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Second Quarter Highlights: INDIANAPOLIS, Aug. 8 /PRNewswire-FirstCall/ -- Windrose Medical Properties Trust (NYSE:WRS), a self-managed specialty medical properties REIT, announced today financial results for the second quarter ended June 30, 2006. Financial and Operating Results Windrose reported second quarter 2006 rental revenues of $22.5 million, compared to $10.2 million for the second quarter 2005, a 119.5% increase. Second quarter 2006 corporate general and administrative expenses were $1.8 million, compared to $1.0 million for the same quarter in 2005, a 76.6% increase. These general and administrative expenses included $122,000 of abandoned transaction expense in the 2006 second quarter related to two acquisitions that Windrose determined not to complete as not being in the best interest of shareholders. Second quarter 2006 net income was $1.5 million, compared to $1.2 million for the second quarter 2005, a 31.2% increase. Second quarter 2006 net income available for common shareholders after preferred dividends was $539,000, or $0.03 per diluted share based on 20.4 million weighted average common shares outstanding, compared to $1.1 million, or $0.08 per diluted share based on 14.1 million weighted average common shares outstanding, for the second quarter 2005. Second quarter 2006 funds from operations (FFO), comprised of net income plus depreciation and amortization from real estate, was $5.7 million, or $0.29 per diluted share on an increased share base, compared to $3.4 million, or $0.25 per diluted share, for the second quarter 2005. Second quarter 2006 funds available for distribution (FAD), which consists of FFO adjusted primarily for straight-line rent, above/below market rents, and amortization of deferred financing fees, was $5.3 million, compared to $3.3 million for the second quarter 2005. Hospital Affiliates Development Corp. (HADC), Windrose's taxable development subsidiary, generated a second quarter 2006 pre-tax loss of approximately $46,000, as compared to a second quarter 2005 pre-tax profit of approximately $23,000. The second quarter 2006 after-tax loss was approximately $28,000 compared to a second quarter 2005 after tax profit of approximately $28,000 compared to a second quarter 2005 profit of approximately $14,000. In April 2006, Windrose completed a public offering of 2.6 million common shares, including the underwriters' over-allotment, at $14.80 per share resulting in total net proceeds of approximately $36.5 million after underwriting discounts, commissions and expenses. Also in April, the Company's development subsidiary, HADC, was retained to manage the project implementation of a $75 million expansion and renovation of an acute care hospital. Under the Program Management Agreement, HADC, as the owner's representative, will manage the work of third party professionals in connection with the site's due diligence, design, equipping and construction. The project is a 200,000 square foot expansion and a 21,000 square foot renovation of Sumner Regional Medical Center (SRMC) on a fee-for-service basis for ownership by Sumner Regional Medical in Gallatin, TN. In June, Windrose acquired five medical office buildings for aggregate consideration of $29.4 million. The properties represent more than 300,000 rentable square feet, with three of the buildings connected to the Princeton campus of a hospital affiliated with Baptist Health System of Birmingham, AL. As part of the transaction, Windrose will be self-developing an estimated 60,000 square foot medical office building on the Citizens Baptist Medical Center campus in Talladega, AL for Baptist. In August, Windrose acquired three specialty hospitals for $26.2 million. With more than 169,000 rentable square feet, the transaction diversifies the Company's portfolio into the long-term acute care and rehabilitation sectors. Fred Klipsch, Chairman and Chief Executive Officer, remarked, "We continue to expand the Windrose property portfolio by acquiring and developing high quality, specialty medical properties. At the end of the quarter, our property portfolio consisted of $720 million in gross asset value and generated $22.5 million in second quarter rental revenues, a 120% increase over the prior year. We have made progress on the acquisition front over the past four months with the acquisition of five medical office buildings and three hospitals. Year to date, our acquisitions total $55.6 million, positioning us well on track to meet our $100 million acquisition