SCOTTSDALE, Ariz., Aug. 2,
2018 /PRNewswire/ -- Healthcare Trust of America, Inc. (NYSE: HTA)
("HTA") announced results for the three and six months ended
June 30, 2018.
Operating
Second Quarter 2018:
- Net Income Attributable to Common Stockholders:
Increased 359.3% to $15.3 million,
compared to Q2 2017. Earnings per diluted share increased 333.3% to
$0.07 per diluted share, compared to
Q2 2017.
- Funds From Operations ("FFO"): As defined by the
National Association of Real Estate Investment Trusts ("NAREIT"),
increased 55.8%, to $84.4 million,
compared to Q2 2017. FFO per diluted share increased 33.3%, to
$0.40 per diluted share, compared to
Q2 2017.
- Normalized FFO: Increased 22.2%, to $85.1 million, compared to Q2 2017. Normalized
FFO per diluted share increased 5.1%, to $0.41 per diluted share, compared to Q2
2017.
- Normalized Funds Available for Distribution ("FAD"):
Increased 19.2%, to $72.2 million,
compared to Q2 2017.
- Same-Property Cash Net Operating Income ("NOI"):
Increased $1.9 million, or 2.6%, to
$77.9 million, compared to Q2 2017.
Excluding the MOBs located on its Forest
Park Dallas campus, Same-Property Cash NOI growth would have
been 3.1%.
Year-to-Date 2018:
- Net Income Attributable to Common Stockholders:
Increased 229.7%, to $25.1 million,
compared to 2017. Earnings per diluted share increased 140.0%, to
$0.12 per diluted share, compared to
2017.
- FFO: As defined by NAREIT, increased 47.7%, to
$169.0 million, compared to 2017. FFO
per diluted share increased 15.7%, to $0.81 per diluted share, compared to 2017.
- Normalized FFO: Increased 31.1%, to $170.1 million, compared to 2017. Normalized FFO
per diluted share increased 2.5%, to $0.81 per diluted share, compared to 2017.
- Normalized FAD: Increased 30.6%, to $148.2 million, compared to 2017.
- Same-Property Cash NOI: Increased $3.7 million, or 2.5%, to $154.1 million, compared to 2017. Excluding the
MOBs located on its Forest Park
Dallas campus, Same-Property Cash NOI growth would have been
2.8%.
Portfolio
- Leasing: During the three months ended June 30, 2018, HTA entered into new and renewal
leases on approximately 1.0 million square feet of gross leasable
area ("GLA"), or 4.2% of its portfolio. Tenant retention for the
Same-Property portfolio was 86% by GLA for the quarter, which
included approximately 0.7 million square feet of GLA of total
expiring leases. Re-leasing spreads for renewal leases on a cash
basis were 1.1%. Renewal leases included tenant improvements of
$1.66 per square foot of GLA per year
of the lease term and approximately one day of free rent per year
of the lease term during the three months ended June 30, 2018.
- Leased Rate: As of June 30,
2018, HTA had a leased rate for its portfolio of 91.9% by
GLA and an occupancy rate of 90.9% by GLA.
- Forest Park Update: During the six months ended
June 30, 2018, HTA entered into
approximately 41,000 square feet of GLA of new leases on the former
Forest Park Dallas campus.
- Development/Redevelopment: During the three months ended
June 30, 2018, HTA announced a new
development in its key gateway market of Miami, Florida and commenced two
redevelopments, including an agreement to build a new on-campus MOB
in the Raleigh, North Carolina
market. The projects will have total expected construction costs of
approximately $70.6 million and are
approximately 78% pre-leased to major health systems. These
projects include:
-
- Jackson South MOB (Miami,
Florida): In April 2018, HTA
entered into an agreement to develop a new 51,000 square foot MOB
located adjacent to the Jackson South Hospital in Coral Reef, Florida. Total development costs are estimated
to be $21.6 million and the building
is 70% pre-leased to the hospital. Construction is expected to
begin in 2019.
- Cary MOB (Raleigh, North
Carolina): HTA announced it will redevelop the Medical Park
of Cary, its existing 90,000
square foot medical park located adjacent to WakeMed Health &
Hospital's ("WakeMed"), a leading health system based in
Raleigh, North Carolina. As part
of the project, HTA will take down four existing buildings totaling
45,000 square feet of GLA and build a new 125,000 square foot Class
A MOB. Following this development, Medical Park of Cary will increase to approximately 170,000
square feet of GLA, including buildings that will remain
operational through construction. Construction is expected to begin
in the spring of 2019, with delivery by 2021 and is expected to
cost $43.0 million.
- Investments: During the six months ended June 30, 2018, HTA invested $8.4 million to acquire an MOB of approximately
24,000 square feet of GLA in Raleigh,
North Carolina, that was 100% leased as of the acquisition
date to Duke Health System. In addition, HTA invested $3.9 million to consolidate its ownership
interests in several other MOBs.
