SCOTTSDALE, Ariz., Aug. 6, 2020 /PRNewswire/ -- Healthcare Trust of
America, Inc. (NYSE: HTA) ("HTA") announced results for the three
and six months ended June 30, 2020
and provided an update on business operations stemming from the
impacts of the ongoing coronavirus ("COVID-19") pandemic.
Highlights
Second Quarter 2020:
- Net Income Attributable to Common Stockholders was
$13.5 million, or $0.06 per diluted share for Q2 2020, a decrease
of $2.8 million, or $0.02 per diluted share, compared to Q2
2019.
- Funds From Operations ("FFO"), as defined by the
National Association of Real Estate Investment Trusts ("NAREIT"),
was $87.8 million, or $0.40 per diluted share, for Q2 2020, an increase
of $3.2 million, and flat on a per
diluted share basis compared to Q2 2019.
- Normalized FFO ("NFFO") was $93.0
million, or $0.42 per diluted
share, for Q2 2020, an increase of $7.8
million and $0.01, or 2.4%,
per diluted share, compared to Q2 2019. This excludes $5.0 million of normalizing adjustments
consisting primarily of a $4.7
million write off of prior-year accounts receivable in
litigation that are more fully described herein.
- Normalized Funds Available for Distribution ("FAD") was
$77.5 million for Q2 2020.
- Same-Property Cash Net Operating Income ("NOI")
increased $0.7 million, or 0.6%, to
$115.0 million, compared to Q2 2019.
In addition to our ordinary operations, our same-property cash NOI
in the period was negatively impacted by $1.2 million in additional free rent associated
with early renewals and a $951
thousand increase in our bad debt reserves primarily related
to ongoing tenants. Excluding these two impacts, our same-property
cash NOI growth for the period would have been 2.5%.
- Leasing: HTA's portfolio had a leased rate of 90.4% by
gross leasable area ("GLA") and an occupancy rate of 89.7% by GLA
for Q2 2020. During Q2 2020, HTA executed approximately 1.3 million
square feet of leases, including 139 thousand square feet of new
leases and 1.2 million square feet of renewals. Re-leasing spreads
increased to 4.6% and tenant retention for the Same-Property
portfolio was 89% by GLA for Q2 2020.
Year-to-date 2020:
- Net Income Attributable to Common Stockholders was
$31.4 million, or $0.14 per diluted share, an increase of
$1.7 million, and flat on a per
diluted share basis compared to 2019.
- FFO, as defined by NAREIT, was $180.9 million, or $0.82 per diluted share, for 2020, an increase of
$13.5 million, and $0.02, or 2.5%, per diluted share compared to
2019.
- NFFO was $186.6 million,
or $0.84 per diluted share, for 2020,
an increase of $18.3 million, and
$0.03, or 3.7% per diluted share,
compared to 2019. This excludes $5.0
million of normalizing adjustments consisting primarily of a
$4.7 million write off of prior-year
accounts receivable in litigation that are more fully described
herein.
- Normalized FAD was $154.9
million for 2020.
- Same-Property Cash NOI increased $3.7 million, or 1.6%, to $230.1 million, compared to 2019. This included
same-property rental revenue growth of 0.7%. In addition to our
ordinary operations, our same-property cash NOI in the period was
negatively impacted by $1.2 million
in additional free rent associated with early renewals and a
$951 thousand increase in our bad
debt reserves primarily related to ongoing tenants. Excluding these
two impacts, our same-property cash NOI growth for the period would
have been 2.6%.
- Leasing: During the six months ended June 30, 2020, HTA executed approximately 377
thousand square feet of new leases and 1.8 million square feet of
renewal leases. Re-leasing spreads increased to 4.0% and tenant
retention for the Same-Property portfolio was 88% by GLA
year-to-date.
Balance Sheet and Capital Markets
- Equity: HTA ended the quarter with $277.5 million of equity to be settled on a
forward basis with the issuance of approximately 9.4 million shares
of common stock, subject to adjustment for costs to borrow under
the terms of the applicable equity distribution agreements.
- Balance Sheet: HTA ended Q2 2020 with total leverage of
(i) 31.8%, measured as debt less cash and cash equivalents to total
capitalization, and (ii) 5.7x net debt to Adjusted Earnings before
Interest, Taxes, Depreciation and Amortization for real estate
("Adjusted EBITDAre"). Including the impact of the unsettled
forward equity agreements, leverage would be 28.6% and 5.1x,
respectively, using the definitions from above.
