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| 8-K - FORM 8-K - HEALTHCARE TRUST OF AMERICA, INC. | d255715d8k.htm |
Exhibit 99.1
PRESS RELEASE
Financial Contact:
Kellie S. Pruitt
Chief Financial Officer
Healthcare Trust of America, Inc.
480-998-3478
kelliepruitt@htareit.com
Healthcare Trust of America, Inc. Reports Third Quarter
2011 Results
Scottsdale, Arizona (November 14, 2011) – Healthcare Trust of America, Inc. (“HTA” or the “Company”), a fully integrated, self-administered, and self-managed real estate investment trust focused primarily on medical office buildings (“MOBs”), announced results for the third quarter ended September 30, 2011.
HTA’s third quarter financial results reflect the strength of HTA’s high quality medical office portfolio combined with the financial flexibility provided by its low leveraged balance sheet. For the third quarter of 2011, HTA’s normalized funds from operations, or normalized FFO, increased by 38% to $28.5 million from $20.6 million for the third quarter of 2010. Normalized FFO excludes from FFO acquisition-related expenses, transition-related charges, termination fee revenue and non-cash fair value adjustments for derivative financial instruments. Net income decreased to $234,000 in the third quarter of 2011 compared to $1.0 million in the third quarter of 2010, primarily because of a $589,000 non-cash loss on interest rate swaps in the third quarter of 2011 compared to a $774,000 non-cash gain in the third quarter of 2010, for a net difference of $1.4 million. Set forth below is a reconciliation of FFO and normalized FFO, non-GAAP measures, to net income (loss).
Normalized FFO increased by 45%, from $59.2 million for the nine months ended September 30, 2010 to $85.7 million for the nine months ended September 30, 2011. Net income also improved to $3.6 million for the nine months ended September 30, 2011 compared to $771,000 during the same period in the prior year, representing a 367% increase.
In October 2011, HTA completed the acquisition of two Class A MOBs located in Phoenix, Arizona, for $32 million, with 118,000 square feet of gross leasable area, or GLA, and a combined occupancy of 88%. At the end of the third quarter 2011, HTA entered into a purchase and sale agreement to acquire a 203,000 square foot on-campus MOB located in Novi, Michigan for $51.32 million with 98% occupancy. The closing of this acquisition is subject to a number of conditions.
As of September 30, 2011, 96% of HTA’s operating portfolio, based on GLA, is located on or adjacent to, or is anchored by, the campuses of nationally and regionally recognized healthcare systems. At the end of the third quarter 2011, HTA had a strong cash position with cash on hand of $122.3 million, an unused $575 million unsecured credit facility and a leverage ratio of mortgage and secured loans payable to total assets of 28%. In July 2011, HTA received an investment grade credit rating due to its MOB operating fundamentals and low-levered balance sheet position, improving HTA’s ability to access the debt markets and achieve favorable pricing.
Funds from Operations, Modified Funds from Operations and Normalized Funds from Operations
HTA defines FFO, a non-GAAP measure, as net income or loss computed in accordance with GAAP, excluding gains or losses from sales of property but including asset impairment write downs, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect FFO. HTA uses modified funds from operations, or MFFO, which excludes from FFO transition charges and acquisition-related expenses, to further evaluate how its portfolio might perform after its acquisition stage is complete and the sustainability of its distributions in the future.
Normalized FFO is calculated by deducting from MFFO termination fee revenue and adjusting for gains/losses in the change in fair value of derivative financial instruments. Like MFFO, HTA believes that normalized FFO is a useful supplemental measure for evaluating the potential future performance of the portfolio without regard to non-routine items and non-cash fair value adjustments for derivative financial instruments.
FFO, MFFO, or normalized FFO should not be considered as an alternative to net income or to cash flows from operating activities and are not intended to be used as a liquidity measure indicative of cash flow available to fund HTA’s cash needs, including its ability to make distributions. FFO, MFFO and normalized FFO should be reviewed in connection with other GAAP measurements. For more information on FFO and MFFO, please see HTA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 as filed with the Securities and Exchange Commission.
