SCOTTSDALE, Ariz., Feb. 15, 2018 /PRNewswire/ -- Healthcare
Trust of America, Inc. (NYSE: HTA) ("HTA") announced results for
the quarter and year ended December 31,
2017.
Fourth Quarter 2017 Highlights
Operating
- Net Income Attributable to Common Stockholders:
Increased 156.9% to $42.5 million,
compared to Q4 2016. Earnings per diluted share increased 81.8% to
$0.20 per diluted share, compared to
Q4 2016.
- Funds From Operations ("FFO"): As defined by the
National Association of Real Estate Investment Trusts ("NAREIT"),
increased 40.4%, to $85.6 million,
compared to Q4 2016. FFO per diluted share decreased (2.4)%, to
$0.41 per diluted share, compared to
Q4 2016.
- Normalized FFO: Increased 45.7%, to $86.7 million, compared to Q4 2016. Normalized
FFO per diluted share increased 2.4%, to $0.42 per diluted share, compared to Q4
2016.
- Normalized Funds Available for Distribution ("FAD"):
Increased 39.1%, to $72.6 million,
compared to Q4 2016.
- Same-Property Cash Net Operating Income ("NOI"):
Increased $2.3 million, or 2.8%, to
$82.5 million, compared to Q4
2016.
Portfolio
- Investments: During the quarter, HTA acquired a medical
office building, a parcel of land which was a part of the
acquisition of the Duke Realty healthcare business ("Duke Assets"),
and an expansion project totaling $32.7
million, bringing year-to-date investments to $2.7 billion, net of development credits received
at the closing of the Duke acquisition.
These investments included the properties in the final closing
associated with the Duke Assets which were announced in Q2
2017.
- Dispositions: HTA completed the disposition of three
medical office buildings located in Wisconsin and California for an aggregate sales price of
$80.2 million, totaling approximately
195,000 square feet of gross leasable area ("GLA"), generating
gains of $37.8 million.
- Leasing: HTA entered into new and renewal leases on
approximately 672,000 square feet of GLA, or 2.8% of its portfolio.
Tenant retention for the Same-Property portfolio was 86% by GLA for
the quarter, which included approximately 217,000 square feet of
GLA of expiring leases. Renewal leases included tenant improvements
of $2.39 per square foot per year of
the lease term and approximately 10 days of free rent per year of
the lease term.
Capital Markets
- Equity: In October 2017,
under its at-the-market ("ATM") offering program, HTA issued
4,200,000 shares of its common stock for $124.3 million of gross proceeds at a price of
$29.60 per share, and entered a
forward sale arrangement pursuant to a forward equity agreement,
with anticipated net proceeds of $75.0
million to be settled in April
2018, subject to adjustments as provided in the forward
equity agreement. Additionally, as part of an acquisition
transaction, HTALP issued 16,972 partnership units with a market
value at the time of issuance of approximately $0.5 million.
2017 Investment Performance
- Investments: During 2017, HTA completed and closed
$2.7 billion of investments, totaling
approximately 6.8 million square feet of GLA, including projects
under development. These acquisitions included 93 in-service
properties, two parcels of land, and seven development properties,
including five recently developed properties and two properties
under development. The two properties under development were 100%
pre-leased and are expected to be completed by the end of Q2 2018.
Approximately 90% of the GLA for HTA's 2017 investments are located
in HTA's existing key markets, allowing HTA to manage and service
these properties with its existing property management, building
services, and leasing platform, thereby generating additional cash
flow opportunities.
- Cash NOI: During the quarter, HTA generated $33.9 million of Cash NOI on its 2017
investments, including a partial period impact for acquisitions
that had closed and developments that were completed during the
period. As of December 31, 2017,
HTA's run rate yield on its 2017 investments was approximately
5.2%, which included the full year impact of acquisitions and
dispositions that had closed during the year, and new leases that
were signed but not yet occupied during the year.
- Leasing: During the quarter, HTA entered into new leases
on approximately 14,000 square feet of GLA for its 2017
investments. In addition, during the quarter, HTA entered into
renewal leases totaling approximately 95,000 square feet of GLA.
HTA executed these leases utilizing its existing in-house leasing
representatives which would have resulted in capitalized leasing
commissions totaling $0.3 million, or
approximately 1% of quarterly Cash NOI, if third party brokers had
been used by HTA.
- Property Management & Building Services: As of
December 31, 2017, HTA provided
property management services to 95% of its 2017 investments as
measured by GLA. During the quarter, HTA earned approximately
$1.3 million of property management
fees related to these properties which were included in total Cash
NOI. On an annual basis, these properties generated a total of
approximately $5.2 million in
property management fees. As of December 31,
2017, HTA provided building services to approximately 65% of
the multi-tenant properties included in its 2017 investments. In
addition, during the quarter, HTA earned $0.4 million in expense recoveries from building
services which were included in total Cash NOI.
