Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - HEALTHCARE TRUST OF AMERICA, INC. | ex99120151025.htm |
| 8-K - 8-K - HEALTHCARE TRUST OF AMERICA, INC. | hta201610258-k.htm |
99.1
3Q 2016 Supplemental Information
Exhibit 99.2
MISSION MEDICAL OFFICE PORTFOIO
MISSION VIEJO, CA
Company Overview
Company Information 3
Quarter and Year-to-Date Highlights 4
Financial Highlights 5
Company Snapshot 6
Financial Information
FFO, Normalized FFO, Normalized FAD and Adjusted EBITDA 7
Capitalization, Interest Expense and Covenants 8
Debt Composition and Maturity Schedule 9
Portfolio Information
Investment Activity 10
Regional Portfolio Distribution and Key Markets and Top 75 MSA Concentration 11
Same-Property Performance and NOI 12
Portfolio Diversification by Type, Historical Campus Proximity and Ownership Interests 13
Tenant Lease Expirations and Historical Leased Rate 14
Key Health System Relationships and In-House Property Management and Leasing Platform 15
Health System Relationship Highlights 16
Financial Statements
Condensed Consolidated Balance Sheets 17
Condensed Consolidated Statements of Operations 18
Condensed Consolidated Statements of Cash Flows 19
Reporting Definitions 20
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
3Q 2016 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 $4.2 billion primarily in MOBs and other healthcare assets comprising 17.6
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.
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.
Company Overview
Executive Management
Scott D. Peters I Chairman, Chief Executive Officer and President
Robert A. Milligan I Chief Financial Officer, Secretary and Treasurer
Mark D. Engstrom I Executive Vice President - Acquisitions
Amanda L. Houghton I Executive Vice President - Asset Management
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
Investor Relations
Robert A. Milligan I Chief Financial Officer, Secretary and Treasurer
Mary C. Jensen I Vice President - Capital Markets
16435 North Scottsdale Road, Suite 320
Scottsdale, Arizona 85254
480.998.3478
info@htareit.com
Transfer Agent
Computershare
P.O. Box 30170
College Station, Texas 77842-3170
888.801.0107
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 3
Third Quarter 2016 Highlights
Operating
• Net Income Attributable to Common Stockholders: Decreased 0.6% to $6.4 million, compared to Q3 2015. Earnings per diluted share
decreased 20.0% to $0.04 per diluted share, compared to Q3 2015. Normalized Funds from Operations (“FFO”), as noted below,
increased due to the continued growth in our operations, however, net income was adversely affected by the payment of debt
extinguishment costs and interest related to debt.
• FFO: As defined by the National Association of Real Estate Investment Trusts (“NAREIT”), increased 16.1% to $54.0 million, compared to
Q3 2015. FFO per diluted share increased 5.6% to $0.38 per diluted share, compared to Q3 2015.
• Normalized FFO: Increased 14.3% to $57.1 million, compared to Q3 2015.
• Normalized FFO Per Diluted Share: Increased 2.6% to $0.40 per diluted share, compared to Q3 2015.
• Same-Property Cash Net Operating Income (“NOI”): Increased $2.2 million, or 3.3%, to $68.6 million, compared to Q3 2015. Same-
Property rental revenue increased $2.1 million, or 2.8%, to $77.7 million, compared to Q3 2015.
Portfolio
• Investments: HTA invested $197.1 million to acquire medical office buildings totaling approximately 536,000 square feet of gross leasable
area (“GLA”) that were 92% leased in our key markets of Tampa, Florida and Birmingham, Alabama and strategically expanded our
presence in Orange County/Los Angeles, California.
• Leasing: HTA entered into new and renewal leases on approximately 339,000 square feet of GLA, or 1.9% of its portfolio. Tenant
retention for the Same-Property portfolio was 67% by GLA for the quarter, which included approximately 309,000 square feet of expiring
leases. Tenant retention for the Same-Property portfolio, excluding the impact of the Forest Park Medical Center hospital leases, was 84%
by GLA for the quarter. Renewal leases included tenant improvements of $2.09 per square foot per year of the lease term and
approximately six days of free rent per year of the lease term.
Balance Sheet and Capital Markets
• Balance Sheet: At the end of the quarter, HTA had total leverage of 26.4% measured as debt to capitalization, and 5.5x measured as debt
to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”). Total liquidity at the end of the quarter was $835.4
million, including $817.5 million of availability under its unsecured revolving credit facility and $17.9 million of cash and cash equivalents.
• Debt: HTA issued $350.0 million of senior unsecured 10-year notes, with a coupon of 3.50% per annum and Healthcare Trust of America
Holdings, LP, the operating partnership of HTA, general partner, executed a $200.0 million 7-year unsecured term loan with proceeds used
to refinance its $155.0 million unsecured term loan due in 2019 and pay down existing mortgage loans of $75.7 million, generating
prepayment penalties of $3.0 million.
• Equity: HTA issued $126.9 million of equity comprised of $125.9 million from the sale of common stock in an underwritten public offering
at an average price of $33.67 per share and $1.0 million from the issuance of Class A Operating Partnership Units (“OP Units”) in
connection with an acquisition transaction.
Year-to-Date 2016 Highlights
Operating
• Net Income Attributable to Common Stockholders: Increased 30.2% to $29.4 million, compared to year-to-date 2015. Earnings per
diluted share increased 16.7% to $0.21 per diluted share, compared to year-to-date 2015.
• FFO: As defined by NAREIT, increased 11.8% to $154.6 million, compared to year-to-date 2015. FFO per diluted share increased 3.7% to
$1.12 per diluted share, compared to year-to-date 2015.
• Normalized FFO: Increased 14.1% to $165.7 million, compared to year-to-date 2015.