The following is the reconciliation of FFO, MFFO and normalized FFO to net income for the three months ended September 30, 2011 and 2010:
| Three Months Ended , | ||||||||
| September 30, 2011 |
September 30, 2010 |
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| Net income |
$ | 234,000 | $ | 1,008,000 | ||||
| Depreciation and amortization — consolidated properties |
27,360,000 | 19,854,000 | ||||||
| Net (income) loss attributable to noncontrolling interest of limited partners |
(9,000) | 125,000 | ||||||
| Depreciation and amortization related to noncontrolling interests |
(66,000) | (616,000) | ||||||
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| FFO attributable to controlling interest |
$ | 27,519,000 | $ | 20,371,000 | ||||
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| FFO per share — basic and diluted |
$ | 0.12 | $ | 0.12 | ||||
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| Acquisition-related expenses |
404,000 | 1,019,000 | ||||||
| Transition-related charges |
— | - | ||||||
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| MFFO attributable to controlling interest |
$ | 27,923,000 | $ | 21,390,000 | ||||
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| MFFO per share — basic and diluted |
$ | 0.12 | $ | 0.13 | ||||
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| Termination fee revenue |
- | - | ||||||
| Net loss (gain) on change in fair value of derivative instruments |
589,000 | (774,000) | ||||||
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| Normalized FFO attributable to controlling interest |
$ | 28,512,000 | $ | 20,616,000 | ||||
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| Normalized FFO per share — basic and diluted |
$ | 0.12 | $ | 0.12 | ||||
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| Weighted average common shares outstanding: |
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| Basic |
229,390,941 | 166,281,800 | ||||||
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| Diluted |
229,568,328 | 166,480,852 | ||||||
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The following is reconciliation of FFO, MFFO and normalized FFO to net income for the nine months ended September 30, 2011 and 2010:
| Nine months Ended September 30, | ||||||||
| 2011 | 2010 | |||||||
| Net income |
$ | 3,586,000 | $ | 771,000 | ||||
| Depreciation and amortization — consolidated properties |
80,811,000 | 55,767,000 | ||||||
| Net (income) loss attributable to noncontrolling interest of limited partners |
(40,000) | 60,000 | ||||||
| Depreciation and amortization related to noncontrolling interests |
(193,000) | (667,000) | ||||||
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| FFO attributable to controlling interest |
$ | 84,164,000 | $ | 55,931,000 | ||||
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| FFO per share — basic and diluted |
$ | 0.38 | $ | 0.36 | ||||
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| Acquisition-related expenses |
1,827,000 | 6,845,000 | ||||||
| Transition-related charges |
— | 1,006,000 | ||||||
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| MFFO attributable to controlling interest |
$ | 85,991,000 | $ | 63,782,000 | ||||
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| MFFO per share — basic and diluted |
$ | 0.39 | $ | 0.41 | ||||
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| Termination fee revenue |
(1,417,000) | (8,000) | ||||||
| Net loss (gain) on change in fair value of derivative instruments |
1,163,000 | (4,571,000) | ||||||
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| Normalized FFO attributable to controlling interest |
$ | 85,737,000 | $ | 59,203,000 | ||||
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| Normalized FFO per share — basic and diluted |
$ | 0.38 | $ | 0.38 | ||||
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| Weighted average common shares outstanding: |
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| Basic |
224,151,270 | 155,480,689 | ||||||
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| Diluted |
224,328,657 | 155,679,741 | ||||||
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Net Operating Income
Net operating income, or NOI, is a non-GAAP financial measure that is defined as net income, computed in accordance with GAAP, generated from HTA’s total portfolio of properties before interest expense, general and administrative expenses, depreciation, amortization, certain one-time charges, and interest and dividend income. 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 management of the properties. Additionally, HTA believes that NOI is a widely accepted measure of comparative operating performance in the real estate community. However, HTA’s use of the term NOI may not be comparable to that of other real estate companies as they may have different methodologies for computing this amount.