- Development: During the year, HTA-Development completed
three development projects located in Dallas, TX, Oxford,
MS, and Raleigh, NC, with
total construction costs of $53.2
million. As such, five of the seven development properties
acquired by HTA as a part of the Duke Assets have been completed,
with a majority thereof fully leased at this time. As of the end of
the quarter, these five properties were 82% leased and generated
$1.0 million of Cash NOI. HTA is
currently in the late stages of lease negotiations for an
additional 14,000 square feet of GLA that would bring the leased
rate on these properties to 89% if completed. The seven development
properties are projected to generate between $2.50 million and $2.75
million in quarterly Cash NOI upon completion and
stabilization.
Year Ended 2017 Highlights
Operating
- Net Income Attributable to Common Stockholders:
Increased 39.2% to $63.9 million,
compared to 2016. Earnings per diluted share increased 3.0% to
$0.34 per diluted share, compared to
2016.
- FFO: As defined by NAREIT, increased 31.8%, to
$284.2 million, compared to 2016. FFO
per diluted share decreased (0.6)% to $1.53 per diluted share, compared to 2016.
- Normalized FFO: Increased 34.1%, to $302.0 million, compared to 2016. Normalized FFO
per diluted share increased 1.2% to $1.63 per diluted share, compared to 2016.
- Normalized FAD: Increased 30.4%, to $260.9 million, compared to 2016.
- Same-Property Cash NOI: Increased $8.0 million, or 2.9%, to $284.8 million, compared to 2016. Same-Property
rental revenue increased $4.8
million, or 1.5%, to $317.9
million, compared to 2016.
Portfolio
- Investments: During the year ended December 31, 2017, HTA completed investments of
$2.7 billion, net of development
credits received at the closing of the Duke acquisition, totaling approximately 6.8
million square feet of GLA, including projects under development,
which were 93% leased as of the date of acquisition and consisted
of the following:
-
- As of December 31, 2017, HTA
closed on Duke Assets of approximately $2.25
billion for 71 properties and two parcels of land, including
a 50% ownership interest in an unconsolidated joint venture,
totaling approximately 5.2 million square feet of GLA, including
projects under development, which were 94% leased as of the date of
acquisition.
- In addition, as of December 31,
2017, HTA completed investments of $485.9 million, including expansion projects,
totaling approximately 1.6 million square feet of GLA that were 90%
leased as of the date of acquisition and which were located
substantially in certain of HTA's 20 to 25 key markets.
- Development Platform Acquisition: During the year ended
December 31, 2017, HTA completed its
acquisition of Duke's development and
construction platform as part of the acquisition of the Duke
Assets. Prior to this acquisition, this best-in-class development
platform, renamed HTA-Development by HTA, had developed over
$1.0 billion in medical real estate
assets over the last 10 years.
- Dispositions: During the year ended December 31, 2017, HTA completed the disposition
of four medical office buildings located in Wisconsin, California and Texas for an aggregate sales price of
$85.2 million, totaling approximately
243,000 square feet of GLA, and generating gains of $37.8 million.
- Leasing: During the year ended December 31, 2017, HTA entered into new and
renewal leases on approximately 2.7 million square feet of GLA, or
11.2%, of its portfolio. Tenant retention for the Same-Property
portfolio was 78% by GLA year-to-date, which included approximately
1.5 million square feet of expiring leases. Renewal leases included
tenant improvements of $1.70 per
square foot of GLA per year of the lease term and approximately six
days of free rent per year of the lease term.
- Leased Rate: As of December 31,
2017, HTA had a leased rate for its portfolio of 91.8% by
GLA and 91.6% for its Same-Property portfolio.
Balance Sheet and Capital Markets
- Balance Sheet: As of December 31,
2017, HTA had total leverage of 29.9% measured as net debt
(total debt less cash and cash equivalents) to total
capitalization, and 5.9x measured as net debt 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 $991.2 million of
availability under HTA's unsecured revolving credit facility,
$100.4 million of cash and cash
equivalents and a $75.0 million
forward equity agreement.
- Equity: During the year ended December 31, 2017, HTA issued and sold
approximately $1.8 billion of equity
at an average price of $28.76 per
share and entered a forward sale arrangement pursuant to a forward
equity agreement, with anticipated net proceeds of $75.0 million to be settled in April 2018, subject to adjustments as provided in
the forward equity agreement under its ATM offering program.