- Dispositions: Subsequent to June
30, 2018, HTA entered into agreements to sell its
Greenville, South Carolina MOB
portfolio for a total of $294.3
million in two transactions, including the sale of a single
MOB for $9.3 million that has closed
subsequent to June 30, 2018 which was
classified as held for sale as of June 30,
2018. The remaining properties are expected to close in
August 2018. HTA has additional
properties under contract to sell which would total up to an
additional $60 million of gross
proceeds. These properties are subject to customary closing
conditions and no closings are assured. HTA intends to use the net
proceeds to pay down debt, repurchase shares of its common stock,
to invest in acquisitions and developments in markets where it
believes it can utilize its property management and leasing
platform to drive incremental returns, and for general corporate
purposes.
2017 Investment Performance
- Cash NOI: During the three months ended June 30, 2018, HTA generated $34.8 million of Cash NOI on its 2017
investments, including its investment in its unconsolidated joint
venture. This Cash NOI includes over $2.2
million of income from property management and building
engineering services provided to its tenants. As of June 30, 2018, HTA's run rate yield on its 2017
investments was approximately 5.3%, which included the full year
impact of new leases which have been executed, but which have not
yet commenced.
- Development: As of part the 2017 investments, HTA
acquired seven development projects that were under construction
and not stabilized at the date of acquisition. Prior to this
quarter, HTA had completed five of the seven development projects.
During the period ended June 30,
2018, HTA completed the development MOB of Memorial Hermann
in Houston, Texas. This MOB was
100,000 square feet of GLA and 100% pre-leased to the hospital. The
remaining development has been completed in July 2018.
As of June 30, 2018, the six
completed development properties were 87% leased and generated
$1.9 million of Cash NOI. HTA
believes it is currently in the late stages of lease negotiations
for an additional 33,000 square feet of GLA that would bring the
leased rate on these development properties to 88%, if
completed. In total, the seven development properties are
projected to generate between approximately $2.5 million and $2.8
million in quarterly Cash NOI upon completion and
stabilization.
Balance Sheet and Capital Markets
- Balance Sheet: As of June 30,
2018, HTA had total leverage of 31.8% measured as debt less
cash and cash equivalents to total capitalization, and 5.8x
measured as debt less cash and cash equivalents to Adjusted
Earnings before Interest, Taxes, Depreciation and Amortization for
real estate ("Adjusted EBITDAre"). Total liquidity at the end of
the quarter was $1.0 billion,
including $994.5 million of
availability under HTA's unsecured revolving credit facility and
$26.2 million of cash and cash
equivalents.
- Debt: During the three months ended June 30, 2018, HTA paid down $96.0 million on its $286.0 million promissory note to the seller, as
lender, in the Duke acquisition. The
interest rate on the promissory note is 4% per annum.
- Equity: In June 2018, HTA
settled its forward sale arrangement pursuant to its forward equity
agreement, which included approximately 2.6 million shares of its
common stock for net proceeds of approximately $73.8 million, adjusted for costs to borrow
equating to a net price to HTA of $28.94 per share of common stock.
- Share Repurchase Plan: On June 8,
2018, HTA's Board of Directors approved a stock repurchase
plan authorizing HTA to purchase up to $100
million of its common stock from time to time prior to the
expiration thereof on June 7, 2020.
During June 2018, pursuant to this
plan, HTA repurchased 333,002 shares of its common stock, at an
average price of $26.26 per share,
for an aggregate amount of $8.7
million. In August 2018, HTA's
Board of Directors terminated the foregoing plan and adopted a new
plan with an increased share repurchase authorization of up to
$300 million.
Subsequent Events
- Debt: Subsequent to June 30,
2018, HTA's operating partnership, HTALP, entered into a
modification of its $200.0 million
unsecured term loan due in 2023. This modification decreased
pricing at HTA's current credit rating by 65 bps from LIBOR plus
165 bps to LIBOR plus 100 bps. The maturity date was also extended
by five months to January 2024. The
other material terms of the unsecured term loan prior to the
modification remained substantially unchanged.
- Dividends: On August 2,
2018, HTA's Board of Directors announced an increased
quarterly dividend of $0.310 per
share of common stock and per OP Unit. The quarterly dividend is to
be paid on October 5, 2018 to
stockholders of record of its common stock and holders of its OP
Units on October 2, 2018.
Financial Results - Second Quarter 2018
Rental Income
Rental income increased 24.2% to $173.2
million for the three months ended June 30, 2018, compared to $139.5 million for the three months ended
June 30, 2017.
Net Income
Net income increased 367.5% to $15.7
million for the three months ended June 30, 2018, compared to a net loss of
$(5.9) million for the three months
ended June 30, 2017.
FFO
FFO, as defined by NAREIT, was $0.40 per diluted share, or $84.4 million, for the three months ended
June 30, 2018, compared to
$0.30 per diluted share, or
$54.2 million, for the three months
ended June 30, 2017.
Normalized FFO
Normalized FFO was $0.41 per
diluted share, or $85.1 million, for
the three months ended June 30, 2018,
compared to $0.39 per diluted share,
or $69.6 million, for the three
months ended June 30, 2017.
Normalized FAD
Normalized FAD increased 19.2% to $72.2
million, for the three months ended June 30, 2018, compared to $60.6 million for the three months ended
June 30, 2017.
