Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - HEALTHCARE TRUST OF AMERICA, INC. | q42017earningsrelease.htm |
| 8-K - 8-K - HEALTHCARE TRUST OF AMERICA, INC. | q42017earnings8k.htm |
99.1
MISSION MEDICAL OFFICE PORTFOIO
MISSION VIEJO, CA
Exhibit 99.2Exhibit 99.2
Company Overview
Quarter and Year Ended 2017 and 2017 Investment Performance Highlights 6
Financial Highlights 8
Company Snapshot 9
Financial Information
FFO, Normalized FFO, Normalized FAD and Adjusted EBITDAre 10
Capitalization, Interest Expense and Covenants 11
Debt Composition and Maturity Schedule 12
Portfolio Information
Investment Activity 13
Regional Portfolio Distribution and Key Markets and Top 75 MSA Concentration 14
Development Summary and Capital Expenditures 15
Same-Property Performance and NOI 16
Portfolio Diversification by Type, Historical Campus Proximity and Ownership Interests 17
Historical Leased Rate, New and Renewal Leasing Activity and Tenant Lease Expirations 18
Key Health System Relationships and Highlights 19
Financial Statements
Condensed Consolidated Balance Sheets 20
Condensed Consolidated Statements of Operations 21
Condensed Consolidated Statements of Cash Flows 22
Reporting Definitions 23
Forward-Looking Statements:
Certain statements contained in this report constitute forward-looking statements within the meaning of the safe harbor from civil liability provided
for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act). Such statements include, in particular, statements
about our plans, strategies, prospects and estimates regarding future medical office building market performance. Additionally, such statements
are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially and in
adverse ways from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future
periods. Forward-looking statements are generally identifiable by the use of such terms as “expect,” “project,” “may,” “should,” “could,” “would,”
“intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “opinion,” “predict,” “potential,” “pro forma” or the negative of such terms and
other comparable terminology. Readers are cautioned not to place undue reliance on these forward-looking statements. We cannot guarantee
the accuracy of any such forward-looking statements contained in this report, and we do not intend to publicly update or revise any forward-
looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Any such forward-looking
statements reflect our current views about future events, are subject to unknown risks, uncertainties, and other factors, and are based on a
number of assumptions involving judgments with respect to, among other things, future economic, competitive and market conditions, all of
which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such
forward-looking statements, including our ability to generate positive cash flow from operations, provide dividends to stockholders, and maintain
the value of our real estate properties, may be significantly hindered. Forward-looking statements express expectations of future events. All
forward-looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and
they are subject to numerous known and unknown risks and uncertainties that could cause actual events or results to differ materially from
those projected. Due to these inherent uncertainties, our stockholders are urged not to place undue reliance on forward-looking statements.
Forward-looking statements speak only as of the date made. In addition, we undertake no obligation to update or revise forward-looking
statements to reflect changed assumptions, the occurrence of unanticipated events or changes to projections over time, except as required
by law. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed
on such statements. Additional information concerning us and our business, including additional factors that could materially affect our financial
results, is included herein and in our filings with the SEC.
Table of Contents
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 2
Company Information
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.
Executive Management
Scott D. Peters I Chairman, Chief Executive Officer and President
Robert A. Milligan I Chief Financial Officer, Secretary and Treasurer
Amanda L. Houghton I Executive Vice President - Asset Management
K. Ann Atkinson I Senior Vice President - Acquisitions
Contact Information
Corporate Headquarters
Healthcare Trust of America, Inc. I NYSE: HTA
16435 North Scottsdale Road, Suite 320
Scottsdale, Arizona 85254
480.998.3478
www.htareit.com
Follow Us:
Investor Relations
Robert A. Milligan I Chief Financial Officer, Secretary and Treasurer
16435 North Scottsdale Road, Suite 320
Scottsdale, Arizona 85254
480.998.3478
info@htareit.com
Transfer Agent
Computershare
P.O. Box 505000
Louisville, KY 40233
888.801.0107
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 3
HTA: LARGEST DEDICATED OWNER OF MEDICAL OFFICE
BEST IN CLASS PORTFOLIO
FOCUSED IN 20-25 KEY CONCENTRATED GEOGRAPHIC MARKETS
24+
MILLION SQUARE
FEET
93%
INTERNALLY
MANAGED
17M SF/70%
ON-CAMPUS
(Largest on-campus owner in U.S.)