HTA ended Q2 with total liquidity
of $1.1 billion, inclusive of
$736.0 million available on our
unsecured revolving credit facility, $277.5
million of unsettled forward equity agreements, and
$75.2 million of cash and cash
equivalents. HTA continues to have very limited near term debt
maturities, with less than $6 million
maturing before our revolving credit facility matures in June of
2022.
Noteworthy Q2 2020 Activities
- Dividend: On May 5, 2020,
HTA's Board of Directors announced a quarterly cash dividend of
$0.315 per share of common stock and
per OP Unit, paid on July 9, 2020 to
stockholders of record on July 2,
2020. The Company's dividend remains subject to the review
and approval of HTA's Board of Directors, and as previously
communicated in our Q1 2020 earnings release, HTA will separate the
announcement of its dividend from its earnings release. The
announcement for the third quarter dividend is expected to be made
in September 2020.
- Environmental, Social, and Governance Commitment: HTA
has made a commitment to its stockholders to be a good steward of
the resources entrusted to it by commencing the reporting of
environmental, social and governance (ESG) initiatives and internal
assessment of its operating assets to the Global Real Estate
Sustainability Benchmark (GRESB), a globally recognized
benchmarking leader and framework for real assets, for their 2020
Real Estate Assessment. While our first reporting year to GRESB is
primarily utilized for benchmarking purposes, this marks a
milestone in HTA's path to further our focus on ESG and
sustainability.
Other COVID-19 Impacts
As previously reported, in March 2020
the Company took various actions in response to the COVID-19
pandemic to adjust our business operations and to address the needs
of our tenants and staff through the implementation of new
protocols based on the Center for Disease Control and other
government mandated or recommended guidelines. Additionally,
the Company has also taken steps to help mitigate the financial
impact arising from the pandemic on its tenants, which have been
previously disclosed. An update on the impacts of COVID-19 on us
are as follows:
HTA Tenants
Our tenants primarily consist of health systems, universities,
physicians, and healthcare service providers, such as imaging
companies, surgery center operators, and pharmacies, of various
size and complexity. By major category, our tenants consist of (i)
Health Systems / Universities at 59% of annualized base rent
("ABR"); (ii) National / Large Regional Healthcare Providers and
Companies at 15%; and (iii) Local Healthcare Providers at 26%. In
addition, approximately 60% of our tenants, by ABR, are credit
rated, with approximately 45% coming from investment grade rated
tenants.
Buildings & Property Management
HTA internally manages approximately 98% of our portfolio, giving
us direct access to our properties and tenants. To date:
- All of our properties have remained open and operational and
virtually all clinical tenants are currently open and seeing
patients.
- We have taken steps at our buildings to ensure that they remain
operational for our tenants during the COVID-19 pandemic, including
enhanced janitorial services, increased signage and hand
sanitization stations, as available, increased PPE for our property
management and building engineering staff, and stringent protocols
for visitors and vendors to seek to ensure that they are limiting
the potential spread of the virus.
- Higher direct costs related to HTA employees for salaries and
PPE to service these buildings during these times totaled
$0.3 million and are included in our
Other Normalizing Adjustments.
Leasing
Following the beginning of the COVID-19 pandemic, we are seeing the
following leasing activity:
- New Leasing: We continue to see leads and requests for new
leases, however, we anticipate that the rate of new lease signings
will continue to be at a reduced level. While leasing activity,
consisting of tours and discussions with tenants, began to resume
to normal levels in Q2, many state and local governments have
reconsidered or planned to reconsider orders allowing commerce to
reopen, which creates the potential for a continued extended
reduction in leasing activity and ability for us to sign new
leases.
- Renewal Leasing: Given the current environment, we have seen an
increase in the number of existing tenants that are looking to
extend in-place. We have also worked with existing tenants to renew
their leases prior to expiration in exchange for new leasing
concessions today, if the economics, credit quality, and strategic
rationale for us are all conducive to such arrangements. As
described above, during Q2 2020, we entered into approximately
493,000 square feet of GLA of early renewal leases, and have
granted $3.6 million of leasing
concessions directly related to these arrangements, of which a
$1.2 million impact was recognized
during the quarter in our Same Property Cash NOI results as noted
above, with the $2.4 million
remainder primarily impacting Q3. As of today, we have not entered
into substantive early renewals with lease concessions since the
end of the quarter.
