STOCK TITAN

Healthcare Realty Trust Reports Results For the Third Quarter

Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
Tags

Healthcare Realty Trust reported Q3 2024 results with a net loss of $(93.0) million, or $(0.26) per share. Key highlights include Normalized FFO per share of $0.39, up 1.2% year-over-year. The company secured $875 million from joint venture and asset sales through October, with $447 million in share repurchases. Multi-tenant absorption reached 159,000 square feet, with occupancy at 86.5%. Same Store cash NOI increased 3.1% year-over-year, with tenant retention at 80.5%. The company maintained its quarterly dividend at $0.31 per share and updated its 2024 Normalized FFO guidance to $1.55-$1.56 per share.

Healthcare Realty Trust ha riportato i risultati del terzo trimestre 2024 con una perdita netta di $(93,0) milioni, ovvero $(0,26) per azione. I punti salienti includono Normalized FFO per azione di $0,39, con un aumento dell'1,2% rispetto all'anno precedente. L'azienda ha assicurato $875 milioni da joint venture e vendite di asset fino ad ottobre, con $447 milioni in riacquisti di azioni. L'assorbimento multi-inquilino ha raggiunto 159.000 piedi quadrati, con una percentuale di occupazione dell'86,5%. Same Store cash NOI è aumentato del 3,1% anno su anno, con una retention degli inquilini dell'80,5%. L'azienda ha mantenuto il suo dividendo trimestrale a $0,31 per azione e ha aggiornato la sua guida 2024 sul Normalized FFO a $1,55-$1,56 per azione.

Healthcare Realty Trust informó los resultados del tercer trimestre de 2024 con una pérdida neta de $(93,0) millones, o $(0,26) por acción. Los aspectos destacados incluyen Normalized FFO por acción de $0,39, un aumento del 1,2% en comparación con el año anterior. La compañía aseguró $875 millones de ventas de activos y joint ventures hasta octubre, con $447 millones en recompras de acciones. La absorción multiinquilino alcanzó los 159,000 pies cuadrados, con una ocupación del 86,5%. Same Store cash NOI aumentó un 3,1% interanualmente, con una retención de inquilinos del 80,5%. La compañía mantuvo su dividendo trimestral en $0,31 por acción y actualizó su guía de Normalized FFO para 2024 entre $1,55 y $1,56 por acción.

Healthcare Realty Trust는 2024년 3분기 결과를 발표하며 순손실이 $(93.0) 밀리언, 즉 주당 $(0.26)이라고 밝혔습니다. 주요 내용으로는 주당 Normalized FFO가 $0.39로, 전년 대비 1.2% 증가했습니다. 회사는 10월까지 합작 투자 및 자산 판매를 통해 $875 밀리언을 확보했으며, $447 밀리언의 자사주 매입을 진행했습니다. 다세대 임대 공간의 흡수량은 159,000 평방 피트에 도달했으며, 점유율은 86.5%입니다. Same Store cash NOI는 전년 대비 3.1% 증가했으며, 임차인 유지율은 80.5%입니다. 회사는 분기 배당금을 주당 $0.31로 유지하고 있으며 2024년 Normalized FFO 가이드를 $1.55-$1.56로 업데이트했습니다.

Healthcare Realty Trust a annoncé les résultats du troisième trimestre 2024 avec une perte nette de $(93,0) millions, soit $(0,26) par action. Les points clés incluent un Normalized FFO par action de $0,39, en hausse de 1,2% par rapport à l'année précédente. L'entreprise a sécurisé $875 millions grâce à des coentreprises et des ventes d'actifs jusqu'en octobre, avec $447 millions en rachats d'actions. L'absorption multi-locataires a atteint 159 000 pieds carrés, avec un taux d'occupation de 86,5%. Le Same Store cash NOI a augmenté de 3,1% d'une année sur l'autre, avec un taux de retention des locataires de 80,5%. L'entreprise a maintenu son dividende trimestriel à $0,31 par action et a mis à jour ses prévisions 2024 du Normalized FFO à $1,55-$1,56 par action.

