SCOTTSDALE, Ariz., Oct. 25, 2018 /PRNewswire/ -- Healthcare
Trust of America, Inc. (NYSE: HTA) ("HTA") announced results for
the three and nine months ended September
30, 2018.
Operating
Third Quarter 2018:
- Net Income Attributable to Common Stockholders:
Increased $159.2 million, to
$173.0 million, compared to Q3 2017.
Earnings per diluted share increased $0.75, to $0.82 per
diluted share, compared to Q3 2017.
- Funds From Operations ("FFO"): As defined by the
National Association of Real Estate Investment Trusts ("NAREIT"),
decreased (3.4)%, to $81.4 million,
compared to Q3 2017. FFO per diluted share decreased (7.3)%, to
$0.38 per diluted share, compared to
Q3 2017.
- Normalized FFO: Increased 0.8%, to $86.1 million, compared to Q3 2017. Normalized
FFO per diluted share decreased (2.4)%, to $0.41 per diluted share, compared to Q3
2017.
- Normalized Funds Available for Distribution ("FAD"):
Decreased (8.0)%, to $68.8 million,
compared to Q3 2017.
- Same-Property Cash Net Operating Income ("NOI"):
Increased $2.7 million, or 2.5%, to
$108.8 million, compared to Q3
2017.
Year-to-Date 2018:
- Net Income Attributable to Common Stockholders:
Increased $176.7 million, to
$198.1 million, compared to 2017.
Earnings per diluted share increased $0.82, to $0.94 per
diluted share, compared to 2017.
- FFO: As defined by NAREIT, increased 26.0%, to
$250.4 million, compared to 2017. FFO
per diluted share increased 6.3%, to $1.19 per diluted share, compared to 2017.
- Normalized FFO: Increased 19.0%, to $256.2 million, compared to 2017. Normalized FFO
per diluted share increased 0.8%, to $1.22 per diluted share, compared to 2017.
- Normalized FAD: Increased 15.3%, to $217.0 million, compared to 2017.
- Same-Property Cash NOI: Increased $5.6 million, or 2.4%, to $233.2 million, compared to 2017. Excluding the
MOBs located on its Forest Park
Dallas campus, Same-Property Cash NOI growth was 2.7%.
Portfolio
- Leasing: During the three months ended September 30, 2018, HTA entered into new and
renewal leases on approximately 532,000 square feet of gross
leasable area ("GLA"), or 2.3%, of its portfolio. Tenant retention
for the Same-Property portfolio was 82% by GLA for the quarter,
which included approximately 381,000 square feet of GLA of total
expiring leases. Re-leasing spreads for renewal leases on a cash
basis were approximately 3.7%. Renewal leases included tenant
improvements of $1.53 per square foot
of GLA per year of the lease term and less than one day of free
rent per year of the lease term during the three months ended
September 30, 2018.
- Leased Rate: As of September 30,
2018, HTA had a leased rate for its portfolio of 92.1% by
GLA and an occupancy rate of 90.9% by GLA.
- Forest Park Update: During the three months ended
September 30, 2018, HTA entered into
approximately 41,000 square feet of GLA of new leases on the former
Forest Park Dallas campus (the
"Campus"), bringing total new leasing for the Campus to 81,000
square feet of GLA for the nine months ended September 30, 2018. The total leased rate for the
Campus was approximately 84% as of September
30, 2018.
- Dispositions: During the three months ended September 30, 2018, HTA completed the disposition
of 19 MOBs, primarily located in Greenville, South Carolina for an aggregate
gross sales price of $305.9 million
and totaling approximately 1.1 million square feet of GLA,
generating gains of approximately $166.4
million, and consisted of the following:
-
- In August 2018, HTA completed the
disposition of its Greenville, South
Carolina MOB portfolio (the "Greenville Disposition"), which
consisted of 17 MOBs for an aggregate gross sales price of
$294.3 million in two transactions,
including (i) the sale of a single MOB which HTA classified as held
for sale as of June 30, 2018, and
(ii) the Greenville Disposition which consisted of approximately
965,000 square feet of GLA.