29.9%
LEVERAGE
FULL SERVICE
OPERATING PLATFORM FOCUS AND SCALE DIVERSIFICATION
INVESTMENT GRADE
BALANCE SHEET
Best in Class
full service
operating platform
Property Management
Leasing
Facilities & Engineering
Construction &
Development
94% of Portfolio in
Key Markets &
Top 75 MSAs
Platform with Scale Creates:
Local Expertise
Strong Relationships
Operational Benefits
Access to Better Performing
Markets
448 Buildings throughout
33 States
Top Tenant < 4.4% of ABR
Top Market < 9.5% of ABR
Size & Diversification
provides stability of
cash flows
BBB/Baa2
Credit Rating
5.9x
Net Debt/Adjusted
EBITDAre
$1.2B
Liquidity
$1.9B/$1.2B
Equity and Debt Issuances
SF Market Invested $’s
2.1M Dallas, TX 843M
1.5M Houston, TX 431M
408K Austin, TX 164M
4.0M TOTAL TEXAS $1,438M
1.0M Boston, MA 411M
969K Harford/New Haven,
CT
278M
881K Albany, NY 179M
333K White Plains, NY 126M
3.2M TOTAL NORTHEAST $994M
1.1M Atlanta, GA 325M
608K Raleigh, NC 186M
965K Greenville, SC 179M
334K Charlotte, NC 95M
290K Charleston, SC 75M
3.3M TOTAL SOUTHEAST $860M
943K Tampa, FL 348M
996K Miami, FL 229M
511K Orlando, FL 156M
2.5M TOTAL FLORIDA $733M
1.4M Indianapolis, IN 282M
1.1M Pittsburgh, PA 149M
323K Columbus, OH 77M
2.8M TOTAL MIDWEST $508M
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 4
10 MARKETS ~ 1M+ SF 16 MARKETS > 500K SF
Dallas, TX
Houston, TX
Miami, FL
Atlanta, GA
Phoenix, AZ
Greenville, SC
Boston, MA
Hartford, CT
Pittsburgh, PA
Indianapolis, IN
HTA Properties
HTA Market with ~ 1 Million+ SF
PM Offices
FINANCIAL PERFORMANCE: DECADE OF VALUE CREATION
9.7% Annualized Average Total Returns Since First Distribution in 2006 to December 31, 2017
Consistent Same Store Growth - 3.0% AverageIncreasing Normalized FFO/Share
$0.43
$0.40
$0.37
$0.34
$0.31
$0.28
$0.25
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
$0.37
$0.38
$0.39 $0.39
$0.40 $0.40 $0.40
$0.41 $0.41
$0.39
$0.42 $0.42 5%
4%
3%
2%
1%
0%
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
3.0% 3.0% 3.1% 3.1% 3.0% 3.1%
3.3%
2.9%
3.2% 3.1%
2.9% 2.8%
CONSISTENT PERFORMANCE
DELIVERING SHAREHOLDER VALUE
Annual Investments
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 5
2.4%
REIT
MOB
Avg
$200,000 $1,100,000 $2,000,000 $2,900,000
$ (Thousands)
2012
2013
2014
2015
2016
2017
$294,937
$397,826
$439,530
$271,510
$700,764
$2,722,467
Top Health Systems
(% of ABR)
» Baylor Scott & White Health » Hospital Corporation of America
» Highmark-Allegheny Health Network » Tenet Healthcare System
» Community Health Systems » Providence St. Joseph Health
» Greenville Health System » SCL Health
» Ascension Health » Adventist Health
» Tufts Medical Center » Mercy Health
» Steward Health Care System » Atrium Health
Operating
Fourth Quarter 2017
• 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.
Year Ended 2017
• 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 Realty healthcare business (“Duke Assets”), totaling approximately 6.8 million square feet of
gross leasable area (“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.
Company Overview
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 6
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 at-the-market
(“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.
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.
Company Overview
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 7
(1) Refer to pages 23 and 24 for the reporting definitions of NOI, Adjusted EBITDAre, FFO, Normalized FFO and Normalized FAD.
(2) Refer to page 16 for a reconciliation of GAAP Net Income to NOI.
(3) Refer to page 10 for the reconciliations of GAAP Net Income Attributable to Common Stockholders to FFO, Normalized FFO, Normalized FAD and Adjusted EBITDAre.
(4) Calculated as the increase in Same-Property Cash NOI for the quarter as compared to the same period in the previous year.
(5) Calculated as Adjusted EBITDAre divided by interest expense (excluding change in fair market value of derivatives) and scheduled principal payments.
(6) For the period ended 4Q17 only, amount and calculation based on net debt. All prior periods presented were based on total debt. Refer to page 11 for components of net debt.
(7) Calculated as the common stock price on the last trading day of the period multiplied by the total diluted common shares outstanding at the end of the period, plus net debt (4Q17
only) at the end of the period. All prior periods presented were based on total debt. Refer to page 11 for details.
Financial Highlights
(unaudited and dollars in thousands, except per share data)
Three Months Ended
4Q17 3Q17 2Q17 1Q17 4Q16
INCOME ITEMS
Revenues $ 173,770 $ 175,994 $ 139,879 $ 124,347 $ 122,039
NOl (1)(2) 120,497 119,663 96,419 85,327 83,587
Adjusted EBITDAre, annualized (1)(3) 457,540 457.716 442,316 319,132 312,340
FFO (1)(3) 85,562 84.248 54,185 60,231 60,944
Normalized FFO (1)(3) 86,732 85,449 69,643 60,133 59,513
Normalized FAD (1)(3) 72,610 74,767 60,618 52,865 52,197
Net income (loss) attributable to
common stockholders per diluted share $ 0.20 $ 0.07 $ (0.03) $ 0.09 $ 0.11
FFO per diluted share 0.41 0.41 0.30 0.41 0.42
Normalized FFO per diluted share 0.42 0.42 0.39 0.41 0.41
Same-Property Cash NOI growth (4) 2.8% 2.9% 3.1% 3.2% 2.9%
Fixed charge coverage ratio (5) 4.36x 4.35x 4.39x 4.30x 4.20x
As of
4Q17 3Q17 2Q17 1Q17 4Q16
ASSETS
Gross real estate investments $ 6,969,565 $ 6,977,851 $ 6,796,889 $ 4,360,906 $ 4,320,613
Total assets 6,449,582 6,413,522 6,366,758 3,753,017 3,747,844
CAPITALIZATION
Net debt (6) $ 2,680,675 $ 2,856,758 $ 2,784,162 $ 1,811,208 $ 1,768,905
Total capitalization (7) 8,959,516 8,959,887 9,154,526 6,409,685 6,020,188
Net debt/total capitalization (6) 29.9% 31.9% 30.4% 28.3% 29.4%
Company Overview
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 8
Investments in Real Estate (1) $ 7.0
Total portfolio GLA (2) 24.1
Leased rate (3) 91.8%
Same-Property portfolio tenant retention rate (YTD) (4) 78%
% of GLA managed internally 93%
% of GLA on-campus/adjacent 70%
% of invested dollars in key markets & top 75 MSAs (5) 94%
Investment grade tenants (6) 47%
Credit rated tenants (6) 61%
Weighted average remaining lease term for all buildings (7) 5.4
Weighted average remaining lease term for single-tenant buildings (7) 8.2
Weighted average remaining lease term for multi-tenant buildings (7) 4.6
Credit ratings (by Moody’s and Standard & Poor’s) Baa2(Negative)/BBB(Stable)
Cash and cash equivalents (2) $ 100.4
Net debt/total capitalization 29.9%
Weighted average interest rate per annum on portfolio debt (8) 3.50%
Building Type Presence in Top MSAs (9)
Company Snapshot
(as of December 31, 2017)
Company Overview
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 9
(1) Amount presented in billions. Refer to page 23 for the reporting definition of Investments in Real Estate.