NOI
NOI increased 24.2% to $119.8
million for the three months ended June 30, 2018, compared to $96.4 million for the three months ended
June 30, 2017.
Same-Property Cash NOI
Same-Property Cash NOI increased $1.9
million, or 2.6%, to $77.9
million, for the three months ended June 30, 2018, compared to $75.9 million for the three months ended
June 30, 2017. Excluding the
MOBs located on its Forest Park
Dallas campus, Same-Property Cash NOI growth would have been
3.1%.
General and Administrative Expenses
General and administrative expenses were $8.7 million for the three months ended
June 30, 2018, compared to
$8.5 million for the three months
ended June 30, 2017.
Interest Expense
Total interest expense was $26.3
million for the three months ended June 30, 2018, compared to $17.9 million for the three months ended
June 30, 2017.
Tenant Retention
Tenant retention for the Same-Property portfolio was 86% by GLA
for the quarter, which included approximately 0.7 million square
feet of GLA of expiring leases.
Financial Results - Year-to-Date 2018
Rental Income
Rental income increased 32.4% to $348.8
million for the six months ended June
30, 2018, compared to $263.5
million for the six months ended June
30, 2017.
Net Income
Net income increased 215.1% to $25.7
million for the six months ended June
30, 2018, compared to $8.1
million for the six months ended June
30, 2017.
FFO
FFO, as defined by NAREIT, was $0.81 per diluted share, or $169.0 million, for the six months ended
June 30, 2018, compared to
$0.70 per diluted share, or
$114.4 million, for the six months
ended June 30, 2017.
Normalized FFO
Normalized FFO was $0.81 per
diluted share, or $170.1 million, for
the six months ended June 30, 2018,
compared to $0.79 per diluted share,
or $129.8 million, for the six months
ended June 30, 2017.
Normalized FAD
Normalized FAD increased 30.6% to $148.2
million, for the six months ended June 30, 2018, compared to $113.5 million for the six months ended
June 30, 2017.
NOI
NOI increased 31.7% to $239.4
million for the six months ended June
30, 2018, compared to $181.7
million for the six months ended June
30, 2017.
Same-Property Cash NOI
Same-Property Cash NOI increased $3.7
million, or 2.5%, to $154.1
million, for the six months ended June 30, 2018, compared to $150.4 million for the six months ended
June 30, 2017. Excluding the
MOBs located on its Forest Park
Dallas campus, Same-Property Cash NOI growth would have been
2.8%.
General and Administrative Expenses
General and administrative expenses were $17.5 million for the six months ended
June 30, 2018, compared to
$16.9 million for the six months
ended June 30, 2017.
Interest Expense
Total interest expense was $52.6
million for the six months ended June
30, 2018, compared to $33.4
million for the six months ended June
30, 2017.
Investment Activity
During the six months ended June 30,
2018, HTA invested $8.4
million to acquire an MOB of approximately 24,000 square
feet of GLA in Raleigh, North
Carolina, that was 100% leased as of the acquisition date to
Duke Health System. In addition, HTA invested $3.9 million to consolidate its ownership
interests in several other MOBs.
Leased Rate, Occupancy Rate and Tenant Retention
The leased rate (includes leases which have been executed, but
which have not yet commenced) was 91.9% by GLA as of June 30, 2018. The occupancy rate of HTA's
portfolio was 90.9% by GLA as of June
30, 2018. Tenant retention for the Same-Property
portfolio was 84% by GLA year-to-date, which included approximately
1.3 million square feet of expiring leases.
Credit Rated Tenants
Investment grade rated tenants as a percent of annualized base
rent was 48% as of June 30,
2018. Additionally, 61% of HTA's annualized base rent as of
June 30, 2018 was derived from
tenants that have (or whose parent companies have) a credit rating
from a nationally recognized rating agency.
In-House Property Management and Leasing Platform
As of June 30, 2018, HTA's
in-house property management and leasing platform operated
approximately 22.7 million square feet of GLA, or 94%, of HTA's
total portfolio.
About Healthcare Trust of America, Inc.
Healthcare Trust of America, Inc. (NYSE: HTA) is the largest
dedicated owner and operator of medical office buildings in
the United States, comprising over
24.2 million square feet of GLA, with over $7.0 billion invested primarily in medical office
buildings. HTA provides real estate infrastructure for the
integrated delivery of healthcare services in highly-desirable
locations. Investments are targeted to build critical mass in
20 to 25 leading gateway markets that generally have leading
university and medical institutions which translates to superior
demographics, high-quality graduates, intellectual talent and job
growth. The strategic markets HTA invests in support a
strong, long-term demand for quality medical office space.
HTA utilizes an integrated asset management platform consisting of
on-site leasing, property management, engineering and building
services, and development capabilities to create complete, state of
the art facilities in each market. This drives efficiencies,
strong tenant and health system relationships, and strategic
partnerships that result in high levels of tenant retention, rental
growth and long-term value creation. Headquartered in
Scottsdale, Arizona, HTA has
developed a national brand with dedicated relationships at the
local level.