Healthcare Realty Trust hat die Ergebnisse des dritten Quartals 2024 mit einem Nettoverlust von $(93,0) Millionen, oder $(0,26) pro Aktie, veröffentlicht. Zu den wichtigsten Punkten gehört ein Normalized FFO pro Aktie von $0,39, was einem Anstieg von 1,2% im Vergleich zum Vorjahr entspricht. Das Unternehmen sicherte sich bis Oktober $875 Millionen aus Joint Ventures und Vermögensverkäufen, wobei $447 Millionen in Aktienrückkäufen investiert wurden. Die Multi-Tenant-Absorption erreichte 159.000 Quadratfuß, mit einer Belegungsrate von 86,5%. Same Store cash NOI stieg um 3,1% im Jahresvergleich, mit einer Mieterbindungsrate von 80,5%. Das Unternehmen hat die vierteljährliche Dividende bei $0,31 pro Aktie beibehalten und die Prognose für 2024 auf ein Normalized FFO von $1,55-$1,56 pro Aktie aktualisiert.

Positive
  • Normalized FFO per share increased 1.2% year-over-year to $0.39
  • Generated $875 million from joint venture and asset sales
  • Same Store cash NOI grew 3.1% year-over-year
  • Multi-tenant occupancy improved 164 basis points over trailing twelve months
  • Operating expenses decreased 1.5% compared to prior year quarter
Negative
  • Net loss of $93.0 million or $(0.26) per share
  • Multi-tenant occupancy remains relatively low at 86.5%
  • Lowered high end of 2024 Normalized FFO guidance from $1.58 to $1.56

Insights

Healthcare Realty Trust's Q3 results reveal mixed performance with notable developments. The $93.0 million net loss translates to $(0.26) per share, though normalized FFO showed slight improvement at $0.39 per share. The company's strategic capital allocation through $875 million in JV and asset sales demonstrates active portfolio optimization.

Key positives include 3.1% same-store cash NOI growth and strong leasing momentum with 431,000 square feet of new leases. The 86.5% multi-tenant occupancy rate shows steady improvement, up 164 basis points year-over-year. However, leverage remains elevated at 6.7x net debt to adjusted EBITDA, though expected to improve to 6.5x by year-end.

The revised guidance suggesting normalized FFO of $1.55 to $1.56 per share indicates stable operational performance despite market challenges. The maintained quarterly dividend of $0.31 per share reflects management's confidence in cash flow stability.

NASHVILLE, Tenn., Oct. 30, 2024 (GLOBE NEWSWIRE) -- Healthcare Realty Trust Incorporated (NYSE:HR) today announced results for the third quarter ended September 30, 2024. Net (loss) income attributable to common stockholders for the three months ended September 30, 2024 was $(93.0) million, or $(0.26) per diluted common share.

KEY THIRD QUARTER HIGHLIGHTS   
  • Normalized FFO per share of $0.39, up 1.2% over the prior year period
  • $875 million of proceeds from JV and asset sale transactions through October
  • $447 million of share repurchases year-to-date through October
  • 159,000 square feet, or 49 basis points, of multi-tenant absorption
  • 431,000 square feet of signed new leases in the quarter, the fifth consecutive quarter above 400,000
CAPITAL ALLOCATION   
  • The Company closed joint venture and asset sale transactions since the second quarter totaling $478 million bringing proceeds to approximately $875 million through October, which includes the following:
    • $522 million from joint venture transactions
    • $353 million from asset sales
  • The Company has additional transactions under contract and letters of intent that are expected to increase proceeds to approximately $1.1 billion for the year.
  • Through October, the Company has repurchased 27.1 million shares totaling $446.8 million at an average price of $16.48 per share.
MULTI-TENANT OCCUPANCY AND ABSORPTION
  • Multi-tenant sequential occupancy gains continue to track towards full year 2024 expectations provided in the February 2024 Investor Presentation as shown below:
  3Q 2024YTD 2024
 Absorption (SF)158,720341,473
 Change in occupancy (bps)+ 49+ 106
  • The multi-tenant portfolio occupancy rate was 86.5% and the leased percentage was 87.8% at September 30.
  • Multi-tenant occupancy has increased by 164 basis points over the trailing-twelve-month period. For the Legacy HTA properties, multi-tenant occupancy has increased by 230 basis points for the same period.
  • An updated multi-tenant occupancy and NOI bridge can be found on page 5 of the Key Highlights Investor Presentation located on the Company's website.
LEASING
  • Portfolio leasing activity that commenced in the third quarter totaled 1,641,000 square feet related to 455 leases:
    • 1,054,000 square feet of renewals
    • 587,000 square feet of new and expansion lease commencements
  • The Company signed new leases totaling 431,000 square feet in the quarter, the fifth consecutive quarter above 400,000.
SAME STORE   
  • Same Store cash NOI for the third quarter increased 3.1% over the same quarter in the prior year.
  • Tenant retention for the third quarter was 80.5%.
  • Operating expenses decreased 1.5% over the same quarter in the prior year.
  • Third quarter predictive growth measures in the Same Store portfolio include:
    • Average in-place rent increases of 2.8%.
    • Future annual contractual increases of 3.1% for leases commencing in the quarter.
    • Weighted average MOB cash leasing spreads of 3.9% on 847,000 square feet renewed:
      • 7% (<0% spread)
      • 7% (0-3%)
      • 58% (3-4%)
      • 28% (>4%)
BALANCE SHEET    
  • As of September 30, 2024, net debt to adjusted EBITDA was 6.7 times. Net debt to adjusted EBITDA is expected to be 6.5 times at the end of the year.
  • In October, the Company repaid the remaining $100 million outstanding of Unsecured Term Loan maturing July 2025.
  • As of September 30, 2024, the Company had approximately $1.3 billion of availability under its credit facility.
DIVIDEND    
  • A dividend of $0.31 per share was paid in August 2024. A dividend of $0.31 per share will be paid on November 27, 2024 to stockholders and OP unitholders of record on November 12, 2024.
GUIDANCE    
  • The Company's 2024 per share guidance ranges are as follows:

    EXPECTED 2024
  ACTUAL PRIOR CURRENT
  3Q 2024YTD LOWHIGH LOWHIGH
 Earnings per share$(0.26)$(1.49) $(1.50)$(1.40) $(1.60)$(1.59)
 NAREIT FFO per share$0.21 $0.23  $0.77 $0.82  $0.58 $0.59 
 Normalized FFO per share$0.39 $1.16  $1.53 $1.58  $1.55 $1.56 
  • The Company's 2024 guidance range includes activities outlined in the Components of Expected FFO on page 29 of the Supplemental Information.

The 2024 annual guidance range reflects the Company's view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, interest rates, and operating and general and administrative expenses. The Company's guidance does not contemplate impacts from gains or losses from
dispositions, potential impairments, or debt extinguishment costs, if any. There can be no assurance that the Company's actual results will not be materially higher or lower than these expectations. If actual results vary from these assumptions, the Company's expectations may change.

EARNINGS CALL    
  • On Wednesday, October 30, 2024, at 11:00 a.m. Eastern Time, Healthcare Realty Trust has scheduled a conference call to discuss earnings results, quarterly activities, general operations of the Company and industry trends.
  • Simultaneously, a webcast of the conference call will be available to interested parties at https://investors.healthcarerealty.com/corporate-profile/webcasts under the Investor Relations section. A webcast replay will be available following the call at the same address.
  • Live Conference Call Access Details:
    • Domestic Toll-Free Number: +1 404-975-4839 access code 470628;
    • All Other Locations: +1 833-470-1428 access code 470628.
  • Replay Information:
    • Domestic Toll-Free Number: +1 929-458-6194 access code 780754;
    • All Other Locations: +1 866-813-9403 access code 780754.

Healthcare Realty (NYSE: HR) is a real estate investment trust (REIT) that owns and operates medical outpatient buildings primarily located around market-leading hospital campuses. The Company selectively grows its portfolio through property acquisition and development. As the first and largest REIT to specialize in medical outpatient buildings, Healthcare Realty's portfolio includes over 650 properties totaling nearly 40 million square feet concentrated in 15 growth markets.

 