Cash Flows & Rent Deferrals
- Rent Collections: In Q2 2020, we collected or deferred
approximately 98% of our total monthly rents, including
approximately 4% of rents that were deferred under deferral
agreements. For July, we collected or deferred approximately 98% of
our total monthly rents that are contractually due and owed,
including approximately 4% of rents that were deferred under
deferral agreements.
- Rent Deferrals: As healthcare providers have seen their
near-term profitability and liquidity levels decline, we have
addressed requests from many of our tenants about their ability to
defer payment of a portion of their rents for a limited duration.
While many of these requests have been incoming, we have
proactively worked with key health system tenants to seek to help
them work through this period of time. Each request is evaluated on
a case by case basis. Key details of our deferrals include the
following:
-
- Total Deferrals: To date, we have approved deferral plans that
total approximately $9.6 million,
which includes approximately $6.6
million of rent that was deferred in Q2. There are no
substantial outstanding requests for assistance from tenants at
this time. Payments of rent deferrals are expected to be repaid
over the next 3 to 12 months (starting in the third quarter of
2020), depending on tenant size.
- Our total rent deferral agreements are broken down as follows
based on total rent deferred:
-
- Tenant Type: Health Systems / Universities 50%; National /
Large Regional Healthcare Providers and Companies 10%; and (iii)
Local Healthcare Providers 40%
- Region: Southwest - (including Texas) 40%; Northeast 28%; Southeast 26%;
Midwest 5%; Northwest 1%
- Space Usage: Clinical Office at 79%; Surgery Centers 18%; Other
3%
- Local Tenant Deferral Breakdown:
-
- (i) On-Campus 57% / Off-Campus 43%
- (ii) Top practice types: Orthopedics 14%; Primary Care 12%;
OB-GYN 11%; Ophthalmology 9%; Dental 8%; Gastroenterology 5%;
Imaging/ Diagnostics 5%
Accounting Impacts & Bad Debt
To date, HTA has not granted forgiveness on rents due under the
terms of its contractual leases. We have, however, entered into
early renewals on existing leases and entered into deferral
agreements with tenants.
- Early Renewals. We have entered into certain lease negotiations
for renewing tenants, allowing those tenants to receive free rent
ranging from one to five months, and averaging three months, with
additional term and/or at increased rental rates. The total amount
of free rent granted was approximately $3.6
million, of which $1.2 million
was recognized in our same property NOI results for the three and
six months ended June 30, 2020, with
the remainder expected to be recognized primarily in Q3. Due to the
accounting treatment of these lease modifications, the amount
attributed to free rent is primarily recaptured as straight-line
rent income in both net income and NFFO.
- Rent Deferral Agreements. All rent deferrals are expected to be
repaid by tenants, subject to our customary bad debt reserve
process listed below. As such, we fully expected to be repaid
within the next 3 to 12 months, and have continued to recognize
revenue and straight line revenue for amounts subject to deferral
agreements. Rent deferred during both the three and six months
ended June 30, 2020 totaled
$6.6 million.
- Bad Debt Reserves: On a quarterly basis, we review our existing
accounts receivables to review for bad debt related to both current
and tenants who have vacated. In Q2, we recognized a total of
$5.7 million in incremental bad debt
reserves. This includes amounts related to both (i) non-recurring
reserves related to tenants in litigation who vacated prior to 2020
and (ii) increased reserves related to ongoing operations.
-
- In Q2, we recorded a non-recurring charge of $4.7 million of bad debt related to three (3)
tenants in litigation and no longer in occupancy as of the
beginning of 2020. While we fully intend to continue to pursue such
collection efforts on amounts owed to us, we recorded this charge
due to the prevailing economic conditions and resulting uncertainty
of the timing and collections of such amounts previously supported
by personal and/or corporate guarantees or other forms of credit
enhancements.
- In Q2, we also recorded an incremental $951 thousand of bad debt as reserves recognized
in our results for the three and six months ended June 30, 2020 for tenants that are in occupancy
but are not timely in making contractual rental payments.