Additionally, in September 2017, HTA
entered into new equity distribution agreements with its various
sales agents with respect to its ATM offering program of common
stock with an aggregate sales amount of up to $500.0 million.
- Debt: During the year ended December 31, 2017, HTA issued approximately
$1.2 billion in debt, which consisted
of $900.0 million in senior unsecured
notes issued in a public offering at an average interest rate of
3.4% per annum and an average duration of 7.7 years, and entered
into a $286.0 million promissory note
with the seller in the Duke
acquisition, with a 4.0% per annum interest rate. Additionally, in
July 2017, HTA, as guarantor, and
HTALP, as borrower, entered into an amended and restated
$1.3 billion unsecured credit
agreement which increased the amount available under the unsecured
revolving credit facility to $1.0
billion and extended the maturity date to June 30, 2022, and extended the maturity date
until February 1, 2023 under the
$300.0 million unsecured term loan.
The interest rate on the unsecured revolving credit facility is
adjusted LIBOR plus a margin ranging from 0.83% to 1.55% per annum
based on HTA's credit rating. These transactions were used to
substantially finance HTA's 2017 investments and position its
investment grade balance sheet for future growth.
Financial Results - Fourth Quarter 2017
Rental Income
Rental income increased 42.4% to $173.6
million for the three months ended December 31, 2017, compared to $121.9 million for the three months ended
December 31, 2016.
Net Income
Net income increased 153.4% to $43.5
million for the three months ended December 31, 2017, compared to $17.2 million net income for the three months
ended December 31, 2016.
FFO
FFO, as defined by NAREIT, was $0.41 per diluted share, or $85.6 million, for the three months ended
December 31, 2017, compared to
$0.42 per diluted share, or
$60.9 million, for the three months
ended December 31, 2016.
Normalized FFO
Normalized FFO was $0.42 per
diluted share, or $86.7 million, for
the three months ended December 31,
2017, compared to $0.41 per
diluted share, or $59.5 million, for
the three months ended December 31,
2016.
Normalized FAD
Normalized FAD increased 39.1% to $72.6
million, for the three months ended December 31, 2017, compared to $52.2 million for the three months ended
December 31, 2016.
NOI
NOI increased 44.2% to $120.5
million for the three months ended December 31, 2017, compared to $83.6 million for the three months ended
December 31, 2016.
Same-Property Cash NOI
Same-Property Cash NOI increased $2.3
million, or 2.8%, to $82.5
million, for the three months ended December 31, 2017, compared to $80.2 million for the three months ended
December 31, 2016.
General and Administrative Expenses
General and administrative expenses were $8.2 million for the three months ended
December 31, 2017, compared to
$7.9 million for the three months
ended December 31, 2016.
Interest Expense and Change in Fair Value of Derivative
Financial Instruments
The total interest expense and change in fair value of
derivative financial instruments for the three months ended
December 31, 2017, was $25.9 million, all of which related to debt and
interest rate swaps.
Investment Activity
During the three months ended December
31, 2017, HTA completed investments of $32.7 million, which consisted of an MOB, a
parcel of land which was part of the acquisition of the Duke
Assets, and an expansion project.
Tenant Retention
Tenant retention for the Same-Property portfolio was 86% by GLA
for the quarter, which included approximately 217,000 square feet
of GLA of expiring leases.
Financial Results - Year Ended 2017
Rental Income
Rental income increased 33.0% to $612.6
million for the year ended December
31, 2017, compared to $460.6
million for the year ended December
31, 2016.
Net Income
Net income increased 38.5% to $65.6
million for the year ended December
31, 2017, compared to $47.3
million for the year ended December
31, 2016.
FFO
FFO, as defined by NAREIT, was $1.53 per diluted share, or $284.2 million, for the year ended December 31, 2017, compared to $1.54 per diluted share, or $215.6 million, for the year ended December 31, 2016.
Normalized FFO
Normalized FFO was $1.63 per
diluted share, or $302.0 million, for
the year ended December 31, 2017,
compared to $1.61 per diluted share,
or $225.2 million, for the year ended
December 31, 2016.
Normalized FAD
Normalized FAD increased 30.4% to $260.9
million, for the year ended December
31, 2017, compared to $200.1
million for the year ended December
31, 2016.
NOI
NOI increased 33.0% to $421.8
million for the year ended December
31, 2017, compared to $317.2
million for the year ended December
31, 2016.
Same-Property Cash NOI
Same-Property Cash NOI increased $8.0
million, or 2.9%, to $284.8
million, for the year ended December
31, 2017, compared to $276.9
million for the year ended December
31, 2016. Same-Property rental revenue increased
$4.8 million, or 1.5%, to
$317.9 million, for the year ended
December 31, 2017, compared to the
year ended December 31, 2016.