- Additionally, HTA completed the disposition of two MOBs located
in Derry, New Hampshire and
North Adams, Massachusetts for an
aggregate gross sales price of $11.6
million, totaling approximately 120,000 square feet of
GLA.
- Development/Redevelopment: During the nine months ended
September 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 Raleigh, North Carolina. These
projects will have total expected construction costs of
approximately $70.6 million and are
approximately 78% pre-leased to major health systems.
- Investments: During the nine months ended September 30, 2018, HTA invested approximately
$13.9 million to acquire three MOBs
of approximately 60,000 square feet of GLA in the key market of
Raleigh, North Carolina. In
addition, HTA invested approximately $3.9
million to consolidate its ownership interests in several
other MOBs.
2017 Investment Performance
- Cash NOI: During the three months ended September 30, 2018, HTA generated $36.4 million of Cash NOI from its 2017
investments, including its investment in its unconsolidated joint
venture. As of September 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 part of the 2017 investments, HTA
acquired seven development projects that were under construction
and not stabilized at the date of acquisition. During the quarter,
HTA completed the remaining development of the Providence Facey MOB
in Los Angeles, California. This
MOB is approximately 37,000 square feet of GLA and is 100%
pre-leased.
Balance Sheet and Capital Markets
- Balance Sheet: As of September
30, 2018, HTA had total leverage of 29.7%, measured as debt
less cash and cash equivalents to total capitalization, and 5.3x,
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 $1.2 billion,
including $994.5 million of
availability under HTA's unsecured revolving credit facility and
$225.5 million of cash and cash
equivalents.
- Debt: In August 2018, HTA
prepaid approximately $72.6 million
of its fixed and variable rate mortgages, including the settlement
of three cash flow hedges, utilizing net proceeds from the
Greenville Disposition to do so. Additionally, in August 2018, HTA's operating partnership, HTALP,
entered into a modification of its $200.0
million unsecured term loan previously due in 2023. This
modification decreased pricing at HTA's current credit rating
by 65 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.
- Stock Repurchase Plan: In August
2018, HTA's Board of Directors approved a stock repurchase
plan authorizing HTA to purchase up to $300.0 million of its common stock from time to
time. During the nine months ended September
30, 2018, HTA repurchased 628,002 shares of its common stock
at an average price of $26.25 per
share, for an aggregate amount of approximately $16.5 million. As of September 30, 2018, the remaining amount of
common stock available for repurchase under the stock repurchase
plan was approximately $283.5
million.
Impact of Future Accounting Standards
- Topic 842 Leases: In February
2016, the Financial Accounting Standards Board issued Topic
842, which is effective for HTA as of January 1, 2019. As part of Topic 842, companies
are required to expense initial direct costs that are currently
capitalized. For the nine months ended September 30, 2018, HTA capitalized approximately
$3.7 million of internal costs
related to leasing activities. Utilizing a traditional third party
leasing commission structure of 3% of gross lease value, total
leasing commissions would have totaled over $9 million during the nine months ended
September 30, 2018.
As of January 1, 2019, these external
costs, which are primarily external broker fees and external legal
fees, will be recorded in HTA's consolidated statement of
operations as additional general and administrative expenses.
HTA estimates the range of these expenses to be approximately
$6 million to $8 million on an annualized basis and effecting
Earnings Per Share and corresponding FFO by approximately
$0.03 to $0.04 per share on an annualized basis.
Subsequent Events
- Debt: Subsequent to September 30,
2018, HTA prepaid approximately $67.2
million of its fixed rate mortgages. HTA did not incur any
prepayment fees related to this transaction.