Additional information regarding the Company, including this quarter's operations, can be found at www.healthcarerealty.com. In addition to the historical information contained within, this press release contains certain forward-looking statements with respect to the Company. Forward-looking statements are statements that are not descriptions of historical facts and include statements regarding management’s intentions, beliefs, expectations, plans or predictions of the future, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Because such statements include risks, uncertainties and contingencies, actual results may differ materially and in adverse ways from those expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, without limitation, the following: the Company's expected results may not be achieved; failure to realize the expected benefits of the Merger; significant transaction costs and/or unknown or inestimable liabilities; risks related to future opportunities and plans for the Company, including the uncertainty of expected future financial performance and results of the Company; the possibility that, if the Company does not achieve the perceived benefits of the Merger as rapidly or to the extent anticipated by financial analysts or investors, the market price of the Company’s common stock could decline; general adverse economic and local real estate conditions; changes in economic conditions generally and the real estate market specifically; legislative and regulatory changes, including changes to laws governing the taxation of REITs and changes to laws governing the healthcare industry; the availability of capital; changes in interest rates; competition in the real estate industry; the supply and demand for operating properties in the Company’s proposed market areas; changes in accounting principles generally accepted in the US; policies and guidelines applicable to REITs; the availability of properties to acquire; the availability of financing; pandemics and other health concerns, and the measures intended to prevent their spread and the potential material adverse effect these matters may have on the Company’s business, results of operations, cash flows and financial condition. Additional information concerning the Company and its business, including additional factors that could materially and adversely affect the Company’s financial results, include, without limitation, the risks described under Part I, Item 1A - Risk Factors, in the Company’s 2023 Annual Report on Form 10-K and in its other filings with the SEC.

Consolidated Balance Sheets
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA


ASSETS     
 3Q 20242Q 20241Q 20244Q 20233Q 2023
Real estate properties     
Land$1,195,116 $1,287,532 $1,342,895 $1,343,265 $1,387,821 
Buildings and improvements 10,074,504  10,436,218  10,902,835  10,881,373  11,004,195 
Lease intangibles 718,343  764,730  816,303  836,302  890,273 
Personal property 9,246  12,501  12,720  12,718  12,686 
Investment in financing receivables, net 123,045  122,413  122,001  122,602  120,975 
Financing lease right-of-use assets 77,728  81,401  81,805  82,209  82,613 
Construction in progress 125,944  97,732  70,651  60,727  85,644 
Land held for development 52,408  59,871  59,871  59,871  59,871 
Total real estate investments 12,376,334  12,862,398  13,409,081  13,399,067  13,644,078 
Less accumulated depreciation and amortization (2,478,544) (2,427,709) (2,374,047) (2,226,853) (2,093,952)
Total real estate investments, net 9,897,790  10,434,689  11,035,034  11,172,214  11,550,126 
Cash and cash equivalents1 22,801  137,773  26,172  25,699  24,668 
Assets held for sale, net 156,218  34,530  30,968  8,834  57,638 
Operating lease right-of-use assets 259,013  261,976  273,949  275,975  323,759 
Investments in unconsolidated joint ventures 417,084  374,841  309,754  311,511  325,453 
Other assets, net and goodwill 491,679  559,818  605,047  842,898  822,084 
Total assets$11,244,585 $11,803,627 $12,280,924 $12,637,131 $13,103,728 
      
LIABILITIES AND STOCKHOLDERS' EQUITY     
 3Q 20242Q 20241Q 20244Q 20233Q 2023
Liabilities     
Notes and bonds payable$4,957,796 $5,148,153 $5,108,279 $4,994,859 $5,227,413 
Accounts payable and accrued liabilities 197,428  195,884  163,172  211,994  204,947 
Liabilities of properties held for sale 7,919  1,805  700  295  3,814 
Operating lease liabilities 229,925  230,601  229,223  229,714  273,319 
Financing lease liabilities 71,887  75,199  74,769  74,503  74,087 
Other liabilities 180,283  177,293  197,763  202,984  211,365 
Total liabilities 5,645,238  5,828,935  5,773,906  5,714,349  5,994,945 
      
Redeemable non-controlling interests 3,875  3,875  3,880  3,868  3,195 
      
Stockholders' equity     
Preferred stock, $0.01 par value; 200,000 shares authorized          
Common stock, $0.01 par value; 1,000,000 shares authorized 3,558  3,643  3,815  3,810  3,809 
Additional paid-in capital 9,198,004  9,340,028  9,609,530  9,602,592  9,597,629 
Accumulated other comprehensive (loss) income (16,963) 6,986  4,791  (10,741) 17,079 
Cumulative net income attributable to common stockholders 481,155  574,178  717,958  1,028,794  1,069,327 
Cumulative dividends (4,150,328) (4,037,693) (3,920,199) (3,801,793) (3,684,144)
Total stockholders' equity 5,515,426  5,887,142  6,415,895  6,822,662  7,003,700 
Non-controlling interest 80,046  83,675  87,243  96,252  101,888 
Total Equity 5,595,472  5,970,817  6,503,138  6,918,914  7,105,588 
Total liabilities and stockholders' equity$11,244,585 $11,803,627 $12,280,924 $12,637,131 $13,103,728 
                


12Q 2024 cash and cash equivalents includes $96.0 million of proceeds held in a cash escrow account from a portfolio disposition that closed on June 28, 2024 and was received by the Company on July 1, 2024.
  