General and Administrative Expenses
General and administrative expenses were $33.4 million for the year ended December 31, 2017, compared to $28.8 million for the year ended December 31, 2016.
Interest Expense and Change in Fair Value of Derivative
Financial Instruments
The total interest expense and change in fair value of
derivative financial instruments for the year ended December 31, 2017, was $85.5 million, which included $86.4 million of interest expense related to debt
and interest rate swaps, and a net gain of $0.9 million on the change in the fair value of
HTA's derivative financial instruments.
HTA ended the year with a weighted average interest rate of
3.50% per annum, including the impact of interest rate swaps.
The weighted average remaining term of HTA's total debt was 5.7
years, including extension options.
Investment Activity
During the year ended December 31,
2017, HTA completed investments of $2.7 billion, net of development credits received
at the closing of the Duke acquisition,
including its investment in a unconsolidated joint venture,
totaling 6.8 million square feet of GLA, including projects under
development, which were 93% leased as of the acquisition date.
Leased Rate, Occupancy Rate and Tenant Retention
The leased rate (includes leases which have been executed, but
which have not yet commenced) was 91.8% by GLA as of December 31, 2017. The occupancy rate of
HTA's portfolio was 91.0% by GLA as of December 31, 2017. Tenant retention for the
Same-Property portfolio was 78% by GLA as of December 31, 2017, which included approximately
1.5 million square feet of GLA of expiring leases.
Credit Rated Tenants
Investment grade rated tenants as a percent of annualized base
rent was 47% as of December 31,
2017. Additionally, 61% of HTA's annualized base rent as of
December 31, 2017 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 December 31, 2017, HTA's
in-house property management and leasing platform operated
approximately 22.4 million square feet of GLA, or 93%, of HTA's
total portfolio.
Balance Sheet
As of December 31, 2017, HTA had
total assets of $6.4 billion, cash
and cash equivalents of $100.4
million, and $991.2 million
available under its unsecured revolving credit facility (includes
the impact of $8.8 million of
outstanding letters of credit). The leverage ratio of net
debt to total capitalization was 29.9% as of December 31, 2017.
About Healthcare Trust of America, Inc.
Healthcare Trust of America, Inc. (NYSE: HTA) is the largest
dedicated owner and operator of medical office buildings ("MOBs")
in the United States based on
gross leasable area ("GLA"). We provide the real estate
infrastructure for the integrated delivery of healthcare services
in highly desirable locations. Over the last decade, we have
invested $7.0 billion primarily in
MOBs and other healthcare assets comprising 24.1 million square
feet of GLA. Our investments are targeted in 20 to 25 key
markets that we believe have superior healthcare demographics that
support strong, long-term demand for medical office space. We
have achieved, and continue to achieve, critical mass within these
key markets by expanding our presence through accretive
acquisitions, and utilizing our in-house operating expertise
through our regionally located property management and leasing
platform. Headquartered in Scottsdale, Arizona and directed from our
full-time service offices, HTA has developed a national brand with
dedicated relationships at the local level. We have achieved
scale in 16 markets with greater than 500,000 square feet and 10
markets with approximately 1 million or greater square feet; in
each market we service our healthcare providers through our
institutional full-service operational platform including property
management, leasing and development services. 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 across the
portfolio.
Founded in 2006 and listed on the New York Stock Exchange in
2012, HTA has produced attractive returns for its stockholders that
we believe have significantly outperformed the S&P 500 and US
REIT indices. More information about HTA can be found on the
Company's website at www.htareit.com.
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 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, February 16, 2018 at 10:00 a.m. Eastern Time (7:00 a.m. Pacific Time) to review its financial
performance and operating results for the quarter and year ended
December 31, 2017.
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: 10116957
Available February 16, 2018 (one hour
after the end of the conference call) to March 16, 2018 at 10:00
a.m. Eastern Time (7:00 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.