(2) GLA and cash presented in millions. Total portfolio GLA excludes GLA for projects under development and includes 100% of the GLA of its unconsolidated joint venture.
(3) Calculations are based on percentage of total GLA, excluding GLA for development properties.
(4) Refer to page 24 for the reporting definition of Retention.
(5) Refer to page 23 for the reporting definition of Metropolitan Statistical Area.
(6) Amounts based on annualized base rent.
(7) Amounts presented in years.
(8) Includes the impact of interest rate swaps.
(9) Refer to page 14 for a detailed table of HTA’ s Key Markets and Top 75 MSA Concentration.
% of Portfolio (based on GLA) % of Portfolio (based on invested dollars)
Medical Office Buildings
95%
Hospitals
4%
Senior Care
1%
Remaining Top
MSAs
41.2%
All Other Markets
6.1%
Dallas, TX
12.1%
Houston, TX
6.2%
Boston, MA
5.9%
Tampa, FL
5.0%
Atlanta, GA
4.7%
Indianapolis, IN
4.0%
Hartford/New
Haven, CT
4.0% Phoenix, AZ
3.8%
Denver, CO
3.5%
Orange County/Los
Angeles, CA
3.5%
FFO, Normalized FFO and Normalized FAD Three Months Ended Year Ended
4Q17 4Q16 4Q17 4Q16
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
Adjusted EBITDAre (3)
Three Months
Ended
4Q17
Net income $ 43,472
Interest expense and net change in fair value of derivative financial
instruments 25,860
Depreciation and amortization expense 72,086
Impairment 8,829
Gain on sale of real estate, net (37,799)
Proportionate share of joint venture depreciation and amortization 463
EBITDAre $ 112,911
Transaction expenses 267
Non-cash compensation expense 1,377
Pro forma impact of acquisitions/dispositions (170)
Adjusted EBITDAre 114,385
Adjusted EBITDAre, annualized $ 457,540
FFO, Normalized FFO, Normalized FAD and Adjusted EBITDAre
(unaudited and in thousands, except per share data)
Financial Information
(1) For the three months and year ended 4Q17, amounts reflect the prospective presentation of the early adoption of ASU 2017-01 as of January 1, 2017.
(2) For the year ended 4Q17, 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.
(3) Refer to page 23 for the reporting definitions of EBiTDAre as defined by NAREIT and Adjusted EBITDAre as previously defined as Adjusted EBITDA.
.
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 10
Capitalization
Unsecured revolving credit facility $ —
Unsecured term loans 500,000
Unsecured senior notes 1,850,000
Secured mortgage loans 452,442
Deferred financing costs, net (15,850)
Discount, net (5,561)
Total debt $ 2,781,031
Less: cash and cash equivalents 100,356
Net debt $ 2,680,675
Stock price (as of December 31, 2017) $ 30.04
Total diluted common shares outstanding 209,016
Equity capitalization $ 6,278,841
Total capitalization $ 8,959,516
Total undepreciated assets $ 7,471,273
Gross book value of unencumbered assets $ 6,231,685
Total debt/undepreciated assets 37.2%
Net debt/total capitalization 29.9%
Net debt/Adjusted EBITDAre ratio 5.9x
Equity
70%
Secured
Debt
5%
Unsecured
Debt
25%
Financial Information
Capitalization, Interest Expense and Covenants
(as of December 31, 2017, dollars and shares in thousands, except stock price)
Interest Expense
Covenants
Three Months Ended Year Ended
4Q17 4Q16 4Q17 4Q16
Interest related to derivative financial instruments $ 204 $ 521 $ 1,031 $ 2,377
Gain on change in fair value of derivative financial instruments, net (1) — (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
Total interest expense $ 25,860 $ 12,299 $ 85,491 $ 60,802
Interest expense excluding net change in fair value of derivative
financial instruments $ 25,860 $ 15,787 $ 86,375 $ 62,146
Bank Loans Required 4Q17
Total leverage ≤ 60% 36%
Secured leverage ≤ 30% 6%
Fixed charge coverage ≥ 1.50x 4.36x
Unencumbered leverage ≤ 60% 34%
Unencumbered coverage ≥ 1.75x 3.77x
Senior Notes Required 4Q17
Total leverage ≤ 60% 38%
Secured leverage ≤ 40% 6%
Unencumbered asset coverage ≥ 150% 281%
Interest coverage ≥ 1.50x 4.11x
(1) In March 2017, HTA designated its derivative financial instruments as cash flow hedges.
