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Healthcare Realty Trust Inc. Reports Operating Results (10-Q)

May 10, 2010 | About:
10qk

10qk

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Healthcare Realty Trust Inc. (HR) filed Quarterly Report for the period ended 2010-03-31.

Healthcare Realty Trust Inc. has a market cap of $1.38 billion; its shares were traded at around $22.43 with and P/S ratio of 5.44. The dividend yield of Healthcare Realty Trust Inc. stocks is 5.35%.HR is in the portfolios of Manning & Napier Advisors, Inc, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

FFO for the three months ended March 31, 2010 was impacted unfavorably by higher interest expense recognized due to the refinancing of the Unsecured Credit Facility, the issuance of the Senior Notes due 2017, and $80.0 million of mortgage debt entered into during the third and fourth quarters of 2009. As a result, interest expense for the three months ended March 31, 2010 as compared to the same period in 2009 was approximately $6.3 million higher, or $0.10 per diluted common share. Also, FFO for the three months ended March 31, 2009 was impacted favorably by a re-measurement gain of $2.7 million, or $0.05 per diluted common share, recognized in connection with the acquisition of the remaining interests in a joint venture during the first quarter of 2009.

Property operating income increased $3.2 million, or 7.6%, due mainly to the recognition of additional revenue of approximately $1.4 million resulting from the Companys 2009 real estate acquisitions. Also, the Company began recognizing the underlying tenant rental income on properties whose master leases had expired, resulting in approximately $0.9 million in additional property operating income in the first quarter of 2010 compared to the same period in 2009. The remaining increase of approximately $1.5 million resulted mainly from new leasing activity and annual rent increases. These increases in property operating income were partially offset by a $0.6 million decrease to property operating income related to a property whose gross revenues were previously reported in property operating income, but are now reported in master lease income upon consummation of a new master lease agreement with the tenant.

General and administrative expenses decreased $2.2 million, or 32.1%, due mainly to expense of approximately $1.0 million recognized in the first quarter of 2009 related to the payment of a partial pension settlement, a decrease in pension and deferred compensation expenses recognized of approximately $0.7 million and an overall decrease in professional fees of approximately $0.4 million.

Property operating expense increased $1.3 million, or 5.6%, due mainly to the recognition of additional first quarter of 2010 expenses of approximately $0.5 million from the Companys 2009 real estate acquisitions. Also, properties previously under construction that commenced operations during 2009 resulted in approximately $0.6 million in additional property operating expenses in 2010 compared to 2009. Property operating expense also increased approximately $0.6 million for the first quarter of 2010 due to properties whose master leases expired, and the Company began incurring the underlying operating expenses of the buildings. These increases to expense were partially offset by overall decreases in property taxes of approximately $0.3 million and the execution of a master lease agreement in the fourth quarter of 2009 related to a property previously managed by the Company whose expenses were previously reported in property operating expense, resulting in a $0.1 million decrease to property operating income from 2009 to 2010.

Depreciation expense increased $1.4 million, or 9.4%, due mainly to approximately $0.5 million in additional depreciation recognized in the first quarter of 2010 compared to 2009 related to the Companys 2009 real estate acquisitions and $0.4 million related to properties previously under construction that commenced operations during 2009. The remainder of the increase of approximately $0.5 million was due mainly to additional depreciation expense recognized related to various building and tenant improvement expenditures.

Other income (expense) for the three months ended March 31, 2010 changed unfavorably by $9.2 million, or 128.0%, compared to the same period in 2009 mainly due to an increase in interest expense associated with Senior Notes due 2017 of approximately $4.8 million and interest on the mortgage debt entered into during 2009 of approximately $1.4 million. Also, during the first quarter of 2009, the Company recognized a $2.7 million gain related to the valuation and re-measurement of the Companys equity interest in a joint venture in connection with the acquisition of the remaining equity

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