- Dividends: On October 25,
2018, HTA's Board of Directors announced a quarterly
dividend of $0.310 per share of
common stock and per OP Unit. The quarterly dividend is to be paid
on January 9, 2019 to stockholders of
record of its common stock and holders of its OP Units on
January 2, 2019.
- Stock Repurchase Plan: Subsequent to September 30, 2018, HTA repurchased 289,519
shares of its common stock at an average price of $25.69 per share, for an aggregate amount of
approximately $7.4 million under its
stock repurchase plan.
Financial Results - Third Quarter 2018
Rental Income
Rental income decreased (0.2)% to $175.0
million for the three months ended September 30, 2018, compared to $175.4 million for the three months ended
September 30, 2017.
Net Income
Net income increased $162.4
million, to $176.3 million for
the three months ended September 30,
2018, compared to $14.0
million for the three months ended September 30, 2017.
FFO
FFO, as defined by NAREIT, was $0.38 per diluted share, or $81.4 million, for the three months ended
September 30, 2018, compared to
$0.41 per diluted share, or
$84.2 million, for the three months
ended September 30, 2017.
Normalized FFO
Normalized FFO was $0.41 per
diluted share, or $86.1 million, for
the three months ended September 30,
2018, compared to $0.42 per
diluted share, or $85.4 million, for
the three months ended September 30,
2017.
Normalized FAD
Normalized FAD decreased (8.0)% to $68.8
million, for the three months ended September 30, 2018, compared to $74.8 million for the three months ended
September 30, 2017.
NOI
NOI decreased (0.3)% to $119.3
million for the three months ended September 30, 2018, compared to $119.7 million for the three months ended
September 30, 2017.
Same-Property Cash NOI
Same-Property Cash NOI increased $2.7
million, or 2.5%, to $108.8
million, for the three months ended September 30, 2018, compared to $106.2 million for the three months ended
September 30, 2017.
General and Administrative Expenses
General and administrative expenses were $8.8 million for the three months ended
September 30, 2018, compared to
$8.3 million for the three months
ended September 30, 2017.
Interest Expense
Total interest expense was $24.8
million for the three months ended September 30, 2018, compared to $26.2 million for the three months ended
September 30, 2017.
Disposition Activity
During the three months ended September
30, 2018, HTA completed the disposition of 19 MOBs,
primarily located in Greenville, South
Carolina for an aggregate gross sales price of $305.9 million and totaling approximately 1.1
million square feet of GLA, generating gains of approximately
$166.4 million.
Tenant Retention
Tenant retention for the Same-Property portfolio was 82% by GLA
for the quarter, which included approximately 381,000 square feet
of GLA of expiring leases.
Financial Results - Year-to-Date 2018
Rental Income
Rental income increased 19.3% to $523.8
million for the nine months ended September 30, 2018, compared to $438.9 million for the nine months ended
September 30, 2017.
Net Income
Net income increased $179.9
million to $202.0 million for
the nine months ended September 30,
2018, compared to $22.1
million for the nine months ended September 30, 2017.
FFO
FFO, as defined by NAREIT, was $1.19 per diluted share, or $250.4 million, for the nine months ended
September 30, 2018, compared to
$1.12 per diluted share, or
$198.7 million, for the nine months
ended September 30, 2017.
Normalized FFO
Normalized FFO was $1.22 per
diluted share, or $256.2 million, for
the nine months ended September 30,
2018, compared to $1.21 per
diluted share, or $215.2 million, for
the nine months ended September 30,
2017.
Normalized FAD
Normalized FAD increased 15.3% to $217.0
million, for the nine months ended September 30, 2018, compared to $188.3 million for the nine months ended
September 30, 2017.
NOI
NOI increased 19.1% to $358.8
million for the nine months ended September 30, 2018, compared to $301.3 million for the nine months ended
September 30, 2017.
Same-Property Cash NOI
Same-Property Cash NOI increased $5.6
million, or 2.4%, to $233.2
million, for the nine months ended September 30, 2018, compared to $227.6 million for the nine months ended
September 30, 2017. Excluding
the MOBs located on HTA's Forest Park
Dallas campus, Same-Property Cash NOI growth was 2.7%.