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 11
Secured Mortgage Loans Unsecured Senior Notes due 2021
Unsecured Senior Notes due 2022 Unsecured Term Loan due 2023 ($300M)
Unsecured Senior Notes due 2023 Unsecured Term Loan due 2023 ($200M)
Unsecured Senior Notes due 2026 Unsecured Senior Notes due 2027
$2,000,000
$1,800,000
$1,600,000
$1,400,000
$1,200,000
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
2018 2019 2020 2021 2022 Thereafter
Financial Information
Debt Composition and Maturity Schedule
(as of December 31, 2017, dollars in thousands)
Unsecured
Revolving
Credit
Facility due
2022 (1)
Secured
Mortgage
Loans
Unsecured
Senior
Notes due
2021
Unsecured
Senior
Notes due
2022
Unsecured
Term Loan
due 2023
Unsecured
Senior
Notes due
2023
Unsecured
Term Loan
due 2023
Unsecured
Senior
Notes due
2026
Unsecured
Senior
Notes due
2027 Total
2018 $ — $ 102,513 $ — $ — $ — $ — $ — $ — $ — $ 102,513
2019 — 107,676 — — — — — — — 107,676
2020 — 146,678 — — — — — — — 146,678
2021 — 5,772 300,000 — — — — — — 305,772
2022 — 63,063 — 400,000 — — — — — 463,063
Thereafter — 26,740 — — 300,000 300,000 200,000 350,000 500,000 1,676,740
Subtotal — 452,442 300,000 400,000 300,000 300,000 200,000 350,000 500,000 2,802,442
Deferred financing
costs, net — (194) (1,527) (2,835) (2,405) (1,817) (1,655) (1,397) (4,020) (15,850)
Premiums
(discounts), net — 1,570 (1,158) (223) — (1,336) — (1,992) (2,422) (5,561)
Total $ — $ 453,818 $ 297,315 $ 396,942 $ 297,595 $ 296,847 $ 198,345 $ 346,611 $ 493,558 $ 2,781,031
Stated rate (2) 2.61% 4.27% 3.38% 2.95% 2.71% 3.70% 3.21% 3.50% 3.75% 3.49%
Hedged rate (3) 2.61% 4.39% 3.38% 2.95% 2.71% 3.70% 3.07% 3.50% 3.75% 3.50%
Debt Composition
(1) Rate does not include the 20 basis point facility fee that is payable on the entire $1.0 billion revolving credit facility.
(2) The stated rate on the debt instrument as of the end of the period.
(3) The effective rate incorporates any swap instruments that serve to fix variable rate debt, as of the end of the period.
Debt Maturity Schedule
$102,513 $107,676 $146,678
$305,772
$463,063
$1,676,740
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 12
Property Market Date Acquired
% Leased at
Acquisition Purchase Price (1) GLA (2)
MatureWell MOB College Station, TX January 100% $ 13,600 23
Medical Village of Tampa MOB Tampa, FL March 100 21,100 55
Dignity MOB (11 buildings) AZ & CA May 87 150,000 591
Northwest Houston MOB (4 buildings) Cypress/Houston, TX May 99 137,600 370
Texas Health MOB Fort Worth, TX May 100 38,500 78
Lake Norman MOB (3 buildings) Charlotte, NC June 54 16,590 143
Duke Asset Acquisition (71 properties & 2 land
parcels) (3) Various
May/June/July/
November 94 2,248,992 5,153
Optimal MOB (7 buildings) Tampa, FL June/July/August 99 76,835 197
Northpoint MOB Dallas, TX December 82 19,250 119
Total $ 2,722,467 6,729
Portfolio Information
Investment Activity
(as of December 31, 2017, dollars and GLA in thousands)
2017 Acquisitions
Annual Investments (4)
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 13
(1) The total purchase price excludes development credits received at closing of the Duke acquisition and includes its unconsolidated joint venture.
(2) The total GLA includes the GLA of projects under development and includes 100% of the GLA of its unconsolidated joint venture.
(3) Includes HTA’s investment in an unconsolidated joint venture of $68.8 million as of the date of acquisition.
(4) Excludes real estate note receivables and corporate assets.
2017 Dispositions
As of December 31, 2017, HTA has invested $7.0 billion primarily in MOBs, development properties and other healthcare assets comprising 24.1 million square
feet of GLA.