Founded in 2006 and listed on the New York Stock Exchange in
2012, HTA has produced attractive returns for its stockholders that
have significantly outperformed the S&P 500 and US REIT
indices. More information about HTA can be found on the
Company's Website, Facebook, LinkedIn and Twitter.
Forward-Looking Language
This press release contains certain forward-looking statements
with respect to HTA. 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:
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 our proposed
market areas; changes in accounting principles generally accepted
in the United States of America;
policies and guidelines applicable to REITs; the availability of
properties to acquire; and the availability of financing.
Additional information concerning us and our business, including
additional factors that could materially and adversely affect our
financial results, include, without limitation, the risks described
under Part I, Item 1A - Risk Factors, in our 2017 Annual
Report on Form 10-K and in our filings with the SEC.
Conference Call
HTA will host a conference call and webcast on Friday, August 3, 2018 at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time) to review its financial
performance and operating results for the three and six months
ended June 30, 2018.
Conference Call and Webcast Details:
Domestic Dial-In Number: (877) 507-6265
International Dial-In Number: (412) 902-6633
Canada Dial-In Number: (855) 669-9657
Webcast: www.htareit.com under the Investor Relations tab
Replay Conference Call Details:
Domestic Dial-In Number: (877) 344-7529
International Dial-In Number: (412) 317-0088
Canada Dial-In Number: (855) 669-9658
Conference ID: 10122321
Available August 3, 2018 (one hour
after the end of the conference call) to September 3, 2018 at 12:00
p.m. Eastern Time (9:00 a.m. Pacific
Time)
Supplemental Information
Supplemental financial data are available on the HTA's website
at www.htareit.com.
Financial Contact:
Robert A. Milligan
Chief Financial Officer
480.998.3478
HEALTHCARE TRUST
OF AMERICA, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands,
except for share and per share data)
|
(Unaudited)
|
|
|
|
June 30,
2018
|
|
December 31,
2017
|
ASSETS
|
|
|
|
|
Real estate
investments:
|
|
|
|
|
Land
|
|
$
|
486,403
|
|
|
$
|
485,319
|
|
Building and
improvements
|
|
5,873,927
|
|
|
5,830,824
|
|
Lease
intangibles
|
|
633,938
|
|
|
639,199
|
|
Construction in
progress
|
|
21,397
|
|
|
14,223
|
|
|
|
7,015,665
|
|
|
6,969,565
|
|
Accumulated
depreciation and amortization
|
|
(1,146,260)
|
|
|
(1,021,691)
|
|
Real estate
investments, net
|
|
5,869,405
|
|
|
5,947,874
|
|
Assets held for sale,
net
|
|
6,916
|
|
|
—
|
|
Investment in
unconsolidated joint venture
|
|
67,870
|
|
|
68,577
|
|
Cash and cash
equivalents
|
|
26,191
|
|
|
100,356
|
|
Restricted
cash
|
|
13,414
|
|
|
18,204
|
|
Receivables and other
assets, net
|
|
215,250
|
|
|
207,857
|
|
Other intangibles,
net
|
|
103,084
|
|
|
106,714
|
|
Total
assets
|
|
$
|
6,302,130
|
|
|
$
|
6,449,582
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Liabilities:
|
|
|
|
|
Debt
|
|
$
|
2,683,531
|
|
|
$
|
2,781,031
|
|
Accounts payable and
accrued liabilities
|
|
152,516
|
|
|
167,852
|
|
Liabilities of assets
held for sale
|
|
161
|
|
|
—
|
|
Derivative financial
instruments - interest rate swaps
|
|
548
|
|
|
1,089
|
|
Security deposits,
prepaid rent and other liabilities
|
|
65,012
|
|
|
61,222
|
|
Intangible
liabilities, net
|
|
64,964
|
|
|
68,203
|
|
Total
liabilities
|
|
2,966,732
|
|
|
3,079,397
|
|
Commitments and
contingencies
|
|
|
|
|
Redeemable
noncontrolling interests
|
|
6,644
|
|
|
6,737
|
|
Equity:
|
|
|
|
|
Preferred stock,
$0.01 par value; 200,000,000 shares authorized; none issued and
outstanding
|
|
—
|
|
|
—
|
|
Class A common
stock, $0.01 par value; 1,000,000,000 shares authorized;