General and Administrative Expenses
General and administrative expenses were $26.3 million for the nine months ended
September 30, 2018, compared to
$25.2 million for the nine months
ended September 30, 2017.
Interest Expense
Total interest expense was $77.4
million for the nine months ended September 30, 2018, compared to $59.6 million for the nine months ended
September 30, 2017.
Investment Activity
During the nine months ended September
30, 2018, HTA invested $13.9
million to acquire three MOBs of approximately 60,000 square
feet of GLA in the key market of Raleigh, North Carolina. 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 (which includes leases which have been executed,
but which have not yet commenced) was 92.1% by GLA as of
September 30, 2018. The
occupancy rate of HTA's portfolio was 90.9% by GLA as of
September 30, 2018. Tenant
retention for the Same-Property portfolio was 83% by GLA
year-to-date, which included approximately 1.7 million square feet
of GLA of expiring leases.
Credit Rated Tenants
Investment grade rated tenants as a percent of annualized base
rent was 46% as of September 30,
2018. Additionally, 59% of HTA's annualized base rent as of
September 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 September 30, 2018, HTA's
in-house property management and leasing platform operated
approximately 21.7 million square feet of GLA, or 93%, of its total
portfolio.
About Healthcare Trust of America, Inc.
Healthcare Trust of America, Inc. (NYSE: HTA) is the largest
dedicated owner and operator of MOBs in the United States, comprising approximately
23.2 million square feet of GLA, with $6.8
billion invested primarily in MOBs. 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 outperformed the S&P 500 and US REIT indices. More
information about HTA can be found on the Company's Website
(www.htareit.com), 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, October 26, 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 nine months
ended September 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: 10125150
Available October 26, 2018 (one hour
after the end of the conference call) to November 26, 2018 at 12:00
p.m. Eastern Time (9:00 a.m. Pacific
Time)
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)
|
|
|
September 30,
2018
|
|
December 31,
2017
|
ASSETS
|
|
|
|
Real estate
investments:
|
|
|
|
Land
|
$
|
483,541
|
|
|
$
|
485,319
|
|
Building and
improvements
|
5,743,439
|
|
|
5,830,824
|
|
Lease
intangibles
|
604,215
|
|
|
639,199
|
|
Construction in
progress
|
27,273
|
|
|
14,223
|
|
|
6,858,468
|
|
|
6,969,565
|
|
Accumulated
depreciation and amortization
|
(1,151,490)
|
|
|
(1,021,691)
|
|
Real estate
investments, net
|
5,706,978
|
|
|
5,947,874
|
|
Investment in
unconsolidated joint venture
|
67,592
|
|
|
68,577
|
|
Cash and cash
equivalents
|
225,518
|
|
|
100,356
|
|
Restricted
cash
|
14,639
|
|
|
18,204
|
|
Receivables and other
assets, net
|
213,482
|
|
|
207,857
|
|
Other intangibles,
net
|
100,475
|
|
|
106,714
|
|
Total
assets
|
$
|
6,328,684
|
|
|
$
|
6,449,582
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Liabilities:
|
|
|
|
Debt
|
$
|
2,609,659
|
|
|
$