Property Market Date Disposed Disposition Price GLA
Baylor Medical MOB Waxahachie, TX February $ 5,000 48
Wisconsin Portfolio (2 buildings) Milwaukee, WI November 61,500 130
St. Mary’s MOB Long Beach, CA December 18,650 65
$ 85,150 243
YTD gain on sale of real estate, net $ 37,802
Acquisitions Dispositions
$2,900,000
$2,300,000
$1,700,000
$1,100,000
$500,000
-$100,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
$413,150
$542,976 $455,950
$802,148
$68,314
($39,483)
$294,937
$397,826
$271,510
$439,530
$700,764
($35,685)($82,885) ($85,150)
$2,722,467
Region Investment % of Investment Total GLA (1) % of Portfolio
Annualized
Base Rent (2)
% of
Annualized
Base Rent
Southwest $ 2,617,815 37.5% 8,030 33.3% $ 179,099 34.0%
Southeast 2,006,185 28.8 7,319 30.4 158,915 30.2
Northeast 1,275,220 18.3 4,705 19.5 106,603 20.3
Midwest 1,064,193 15.3 4,038 16.7 81,119 15.4
Northwest 7,750 0.1 22 0.1 542 0.1
Total $ 6,971,163 100% 24,114 100% $ 526,278 100%
Portfolio Information
Regional Portfolio Distribution and Key Markets and Top 75 MSA Concentration
(as of December 31, 2017, dollars and GLA in thousands)
Regional Portfolio Distribution
Key Markets and Top 75 MSA Concentration (3)
(1) Total portfolio GLA excludes GLA of projects under development and includes 100% of the GLA of its unconsolidated joint venture.
(2) Refer to page 23 for the reporting definition of Annualized Base Rent.
(3) Key markets are titled as such based on HTA’s concentration in the respective MSA.
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 14
Key Markets Investment
% of
Investment Total GLA % of Portfolio
Annualized
Base Rent
% of
Annualized
Base Rent
Dallas, TX $ 843,274 12.1% 2,053 8.5% $ 49,243 9.4%
Houston, TX 430,979 6.2 1,484 6.2 31,333 6.0
Boston, MA 410,730 5.9 1,037 4.3 33,440 6.4
Tampa, FL 347,764 5.0 943 3.9 22,479 4.3
Atlanta, GA 325,186 4.7 1,088 4.5 23,197 4.4
Indianapolis, IN 281,768 4.0 1,396 5.8 24,742 4.7
Hartford/New Haven, CT 277,509 4.0 969 4.0 20,935 4.0
Phoenix, AZ 267,781 3.8 1,315 5.5 24,716 4.7
Denver, CO 246,957 3.5 538 2.2 17,193 3.3
Orange County/Los Angeles, CA 241,242 3.5 513 2.1 13,550 2.6
Miami, FL 228,624 3.3 996 4.1 21,416 4.1
Chicago, IL 190,778 2.7 382 1.6 11,237 2.1
Raleigh, NC 185,564 2.7 608 2.5 14,977 2.8
Albany, NY 179,253 2.6 881 3.7 16,042 3.0
Greenville, SC 179,070 2.6 965 4.0 18,014 3.4
Austin, TX 164,425 2.3 408 1.7 8,320 1.6
Orlando, FL 156,300 2.2 511 2.1 10,754 2.0
Pittsburgh, PA 148,612 2.1 1,094 4.5 20,735 3.9
White Plains, NY 126,144 1.8 333 1.4 7,818 1.5
Milwaukee, WI 116,082 1.7 368 1.5 7,492 1.4
Top 20 MSAs 5,348,042 76.7 17,882 74.1 397,633 75.6
Additional Top MSAs 1,198,886 17.2 4,527 18.8 92,364 17.5
Total Key Markets & Top 75
MSAs $ 6,546,928 93.9% 22,409 92.9% $ 489,997 93.1%
Portfolio Information
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 15
Development Market Total GLA % Leased
Baptist Memorial Oxford MOB Oxford, MS 80 97%
BS&W EMC - Grand Prairie MOB Dallas, TX 27 100
UNC REX Holly Springs MOB Raleigh, NC 45 100
Stabilized Total 152 98
Main Line Bryn Mawr MOB Philadelphia, PA 101 57
Centegra Health MOB Chicago, IL 81 83
Unstabilized Total 182 69
Memorial Hermann Plaza II MOB Houston, TX 100 100
Providence Facey MOB Orange County, CA 37 100
Construction in Progress total 137 100
Total 471 87%
Development
Completion/
Estimated
Completion
Total
Construction Cost
Construction in
Progress Costs to Complete
Baptist Memorial Oxford MOB 3Q17 $ 21,848 $ 21,008 $ 840
BS&W EMC - Grand Prairie MOB 4Q17 14,775 13,695 1,080
UNC REX Holly Springs MOB 4Q17 16,591 16,331 260
Stabilized Total 53,214 51,034 2,180
Main Line Bryn Mawr MOB 1Q17 33,776 30,779 2,997
Centegra Health MOB 1Q17 24,753 23,704 1,049
Unstabilized Total 58,529 54,483 4,046
Memorial Hermann Plaza II MOB 2Q18 20,674 3,825 16,849
Providence Facey MOB 2Q18 18,165 9,314 8,851
Construction in Progress total $ 38,839 $ 13,139 $ 25,700
Stabilized yield 6.8%
Total construction costs/gross real estate
investments 2.2%
Development Summary - Development Costs Three Months Ended Year Ended