207,493,355 and 204,892,118 shares issued and outstanding as of
June 30, 2018 and December 31, 2017, respectively
|
|
2,075
|
|
|
2,049
|
|
Additional paid-in
capital
|
|
4,580,373
|
|
|
4,508,528
|
|
Accumulated other
comprehensive loss
|
|
1,367
|
|
|
274
|
|
Cumulative dividends
in excess of earnings
|
|
(1,332,759)
|
|
|
(1,232,069)
|
|
Total stockholders'
equity
|
|
3,251,056
|
|
|
3,278,782
|
|
Noncontrolling
interests
|
|
77,698
|
|
|
84,666
|
|
Total
equity
|
|
3,328,754
|
|
|
3,363,448
|
|
Total liabilities and
equity
|
|
$
|
6,302,130
|
|
|
$
|
6,449,582
|
|
HEALTHCARE TRUST
OF AMERICA, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues:
|
|
|
|
|
|
|
|
Rental
income
|
$
|
173,221
|
|
|
$
|
139,525
|
|
|
$
|
348,788
|
|
|
$
|
263,518
|
|
Interest and other
operating income
|
111
|
|
|
354
|
|
|
205
|
|
|
708
|
|
Total
revenues
|
173,332
|
|
|
139,879
|
|
|
348,993
|
|
|
264,226
|
|
Expenses:
|
|
|
|
|
|
|
|
Rental
|
53,553
|
|
|
43,523
|
|
|
109,575
|
|
|
82,543
|
|
General and
administrative
|
8,725
|
|
|
8,472
|
|
|
17,511
|
|
|
16,895
|
|
Transaction
|
396
|
|
|
5,073
|
|
|
587
|
|
|
5,357
|
|
Depreciation and
amortization
|
69,104
|
|
|
55,353
|
|
|
139,496
|
|
|
102,409
|
|
Impairment
|
—
|
|
|
5,093
|
|
|
4,606
|
|
|
5,093
|
|
Total
expenses
|
131,778
|
|
|
117,514
|
|
|
271,775
|
|
|
212,297
|
|
Income before
other income (expense)
|
41,554
|
|
|
22,365
|
|
|
77,218
|
|
|
51,929
|
|
Interest income
(expense):
|
|
|
|
|
|
|
|
Interest related to
derivative financial instruments
|
186
|
|
|
(239)
|
|
|
128
|
|
|
(563)
|
|
Gain on change in
fair value of derivative financial instruments, net
|
—
|
|
|
45
|
|
|
—
|
|
|
884
|
|
Total interest
related to derivative financial instruments, including net change
in fair value of derivative financial instruments
|
186
|
|
|
(194)
|
|
|
128
|
|
|
321
|
|
Interest related to
debt
|
(26,491)
|
|
|
(17,706)
|
|
|
(52,686)
|
|
|
(33,764)
|
|
Gain on sale of real
estate, net
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Loss on
extinguishment of debt, net
|
—
|
|
|
(10,386)
|
|
|
—
|
|
|
(10,418)
|
|
Income from
unconsolidated joint venture
|
403
|
|
|
63
|
|
|
973
|
|
|
63
|
|
Other
income
|
5
|
|
|
6
|
|
|
40
|
|
|
14
|
|
Net income
(loss)
|
$
|
15,657
|
|
|
$
|
(5,852)
|
|
|
$
|
25,673
|
|
|
$
|
8,148
|
|
Net income
attributable to noncontrolling interests
|
(311)
|
|
|
(66)
|
|
|
(525)
|
|
|
(521)
|
|
Net income (loss)
attributable to common stockholders
|
$
|
15,346
|
|
|
$
|
(5,918)
|
|
|
$
|
25,148
|
|
|
$
|
7,627
|
|
Earnings per
common share - basic:
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$
|
0.07
|
|
|
$
|
(0.03)
|
|
|
$
|
0.12
|
|
|
$
|
0.05
|
|
Earnings per
common share - diluted:
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$
|
0.07
|
|
|
$
|
(0.03)
|
|
|
$
|
0.12
|
|
|
$
|
0.05
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
205,241
|
|
|
176,464
|
|
|
205,155
|
|
|
159,218
|
|
Diluted
|
209,259
|
|
|
176,464
|
|
|
209,218
|
|
|
163,490
|
|
Dividends declared
per common share
|
$
|
0.305
|
|
|
$
|
0.300
|
|
|
$
|
0.610
|
|
|
$
|
0.600
|
|
HEALTHCARE TRUST
OF AMERICA, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
25,673
|
|
|
$
|
8,148
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation,
amortization and other
|
135,177
|
|
|
100,536
|
|
Share-based
compensation expense
|
5,703
|
|
|
3,839
|
|
Impairment
|
4,606
|
|
|
5,093
|
|
Income from
unconsolidated joint venture
|
(973)
|
|
|
(63)
|
|
Distributions from
unconsolidated joint venture
|
975
|
|
|
—
|
|
Gain on sale of real
estate, net
|
—
|
|
|
(3)
|
|
Loss on
extinguishment of debt, net
|
—
|
|
|
10,418
|
|
Change in fair value
of derivative financial instruments
|
—
|
|
|
(884)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables and other
assets, net
|
(2,956)
|
|
|
(2,742)
|
|
Accounts payable and
accrued liabilities
|
(13,254)
|
|
|
14,272
|
|
Prepaid rent and