goal." Fred Farrar, President and Chief Operating Officer, stated, "We are focused on strengthening our balance sheet as exemplified by the utilization of the proceeds from the April stock offering to pay down debt. Our asset management team has made significant strides on the leasing front that has lead to occupancy increasing to 94% across the portfolio at the end of the second quarter of 2006 and to over 96% at the end of the second quarter of 2006 across the 21 property portfolio acquired in the fourth quarter of 2005." Distributions As previously announced, Windrose's Board of Trustees declared a second quarter 2006 dividend of $0.235 per common share. The dividend is payable on August 21, 2006 to shareholders of record on August 11, 2006. The Board of Trustees declared a quarterly dividend of $0.4726 per 7.5% Series A cumulative convertible preferred share. This dividend is payable on August 21, 2006 to preferred shareholders of record on August 4, 2006. Conference Call and Webcast Windrose will host a conference call to discuss second quarter results on Tuesday, August 8, 2006 at 11:00 a.m. Eastern Time. The conference call will be accessible by telephone and through the Internet. Telephone access is available by dialing (877) 407-9039 for domestic callers, and (201) 689-8470 for international callers. Those interested in listening to the conference call should dial into the call approximately 10 minutes before the start time. A live webcast of the conference call will be available online at http://www.windrosempt.com/. After the live webcast, the call will remain available on Windrose Medical Properties Trust's website, http://www.windrosempt.com/, through September 8, 2006. In addition, a telephonic replay of the call will be available through August 22, 2006. The replay dial-in numbers are (877) 660- 6853 for domestic callers and (201) 612-7415 for international. Please use account number 3055 and conference ID number 208447. About Windrose Windrose is a self-managed real estate investment trust (REIT) based in Indianapolis, Indiana with offices in Nashville, Tennessee. Windrose was formed to acquire, selectively develop and manage specialty medical properties, such as medical office buildings, ambulatory surgery centers, outpatient treatment diagnostic facilities, physician group practice clinics, specialty hospitals and treatment centers. Non-GAAP Financial Measures This press release contains non-GAAP financial information that is generally provided by most publicly-traded REITs and that we believe may be of interest to the investment community. Reconciliation of all non-GAAP financial measures to GAAP financial measures are included in the schedule accompanying this press release and on Windrose's web site at http://www.windrosempt.com/ under the heading "Financial Reports" on the "Investor Center" section of Windrose's web site. Windrose believes that FFO is helpful in understanding Windrose's operating performance in that FFO excludes depreciation and amortization expense on real estate assets. Windrose believes that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies. FFO should not be considered as an alternative to cash flows from operating, investing and financing activities as a measure of liquidity. The White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") in April 2002 defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of properties, plus real estate related depreciation and amortization and after comparable adjustments for Windrose's portion of these items related to unconsolidated entities and joint ventures. A reconciliation of Windrose's second quarter 2006 and 2005 FFO to net income, the most directly comparable GAAP measure, is included in a schedule accompanying this press release. Windrose's management considers funds available for distribution ("FAD") to be a useful liquidity measure because FAD provides investors with an additional basis to evaluate the ability of Windrose to incur and service debt and to fund capital expenditures and distributions to shareholders and unit holders. Windrose derives FAD by adjusting FFO for certain non-cash items such as the straight line rent adjustment, above/below market lease rents, amortization of loan fees, and depreciation of property, plant and equipment. A reconciliation of Windrose's second quarter 2006 and 2005 FAD to net income, the most directly comparable GAAP measure, is included in a schedule accompanying this press release. Safe Harbor Some of the statements in this news release, including those