|
CONSOLIDATED
BALANCE SHEETS
|
(unaudited and in
thousands, except share data)
|
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
ASSETS
|
|
|
|
Real estate
investments:
|
|
|
|
Land
|
$
|
485,319
|
|
|
$
|
386,526
|
|
Building and
improvements
|
5,830,824
|
|
|
3,466,516
|
|
Lease
intangibles
|
639,199
|
|
|
467,571
|
|
Construction in
progress
|
14,223
|
|
|
—
|
|
|
6,969,565
|
|
|
4,320,613
|
|
Accumulated
depreciation and amortization
|
(1,021,691)
|
|
|
(817,593)
|
|
Real estate
investments, net
|
5,947,874
|
|
|
3,503,020
|
|
Investment in
unconsolidated joint venture
|
68,577
|
|
|
—
|
|
Cash and cash
equivalents
|
100,356
|
|
|
11,231
|
|
Restricted
cash
|
18,204
|
|
|
13,814
|
|
Receivables and other
assets, net
|
207,857
|
|
|
173,461
|
|
Other intangibles,
net
|
106,714
|
|
|
46,318
|
|
Total
assets
|
$
|
6,449,582
|
|
|
$
|
3,747,844
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Liabilities:
|
|
|
|
Debt
|
$
|
2,781,031
|
|
|
$
|
1,768,905
|
|
Accounts payable and
accrued liabilities
|
167,852
|
|
|
105,034
|
|
Derivative financial
instruments - interest rate swaps
|
1,089
|
|
|
1,920
|
|
Security deposits,
prepaid rent and other liabilities
|
61,222
|
|
|
49,859
|
|
Intangible
liabilities, net
|
68,203
|
|
|
37,056
|
|
Total
liabilities
|
3,079,397
|
|
|
1,962,774
|
|
Commitments and
contingencies
|
|
|
|
Redeemable
noncontrolling interests
|
6,737
|
|
|
4,653
|
|
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;
204,892,118 and 141,719,134 shares issued and outstanding as of
December 31, 2017 and 2016, respectively
|
2,049
|
|
|
1,417
|
|
Additional paid-in
capital
|
4,508,528
|
|
|
2,754,818
|
|
Accumulated other
comprehensive loss
|
274
|
|
|
—
|
|
Cumulative dividends
in excess of earnings
|
(1,232,069)
|
|
|
(1,068,961)
|
|
Total stockholders'
equity
|
3,278,782
|
|
|
1,687,274
|
|
Noncontrolling
interests
|
84,666
|
|
|
93,143
|
|
Total
equity
|
3,363,448
|
|
|
1,780,417
|
|
Total liabilities and
equity
|
$
|
6,449,582
|
|
|
$
|
3,747,844
|
|
HEALTHCARE TRUST
OF AMERICA, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(unaudited and in
thousands, except per share data)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues:
|
|
|
|
|
|
|
|
Rental
income
|
$
|
173,607
|
|
|
$
|
121,917
|
|
|
$
|
612,556
|
|
|
$
|
460,563
|
|
Interest and other
operating income
|
163
|
|
|
122
|
|
|
1,434
|
|
|
365
|
|
Total
revenues
|
173,770
|
|
|
122,039
|
|
|
613,990
|
|
|
460,928
|
|
Expenses:
|
|
|
|
|
|
|
|
Rental
|
53,273
|
|
|
38,452
|
|
|
192,147
|
|
|
143,751
|
|
General and
administrative
|
8,225
|
|
|
7,894
|
|
|
33,403
|
|
|
28,773
|
|
Transaction
|
267
|
|
|
1,541
|
|
|
5,885
|
|
|
6,538
|
|
Depreciation and
amortization
|
72,086
|
|
|
46,436
|
|
|
244,986
|
|
|
176,866
|
|
Impairment
|
8,829
|
|
|
3,080
|
|
|
13,922
|
|
|
3,080
|
|
Total
expenses
|
142,680
|
|
|
97,403
|
|
|
490,343
|
|
|
359,008
|
|
Income before
other income (expense)
|
31,090
|
|
|
24,636
|
|
|
123,647
|
|
|
101,920
|
|
Interest
expense:
|
|
|
|
|
|
|
|
Interest related to
derivative financial instruments
|
(204)
|
|
|
(521)
|
|
|
(1,031)
|
|
|
(2,377)
|
|
Gain on change in
fair value of derivative financial instruments, net
|
—
|
|
|
3,488
|
|
|
884
|
|
|
1,344
|
|
Total interest
related to derivative financial instruments, including net change
in fair value of derivative financial instruments
|
(204)
|
|
|
2,967
|
|
|
(147)
|
|
|
(1,033)
|
|
Interest related to
debt
|
(25,656)
|
|
|
(15,266)
|
|
|
(85,344)
|
|
|
(59,769)
|
|
Gain on sale of real
estate, net
|
37,799
|
|
|
4,754
|
|
|
37,802
|
|
|
8,966
|
|
Loss on
extinguishment of debt, net
|
—
|
|
|
(3)
|
|
|
(11,192)
|
|
|
(3,025)
|
|
Income from
unconsolidated joint venture
|
401
|
|
|
—
|
|
|
782
|
|
|
—
|
|
Other
income
|
42
|
|
|
66
|
|
|
29
|
|
|
286
|
|
Net
income
|
$
|
43,472
|
|
|
$
|
17,154
|
|
|
$
|
65,577
|
|
|
$
|
47,345
|
|
Net income
attributable to noncontrolling interests
|
(946)
|
|
|
(603)
|
|
|
(1,661)
|
|
|
(1,433)
|
|
Net income
attributable to common stockholders
|
$
|
42,526
|
|
|
$
|