|
2,781,031
|
|
Accounts payable and
accrued liabilities
|
160,246
|
|
|
167,852
|
|
Derivative financial
instruments - interest rate swaps
|
—
|
|
|
1,089
|
|
Security deposits,
prepaid rent and other liabilities
|
55,753
|
|
|
61,222
|
|
Intangible
liabilities, net
|
62,887
|
|
|
68,203
|
|
Total
liabilities
|
2,888,545
|
|
|
3,079,397
|
|
Commitments and
contingencies
|
|
|
|
Redeemable
noncontrolling interests
|
6,610
|
|
|
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;
207,231,171 and 204,892,118 shares issued and outstanding as of
September 30, 2018 and December 31, 2017, respectively
|
2,072
|
|
|
2,049
|
|
Additional paid-in
capital
|
4,574,913
|
|
|
4,508,528
|
|
Accumulated other
comprehensive income
|
648
|
|
|
274
|
|
Cumulative dividends
in excess of earnings
|
(1,224,006)
|
|
|
(1,232,069)
|
|
Total stockholders'
equity
|
3,353,627
|
|
|
3,278,782
|
|
Noncontrolling
interests
|
79,902
|
|
|
84,666
|
|
Total
equity
|
3,433,529
|
|
|
3,363,448
|
|
Total liabilities and
equity
|
$
|
6,328,684
|
|
|
$
|
6,449,582
|
|
HEALTHCARE TRUST
OF AMERICA, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues:
|
|
|
|
|
|
|
|
Rental
income
|
$
|
175,038
|
|
|
$
|
175,431
|
|
|
$
|
523,826
|
|
|
$
|
438,949
|
|
Interest and other
operating income
|
97
|
|
|
563
|
|
|
302
|
|
|
1,271
|
|
Total
revenues
|
175,135
|
|
|
175,994
|
|
|
524,128
|
|
|
440,220
|
|
Expenses:
|
|
|
|
|
|
|
|
Rental
|
55,789
|
|
|
56,331
|
|
|
165,364
|
|
|
138,874
|
|
General and
administrative
|
8,770
|
|
|
8,283
|
|
|
26,281
|
|
|
25,178
|
|
Transaction
|
346
|
|
|
261
|
|
|
933
|
|
|
5,618
|
|
Depreciation and
amortization
|
70,568
|
|
|
70,491
|
|
|
210,064
|
|
|
172,900
|
|
Impairment
|
4,281
|
|
|
—
|
|
|
8,887
|
|
|
5,093
|
|
Total
expenses
|
139,754
|
|
|
135,366
|
|
|
411,529
|
|
|
347,663
|
|
Income before
other income (expense)
|
35,381
|
|
|
40,628
|
|
|
112,599
|
|
|
92,557
|
|
Interest income
(expense):
|
|
|
|
|
|
|
|
Interest related to
derivative financial instruments
|
169
|
|
|
(264)
|
|
|
297
|
|
|
(827)
|
|
Gain on change in
fair value of derivative financial instruments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
884
|
|
Total interest
related to derivative financial instruments, including net change
in fair value of derivative financial instruments
|
169
|
|
|
(264)
|
|
|
297
|
|
|
57
|
|
Interest related to
debt
|
(25,003)
|
|
|
(25,924)
|
|
|
(77,689)
|
|
|
(59,688)
|
|
Gain on sale of real
estate, net
|
166,372
|
|
|
—
|
|
|
166,372
|
|
|
3
|
|
Loss on
extinguishment of debt, net
|
(1,092)
|
|
|
(774)
|
|
|
(1,092)
|
|
|
(11,192)
|
|
Income from
unconsolidated joint venture
|
432
|
|
|
318
|
|
|
1,405
|
|
|
381
|
|
Other income
(expense)
|
89
|
|
|
(27)
|
|
|
129
|
|
|
(13)
|
|
Net
income
|
$
|
176,348
|
|
|
$
|
13,957
|
|
|
$
|
202,021
|
|
|
$
|
22,105
|
|
Net income
attributable to noncontrolling interests
|
(3,362)
|
|
|
(194)
|
|
|
(3,887)
|
|
|
(715)
|
|
Net income
attributable to common stockholders
|
$
|
172,986
|
|
|
$
|
13,763
|
|
|
$
|
198,134
|
|
|
$
|
21,390
|
|
Earnings per
common share - basic:
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
$
|
0.83
|
|
|
$
|
0.07
|
|
|
$
|
0.96