The following is the reconciliation of NOI to net income for the three and nine months ended September 30, 2011 and 2010:
| Three Months Ended September 30, | Nine months Ended September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net income |
$ | 234,000 | $ | 1,008,000 | $ | 3,586,000 | $ | 771,000 | ||||||||
| Add: |
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| General and administrative |
8,160,000 | 5,096,000 | 22,223,000 | 12,781,000 | ||||||||||||
| Acquisition-related expenses |
404,000 | 1,019,000 | 1,827,000 | 6,845,000 | ||||||||||||
| Depreciation and amortization |
27,360,000 | 19,854,000 | 80,811,000 | 55,767,000 | ||||||||||||
| Interest expense and net loss on derivative financial instruments |
10,916,000 | 7,706,000 | 32,155,000 | 21,900,000 | ||||||||||||
| Less: |
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| Interest and dividend income |
(17,000) | (24,000) | (161,000) | (74,000) | ||||||||||||
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| Net operating income |
$ | 47,057,000 | $ | 34,659,000 | $ | 140,441,000 | $ | 97,990,000 | ||||||||
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Note that all figures are rounded to reflect approximate amounts. For more information on financial results, please see HTA’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 as filed with the Securities and Exchange Commission.
For more information on Healthcare Trust of America, Inc., please visit www.htareit.com.
About Healthcare Trust of America, Inc.
Healthcare Trust of America, Inc. is a fully integrated, self-administered, self-managed real estate investment trust. Since its formation in 2006, HTA has made 79 geographically diverse acquisitions valued at approximately $2.3 billion based on purchase price, which includes 244 buildings and two other real estate-related assets. HTA’s portfolio totals approximately 11.2 million square feet and includes 220 medical office buildings, ten hospitals, nine skilled nursing and assisted living facilities and five healthcare-related office buildings located in 25 states. With average occupancy of 91%, including leases signed but not commenced, over half of HTA’s current annualized base rent comes from credit rated tenants. Ninety-six percent of HTA’s portfolio is strategically located on-campus or aligned with recognized healthcare systems.
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 from those expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, the following: we may not be able to access the public debt markets or access other sources of debt or equity financing, which may limit our growth; our results may be impacted by, among other things, uncertainties relating to the debt and equity capital markets; uncertainties relating to changes in general economic and real estate conditions; uncertainties relating to the implementation of recent healthcare legislation; uncertainties regarding changes in the healthcare industry; the uncertainties relating to the implementation of HTA’s real estate investment strategy; and other risk factors as outlined in HTA’s periodic reports, as filed with the Securities and Exchange Commission.
Healthcare Trust of America, Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 2011 and December 31, 2010
(Unaudited)
| September 30, 2011 | December 31, 2010 | |||||||
| ASSETS | ||||||||
| Real estate investments, net |
$ | 1,785,287,000 | $ | 1,797,463,000 | ||||
| Real estate notes receivable, net |
58,850,000 | 57,091,000 | ||||||
| Cash and cash equivalents |
122,303,000 | 29,270,000 | ||||||
| Accounts and other receivables, net |
14,838,000 | 16,385,000 | ||||||
| Restricted cash and escrow deposits |
17,942,000 | 26,679,000 | ||||||
| Identified intangible assets, net |
279,294,000 | 304,355,000 | ||||||
| Other assets, net |
55,560,000 | 40,552,000 | ||||||
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| Total assets |
$ | 2,334,074,000 | $ | 2,271,795,000 | ||||
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| LIABILITIES AND EQUITY | ||||||||
| Liabilities: |
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| Mortgage and secured term loans payable, net |
$ | 650,111,000 | $ | 699,526,000 | ||||
| Outstanding balance on unsecured revolving credit facility |
— | 7,000,000 | ||||||
| Accounts payable and accrued liabilities |
48,425,000 | 43,033,000 | ||||||
| Derivative financial instruments—interest rate swaps |