- Normalizing Adjustments: We routinely identify items that are
non-recurring in nature or incremental in nature related to
COVID-19. For the three and six months ending June 30, 2020, we have identified approximately
$5.0 million for Normalizing
Adjustments. This consists of the (i) $4.7
million in non-recurring bad debt reserves and (ii)
$0.3 million in incremental costs
directly related to COVID-19 for the three months ended
June 30, 2020. Due to the non-routine
and incremental nature related to COVID-19, these amounts were
normalized out of both NOI and FFO results.
Earnings Impact & Guidance
We continue to have uncertainty around (i) acquisitions, (ii)
capital structure, and (iii) the accounting implications of
deferral requests which could continue to significantly impact our
financials for the remainder of 2020. Although we currently
expect to collect all of the rent that we agree to defer, estimates
of and the corresponding financial statement impact for bad debt
under the new market environment may continue to fluctuate, and may
be material, to the extent any rents are not determined to be
probable for collection.
We do not undertake a duty to update our forward-looking
statements. We may, in our sole discretion, provide information in
future public announcements regarding our outlook that may be of
interest to the investment community.
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
24.9 million square feet of GLA, with $7.3
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 US REIT index. 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; the availability of financing; and pandemics
and other health concerns, and the measures intended to prevent
their spread, including the currently ongoing COVID-19 pandemic,
and potential material adverse effect these may have on our
business, results of operations, cash flows and financial
condition. 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 2019 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 7, 2020 at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time) to review its financial
performance and operating results for the three and six months
ended June 30, 2020.
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: 10146614
Available August 7, 2020 (one hour
after the end of the conference call) to September 7, 2020 at 1:00
p.m. Eastern Time (10:00 a.m. Pacific
Time)
|
HEALTHCARE TRUST
OF AMERICA, INC.
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(In thousands,
except for share and per share data)
|
|
(Unaudited)
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
ASSETS
|
|
|
|
|
|
Real estate
investments:
|
|
|
|
|
|
Land
|
|
$
|
587,362
|
|
|
$
|
584,546
|
|
|
Building and
improvements
|
|
6,333,715
|
|
|
6,252,854
|
|
|
Lease
intangibles
|
|
629,478
|
|
|
628,066
|
|
|
Construction in
progress
|
|
55,854
|
|
|
28,150
|
|
|
|
7,606,409
|
|
|
7,493,616
|
|
|
Accumulated
depreciation and amortization
|
|
(1,589,137)
|
|
|
(1,447,815)
|
|
|
Real estate
investments, net
|
|
6,017,272
|
|
|
6,045,801
|
|
|
Investment in
unconsolidated joint venture
|
|
65,120
|
|
|
65,888
|
|
|
Cash and cash
equivalents
|
|
75,202
|
|
|
32,713
|
|
|
Restricted
cash
|
|
4,798
|
|
|
4,903
|
|
|
Receivables and other
assets, net
|
|
234,456
|
|
|
237,024
|
|
|
Right-of-use assets -