|
|
|
$
|
0.12
|
|
Earnings per
common share - diluted:
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
$
|
0.82
|
|
|
$
|
0.07
|
|
|
$
|
0.94
|
|
|
$
|
0.12
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
207,513
|
|
|
200,674
|
|
|
205,950
|
|
|
173,189
|
|
Diluted
|
211,444
|
|
|
204,795
|
|
|
209,968
|
|
|
177,410
|
|
Dividends declared
per common share
|
$
|
0.310
|
|
|
$
|
0.305
|
|
|
$
|
0.920
|
|
|
$
|
0.905
|
|
HEALTHCARE TRUST
OF AMERICA, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
Nine Months Ended
September 30,
|
|
2018
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
202,021
|
|
|
$
|
22,105
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation,
amortization and other
|
203,550
|
|
|
169,057
|
|
Share-based
compensation expense
|
7,830
|
|
|
5,493
|
|
Impairment
|
8,887
|
|
|
5,093
|
|
Income from
unconsolidated joint venture
|
(1,405)
|
|
|
(381)
|
|
Distributions from
unconsolidated joint venture
|
1,680
|
|
|
—
|
|
Gain on sale of real
estate, net
|
(166,372)
|
|
|
(3)
|
|
Loss on
extinguishment of debt, net
|
1,092
|
|
|
11,192
|
|
Change in fair value
of derivative financial instruments
|
—
|
|
|
(884)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Receivables and other
assets, net
|
(7,820)
|
|
|
(19,854)
|
|
Accounts payable and
accrued liabilities
|
(5,932)
|
|
|
29,566
|
|
Prepaid rent and
other liabilities
|
(2,780)
|
|
|
7,158
|
|
Net cash provided by
operating activities
|
240,751
|
|
|
228,542
|
|
Cash flows from
investing activities:
|
|
|
|
Investments in real
estate
|
(17,389)
|
|
|
(2,357,570)
|
|
Investment in
unconsolidated joint venture
|
—
|
|
|
(68,839)
|
|
Development of real
estate
|
(29,593)
|
|
|
(19,163)
|
|
Proceeds from the
sale of real estate
|
302,440
|
|
|
4,746
|
|
Capital
expenditures
|
(61,136)
|
|
|
(42,990)
|
|
Collection of real
estate notes receivable
|
524
|
|
|
—
|
|
Net cash provided by
(used in) investing activities
|
194,846
|
|
|
(2,483,816)
|
|
Cash flows from
financing activities:
|
|
|
|
Borrowings on
unsecured revolving credit facility
|
145,000
|
|
|
515,000
|
|
Payments on unsecured
revolving credit facility
|
(145,000)
|
|
|
(528,000)
|
|
Proceeds from
unsecured senior notes
|
—
|
|
|
900,000
|
|
Payments on secured
mortgage loans
|
(173,212)
|
|
|
(75,444)
|
|
Deferred financing
costs
|
(782)
|
|
|
(16,902)
|
|
Debt extinguishment
costs
|
(1,909)
|
|
|
(10,391)
|
|
Security
deposits
|
499
|
|
|
1,932
|
|
Proceeds from
issuance of common stock
|
72,814
|
|
|
1,624,222
|
|
Issuance of operating
partnership units
|
411
|
|
|
—
|
|
Repurchase and
cancellation of common stock
|
(19,431)
|
|
|
(3,413)
|
|
Dividends
paid
|
(188,414)
|
|
|
(145,877)
|
|
Distributions paid to
noncontrolling interest of limited partners
|
(3,976)
|
|
|
(4,019)
|
|
Net cash (used in)
provided by financing activities
|
(314,000)
|
|
|
2,257,108
|
|
Net change in cash,
cash equivalents and restricted cash
|
121,597
|
|
|
1,834
|
|
Cash, cash
equivalents and restricted cash - beginning of
period
|
118,560
|
|
|
25,045
|
|
Cash, cash
equivalents and restricted cash - end of period
|
$
|
240,157
|
|
|
$
|
26,879
|
|
HEALTHCARE TRUST
OF AMERICA, INC.