4Q17 4Q17
Development $ 12,749 $ 28,891
Capital Expenditures Three Months Ended Year Ended
4Q17 4Q17
Recurring capital expenditures $ 6,138 $ 19,823
Tenant improvements - 2nd generation 4,933 15,226
Lease commissions 3,517 10,559
Total recurring capital expenditures $ 14,588 $ 45,608
Capital expenditures - 1st generation/acquisition 784 3,048
Tenant improvements - 1st generation 5,947 9,614
Redevelopment 2,529 9,815
Total capital expenditures $ 23,848 $ 68,085
Development Summary and Capital Expenditures
(as of December 31, 2017, dollars and GLA in thousands)
Development Summary - Property Information
Development Summary - Financial Information
Three Months Ended Sequential Year-Over-Year
4Q17 3Q17 4Q16 $ Change % Change $ Change % Change
Rental revenue $ 93,051 $ 92,676 $ 92,114 $ 375 0.4% $ 937 1.0%
Tenant recoveries 23,469 26,827 24,403 (3,358) (12.5) (934) (3.8)
Total rental income 116,520 119,503 116,517 (2,983) (2.5) 3 —
Expenses 34,061 37,554 36,327 (3,493) (9.3) (2,266) (6.2)
Same-Property Cash NOI $ 82,459 $ 81,949 $ 80,190 $ 510 0.6% $ 2,269 2.8%
Rental Margin (1) 88.6% 88.4% 87.1%
As of
4Q17 3Q17 4Q16
Number of buildings 343 343 343
GLA 17,091 17,075 17,067
Leased GLA, end of period 15,650 15,598 15,682
Leased %, end of period 91.6% 91.3% 91.9%
NOI (2) Three Months Ended
4Q17 4Q16
Net income $ 43,472 $ 17,154
General and administrative expenses 8,225 7,894
Transaction expenses (3) 267 1,541
Depreciation and amortization expense 72,086 46,436
Impairment 8,829 3,080
Interest expense and net change in fair value of derivative financial instruments 25,860 12,299
Gain on sales of real estate, net (37,799) (4,754)
Loss on extinguishment of debt, net — 3
Income from unconsolidated joint venture (401) —
Other income (42) (66)
NOI $ 120,497 $ 83,587
NOI percentage growth 44.2%
NOI $ 120,497 $ 83,587
Straight-line rent adjustments, net (2,803) (523)
Amortization of (below) and above market leases/leasehold interests, net and lease termination fees 108 185
Cash NOI $ 117,802 $ 83,249
Notes receivable interest income (104) (115)
Non Same-Property Cash NOI (35,239) (2,944)
Same-Property Cash NOI $ 82,459 $ 80,190
Same-Property Cash NOI percentage growth 2.8%
Portfolio Information
Same-Property Performance and NOI
(as of December 31, 2017, unaudited and dollars and GLA in thousands)
Same-Property Performance
(1) Rental margin percentage presents Same-Property Cash NOI divided by Same-Property rental revenue for the quarter.
(2) Refer to pages 23 and 24 for the reporting definitions of NOI, Cash NOI and Same-Property Cash NOI.
(3) For the period ended 4Q17, amounts reflect the prospective presentation of the early adoption of ASU 2017-01 as of January 1, 2017.
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 16
As of
4Q17 3Q17 2Q17 1Q17 4Q16
Off-campus aligned 26% 26% 26% 29% 30%
On-campus 70 70 71 67 67
On-campus/aligned 96% 96% 97% 96% 97%
Off-campus/non-aligned 4 4 3 4 3
Total 100% 100% 100% 100% 100%
Number of
Buildings
Number of
States GLA (1)
% of Total
GLA
Annualized
Base Rent
% of
Annualized
Base Rent
Medical Office Buildings
Single-tenant 118 22 6,408 26.6% $ 146,821 27.9%
Multi-tenant 312 31 16,397 68.0 341,838 65.0
Other Healthcare Facilities
Hospitals 15 7 954 3.9 32,377 6.1
Senior care 3 1 355 1.5 5,242 1.0
Total 448 33 24,114 100% $ 526,278 100%
Number of
Buildings
Number of
States GLA (1)
% of Total
GLA
Annualized
Base Rent
% of
Annualized
Base Rent
Net-Lease/Gross-Lease
Net-lease 294 30 15,360 63.7% $ 342,539 65.1%
Gross-lease 154 19 8,754 36.3 183,739 34.9
Total 448 33 24,114 100% $ 526,278 100%
(1) Total portfolio GLA excludes GLA of projects under development and includes 100% of the GLA of its unconsolidated joint venture.
(2) Percentages shown as percent of total GLA.
(3) Refer to page 24 for the reporting definitions of Off-campus/non-aligned and On-campus/aligned.
(4) Refer to pages 23 and 24 for the reporting definitions of Customary Health System Restrictions, Economic with Limited Restrictions, and Occupancy Health System Restrictions.