other liabilities
|
1,157
|
|
|
1,907
|
|
Net cash provided by
operating activities
|
156,108
|
|
|
140,521
|
|
Cash flows from
investing activities:
|
|
|
|
Investments in real
estate
|
(11,887)
|
|
|
(2,202,815)
|
|
Investment in
unconsolidated joint venture
|
—
|
|
|
(68,839)
|
|
Development of real
estate
|
(23,861)
|
|
|
(348)
|
|
Proceeds from the
sale of real estate
|
—
|
|
|
4,746
|
|
Capital
expenditures
|
(34,110)
|
|
|
(26,022)
|
|
Collection of real
estate notes receivable
|
347
|
|
|
—
|
|
Net cash used in
investing activities
|
(69,511)
|
|
|
(2,293,278)
|
|
Cash flows from
financing activities:
|
|
|
|
Borrowings on
unsecured revolving credit facility
|
85,000
|
|
|
305,000
|
|
Payments on unsecured
revolving credit facility
|
(85,000)
|
|
|
(393,000)
|
|
Proceeds from
unsecured senior notes
|
—
|
|
|
900,000
|
|
Payments on secured
mortgage loans
|
(99,218)
|
|
|
(74,319)
|
|
Deferred financing
costs
|
—
|
|
|
(9,400)
|
|
Debt extinguishment
costs
|
—
|
|
|
(10,391)
|
|
Security
deposits
|
222
|
|
|
1,964
|
|
Proceeds from
issuance of common stock
|
72,814
|
|
|
1,624,222
|
|
Repurchase and
cancellation of common stock
|
(11,553)
|
|
|
(3,339)
|
|
Dividends
paid
|
(125,128)
|
|
|
(85,683)
|
|
Distributions paid to
noncontrolling interest of limited partners
|
(2,689)
|
|
|
(2,722)
|
|
Net cash (used in)
provided by financing activities
|
(165,552)
|
|
|
2,252,332
|
|
Net change in cash,
cash equivalents and restricted cash
|
(78,955)
|
|
|
99,575
|
|
Cash, cash
equivalents and restricted cash - beginning of
period
|
118,560
|
|
|
25,045
|
|
Cash, cash
equivalents and restricted cash - end of period
|
$
|
39,605
|
|
|
$
|
124,620
|
|
HEALTHCARE TRUST
OF AMERICA, INC.
|
NOI, CASH NOI AND
SAME-PROPERTY CASH NOI
|
(In
thousands)
|
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income
(loss)
|
$
|
15,657
|
|
|
$
|
(5,852)
|
|
|
$
|
25,673
|
|
|
$
|
8,148
|
|
General and
administrative expenses
|
8,725
|
|
|
8,472
|
|
|
17,511
|
|
|
16,895
|
|
Transaction expenses
(1)
|
396
|
|
|
5,073
|
|
|
587
|
|
|
5,357
|
|
Depreciation and
amortization expense
|
69,104
|
|
|
55,353
|
|
|
139,496
|
|
|
102,409
|
|
Impairment
|
—
|
|
|
5,093
|
|
|
4,606
|
|
|
5,093
|
|
Interest expense and
net change in fair value of derivative financial
instruments
|
26,305
|
|
|
17,900
|
|
|
52,558
|
|
|
33,443
|
|
Gain on sale of real
estate, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
Loss on
extinguishment of debt, net
|
—
|
|
|
10,386
|
|
|
—
|
|
|
10,418
|
|
Income from
unconsolidated joint venture
|
(403)
|
|
|
—
|
|
|
(973)
|
|
|
—
|
|
Other
income
|
(5)
|
|
|
(6)
|
|
|
(40)
|
|
|
(14)
|
|
NOI
|
$
|
119,779
|
|
|
$
|
96,419
|
|
|
$
|
239,418
|
|
|
$
|
181,746
|
|
NOI percentage
growth
|
24.2
|
%
|
|
|
|
31.7
|
%
|
|
|
|
|
|
|
|
|
|
|
NOI
|
$
|
119,779
|
|
|
$
|
96,419
|
|
|
$
|
239,418
|
|
|
$
|
181,746
|
|
Straight-line rent
adjustments, net
|
(2,377)
|
|
|
(1,616)
|
|
|
(5,543)
|
|
|
(2,825)
|
|
Amortization of
(below) and above market leases/leasehold interests, net
|
40
|
|
|
126
|
|
|
255
|
|
|
32
|
|
Notes receivable
interest income and other GAAP adjustments
|
(19)
|
|
|
(240)
|
|
|
(149)
|
|
|
(495)
|
|
Cash NOI
|
$
|
117,423
|
|
|
$
|
94,689
|
|
|
$
|
233,981
|
|
|
$
|
178,458
|
|
Acquisitions not
owned/operated for all periods presented and disposed properties
Cash NOI
|
(33,664)
|
|
|
(11,973)
|
|
|
(68,340)
|
|
|
(14,535)
|
|
Redevelopment Cash
NOI
|
(365)
|
|
|
(1,149)
|
|
|
(622)
|
|
|
(2,364)
|
|
Intended for sale
Cash NOI
|
(5,507)
|
|
|
(5,628)
|
|
|
(10,889)
|
|
|
(11,122)
|
|
Same-Property Cash
NOI (2)
|
$
|
77,887
|
|
|
$
|
75,939
|
|
|
$
|
154,130
|
|
|
$
|
150,437
|
|
Same-Property Cash
NOI percentage growth
|
2.6
|
%
|
|
|
|
2.5
|
%
|
|
|
|
|
(1)
|
For the three and six
months ended June 30, 2017, transaction costs include $4.6 million
of non-incremental costs related to the Duke
acquisition.