|
NOI, CASH NOI AND
SAME-PROPERTY CASH NOI
|
(In
thousands)
|
(Unaudited)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income
|
$
|
176,348
|
|
|
$
|
13,957
|
|
|
$
|
202,021
|
|
|
$
|
22,105
|
|
General and
administrative expenses
|
8,770
|
|
|
8,283
|
|
|
26,281
|
|
|
25,178
|
|
Transaction expenses
(1)
|
346
|
|
|
261
|
|
|
933
|
|
|
5,618
|
|
Depreciation and
amortization expense
|
70,568
|
|
|
70,491
|
|
|
210,064
|
|
|
172,900
|
|
Impairment
|
4,281
|
|
|
—
|
|
|
8,887
|
|
|
5,093
|
|
Interest expense and
net change in fair value of derivative financial
instruments
|
24,834
|
|
|
26,188
|
|
|
77,392
|
|
|
59,631
|
|
Gain on sale of real
estate, net
|
(166,372)
|
|
|
—
|
|
|
(166,372)
|
|
|
(3)
|
|
Loss on
extinguishment of debt, net
|
1,092
|
|
|
774
|
|
|
1,092
|
|
|
11,192
|
|
Income from
unconsolidated joint venture
|
(432)
|
|
|
(318)
|
|
|
(1,405)
|
|
|
(381)
|
|
Other (income)
expense
|
(89)
|
|
|
27
|
|
|
(129)
|
|
|
13
|
|
NOI
|
$
|
119,346
|
|
|
$
|
119,663
|
|
|
$
|
358,764
|
|
|
$
|
301,346
|
|
NOI percentage
growth
|
(0.3)%
|
|
|
|
|
19.1
|
%
|
|
|
|
|
|
|
|
|
|
|
NOI
|
$
|
119,346
|
|
|
$
|
119,663
|
|
|
$
|
358,764
|
|
|
$
|
301,346
|
|
Straight-line rent
adjustments, net
|
(2,746)
|
|
|
(3,009)
|
|
|
(8,289)
|
|
|
(5,834)
|
|
Amortization of
(below) and above market leases/leasehold interests, net
|
(65)
|
|
|
214
|
|
|
190
|
|
|
246
|
|
Notes receivable
interest income and other GAAP adjustments
|
(33)
|
|
|
(588)
|
|
|
(218)
|
|
|
(1,163)
|
|
Cash NOI
|
$
|
116,502
|
|
|
$
|
116,280
|
|
|
$
|
350,447
|
|
|
$
|
294,595
|
|
Acquisitions not
owned/operated for all periods presented and disposed properties
Cash NOI
|
(6,065)
|
|
|
(7,337)
|
|
|
(112,557)
|
|
|
(59,865)
|
|
Redevelopment Cash
NOI
|
(607)
|
|
|
(1,540)
|
|
|
(1,923)
|
|
|
(4,072)
|
|
Intended for sale
Cash NOI
|
(1,007)
|
|
|
(1,243)
|
|
|
(2,815)
|
|
|
(3,063)
|
|
Same-Property Cash
NOI (2)
|
$
|
108,823
|
|
|
$
|
106,160
|
|
|
$
|
233,152
|
|
|
$
|
227,595
|
|
Same-Property Cash
NOI percentage growth
|
2.5
|
%
|
|
|
|
2.4
|
%
|
|
|
|
|
(1)
|
For the nine months
ended September 30, 2017, transaction costs included $4.6 million
of non-incremental costs related to the Duke
acquisition.