16,551
|
|
|
$
|
63,916
|
|
|
$
|
45,912
|
|
Earnings per
common share - basic:
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
$
|
0.21
|
|
|
$
|
0.12
|
|
|
$
|
0.35
|
|
|
$
|
0.34
|
|
Earnings per
common share - diluted:
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
$
|
0.20
|
|
|
$
|
0.11
|
|
|
$
|
0.34
|
|
|
$
|
0.33
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
204,434
|
|
|
141,727
|
|
|
181,064
|
|
|
136,620
|
|
Diluted
|
208,626
|
|
|
146,050
|
|
|
185,278
|
|
|
140,259
|
|
HEALTHCARE TRUST
OF AMERICA, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited and in
thousands)
|
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
$
|
65,577
|
|
|
$
|
47,345
|
|
|
33,557
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
Depreciation,
amortization and other
|
239,044
|
|
|
175,285
|
|
|
151,614
|
|
Share-based
compensation expense
|
6,870
|
|
|
7,071
|
|
|
5,724
|
|
Bad debt
expense
|
438
|
|
|
846
|
|
|
828
|
|
Impairment
|
13,922
|
|
|
3,080
|
|
|
2,581
|
|
Income from
unconsolidated joint venture
|
(782)
|
|
|
—
|
|
|
—
|
|
Distributions from
unconsolidated joint venture
|
750
|
|
|
—
|
|
|
—
|
|
Gain on sale of real
estate, net
|
(37,802)
|
|
|
(8,966)
|
|
|
(152)
|
|
Loss (gain) on
extinguishment of debt, net
|
11,192
|
|
|
3,025
|
|
|
(123)
|
|
Change in fair value
of derivative financial instruments
|
(884)
|
|
|
(1,344)
|
|
|
769
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Receivables and other
assets, net
|
(33,733)
|
|
|
(22,080)
|
|
|
(7,508)
|
|
Accounts payable and
accrued liabilities
|
37,406
|
|
|
2,171
|
|
|
(6,284)
|
|
Prepaid rent and
other liabilities
|
5,545
|
|
|
(2,738)
|
|
|
10,089
|
|
Net cash provided by
operating activities
|
307,543
|
|
|
203,695
|
|
|
191,095
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Investments in real
estate
|
(2,383,581)
|
|
|
(591,954)
|
|
|
(279,334)
|
|
Investment in
unconsolidated joint venture
|
(68,839)
|
|
|
—
|
|
|
—
|
|
Development of real
estate
|
(25,191)
|
|
|
—
|
|
|
—
|
|
Proceeds from the
sale of real estate
|
80,640
|
|
|
26,555
|
|
|
34,629
|
|
Capital
expenditures
|
(64,833)
|
|
|
(42,994)
|
|
|
(29,270)
|
|
Collection of real
estate notes receivable
|
9,964
|
|
|
—
|
|
|
—
|
|
Advances on real
estate notes receivable
|
(3,256)
|
|
|
—
|
|
|
—
|
|
Other
assets
|
—
|
|
|
—
|
|
|
(196)
|
|
Net cash used in
investing activities
|
(2,455,096)
|
|
|
(608,393)
|
|
|
(274,171)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Borrowings on
unsecured revolving credit facility
|
570,000
|
|
|
574,000
|
|
|
454,000
|
|
Payments on unsecured
revolving credit facility
|
(658,000)
|
|
|
(704,000)
|
|
|
(272,000)
|
|
Proceeds from
unsecured senior notes
|
900,000
|
|
|
347,725
|
|
|
—
|
|
Borrowings on
unsecured term loans
|
—
|
|
|
200,000
|
|
|
100,000
|
|
Payments on unsecured
term loans
|
—
|
|
|
(155,000)
|
|
|
—
|
|
Payments on secured
mortgage loans
|
(77,024)
|
|
|
(110,935)
|
|
|
(94,856)
|
|
Deferred financing
costs
|
(16,904)
|
|
|
(3,191)
|
|
|
(204)
|
|
Debt extinguishment
costs
|
(10,571)
|
|
|
—
|
|
|
—
|
|
Security
deposits
|
2,419
|
|
|
924
|
|
|
(243)
|
|
Proceeds from
issuance of common stock
|
1,746,956
|
|
|
418,891
|
|
|
44,324
|
|
Issuance of operating
partnership units
|
—
|
|
|
2,706
|
|
|
—
|
|
Repurchase and
cancellation of common stock
|
(3,413)
|
|
|
(2,642)
|
|
|
(1,667)
|
|
Dividends
paid
|
(207,087)
|
|
|
(159,174)
|
|
|
(146,372)
|
|
Distributions paid to
noncontrolling interest of limited partners
|
(5,308)
|
|
|
(3,951)
|
|
|
(2,156)
|
|
Redemption of
redeemable noncontrolling interest
|
—
|
|
|
(4,572)
|
|
|
—
|
|
Net cash provided by
financing activities
|
2,241,068
|
|
|
400,781
|
|
|
80,826
|
|
Net change in cash,
cash equivalents and restricted cash
|
93,515
|
|
|
(3,917)
|
|
|
(2,250)
|
|
Cash, cash
equivalents and restricted cash - beginning of year
|
25,045
|
|
|
28,962
|
|
|
31,212
|
|
Cash, cash
equivalents and restricted cash - end of year
|
$
|
118,560
|
|
|
$
|
25,045
|
|
|
$
|
28,962
|
|
HEALTHCARE TRUST
OF AMERICA, INC.