2,104,000 | 1,527,000 | ||||||
| Security deposits, prepaid rent and other liabilities |
20,313,000 | 16,168,000 | ||||||
| Identified intangible liabilities, net |
12,198,000 | 13,428,000 | ||||||
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| Total liabilities |
733,151,000 | 780,682,000 | ||||||
| Commitments and contingencies |
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| Redeemable noncontrolling interest of limited partners |
3,784,000 | 3,867,000 | ||||||
| Stockholders’ Equity: |
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| Preferred stock, $0.01 par value; 200,000,000 shares authorized; none issued and outstanding |
— | — | ||||||
| Common stock, $0.01 par value; 1,000,000,000 shares authorized; 227,611,070 and 202,643,705 shares issued and outstanding as of September 30, 2011 and December 31, 2010, respectively |
2,278,000 | 2,026,000 | ||||||
| Additional paid-in capital |
2,022,398,000 | 1,795,413,000 | ||||||
| Accumulated deficit |
(427,537,000 | ) | (310,193,000 | ) | ||||
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| Total stockholders’ equity |
1,597,139,000 | 1,487,246,000 | ||||||
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| Total liabilities and equity |
$ | 2,334,074,000 | $ | 2,271,795,000 | ||||
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Healthcare Trust of America, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenues: |
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| Rental income |
$ | 68,291,000 | $ | 50,847,000 | $ | 203,960,000 | $ | 139,640,000 | ||||||||
| Interest income from mortgage notes receivable and other income |
1,649,000 | 1,649,000 | 4,946,000 | 5,937,000 | ||||||||||||
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| Total revenues |
69,940,000 | 52,496,000 | 208,906,000 | 145,577,000 | ||||||||||||
| Expenses: |
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| Rental expenses |
22,883,000 | 17,837,000 | 68,465,000 | 47,587,000 | ||||||||||||
| General and administrative |
8,160,000 | 5,096,000 | 22,223,000 | 12,781,000 | ||||||||||||
| Acquisition-related expenses |
404,000 | 1,019,000 | 1,827,000 | 6,845,000 | ||||||||||||
| Depreciation and amortization |
27,360,000 | 19,854,000 | 80,811,000 | 55,767,000 | ||||||||||||
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| Total expenses |
58,807,000 | 43,806,000 | 173,326,000 | 122,980,000 | ||||||||||||
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| Income before other income (expense) |
11,133,000 | 8,690,000 | 35,580,000 | 22,597,000 | ||||||||||||
| Other income (expense): |
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| Interest expense (including amortization of deferred financing costs and debt premium/discount): |
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| Interest expense related to mortgage loan payables and credit facility |
(9,936,000 | ) | (6,183,000 | ) | (29,875,000 | ) | (18,581,000 | ) | ||||||||
| Interest expense related to derivative financial instruments and net change in fair value of derivative financial instruments |
(980,000 | ) | (1,523,000 | ) | (2,280,000 | ) | (3,319,000 | ) | ||||||||
| Interest and dividend income |
17,000 | 24,000 | 161,000 | 74,000 | ||||||||||||
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| Net income (loss) |
234,000 | 1,008,000 | 3,586,000 | 771,000 | ||||||||||||
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| Less: Net (income) loss attributable to noncontrolling interest of limited partners |
(9,000 | ) | 125,000 | (40,000 | ) | 60,000 | ||||||||||
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| Net income (loss) attributable to controlling interest |
$ | 225,000 | $ | 1,133,000 | $ | 3,546,000 | $ | 831,000 | ||||||||
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| Net income (loss) per share attributable to controlling interest on distributed and undistributed earnings — basic and diluted |
$ | 0.00 | $ | 0.01 | $ | 0.02 | $ | 0.01 | ||||||||
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| Weighted average number of shares outstanding — |
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| Basic |
229,390,941 | 166,281,800 | 224,151,270 | 155,480,689 | ||||||||||||
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| Diluted |
229,568,328 | 166,480,852 | 224,328,657 | 155,679,741 | ||||||||||||
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