Portfolio Information
Portfolio Diversification by Type, Historical Campus Proximity and Ownership Interests
(as of December 31, 2017, dollars and GLA in thousands)
Portfolio Diversification by Type
Historical Campus Proximity (2)(3)
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 17
Ownership Interests (4)
Number of
Buildings GLA (1)
Annualized
Base Rent
% of
Annualized
Base Rent
As of (2)
4Q17 3Q17 2Q17 1Q17 4Q16
Fee Simple 307 14,999 $ 328,921 63% 62% 62% 62% 69% 68%
Customary Health System
Restrictions 126 8,125 176,002 33 34 34 34 26 26
Economic with Limited
Restrictions 5 262 6,852 1 1 1 1 1 2
Occupancy Health System
Restrictions 10 728 14,503 3 3 3 3 4 4
Leasehold Interest Subtotal 141 9,115 197,357 37 38 38 38 31 32
Total 448 24,114 $ 526,278 100% 100% 100% 100% 100% 100%
Total GLA Average Term (2)
Average Base Rent (3) Tenant
Improvements (3)
Leasing
Commissions (3) Expiring Starting
1Q 2017
New Leases 172 5.5 $ 22.51 $ 18.09 $ 2.28
Renewal Leases 604 4.9 $ 23.18 22.64 7.16 1.24
Total 1Q 2017 776 5.0 22.63 9.62 1.48
2Q 2017
New Leases 107 5.8 23.97 20.46 1.75
Renewal Leases 412 4.4 21.92 22.19 6.64 0.94
Total 2Q 2017 519 4.7 22.36 9.49 1.11
3Q 2017
New Leases 224 6.2 22.74 17.18 1.92
Renewal Leases 521 5.5 21.76 22.24 8.58 1.02
Total 3Q 2017 745 5.7 22.34 11.18 1.29
4Q 2017
New Leases 170 8.4 22.58 17.43 1.91
Renewal Leases 502 4.3 22.59 22.98 10.20 2.80
Total 4Q 2017 672 5.3 22.94 12.11 2.56
YTD 2017
New Leases 673 6.5 22.90 17.98 1.99
Renewal Leases 2,039 4.8 $ 22.45 22.54 8.15 1.50
Total YTD 2017 2,712 5.2 $ 22.58 $ 10.64 $ 1.62
As of
4Q17 3Q17 2Q17 1Q17 4Q16
Total portfolio leased rate 91.8% 91.7% 92.0% 91.8% 91.9%
On-campus/aligned leased rate 91.8 91.7 92.0 91.8 91.9
Off-campus/non-aligned leased rate 91.6 92.5 92.3 90.3 90.1
Total portfolio occupancy rate 91.0 90.6 91.1 91.0 91.2
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 18
Portfolio Information
Historical Leased Rate, New and Renewal Leasing Activity and Tenant Lease Expirations
(as of December 31, 2017, dollars and GLA in thousands)
New and Renewal Leasing Activity
Historical Leased Rate (1)
Expiration
Number of
Expiring Leases
Total GLA of
Expiring Leases
% of GLA of
Expiring
Leases
Annualized Base
Rent of Expiring
Leases
% of Total
Annualized
Base Rent
Month-to-month 158 323 1.5% $ 7,210 1.4%
2018 531 2,021 9.1 46,044 8.8
2019 531 2,377 10.7 61,966 11.8
2020 440 1,978 8.9 47,344 9.0
2021 502 2,577 11.7 56,825 10.8
2022 388 2,226 10.1 52,832 10.0
2023 194 1,506 6.8 30,684 5.8
2024 168 1,792 8.1 40,572 7.7
2025 144 1,001 4.5 21,544 4.1
2026 133 1,082 4.9 21,825 4.1
2027 147 2,042 9.2 56,350 10.7
Thereafter 197 3,214 14.5 83,082 15.8
Total 3,533 22,139 100% $ 526,278 100%
Tenant Lease Expirations
(1) Calculations are based on percentage of total GLA, excluding GLA for projects under development and including 100% of the GLA of its unconsolidated joint venture.
(2) Amounts presented in years.
(3) Amounts presented per square feet.
Health System
Weighted
Average
Remaining
Lease Term (2)
Credit
Rating
Total Leased
GLA
% of
Leased
GLA
Annualized
Base Rent
% of
Annualized
Base Rent
Baylor Scott & White Health 8 Aa3 849 3.8% $ 22,752 4.3%
Highmark-Allegheny Health Network (3) 5 Baa2 914 4.1 17,645 3.3
Community Health Systems (TN) 7 B2 738 3.3 16,227 3.1
Greenville Health System 6 A1 806 3.7 15,976 3.0
Ascension Health 2 Aa2 467 2.1 11,672 2.2
Tufts Medical Center 10 Aa2 252 1.1 10,251 2.0
Steward Health Care System 9 B2 380 1.7 9,418 1.8
Hospital Corporation of America 3 B1 342 1.6 9,407 1.8
Tenet Healthcare System 8 B2 384 1.7 9,171 1.7
Providence St. Joseph Health 2 Aa3 262 1.2 8,942 1.7
SCL Health 14 Aa3 167 0.8 8,238 1.6
Harbin Clinic 10 N/A 313 1.4 6,687 1.3
Adventist Health 4 Aa2 285 1.3 6,228 1.2
Mercy Health 9 Aa3 251 1.1 6,184 1.2
Atrium Health 3 Aa3 190 0.9 5,727 1.1
Total 6,600 29.8% $ 164,525 31.3%
Health System Relationship Highlights
Portfolio Information
Key Health System Relationships and Highlights
(as of December 31, 2017, dollars and GLA in thousands, except as otherwise noted)
Key Health System Relationships (1)
(1) The amounts in this table illustrate only direct leases with selected top health systems in the HTA portfolio and is not inclusive of all HTA’s health system tenants.
(2) Amounts presented in years.
(3) Credit rating refers to Highmark, Inc.
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 19
Baylor Scott & White Health (Aa3), headquartered in Dallas, Texas, is the largest not-for-profit health care system in Texas. Baylor Scott &
White Health was started in 2013 with the combination of Baylor Health Care System and Scott & White Healthcare. BS&W includes 48 hospitals,
more than 1,000 patient care sites, and more than 9,600 active physicians. BS&W provides inpatient, outpatient, rehabilitation, and emergency
medical services helping 5.1 million patients annually.
Highmark-Allegheny Health Network (Baa2), based in Pittsburgh, Pennsylvania, is a diversified healthcare partner that serves members across
the United States through its businesses in health insurance, dental insurance, vision care and reinsurance. In 2013, Highmark and West Penn
Allegheny combined to create an integrated care delivery model which they believe will preserve an important community asset that provides high-
quality, efficient health care for patients. Highmark’s mission is to deliver high quality, accessible, understandable and affordable experiences,
outcomes and solutions to their customers.