Consolidated Statements of Income
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA


      
 3Q 20242Q 20241Q 20244Q 20233Q 2023
Revenues     
Rental income 1$306,499 $308,135 $318,076 $322,076 $333,335 
Interest income 3,904  3,865  4,538  4,422  4,264 
Other operating 5,020  4,322  4,191  3,943  4,661 
  315,423  316,322  326,805  330,441  342,260 
Expenses     
Property operating 120,232  117,719  121,078  121,362  131,639 
General and administrative 20,124  14,002  14,787  14,609  13,396 
Normalizing items 2 (6,861)     (1,445)  
Normalized general and administrative 13,263  14,002  14,787  13,164  13,396 
Transaction costs 719  431  395  301  769 
Merger-related costs       1,414  7,450 
Depreciation and amortization 163,226  173,477  178,119  180,049  182,989 
  304,301  305,629  314,379  317,735  336,243 
Other income (expense)     
Interest expense before merger-related fair value (50,465) (52,393) (50,949) (52,387) (55,637)
Merger-related fair value adjustment (10,184) (10,064) (10,105) (10,800) (10,667)
Interest expense (60,649) (62,457) (61,054) (63,187) (66,304)
Gain on sales of real estate properties and other assets 39,310  38,338  22  20,573  48,811 
Gain on extinguishment of debt         62 
Impairment of real estate assets and credit loss reserves (84,394) (132,118) (15,937) (11,403) (56,873)
Impairment of goodwill     (250,530)    
Equity income (loss) from unconsolidated joint ventures 208  (146) (422) (430) (456)
Interest and other (expense) income, net (132) (248) 275  65  139 
  (105,657) (156,631) (327,646) (54,382) (74,621)
Net (loss) income$(94,535)$(145,938)$(315,220)$(41,676)$(68,604)
Net loss (income) attributable to non-controlling interests 1,512  2,158  4,384  1,143  760 
Net (loss) income attributable to common stockholders$(93,023)$(143,780)$(310,836)$(40,533)$(67,844)
      
      
Basic earnings per common share$(0.26)$(0.39)$(0.82)$(0.11)$(0.18)
Diluted earnings per common share$(0.26)$(0.39)$(0.82)$(0.11)$(0.18)
      
Weighted average common shares outstanding - basic 358,960  372,477  379,455  379,044  378,925 
Weighted average common shares outstanding - diluted 3 358,960  372,477  379,455  379,044  378,925 


1In 2Q 2024, rental income was reduced by $3.0 million for Steward Health revenue reserves. This consisted of $2.2 million for April and prepetition rent for May as well as $0.8 million for March. In addition, the Company reversed $2.2 million of straight-line rent receivable against rental income.
23Q 2024 and 4Q 2023 normalizing items primarily include severance-related costs.
3Potential common shares are not included in the computation of diluted earnings per share when a loss exists, as the effect would be an antidilutive per share amount. As a result, the outstanding limited partnership units in the Company's operating partnership ("OP"), totaling 3,649,637 units were not included.
  


Reconciliation of FFO, Normalized FFO and FAD 1,2,3
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA


      
 3Q 20242Q 20241Q 20244Q 20233Q 2023
Net loss attributable to common stockholders$(93,023)$(143,780)$(310,836)$(40,533)$(67,844)
Net loss attributable to common stockholders/diluted share3$(0.26)$(0.39)$(0.82)$(0.11)$(0.18)
      
Gain on sales of real estate assets (39,148) (33,431) (22) (20,573) (48,811)
Impairments of real estate assets 37,632  120,917  15,937  11,403  56,873 
Real estate depreciation and amortization 167,821  177,350  181,161  182,272  185,143 
Non-controlling loss from operating partnership units (1,372) (2,077) (4,278) (491) (841)
Unconsolidated JV depreciation and amortization 5,378  4,818  4,568  4,442  4,421 
FFO adjustments$170,311 $267,577 $197,366 $177,053 $196,785 
FFO adjustments per common share - diluted$0.47 $0.71 $0.51 $0.46 $0.51 
FFO$77,288 $123,797 $(113,470)$136,520 $128,941 
FFO per common share - diluted4$0.21 $0.33 $(0.30)$0.36 $0.34 
      
