,242			2,363		2,387			8,959
Impairments		—			—		(29	)		(2,792	)
Gain on sales of real estate properties		7,715			7,482		8,352			37,871
INCOME FROM DISCONTINUED OPERATIONS		8,957			9,845		10,710			44,038
NET INCOME	$	13,766		$	13,643	$	20,566		$	49,987
BASIC EARNINGS PER COMMON SHARE
Income from continuing operations per common share	$	0.10		$	0.08	$	0.20		$	0.13
Discontinued operations per common share	$	0.18		$	0.21	$	0.22		$	0.94
Net income per common share	$	0.28		$	0.29	$	0.42		$	1.07
DILUTED EARNINGS PER COMMON SHARE
Income from continuing operations per common share	$	0.10		$	0.08	$	0.20		$	0.13
Discontinued operations per common share	$	0.17		$	0.21	$	0.21		$	0.92
Net income per common share	$	0.27		$	0.29	$	0.41		$	1.05
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING — BASIC		49,431,724			46,603,643		49,422,391			46,575,554
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING — DILUTED		50,474,762			47,577,334		50,442,808			47,587,624

(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.

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HEALTHCARE REALTY TRUST INCORPORATED
Condensed Consolidated Statements of Cash Flows (1)
(Dollars in thousands)
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
Cash flows from operating activities:
Net income	$	13,766		$	13,643		$	20,566		$	49,987
Non-cash items:
Depreciation and amortization — real estate		12,721			12,262			25,276			26,265
Depreciation and amortization — other		640			560			1,204			1,131
Provision for bad debt, net of recoveries		115			77			331			82
Impairments		—			—			29			2,792
Straight-line rent receivable		134			(34	)		199			(95	)
Straight-line rent liability		43			285			86			1,095
Equity in (income) losses from unconsolidated LLCs		(116	)		155			148			252
Consolidated losses from variable interest entities		—			188			—			394
Stock-based compensation		1,107			954			2,403			2,666
Provision for deferred post-retirement benefits		818			522			1,654			1,038
Gain on repurchase of notes payable		(9	)		—			(9	)		—
Other non-cash items		133			33			439			78
Total non-cash items		15,586			15,002			31,760			35,698
Other items:
Accounts payable and accrued liabilities		(7,465	)		(8,518	)		(3,686	)		(6,777	)
Other liabilities		(2,075	)		3,433			(2,810	)		3,605
Other assets		(508	)		(2,141	)		5,866			(2,210	)
Gain on sales of real estate properties		(7,715	)		(7,482	)		(8,352	)		(37,871	)
State income taxes paid, net of refunds		(621	)		(25	)		(621	)		(41	)
Total other items		(18,384	)		(14,733	)		(9,603	)		(43,294	)
Net cash provided by operating activities		10,968			13,912			42,723			42,391
Cash flows from investing activities:
Acquisition and development of real estate properties		(18,134	)		(20,157	)		(37,694	)		(37,963	)
Funding of mortgages and notes receivable		(5,916	)		(145	)		(7,181	)		(4,071	)
Distributions received from unconsolidated LLCs		444			262			867			524
Proceeds from sales of real estate		18,625			171,494			22,040			281,699
Proceeds from mortgage and notes receivable repayments		43			52,512			79			65,519
Net cash provided by (used in) investing activities		(4,938	)		203,966			(21,889	)		305,708
Cash flows from financing activities:
Borrowings on notes and bonds payable		64,000			232,000			90,000			304,839
Repayments on notes and bonds payable		(50,918	)		(195,788	)		(69,825	)		(365,661	)
Repurchase of notes payable		(5,332	)		—			(5,332	)		—
Special dividend paid		—			(227,157	)		—			(227,157	)
Quarterly dividends paid		(19,534	)		(31,602	)		(39,067	)		(63,165	)
Proceeds from issuance of common stock		176			1,494			361			1,767
Common stock redemption		(282	)		(16	)		(282	)		(30	)
Credit facility amendment fee		(326	)		—			(326	)		—
Net cash used in financing activities		(12,216	)		(221,069	)		(24,471	)		(349,407	)
Decrease in cash and cash equivalents		(6,186	)		(3,191	)		(3,637	)		(1,308	)
Cash and cash equivalents, beginning of period		11,068			3,833			8,519			1,950
Cash and cash equivalents, end of period	$	4,882		$	642		$	4,882		$	642

(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.

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RECONCILIATION OF FUNDS FROM OPERATIONS (1):
(Dollars in thousands, except per share data)
(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2008			2007			2008			2007
Net Income	$	13,766		$	13,643		$	20,566		$	49,987
Gain on sales of real estate properties		(7,715	)		(7,482	)		(8,352	)		(37,871	)
Real estate depreciation and amortization		13,150			12,699			26,423			27,070
Total adjustments		5,435			5,217			18,071			(10,801	)
Funds From Operations — Basic and Diluted	$	19,201		$	18,860		$	38,637		$	39,186
Funds From Operations Per Common Share — Basic	$	0.39		$	0.40		$	0.78		$	0.84
Funds From Operations Per Common Share — Diluted	$	0.38		$	0.40		$	0.77		$	0.82
Weighted Average Common Shares Outstanding — Basic		49,431,724			46,603,643			49,422,391			46,575,554
Weighted Average Common Shares Outstanding — Diluted		50,474,762			47,577,334			50,442,808			47,587,624

RECONCILIATION OF FUNDS AVAILABLE FOR DISTRIBUTION (1):
(Dollars in thousands, except per share data)
(Unaudited)

	Three Months Ended
	June 30, 2008
Net Income	$	13,766
Gain on sales of real estate properties		(7,715	)
Total non-cash items included in cash flows from operating activities (2)		15,586
Funds Available For Distribution	$	21,637
Funds Available For Distribution Per Common Share — Diluted	$	0.43
Weighted Average Common Shares Outstanding — Diluted		50,474,762

(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 the Condensed Consolidated Statements of Cash Flows that are included in this earnings release.

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