Community Health Systems (TN) (B2), headquartered in Franklin, Tennessee, is one of the nation’s leading operators of general acute care
hospitals. The organization includes 137 affiliated hospitals in 21 states with approximately 123,000 employees and 20,000 physicians. Affiliated
hospitals are dedicated to providing quality healthcare for local residents and contribute to the economic development of their communities.
Based on the unique needs of each community served, these hospitals offer a wide range of diagnostic, medical and surgical services in inpatient
and outpatient settings.
Greenville Health System (A1), located in Greenville, South Carolina, is a public not-for-profit academic healthcare delivery system committed to
medical excellence through clinical care, education and research. GHS is a health resource for its community and a leader in transforming the
delivery of healthcare for the benefit of people and communities served. The University of South Carolina School of Medicine Greenville is located
on GHS’ Greenville Memorial Medical Campus. The medical school is focused on transforming healthcare by training physicians to connect with
communities, patients, colleagues and technology in a new, more progressive way.
Ascension Health (Aa2), located in St. Louis, Missouri, is the largest non-profit health system in the United States which includes approximately
150,000 associates and 36,000 aligned providers. Ascension Health operates 2,500 sites including 141 hospitals and 30 senior living facilities
located in 22 states and the District of Columbia. In 2016, Ascension Health had over 39 million patient visits to their care locations.
As of
4Q17 4Q16
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
Financial Statements
Condensed Consolidated Balance Sheets
(unaudited and in thousands, except share data)
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 20
Three Months Ended Year Ended
4Q17 4Q16 4Q17 4Q16
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
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 21
Financial Statements
Condensed Consolidated Statements of Operations
(unaudited and in thousands, except per share data)
Year Ended
4Q17 4Q16 4Q15
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
Financial Statements
Condensed Consolidated Statements of Cash Flows
(unaudited and in thousands)
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 22
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 23
Reporting Definitions
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“Adjusted EBITDAre”): As previously defined as
Adjusted EBITDA, Adjusted EBITDAre is presented on an assumed annualized basis. HTA defines Adjusted EBITDAre as EBITDAre (computed
in accordance with NAREIT as defined below) 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 items. HTA consider 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.
Annualized Base Rent: Annualized base rent is calculated by multiplying contractual base rent for the end of the period by 12 (excluding the
impact of abatements, concessions, and straight-line rent).
Cash Net Operating Income (“Cash NOI”): 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 real estate investment trusts (“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.
Credit Ratings: Credit ratings of HTA’s tenants or their parent companies.
Customary Health System Restrictions: Ground leases with a health system lessor that include restrictions on tenants that may be considered
competitive with the hospital, which may include provisions that tenants must have hospital privileges.
Economic with Limited Restrictions: Ground leases that are primarily economic in nature and contain no material restrictions on tenancy.
Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”): During 2017, NAREIT issued a white paper defining
EBITDA for real estate which HTA effectively adopted during the year ended December 31, 2017. NAREIT defines EBITDAre as net income or
loss (computed in accordance with GAAP) plus: (i) interest expense and net change in the fair value of derivative financial instruments; (ii)
income tax expense (not applicable to HTA); (iii) depreciation and amortization; (iv) impairment; (v) gain or loss from sale of real estate; and (vi)
and proportionate share of joint venture depreciation, amortization and other adjustments.
Funds from Operations (“FFO”): 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.
Gross Leasable Area (“GLA”): Gross leasable area (in square feet).
Investments in Real Estate: Based on acquisition price.
Leased Rate: Leased rate represents the percentage of total GLA that is leased (excluding GLA for properties under development), including
month-to-month leases and leases which have been executed, but which have not yet commenced, as of the date reported.
Metropolitan Statistical Area (“MSA”): Is a geographical region with a relatively high population density at its core and close economic ties
throughout the area. MSAs are defined by the Office of Management and Budget.
Net Operating Income (“NOI”): 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 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.
4Q 2017 I Supplemental Information
Healthcare Trust of America, Inc. I 24
Reporting Definitions - Continued
Normalized Funds Available for Distribution (“Normalized FAD”): HTA 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.
Normalized Funds From Operations (“Normalized FFO”): 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.
Occupancy Health System Restrictions: Ground leases with customary health system restrictions whereby the restrictions cease if occupancy
in the buildings/on-campus fall below stabilized occupancy, which is generally between 85% and 90%.
Off-Campus/Non-Aligned: A building or portfolio that is not located on or adjacent to a healthcare or hospital campus or does not have a majority
alignment with a recognized healthcare system.
On-Campus/Aligned: On-campus refers to a property that is located on or adjacent to a healthcare or hospital campus. Aligned refers to a
property that is not on a healthcare or hospital campus, but anchored by a healthcare system.
Recurring Capital Expenditures, Tenant Improvements and Leasing Commissions: Represents amounts paid for: (i) recurring capital expenditures
required to maintain and re-tenant its properties; (ii) second generation tenant improvements; and (iii) leasing commissions paid to secure new
tenants. Excludes capital expenditures and tenant improvements for recent acquisitions that were contemplated in the purchase price or closing
agreements.
Retention: Represents the sum of the total leased GLA of tenants that renewed a lease during the period over the total GLA of leases that
renewed or expired during the period.
Same-Property Cash Net Operating Income (“Same-Property Cash NOI”): 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.