Transaction costs 719  431  395  301  769 
Merger-related costs       1,414  7,450 
Lease intangible amortization (10) 129  175  261  213 
Non-routine legal costs/forfeited earnest money received 306  465    (100)  
Debt financing costs         (62)
Restructuring and severance-related charges 6,861      1,445   
Credit losses and gains on other assets, net5 46,600  8,525       
Impairment of goodwill     250,530     
Merger-related fair value adjustment 10,184  10,064  10,105  10,800  10,667 
Unconsolidated JV normalizing items6 101  89  87  89  90 
Normalized FFO adjustments$64,761 $19,703 $261,292 $14,210 $19,127 
Normalized FFO adjustments per common share - diluted$0.18 $0.05 $0.68 $0.04 $0.05 
Normalized FFO$142,049 $143,500 $147,822 $150,730 $148,068 
Normalized FFO per common share - diluted$0.39 $0.38 $0.39 $0.39 $0.39 
      
Non-real estate depreciation and amortization 276  313  485  685  475 
Non-cash interest amortization, net7 1,319  1,267  1,277  1,265  1,402 
Rent reserves, net8 (27) 1,261  (151) 1,404  442 
Straight-line rent income, net (5,771) (6,799) (7,633) (7,872) (8,470)
Stock-based compensation 4,064  3,383  3,562  3,566  2,556 
Unconsolidated JV non-cash items9 (376) (148) (122) (206) (231)
Normalized FFO adjusted for non-cash items 141,534  142,777  145,240  149,572  144,242 
2nd generation TI (16,951) (12,287) (20,204) (18,715) (21,248)
Leasing commissions paid (10,266) (10,012) (15,215) (14,978) (8,907)
Building capital (7,389) (12,835) (5,363) (17,393) (14,354)
Total maintenance capex (34,606) (35,134) (40,782) (51,086) (44,509)
FAD$106,928 $107,643 $104,458 $98,486 $99,733 
Quarterly/dividends and OP distributions$113,770 $118,627 $119,541 $118,897 $119,456 
FFO wtd avg common shares outstanding - diluted10 363,370  376,556  383,413  383,326  383,428 


1Funds from operations (“FFO”) and FFO per share are operating performance measures adopted by NAREIT. NAREIT defines FFO as “net income (computed in accordance with GAAP) excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.”
2FFO, Normalized FFO and Funds Available for Distribution ("FAD") do not represent cash generated from operating activities determined in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs. FFO, Normalized FFO and FAD should not be considered alternatives to net income attributable to common stockholders as indicators of the Company's operating performance or as alternatives to cash flow as measures of liquidity.
3Potential common shares are not included in the computation of diluted earnings per share when a loss exists, as the effect would be an antidilutive per share amount.
4For 1Q 2024, basic weighted average common shares outstanding was the denominator used in the per share calculation.
53Q 2024 includes $46.8 million of credit loss reserves and $0.2 million gain on other assets. 2Q 2024 includes $11.2 million of credit loss reserves and $2.2 million write-off of prior period Steward Health straight-line rent, offset by $4.9 million gain on other assets.
6Includes the Company's proportionate share of normalizing items related to unconsolidated joint ventures such as lease intangibles and acquisition and pursuit costs.
7Includes the amortization of deferred financing costs, discounts and premiums, and non-cash financing receivable amortization.
82Q 2024 includes $0.8 million related to the Steward Health revenue reserve for March.
9Includes the Company's proportionate share of straight-line rent, net and rent reserves, net related to unconsolidated joint ventures.
10The Company utilizes the treasury stock method, which includes the dilutive effect of nonvested share-based awards outstanding of 760,552 for the three months ended September 30, 2024. Also includes the diluted impact of 3,649,637 OP units outstanding.
  


Reconciliation of Non-GAAP Measures
DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA - UNAUDITED
 

Management considers funds from operations ("FFO"), FFO per share, normalized FFO, normalized FFO per share, and funds available for distribution ("FAD") to be useful non-GAAP measures of the Company's operating performance. A non-GAAP financial measure is generally defined as one that purports to measure historical financial performance, financial position or cash flows, but excludes or includes amounts that would not be so adjusted in the most comparable measure determined in accordance with GAAP. Set forth below are descriptions of the non-GAAP financial measures management considers relevant to the Company's business and useful to investors.