|
(2)
|
Same-Property
includes 321 and 319 buildings for the three and six months ended
June 30, 2018 and 2017, respectively.
|
NOI is a non-GAAP financial measure that is defined as net
income or loss (computed in accordance with GAAP) before: (i)
general and administrative expenses; (ii) transaction expenses;
(iii) depreciation and amortization expense; (iv) impairment; (v)
interest expense and net change in fair value of derivative
financial instruments; (vi) gain or loss on sales of real estate;
(vii) gain or loss on extinguishment of debt; (viii) income or loss
from unconsolidated joint venture; and (ix) other income or
expense. HTA believes that NOI provides an accurate measure
of the operating performance of its operating assets because NOI
excludes certain items that are not associated with the management
of its properties. Additionally, HTA believes that NOI is a
widely accepted measure of comparative operating performance of
real estate investment trusts ("REITs"). However, HTA's use
of the term NOI may not be comparable to that of other REITs as
they may have different methodologies for computing this
amount. NOI should not be considered as an alternative to net
income or loss (computed in accordance with GAAP) as an indicator
of its financial performance. NOI should be reviewed in
connection with other GAAP measurements.
Cash NOI is a non-GAAP financial measure which excludes from
NOI: (i) straight-line rent adjustments; (ii) amortization of below
and above market leases/leasehold interests; (iii) notes receivable
interest income; and (iv) other GAAP adjustments. Contractual
base rent, contractual rent increases, contractual rent concessions
and changes in occupancy or lease rates upon commencement and
expiration of leases are a primary driver of HTA's revenue
performance. HTA believes that Cash NOI, which removes the
impact of straight-line rent adjustments, provides another
measurement of the operating performance of its operating
assets. Additionally, HTA believes that Cash NOI is a widely
accepted measure of comparative operating performance of
REITs. However, HTA's use of the term Cash NOI may not be
comparable to that of other REITs as they may have different
methodologies for computing this amount. Cash NOI should not
be considered as an alternative to net income or loss (computed in
accordance with GAAP) as an indicator of its financial
performance. Cash NOI should be reviewed in connection with
other GAAP measurements.
To facilitate the comparison of Cash NOI between periods, HTA
calculates comparable amounts for a subset of its owned and
operational properties referred to as "Same-Property".
Same-Property Cash NOI excludes (i) properties which have not been
owned and operated by HTA during the entire span of all periods
presented and disposed properties, (ii) HTA's share of
unconsolidated joint ventures, (iii) development, redevelopment and
land parcels, (iv) properties intended for disposition in the near
term which have (a) been approved by the Board of Directors, (b) is
actively marketed for sale, and (c) an offer has been received at
prices HTA would transact and the sales process is ongoing, and (v)
certain non-routine items. Same-Property Cash NOI should not
be considered as an alternative to net income or loss (computed in
accordance with GAAP) as an indicator of its financial
performance. Same-Property Cash NOI should be reviewed in
connection with other GAAP measurements.
HEALTHCARE TRUST
OF AMERICA, INC.
|
FFO, NORMALIZED
FFO AND NORMALIZED FAD
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income (loss)
attributable to common stockholders
|
$
|
15,346
|
|
|
$
|
(5,918)
|
|
|
$
|
25,148
|
|
|
$
|
7,627
|
|
Depreciation and
amortization expense related to investments in real
estate
|
68,585
|
|
|
54,968
|
|
|
138,441
|
|
|
101,657
|
|
Gain on sale of real
estate, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
Impairment
|
—
|
|
|
5,093
|
|
|
4,606
|
|
|
5,093
|
|
Proportionate share
of joint venture depreciation and amortization
|
463
|
|
|
42
|
|
|
814
|
|
|
42
|
|
FFO attributable to
common stockholders
|
$
|
84,394
|
|
|
$
|
54,185
|
|
|
$
|
169,009
|
|
|
$
|
114,416
|
|
Transaction
expenses
|
252
|
|
|
430
|
|
|
443
|
|
|
714
|
|
Gain on change in
fair value of derivative financial instruments, net
|
—
|
|
|
(45)
|
|
|
—
|
|
|
(884)
|
|
Loss on
extinguishment of debt, net
|
—
|
|
|
10,386
|
|
|
—
|
|
|
10,418
|
|
Noncontrolling income
from partnership units included in diluted shares
|
297
|
|
|
44
|
|
|
478
|
|
|
469
|
|
Other normalizing
items, net (1)
|
144
|
|
|
4,643
|
|
|
144
|
|
|
4,643
|
|
Normalized FFO
attributable to common stockholders
|
$
|
85,087
|
|
|
$
|
69,643
|
|
|
$
|
170,074
|
|
|
$
|
129,776
|
|
Other
income
|
(5)
|
|
|
(6)
|
|
|
(40)
|
|
|
(14)
|
|
Non-cash compensation
expense
|
2,224
|
|
|
1,309
|
|
|
5,703
|
|
|
3,839
|
|
Straight-line rent
adjustments, net
|
(2,377)
|
|
|
(1,616)
|
|
|
(5,543)
|
|
|
(2,825)
|
|
Amortization of