operating leases, net
|
|
236,438
|
|
|
239,867
|
|
|
Other intangibles,
net
|
|
11,210
|
|
|
12,553
|
|
|
Total
assets
|
|
$
|
6,644,496
|
|
|
$
|
6,638,749
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Debt
|
|
$
|
2,818,695
|
|
|
$
|
2,749,775
|
|
|
Accounts payable and
accrued liabilities
|
|
167,999
|
|
|
171,698
|
|
|
Derivative financial
instruments - interest rate swaps
|
|
22,796
|
|
|
29
|
|
|
Security deposits,
prepaid rent and other liabilities
|
|
52,655
|
|
|
49,174
|
|
|
Lease liabilities -
operating leases
|
|
198,511
|
|
|
198,650
|
|
|
Intangible
liabilities, net
|
|
35,076
|
|
|
38,779
|
|
|
Total
liabilities
|
|
3,295,732
|
|
|
3,208,105
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
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;
218,514,870 and 216,453,312 shares issued and outstanding as of
June 30, 2020 and December 31, 2019, respectively
|
|
2,185
|
|
|
2,165
|
|
|
Additional paid-in
capital
|
|
4,912,419
|
|
|
4,854,042
|
|
|
Accumulated other
comprehensive income
|
|
(20,768)
|
|
|
4,546
|
|
|
Cumulative dividends
in excess of earnings
|
|
(1,609,048)
|
|
|
(1,502,744)
|
|
|
Total stockholders'
equity
|
|
3,284,788
|
|
|
3,358,009
|
|
|
Noncontrolling
interests
|
|
63,976
|
|
|
72,635
|
|
|
Total
equity
|
|
3,348,764
|
|
|
3,430,644
|
|
|
Total liabilities and
equity
|
|
$
|
6,644,496
|
|
|
$
|
6,638,749
|
|
|
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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Rental
income
|
$
|
178,670
|
|
|
$
|
171,609
|
|
|
$
|
364,201
|
|
|
$
|
340,484
|
|
|
Interest and other
operating income
|
175
|
|
|
148
|
|
|
420
|
|
|
239
|
|
|
Total
revenues
|
178,845
|
|
|
171,757
|
|
|
364,621
|
|
|
340,723
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Rental
|
56,200
|
|
|
52,938
|
|
|
113,062
|
|
|
104,406
|
|
|
General and
administrative
|
10,160
|
|
|
10,079
|
|
|
21,678
|
|
|
21,369
|
|
|
Transaction
|
32
|
|
|
296
|
|
|
172
|
|
|
336
|
|
|
Depreciation and
amortization
|
74,927
|
|
|
68,429
|
|
|
152,592
|
|
|
137,910
|
|
|
Interest
expense
|
24,277
|
|
|
24,006
|
|
|
48,149
|
|
|
47,976
|
|
|
Total
expenses
|
165,596
|
|
|
155,748
|
|
|
335,653
|
|
|
311,997
|
|
|
Gain (loss) on sale of
real estate, net
|
—
|
|
|
—
|
|
|
1,991
|
|
|
(37)
|
|
|
Income from
unconsolidated joint venture
|
379
|
|
|
548
|
|
|
801
|
|
|
1,034
|
|
|
Other
income
|
97
|
|
|
41
|
|
|
173
|
|
|
576
|
|
|
Net
income
|
$
|
13,725
|
|
|
$
|
16,598
|
|
|
$
|
31,933
|
|
|
$
|
30,299
|
|
|
Net income
attributable to noncontrolling interests
|
(236)
|
|
|
(339)
|
|
|
(543)
|
|
|
(600)
|
|
|
Net income
attributable to common stockholders
|
$
|
13,489
|
|
|
$
|
16,259
|
|
|
$
|
31,390
|
|
|
$
|
29,699
|
|
|
Earnings per
common share - basic:
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
$
|
0.06
|
|
|
$
|
0.08
|
|
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
Earnings per
common share - diluted:
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
$
|
0.06
|
|
|
$
|
0.08
|
|
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
218,483
|
|
|
205,108
|
|
|
217,588
|
|
|
205,094
|
|
|
Diluted
|
222,088
|
|
|
209,005
|
|
|
221,228
|
|
|
209,002
|
|
|
Dividends declared
per common share
|
$
|
0.315
|
|
|
$
|
0.310
|
|
|
$
|
0.630
|
|
|
$
|
0.620
|
|
|
HEALTHCARE TRUST
OF AMERICA, INC.