|
(2)
|
Same-Property
includes 403 and 317 buildings for the three and nine months ended
September 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income
attributable to common stockholders
|
$
|
172,986
|
|
|
$
|
13,763
|
|
|
$
|
198,134
|
|
|
$
|
21,390
|
|
Depreciation and
amortization expense related to investments in real
estate
|
70,004
|
|
|
70,021
|
|
|
208,445
|
|
|
171,678
|
|
Gain on sale of real
estate, net
|
(166,372)
|
|
|
—
|
|
|
(166,372)
|
|
|
(3)
|
|
Impairment
|
4,281
|
|
|
—
|
|
|
8,887
|
|
|
5,093
|
|
Proportionate share
of joint venture depreciation and amortization
|
463
|
|
|
464
|
|
|
1,277
|
|
|
506
|
|
FFO attributable to
common stockholders
|
$
|
81,362
|
|
|
$
|
84,248
|
|
|
$
|
250,371
|
|
|
$
|
198,664
|
|
Transaction
expenses
|
346
|
|
|
261
|
|
|
789
|
|
|
975
|
|
Gain on change in
fair value of derivative financial instruments, net
|
—
|
|
|
—
|
|
|
—
|
|
|
(884)
|
|
Loss on
extinguishment of debt, net
|
1,092
|
|
|
774
|
|
|
1,092
|
|
|
11,192
|
|
Noncontrolling income
from partnership units included in diluted shares
|
3,344
|
|
|
166
|
|
|
3,822
|
|
|
635
|
|
Other normalizing
items, net (1)
|
—
|
|
|
—
|
|
|
144
|
|
|
4,643
|
|
Normalized FFO
attributable to common stockholders
|
$
|
86,144
|
|
|
$
|
85,449
|
|
|
$
|
256,218
|
|
|
$
|
215,225
|
|
Other (income)
expense
|
(89)
|
|
|
27
|
|
|
(129)
|
|
|
13
|
|
Non-cash compensation
expense
|
2,127
|
|
|
1,654
|
|
|
7,830
|
|
|
5,493
|
|
Straight-line rent
adjustments, net
|
(2,746)
|
|
|
(3,009)
|
|
|
(8,289)
|
|
|
(5,834)
|
|
Amortization of
(below) and above market leases/leasehold interests and corporate
assets, net
|
499
|
|
|
683
|
|
|
1,809
|
|
|
1,467
|
|
Deferred revenue -
tenant improvement related
|
(1)
|
|
|
(12)
|
|
|
(70)
|
|
|
(23)
|
|
Amortization of
deferred financing costs and debt discount/premium, net
|
1,277
|
|
|
1,290
|
|
|
3,857
|
|
|
2,929
|
|
Recurring capital
expenditures, tenant improvements and leasing
commissions
|
(18,397)
|
|
|
(11,315)
|
|
|
(44,258)
|
|
|
(31,020)
|
|
Normalized FAD
attributable to common stockholders
|
$
|
68,814
|
|
|
$
|
74,767
|
|
|
$
|
216,968
|
|
|
$
|
188,250
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders per diluted share
|
$
|
0.82
|
|
|
$
|
0.07
|
|
|
$
|
0.94
|
|
|
$
|
0.12
|
|
FFO adjustments per
diluted share, net
|
(0.44)
|
|
|
0.34
|
|
|
0.25
|
|
|
1.00
|
|
FFO attributable to
common stockholders per diluted share
|
$
|
0.38
|
|
|
$
|
0.41
|
|
|
$
|
1.19
|
|
|
$
|
1.12
|
|
Normalized FFO
adjustments per diluted share, net
|
0.03
|
|
|
0.01
|
|
|
0.03
|
|
|
0.09
|
|
Normalized FFO
attributable to common stockholders per diluted share
|
$
|
0.41
|
|
|
$
|
0.42
|
|
|
$
|
1.22
|
|
|
$
|
1.21
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding
|
211,444
|
|
|
204,795
|
|
|
209,968
|
|
|
177,410
|
|
|
|
(1)
|
For the nine months
ended September 30, 2017, other normalizing items included $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.
|
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.