related to this earnings report, constitute forward-looking statements. Such statements include, in particular, statements about our beliefs, expectations, plans and strategies that are not based on historical facts. You should not rely on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties, assumptions and changes in circumstances, many of which are beyond our control, which may cause our actual results to differ significantly from those expressed in any forward- looking statement. The factors that could cause actual results to differ materially from current expectations include adverse changes in healthcare laws, changes in economic and general business conditions, competition for specialty medical properties, our ability to finance our operations, regulatory conditions and other factors described from time to time in filings we make with the Securities and Exchange Commission including our Annual Report on Form 10-K for the year ended December 31, 2005. The forward-looking statements contained herein represent our judgment as of the date hereof, and we caution readers not to place undue reliance on such statements. We do not undertake to publicly update or revise any forward-looking statement whether as a result of new information, future events or otherwise. Contact: Investors/Media: Windrose Medical Properties Trust The Ruth Group Fred Farrar Stephanie Carrington/Jason Rando President and COO (646) 536-7017/7025 (317) 860-8213 Windrose Medical Properties Trust Condensed Consolidated Financial Information (Dollars in Thousands, except per share amounts) Three months Three months ended ended 6/30/2006 6/30/2005 RENTAL OPERATIONS Revenues Rent $22,452 $10,229 Operating expenses Rental expenses 5,020 2,240 Property Taxes 1,705 894 Depreciation and amortization 5,327 2,303 Total operating expenses $12,052 $5,437 Operating income from rental operations $10,400 $4,792 SERVICE OPERATIONS (HADC) Revenues Development and project management fees $467 $608 Expenses Cost of sales and project costs 381 364 General and administrative expenses 132 221 Gain (Loss) from service operations $(46) $23 GENERAL AND ADMINISTRATIVE EXPENSES Corporate operations 1,699 1,028 Abandoned Deals Expense 122 3 Total General and Administrative Expenses $1,821 $1,031 Operating income $8,533 $3,784 OTHER INCOME (EXPENSE) Interest income (expense) (6,827) (2,541) Other income (expense) (66) (39) Total other income(expense) $(6,893) $(2,580) Income tax benefit(expense) 18 (9) Net income before minority interest and discontinued operations $1,658 $1,195 Minority interest in income of common unit holders and other subsidiaries (137) (36) Net income $1,521 $1,159 Dividends on preferred shares 982 11 Net Income available for common shareholders $539 $1,148 Weighted average shares of common stock outstanding - Basic 20,050 13,666 - Diluted 20,445 14,054 Net income per common share - Basic and diluted $0.03 $0.08 Windrose Medical Properties Trust Condensed Consolidated Financial Information (Dollars in Thousands, except per share amounts) Three months Three months ended ended 6/30/2006 6/30/2005 Funds from operations(1) (FFO): Net income available for common shareholders $539 $1,148 Add back (deduct): Amortization and depreciation expense 5,327 2,303 Minority interest share of depreciation and amortization (132) (60) Funds from operations (FFO) $5,734 $3,391 Weighted average shares of common stock outstanding - Basic 20,050 13,666 - Diluted 20,445 14,054 FFO per common share - Basic and diluted $0.29 $0.25 Windrose Medical Properties Trust Condensed Consolidated Financial Information (Dollars in Thousands) Three months Three months ended ended 6/30/2006 6/30/2005 Funds available for distribution(2) (FAD) Funds from operations (FFO) $5,734 $3,391 Add back (deduct): Straight-line rent adjustment (1,112) (413) Rental income associated with above/below market leases 373 101 Amortization of deferred financing fees 211 163 Depreciation of property, plant and equipment 50 39 Minority interest share of FAD adjustments 38 13 Funds available for distribution (FAD) $5,295 $3,294 Cash Spent on Tenant Improvements, Capital Expenditures and Leasing Commissions Capital improvement expenditures $111 $ - Tenant improvements and leasing commissions 186 209 Total $297 $209 Reconciliation of Net Income to Cash Flows Provided by Operating Activities Three months Three months ended ended 6/30/2006 6/30/2005 Net income $1,521 $1,159 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,327 2,303 Rental income associated with above/ below market