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In
thousands)
|
|
(Unaudited)
|
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
|
31,933
|
|
|
$
|
30,299
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
144,724
|
|
|
132,931
|
|
|
Share-based
compensation expense
|
5,303
|
|
|
5,491
|
|
|
Income from
unconsolidated joint venture
|
(801)
|
|
|
(1,034)
|
|
|
Distributions from
unconsolidated joint venture
|
1,670
|
|
|
1,335
|
|
|
(Gain) loss on sale of
real estate, net
|
(1,991)
|
|
|
37
|
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Receivables and other
assets, net
|
2,504
|
|
|
457
|
|
|
Accounts payable and
accrued liabilities
|
(6,337)
|
|
|
(23,262)
|
|
|
Security deposits,
prepaid rent and other liabilities
|
5,178
|
|
|
2,483
|
|
|
Net cash provided by
operating activities
|
182,183
|
|
|
148,737
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Investments in real
estate
|
(41,338)
|
|
|
(93,855)
|
|
|
Development of real
estate
|
(30,367)
|
|
|
(4,627)
|
|
|
Proceeds from the sale
of real estate
|
6,420
|
|
|
1,193
|
|
|
Capital
expenditures
|
(43,917)
|
|
|
(37,763)
|
|
|
Collection of real
estate notes receivable
|
514
|
|
|
365
|
|
|
Advances on real
estate notes receivable
|
(6,000)
|
|
|
—
|
|
|
Net cash used in
investing activities
|
(114,688)
|
|
|
(134,687)
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Borrowings on
unsecured revolving credit facility
|
1,314,000
|
|
|
135,000
|
|
|
Payments on unsecured
revolving credit facility
|
(1,150,000)
|
|
|
(15,000)
|
|
|
Payments on secured
mortgage loans
|
(96,206)
|
|
|
(96,173)
|
|
|
Proceeds from issuance
of common stock
|
50,020
|
|
|
—
|
|
|
Issuance of OP
Units
|
1,378
|
|
|
—
|
|
|
Repurchase and
cancellation of common stock
|
(4,798)
|
|
|
(12,095)
|
|
|
Dividends
paid
|
(137,050)
|
|
|
(127,387)
|
|
|
Distributions paid to
noncontrolling interest of limited partners
|
(2,455)
|
|
|
(2,781)
|
|
|
Net cash used in
financing activities
|
(25,111)
|
|
|
(118,436)
|
|
|
Net change in cash,
cash equivalents and restricted cash
|
42,384
|
|
|
(104,386)
|
|
|
Cash, cash
equivalents and restricted cash - beginning of
period
|
37,616
|
|
|
133,530
|
|
|
Cash, cash
equivalents and restricted cash - end of period
|
$
|
80,000
|
|
|
$
|
29,144
|
|
|
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,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Net income
|
$
|
13,725
|
|
|
$
|
16,598
|
|
|
$
|
31,933
|
|
|
$
|
30,299
|
|
|
General and
administrative expenses
|
10,160
|
|
|
10,079
|
|
|
21,678
|
|
|
21,369
|
|
|
Transaction
expenses
|
32
|
|
|
296
|
|
|
172
|
|
|
336
|
|
|
Depreciation and
amortization expense
|
74,927
|
|
|
68,429
|
|
|
152,592
|
|
|
137,910
|
|
|
Interest
expense
|
24,277
|
|
|
24,006
|
|
|
48,149
|
|
|
47,976
|
|
|
(Gain) loss on sale of
real estate, net
|
—
|
|
|
—
|
|
|
(1,991)
|
|
|
37
|
|
|
Income from
unconsolidated joint venture
|
(379)
|
|
|
(548)
|
|
|
(801)
|
|
|
(1,034)
|
|
|
Other
income
|
(97)
|
|
|
(41)
|
|
|
(173)
|
|
|
(576)
|
|
|
NOI
|
$
|
122,645
|
|
|
$
|
118,819
|
|
|
$
|
251,559
|
|
|
$
|
236,317
|
|
|
NOI percentage
growth
|
3.2
|
%
|
|
|
|
6.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
NOI
|
$
|
122,645
|
|
|
$
|
118,819
|
|
|
$
|
251,559
|
|
|
$
|
236,317
|
|
|
Straight-line rent
adjustments, net
|
(3,717)
|
|
|
(2,464)
|
|
|
(6,962)
|
|
|
(5,722)
|
|
|
Amortization of
(below) and above market leases/leasehold interests, net and other
GAAP adjustments (1)
|
(344)
|
|
|
(260)
|
|
|
(2,043)
|
|
|
(482)
|
|
|
Notes receivable
interest income
|
(3)
|
|
|
(25)
|
|
|
(141)
|
|
|
(52)
|
|
|
Other normalizing
adjustments (2)
|
4,959
|
|
|
—
|
|
|
5,031
|
|
|
—
|
|
|
Cash NOI
|
$
|
123,540
|
|
|
$
|
116,070
|
|
|
$
|
247,444
|
|
|
$
|
230,061
|
|
|
Acquisitions not
owned/operated for all periods presented and disposed properties
Cash NOI
|
(8,669)
|
|
|
(728)
|
|
|
(17,310)
|
|
|
(1,369)
|
|
|
Redevelopment Cash
NOI
|
286
|
|
|
(856)
|
|
|
330
|
|
|
(1,933)
|
|
|
Intended for sale Cash
NOI
|
(187)
|
|
|
(174)
|
|
|
(373)
|
|
|
(352)
|
|
|
Same-Property Cash
NOI (3)
|
$
|
114,970
|
|
|
$
|
114,312
|
|
|
$
|
230,091
|
|
|
$
|
226,407
|
|
|
Same-Property Cash
NOI percentage growth
|
0.6
|
%
|
|
|
|
1.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The presentation
includes certain adjustments to allow for the consistent treatment
of items impacted by Topic 842-Leases.