|
NOI, CASH NOI AND
SAME-PROPERTY CASH NOI
|
(unaudited and in
thousands)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net income
|
$
|
43,472
|
|
|
$
|
17,154
|
|
|
$
|
65,577
|
|
|
$
|
47,345
|
|
General and
administrative expenses
|
8,225
|
|
|
7,894
|
|
|
33,403
|
|
|
28,773
|
|
Transaction expenses
(1)
|
267
|
|
|
1,541
|
|
|
5,885
|
|
|
6,538
|
|
Depreciation and
amortization expense
|
72,086
|
|
|
46,436
|
|
|
244,986
|
|
|
176,866
|
|
Impairment
|
8,829
|
|
|
3,080
|
|
|
13,922
|
|
|
3,080
|
|
Interest expense and
net change in fair value of derivative financial
instruments
|
25,860
|
|
|
12,299
|
|
|
85,491
|
|
|
60,802
|
|
Gain on sales of real
estate, net
|
(37,799)
|
|
|
(4,754)
|
|
|
(37,802)
|
|
|
(8,966)
|
|
Loss on
extinguishment of debt, net
|
—
|
|
|
3
|
|
|
11,192
|
|
|
3,025
|
|
Income from
unconsolidated joint venture
|
(401)
|
|
|
—
|
|
|
(782)
|
|
|
—
|
|
Other
income
|
(42)
|
|
|
(66)
|
|
|
(29)
|
|
|
(286)
|
|
NOI
|
$
|
120,497
|
|
|
$
|
83,587
|
|
|
$
|
421,843
|
|
|
$
|
317,177
|
|
NOI percentage
growth
|
44.2
|
%
|
|
|
|
33.0
|
%
|
|
|
|
|
|
|
|
|
|
|
NOI
|
$
|
120,497
|
|
|
$
|
83,587
|
|
|
$
|
421,843
|
|
|
$
|
317,177
|
|
Straight-line rent
adjustments, net
|
(2,803)
|
|
|
(523)
|
|
|
(8,637)
|
|
|
(4,159)
|
|
Amortization of
(below) and above market leases/leasehold interests, net and lease
termination fees
|
108
|
|
|
185
|
|
|
354
|
|
|
682
|
|
Cash NOI
|
$
|
117,802
|
|
|
$
|
83,249
|
|
|
$
|
413,560
|
|
|
$
|
313,700
|
|
Notes receivable
interest income
|
(104)
|
|
|
(115)
|
|
|
(1,193)
|
|
|
(183)
|
|
Non Same-Property
Cash NOI
|
(35,239)
|
|
|
(2,944)
|
|
|
(127,528)
|
|
|
(36,652)
|
|
Same-Property Cash
NOI (2)
|
$
|
82,459
|
|
|
$
|
80,190
|
|
|
$
|
284,839
|
|
|
$
|
276,865
|
|
Same-Property Cash
NOI percentage growth
|
2.8
|
%
|
|
|
|
2.9
|
%
|
|
|
|
(1)
|
For the three months
and year ended December 31, 2017, transaction costs reflect the
prospective presentation of the early adoption of ASU 2017-01 as of
January 1, 2017. Additionally, for the year ended December
31, 2017, transaction costs included $4.6 million of
non-incremental costs related to the Duke acquisition.
|
(2)
|
Same-Property
includes 343 and 295 buildings for the three months and year ended
December 31, 2017 and 2016, 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; and (ii) amortization of
below and above market leases/leasehold interests.