The non-GAAP financial measures presented herein are not necessarily identical to those presented by other real estate companies due to the fact that not all real estate companies use the same definitions. These measures should not be considered as alternatives to net income (determined in accordance with GAAP), as indicators of the Company's financial performance, or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of the Company's liquidity, nor are these measures necessarily indicative of sufficient cash flow to fund all of the Company's needs.

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 “net income (computed in accordance with GAAP) excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity.” The Company defines Normalized FFO as FFO excluding acquisition-related expenses, lease intangible amortization and other normalizing items that are unusual and infrequent in nature. FAD is presented by adding to Normalized FFO non-real estate depreciation and amortization, deferred financing fees amortization, share-based compensation expense and rent reserves, net; and subtracting maintenance capital expenditures, including second generation tenant improvements and leasing commissions paid and straight-line rent income, net of expense. The Company's definition of these terms may not be comparable to that of other real estate companies as they may have different methodologies for computing these amounts. FFO, Normalized FFO and FAD do not represent cash generated from operating activities determined in accordance with GAAP and are not necessarily indicative of cash available to fund cash needs. FFO, Normalized FFO and FAD 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. FFO, Normalized FFO and FAD should be reviewed in connection with GAAP financial measures.

Management believes FFO, FFO per share, Normalized FFO, Normalized FFO per share, and FAD provide an understanding of the operating performance of the Company’s properties without giving effect to certain significant non-cash items, including depreciation and amortization expense. Historical cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. However, real estate values instead have historically risen or fallen with market conditions. The Company believes that by excluding the effect of depreciation, amortization, gains or losses from sales of real estate, and other normalizing items that are unusual and infrequent, FFO, FFO per share, Normalized FFO, Normalized FFO per share and FAD can facilitate comparisons of operating performance between periods. The Company reports these measures because they have been observed by management to be the predominant measures used by the REIT industry and by industry analysts to evaluate REITs and because these measures are consistently reported, discussed, and compared by research analysts in their notes and publications about REITs.

Cash NOI and Same Store Cash NOI are key performance indicators. Management considers these to be supplemental measures that allow investors, analysts and Company management to measure unlevered property-level operating results. The Company defines Cash NOI as rental income and less property operating expenses. Cash NOI excludes non-cash items such as above and below market lease intangibles, straight-line rent, lease inducements, lease termination fees, tenant improvement amortization and leasing commission amortization. Cash NOI is historical and not necessarily indicative of future results.

Same Store Cash NOI compares Cash NOI for stabilized properties. Stabilized properties are properties that have been included in operations for the duration of the year-over-year comparison period presented. Accordingly, stabilized properties exclude properties that were recently acquired or disposed of, properties classified as held for sale, properties undergoing redevelopment, and newly redeveloped or developed properties.

The Company utilizes the redevelopment classification for properties where management has approved a change in strategic direction for such properties through the application of additional resources including an amount of capital expenditures significantly above routine maintenance and capital improvement expenditures.

Any recently acquired property will be included in the same store pool once the Company has owned the property for eight full quarters. Newly developed or redeveloped properties will be included in the same store pool eight full quarters after substantial completion.

Ron Hubbard
Vice President, Investor Relations
P: 615.269.8290


FAQ

What was Healthcare Realty Trust's (HR) Q3 2024 net income?

Healthcare Realty Trust reported a net loss of $(93.0) million, or $(0.26) per diluted common share for Q3 2024.

How much did Healthcare Realty Trust (HR) generate from asset sales in 2024?

The company generated $875 million in proceeds from joint venture and asset sale transactions through October 2024, including $522 million from joint ventures and $353 million from asset sales.

What is Healthcare Realty Trust's (HR) dividend for Q3 2024?

Healthcare Realty Trust declared a dividend of $0.31 per share, to be paid on November 27, 2024 to stockholders of record on November 12, 2024.

What is Healthcare Realty Trust's (HR) updated FFO guidance for 2024?

The company updated its 2024 Normalized FFO guidance to $1.55-$1.56 per share.

Healthcare Realty Trust Incorporated

NYSE:HR

HR Rankings

HR Latest News

HR Stock Data

6.18B
352.20M
0.62%
109.12%
3.19%
REIT - Healthcare Facilities
Real Estate Investment Trusts
Link
United States of America
NASHVILLE