|
|
|
(2) Other normalizing
adjustments includes the following:
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Non-recurring bad
debt
|
$
|
4,672
|
|
|
$
|
—
|
|
|
$
|
4,672
|
|
|
$
|
—
|
|
|
Incremental hazard pay
to facilities employees
|
242
|
|
|
—
|
|
|
314
|
|
|
—
|
|
|
Incremental personal
protective equipment
|
45
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
Total normalizing
adjustments
|
$
|
4,959
|
|
|
$
|
—
|
|
|
$
|
5,031
|
|
|
$
|
—
|
|
|
|
(3) Same-Property
includes 413 and 412 buildings for the three and six months ended
June 30, 2020 and 2019, 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; (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 HTA's 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 and other GAAP adjustments;
(iii) notes receivable interest income; and (iv) other normalizing
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) are 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
|
|
(Unaudited and in
thousands, except per share data)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
Net income
attributable to common stockholders
|
$
|
13,489
|
|
|
$
|
16,259
|
|
|
$
|
31,390
|
|
|
$
|
29,699
|
|
|
Depreciation and
amortization expense related to investments in real
estate
|
73,769
|
|
|
67,846
|
|
|
150,506
|
|
|
136,772
|
|
|
(Gain) loss on sale of
real estate, net
|
—
|
|
|
—
|
|
|
(1,991)
|
|
|
37
|
|
|
Proportionate share of
joint venture depreciation and amortization
|
508
|
|
|
450
|
|
|
975
|
|
|
922
|
|
|
FFO attributable to
common stockholders
|
$
|
87,766
|
|
|
$
|
84,555
|
|
|
$
|
180,880
|
|
|
$
|
167,430
|
|
|
Transaction
expenses
|
32
|
|
|
296
|
|
|
172
|
|
|
336
|
|
|
Noncontrolling income
from OP units included in diluted shares
|
236
|
|
|
301
|
|
|
543
|
|
|
534
|
|
|
Other normalizing
adjustments (1)
|
4,959
|
|
|
—
|
|
|
5,031
|
|
|
—
|
|
|
Normalized FFO
attributable to common stockholders
|
$
|
92,993
|
|
|
$
|
85,152
|
|
|
$
|
186,626
|
|
|
$
|
168,300
|
|
|
Non-cash compensation
expense
|
2,100
|
|
|
2,102
|
|
|
5,303
|
|
|
5,491
|
|
|
Straight-line rent
adjustments, net
|
(3,717)
|
|
|
(2,464)
|
|
|
(6,962)
|
|
|
(5,722)
|
|
|
Amortization of
(below) and above market leases/leasehold interests and corporate
assets, net
|
676
|
|
|
325
|
|
|
(95)
|
|
|
657
|
|
|
Deferred revenue -
tenant improvement related and other
|
—
|
|
|
(2)
|
|
|
—
|
|
|
(3)
|
|
|
Amortization of
deferred financing costs and debt discount/premium, net
|
1,006
|
|
|
1,407
|
|
|
1,987
|
|
|
2,812
|
|
|
Recurring capital
expenditures, tenant improvements and leasing
commissions
|
(15,593)
|
|
|
(13,402)
|
|
|
(31,933)
|
|
|
(25,264)
|
|
|
Normalized FAD
attributable to common stockholders
|
$
|
77,465
|
|
|
$
|
73,118
|
|
|
$
|
154,926
|
|
|
$
|
146,271
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders per diluted share
|
$
|
0.06
|
|
|
$
|
0.08
|
|
|
$
|
0.14
|
|
|
$
|
0.14
|
|
|
FFO adjustments per
diluted share, net
|
0.34
|
|
|
0.32
|
|
|
0.68
|
|
|
0.66
|
|
|
FFO attributable to
common stockholders per diluted share
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
$
|
0.82
|
|
|
$
|
0.80
|
|
|
Normalized FFO
adjustments per diluted share, net
|
0.02
|
|
|
0.01
|
|
|
0.02
|
|
|
0.01
|
|
|
Normalized FFO
attributable to common stockholders per diluted share
|
$
|
0.42
|
|
|
$
|
0.41
|
|
|
$
|
0.84
|
|
|
$
|
0.81
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding
|
222,088
|
|
|
209,005
|
|
|
221,228
|
|
|
209,002
|
|
|
|
(1) Other normalizing
adjustments includes the following: non-recurring bad debt of
$4,672 thousand, incremental hazard pay to facilities employees of
$242 thousand, and incremental personal protective equipment of $45
thousand for the three months ended June 30, 2020 and non-recurring
bad debt of $4,672 thousand, incremental hazard pay to facilities
employees of $314 thousand, and incremental personal protective
equipment of $45 thousand for the six months ended June 30,
2020.