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 properties which have not
been owned and operated by HTA during the entire span of all
periods presented, excluding properties intended for disposition in
the near term, development and land parcels, HTA's share of
unconsolidated joint ventures, notes receivable interest income and
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
December 31,
|
|
Year Ended
December 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net income
attributable to common stockholders
|
$
|
42,526
|
|
|
$
|
16,551
|
|
|
$
|
63,916
|
|
|
$
|
45,912
|
|
Depreciation and
amortization expense related to investments in real
estate
|
71,543
|
|
|
46,067
|
|
|
243,221
|
|
|
175,544
|
|
Gain on sale of real
estate, net
|
(37,799)
|
|
|
(4,754)
|
|
|
(37,802)
|
|
|
(8,966)
|
|
Impairment
|
8,829
|
|
|
3,080
|
|
|
13,922
|
|
|
3,080
|
|
Proportionate share
of joint venture depreciation and amortization
|
463
|
|
|
—
|
|
|
969
|
|
|
—
|
|
FFO attributable to
common stockholders
|
$
|
85,562
|
|
|
$
|
60,944
|
|
|
$
|
284,226
|
|
|
$
|
215,570
|
|
Transaction expenses
(1)
|
267
|
|
|
1,541
|
|
|
1,242
|
|
|
6,538
|
|
Gain on change in
fair value of derivative financial instruments, net
|
—
|
|
|
(3,488)
|
|
|
(884)
|
|
|
(1,344)
|
|
Loss on
extinguishment of debt, net
|
—
|
|
|
3
|
|
|
11,192
|
|
|
3,025
|
|
Noncontrolling income
from partnership units included in diluted shares
|
903
|
|
|
513
|
|
|
1,538
|
|
|
1,315
|
|
Other normalizing
items, net (2)
|
—
|
|
|
—
|
|
|
4,643
|
|
|
117
|
|
Normalized FFO
attributable to common stockholders
|
$
|
86,732
|
|
|
$
|
59,513
|
|
|
$
|
301,957
|
|
|
$
|
225,221
|
|
Other
income
|
(42)
|
|
|
(66)
|
|
|
(29)
|
|
|
(286)
|
|
Non-cash compensation
expense
|
1,377
|
|
|
1,935
|
|
|
6,870
|
|
|
7,071
|
|
Straight-line rent
adjustments, net
|
(2,803)
|
|
|
(523)
|
|
|
(8,637)
|
|
|
(4,159)
|
|
Amortization of
(below) and above market leases/leasehold interests and corporate
assets, net
|
652
|
|
|
554
|
|
|
2,119
|
|
|
2,030
|
|
Deferred revenue -
tenant improvement related
|
(5)
|
|
|
—
|
|
|
(28)
|
|
|
—
|
|
Amortization of
deferred financing costs and debt discount/premium, net
|
1,287
|
|
|
816
|
|
|
4,216
|
|
|
3,104
|
|
Recurring capital
expenditures, tenant improvements and leasing
commissions
|
(14,588)
|
|
|
(10,032)
|
|
|
(45,608)
|
|
|
(32,898)
|
|
Normalized FAD
attributable to common stockholders
|
$
|
72,610
|
|
|
$
|
52,197
|
|
|
$
|
260,860
|
|
|
$
|
200,083
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders per diluted share
|
$
|
0.20
|
|
|
$
|
0.11
|
|
|
$
|
0.34
|
|
|
$
|
0.33
|
|
FFO adjustments per
diluted share, net
|
0.21
|
|
|
0.31
|
|
|
1.19
|
|
|
1.21
|
|
FFO attributable to
common stockholders per diluted share
|
$
|
0.41
|
|
|
$
|
0.42
|
|
|
$
|
1.53
|
|
|
$
|
1.54
|
|
Normalized FFO
adjustments per diluted share, net
|
0.01
|
|
|
(0.01)
|
|
|
0.10
|
|
|
0.07
|
|
Normalized FFO
attributable to common stockholders per diluted share
|
$
|
0.42
|
|
|
$
|
0.41
|
|
|
$
|
1.63
|
|
|
$
|
1.61
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding
|
208,626
|
|
|
146,050
|
|
|
185,278
|
|
|
140,259
|
|
|
(1)
|
For the three months
and year ended December 31, 2017, amounts reflect the prospective
presentation of the early adoption of ASU 2017-01 as of January 1,
2017.
|
(2)
|
For the year ended
December 31, 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. In addition, other normalizing
items excludes lease termination fees as they are deemed to be
generated in the ordinary course of business.
|
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.