leases 373 101 Deferred income taxes (18) 9 Deferred compensation expense 114 46 Amortization of deferred financing fees 211 163 Amortization of fair value of debt adjustment (119) (229) Minority interest in earnings 137 36 Increase (decrease) in cash due to changes in: Construction receivables and payables, net 7 30 Straight line rent receivable (1,112) (418) Revenue earned in excess of billings 19 73 Billings in excess of revenues earned 86 28 Receivables from tenants (1,037) 673 Other accrued revenues and expenses (1,238) 574 Cash flows provided by operating activities $4,271 $4,548 Reconciliation of Cash Flows Provided by Operating Activities to Funds Available for Distribution (FAD) Three months Three months ended ended 6/30/2006 6/30/2005 Cash flows provided by operating activities 4,271 $4,548 Add (Deduct): Non-income Operating Cash Flows: Billings in excess of revenues earned (19) (73) Revenue earned in excess of billings (86) (28) Deferred income taxes 18 (9) Receivables from tenants 1,037 (673) Amortization of fair value of debt 119 229 Depreciation of PP&E and amortization of other assets 50 39 Other accrued revenues and expenses 1,238 (574) Construction payables, net (7) (30) Deferred compensation expense (114) (46) Minority interest in earnings (137) (36) Minority interest share of depreciation and amortization and FAD Adjustments (94) (42) Preferred dividends (982) (11) Funds available for distribution (FAD) $5,295 $3,294 Windrose Medical Properties Trust Condensed Consolidated Balance Sheets (Dollars in Thousands) 6/30/2006 6/30/2005 Cash and cash equivalents $11,312 $23,433 Net real estate assets 686,170 400,446 Other assets 31,158 12,858 Total assets $728,640 $436,737 Debt $375,449 $214,029 Liability to subsidiary trust issuing preferred securities 51,000 - Payables and other liabilities 16,050 21,842 Minority interest 5,940 5,638 Shareholders' equity 280,201 195,228 Total liabilities and shareholders' equity $728,640 $436,737 (1) The Company believes that FFO is helpful in understanding the Company's operating performance in that FFO excludes depreciation and amortization expense on real estate assets. The Company believes that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies. FFO should not be considered as an alternative to cash flows from operating, investing and financing activities as a measure of liquidity. The White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT") in April 2002 defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains from sales of properties, plus real estate related depreciation and amortization and after comparable adjustments for the Company's portion of these items related to unconsolidated entities and joint ventures. (2) The Company's management considers funds available for distribution ("FAD") to be a useful liquidity measure because FAD provides investors with an additional basis to evaluate the ability of the Company to incur and service debt and to fund capital expenditures and distributions to shareholders and unit holders. The Company derives FAD by adjusting FFO for certain non-cash items such as the straight line rent adjustment, above/below market lease rents, amortization of loan fees, and depreciation of non-real estate property, plant and equipment. The Company's calculations of FFO and FAD may not be comparable to FFO and FAD reported by other real estate investment trusts ("REITs") due to the fact that not all REITs use the same definitions. FFO and FAD should not be considered as alternatives to net income as indicators of the Company's operating performance or alternatives to cash flows as measures of liquidity. FFO and FAD do not measure whether cash flow is sufficient to fund all of the Company's cash needs, including principal amortization, capital expenditures, and distributions to shareholders and unit holders. Additionally, FFO and FAD do not represent cash flows from operating, investing or financing activities as defined by GAAP. Reclassifications: Certain prior quarter balances have been reclassified to conform to the current presentation. Rounding: Certain amounts and balances may differ due to numerical rounding. DATASOURCE: Windrose Medical Properties Trust CONTACT: Fred Farrar, President and COO of Windrose Medical Properties Trust, +1-317-860-8213; or Investors: Stephanie Carrington, +1-646-536-7017, , or Media: Jason Rando, +1-646-536-7025, , both of The Ruth Group for Windrose Medical Properties Trust Web site: http://www.windrosempt.com/

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