(below) and above market leases/leasehold interests and corporate
assets, net
|
559
|
|
|
511
|
|
|
1,310
|
|
|
784
|
|
Deferred revenue -
tenant improvement related
|
(38)
|
|
|
(11)
|
|
|
(69)
|
|
|
(11)
|
|
Amortization of
deferred financing costs and debt discount/premium, net
|
1,291
|
|
|
853
|
|
|
2,580
|
|
|
1,639
|
|
Recurring capital
expenditures, tenant improvements and leasing
commissions
|
(14,511)
|
|
|
(10,065)
|
|
|
(25,861)
|
|
|
(19,705)
|
|
Normalized FAD
attributable to common stockholders
|
$
|
72,230
|
|
|
$
|
60,618
|
|
|
$
|
148,154
|
|
|
$
|
113,483
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders per diluted share
|
$
|
0.07
|
|
|
$
|
(0.03)
|
|
|
$
|
0.12
|
|
|
$
|
0.05
|
|
FFO adjustments per
diluted share, net
|
0.33
|
|
|
0.33
|
|
|
0.69
|
|
|
0.65
|
|
FFO attributable to
common stockholders per diluted share
|
$
|
0.40
|
|
|
$
|
0.30
|
|
|
$
|
0.81
|
|
|
$
|
0.70
|
|
Normalized FFO
adjustments per diluted share, net
|
0.01
|
|
|
0.09
|
|
|
0.00
|
|
|
0.09
|
|
Normalized FFO
attributable to common stockholders per diluted share
|
$
|
0.41
|
|
|
$
|
0.39
|
|
|
$
|
0.81
|
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding (2)
|
209,259
|
|
|
180,672
|
|
|
209,218
|
|
|
163,490
|
|
|
|
(1)
|
For the three and six
months ended June 30, 2017, other normalizing items include $4.6
million of non-incremental costs related to the Duke acquisition
that were included in transaction expenses on HTA's condensed
consolidated statements of operations.
|
(2)
|
For the three months
ended June 30, 2017, these securities are anti-dilutive on a GAAP
basis as a result of HTA's net loss, but are considered dilutive on
a non-GAAP basis in periods where we report non-GAAP net
income.
|
HTA computes FFO in accordance with the current standards
established by NAREIT. NAREIT defines FFO as net income or
loss attributable to common stockholders (computed in accordance
with GAAP), excluding gains or losses from sales of real estate
property and impairment write-downs of depreciable assets, plus
depreciation and amortization related to investments in real
estate, and after adjustments for unconsolidated partnerships and
joint ventures. HTA presents this non-GAAP financial measure
because it considers it an important supplemental measure of its
operating performance and believes it is frequently used by
securities analysts, investors and other interested parties in the
evaluation of REITs. Historical cost accounting assumes that
the value of real estate assets diminishes ratably over time.
Since real estate values have historically risen or fallen based on
market conditions, many industry investors have considered the
presentation of operating results for real estate companies that
use historical cost accounting to be insufficient by
themselves. Because FFO excludes depreciation and
amortization unique to real estate, among other items, it provides
a perspective not immediately apparent from net income or loss
attributable to common stockholders.
HTA computes Normalized FFO, which excludes from FFO: (i)
transaction expenses; (ii) gain or loss on change in fair value of
derivative financial instruments; (iii) gain or loss on
extinguishment of debt; (iv) noncontrolling income or loss from
partnership units included in diluted shares; and (v) other
normalizing items, which include items that are unusual and
infrequent in nature. HTA presents this non-GAAP financial
measure because it allows for the comparison of its operating
performance to other REITs and between periods on a consistent
basis. HTA's methodology for calculating Normalized FFO may
be different from the methods utilized by other REITs and,
accordingly, may not be comparable to other REITs. Normalized
FFO should not be considered as an alternative to net income or
loss attributable to common stockholders (computed in accordance
with GAAP) as an indicator of its financial performance, nor is it
indicative of cash available to fund cash needs. Normalized
FFO should be reviewed in connection with other GAAP
measurements.
HTA also computes Normalized FAD, which excludes from Normalized
FFO: (i) other income or expense; (ii) non-cash compensation
expense; (iii) straight-line rent adjustments; (iv) amortization of
below and above market leases/leasehold interests and corporate
assets; (v) amortization of deferred financing costs and debt
premium/discount; and (vi) recurring capital expenditures, tenant
improvements and leasing commissions. HTA believes this
non-GAAP financial measure provides a meaningful supplemental
measure of its operating performance. Normalized FAD should
not be considered as an alternative to net income or loss
attributable to common stockholders (computed in accordance with
GAAP) as an indicator of its financial performance, nor is it
indicative of cash available to fund cash needs. Normalized
FAD should be reviewed in connection with other GAAP
measurements.
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SOURCE Healthcare Trust of America, Inc.