|
|
|
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. 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 extinguishment of debt; (iii) noncontrolling
income or loss from OP Units included in diluted shares; and (iv)
other normalizing adjustments, which include items that are unusual
and infrequent in nature. 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.
|
|
|
HTA also computes
Normalized FAD, which excludes from Normalized FFO: (i) non-cash
compensation expense; (ii) straight-line rent adjustments; (iii)
amortization of below and above market leases/leasehold interests
and corporate assets; (iv) deferred revenue - tenant improvement
related and other income; (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.
|
|
|
HTA presents these
non-GAAP financial measures because it considers them important
supplemental measures of its operating performance and believes
they are 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. These non-GAAP
financial measures should not be considered as alternatives to net
income or loss attributable to common stockholders (computed in
accordance with GAAP) as indicators of its financial
performance. FFO and Normalized FFO is not indicative of cash
available to fund cash needs. These non-GAAP financial
measures should be reviewed in connection with other GAAP
measurements.
|
|
HEALTHCARE TRUST
OF AMERICA, INC.
|
|
NET DEBT TO
ADJUSTED EBITDAre
|
|
(Unaudited and in
thousands)
|
|
|
Three Months
Ended
|
|
June 30,
2020
|
|
Net income
|
$
|
13,725
|
|
|
Interest
expense
|
24,277
|
|
|
Depreciation and
amortization expense
|
74,927
|
|
|
Proportionate share of
joint venture depreciation and amortization
|
508
|
|
|
EBITDAre
|
$
|
113,437
|
|
|
Transaction
expenses
|
32
|
|
|
Non-cash compensation
expense
|
2,100
|
|
|
Other normalizing
adjustments (1)
|
4,959
|
|
|
Adjusted
EBITDAre
|
$
|
120,528
|
|
|
|
|
Adjusted
EBITDAre, annualized
|
$
|
482,112
|
|
|
|
|
As of June 30,
2020:
|
|
|
Debt
|
$
|
2,818,695
|
|
|
Less: cash and cash
equivalents
|
75,202
|
|
|
Net Debt
|
$
|
2,743,493
|
|
|
|
|
Net Debt to Adjusted
EBITDAre
|
5.7
|
x
|
|
|
(1) Other normalizing
adjustments includes the following: non-recurring bad debt of
$4,672 thousand, incremental hazard pay to facilities employees of
$242 thousand, and incremental personal protective equipment of $45
thousand.
|
|
|
As defined by NAREIT,
EBITDAre is computed as net income or loss (computed in
accordance with GAAP) plus: (i) interest expense; (ii) income tax
expense (not applicable to HTA); (iii) depreciation and
amortization; (iv) impairment; (v) gain or loss on the sale of real
estate; and (vi) the proportionate share of joint venture
depreciation and amortization.
|
|
|
Adjusted
EBITDAre is presented on an assumed annualized basis.
HTA defines Adjusted EBITDAre as EBITDAre (computed
in accordance with NAREIT as defined above) plus: (i) transaction
expenses; (ii) gain or loss on extinguishment of debt; (iii)
non-cash compensation expense; (iv) pro forma impact of its
acquisitions/dispositions; and (v) other normalizing
adjustments. HTA considers Adjusted EBITDAre an
important measure because it provides additional information to
allow management, investors, and its current and potential
creditors to evaluate and compare its core operating results and
its ability to service debt.
|
Financial Contact:
Robert A. Milligan
Chief Financial Officer
480.998.3478
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SOURCE Healthcare Trust of America, Inc.