• Normalized FFO Per Diluted Share: Increased 5.3% to $1.20 per diluted share, compared to year-to-date 2015.
• Same-Property Cash NOI: Increased $5.6 million, or 3.0%, to $192.8 million, compared to year-to-date 2015. Same-Property rental
revenue increased $4.9 million, or 2.3%, to $218.3 million, compared to year-to-date 2015.
Portfolio
• Investments: HTA completed $633.0 million of investments totaling approximately 2.2 million square feet of GLA that were 93% leased as
of the date of acquisition.
• Dispositions: HTA completed the disposition of four senior care facilities located in Texas for an aggregate gross sales price of $26.5
million (approximately 155,000 square feet of GLA), generating a gain of $4.2 million.
• Leasing: HTA entered into new and renewal leases on approximately 1.1 million square feet of GLA, or 6.4% of its portfolio. Tenant
retention for the Same-Property portfolio was 79% by GLA year-to-date, which included approximately 932,000 square feet of expiring
leases. Tenant retention for the Same-Property portfolio, excluding the impact the Forest Park Medical Center hospital leases, was 84%
by GLA year-to-date. Renewal leases included tenant improvements of $1.29 per square foot per year of the lease term and
approximately four days of free rent per year of the lease term.
• Leased Rate: The leased rate by GLA was 91.8% as of September 30, 2016. For the Same-Property portfolio the leased rate by GLA was
91.7% as of September 30, 2016.
Capital Markets
• Equity: HTA issued $492.5 million of equity comprised of $297.8 million from the sale of common stock in underwritten public offerings at
an average price of $30.64 per share, $122.9 million from the sale of common stock under the at-the-market offering program at an
average price of $27.82 per share, and $71.8 million from the issuance of OP Units in connection with acquisition transactions.
Company Overview
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 4
(1) Refer to pages 20 and 21 for the reporting definitions of NOI, Adjusted EBITDA, FFO, Normalized FFO and Normalized FAD.
(2) Refer to page 12 for a reconciliation of GAAP Net Income to NOI.
(3) Refer to page 7 for the reconciliations of GAAP Net Income Attributable to Common Stockholders to FFO, Normalized FFO, Normalized FAD and Adjusted EBITDA.
(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 EBITDA divided by interest expense (excluding change in fair market value of derivatives) and scheduled principal payments.
(6) For the period 3Q15, amounts have been adjusted to reflect the retrospective presentation of the early adoption of ASU 2015-03 and 2015-15 as of December 31, 2015.
(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 total debt
outstanding at the end of the period. Refer to page 8 for details.
Financial Highlights
(unaudited and dollars in thousands, except per share data)
Three Months Ended
3Q16 2Q16 1Q16 4Q15 3Q15
INCOME ITEMS
Revenues $ 118,340 $ 113,234 $ 107,315 $ 102,049 $ 103,942
NOl (1)(2) 81,455 78,173 73,962 71,514 71,021
Adjusted EBITDA (1)(3) 311,776 294,256 279,916 267,476 265,024
FFO (1)(3) 53,972 53,273 47,381 49,924 46,499
Normalized FFO (1)(3) 57,132 56,461 52,115 50,737 50,001
Normalized FAD (1)(3) 49,222 50,061 48,603 44,889 44,683
Net income attributable to
common stockholders per diluted share $ 0.04 $ 0.09 $ 0.08 $ 0.08 $ 0.05
FFO per diluted share 0.38 0.38 0.36 0.39 0.36
Normalized FFO per diluted share 0.40 0.40 0.40 0.39 0.39
Same-Property Cash NOI growth (4) 3.3% 3.1% 3.0% 3.1% 3.1%
Fixed charge coverage ratio (5) 4.08x 4.06x 3.85x 3.84x 3.77x
As of
3Q16 2Q16 1Q16 4Q15 3Q15
ASSETS
Gross real estate investments $ 4,255,076 $ 4,058,071 $ 3,806,206 $ 3,635,612 $ 3,600,705
Total assets (6) 3,715,890 3,532,289 3,310,519 3,172,300 3,170,712
CAPITALIZATION
Total debt (6) $ 1,712,598 $ 1,631,642 $ 1,667,320 $ 1,590,696 $ 1,567,091
Total capitalization (6)(7) 6,476,814 6,227,027 5,565,352 5,068,666 4,728,097
Total debt/capitalization (6) 26.4% 26.2% 30.0% 31.4% 33.1%
Company Overview
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 5
Investments in Real Estate (1) $ 4.2
Total portfolio GLA (2) 17.6
Leased rate 91.8%
Same-Property portfolio tenant retention rate (YTD)(3) 79%
% of GLA on-campus/aligned 97%
% of invested dollars in key markets & top 75 MSAs (4) 92%
Investment grade tenants (5) 44%
Credit rated tenants (5) 60%
Weighted average remaining lease term for all buildings (6) 5.3
Weighted average remaining lease term for single-tenant buildings (6) 6.9
Weighted average remaining lease term for multi-tenant buildings (6) 4.6
Credit ratings (by Moody’s and Standard & Poor’s) Baa2(Stable)/BBB(Stable)
Cash and cash equivalents (2) $ 17.9
Debt/capitalization 26.4%
Weighted average interest rate per annum on portfolio debt (7) 3.35%
Building Type Presence in Top MSAs (8)
Company Snapshot
(as of September 30, 2016)
Company Overview
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 6
(1) Amount presented in billions. Refer to page 20 for the reporting definition of Investments in Real Estate.
(2) Amounts presented in millions.
(3) Refer to page 21 for the reporting definition of Retention.
(4) Refer to page 20 for the reporting definition of Metropolitan Statistical Area.
(5) Amounts based on annualized base rent.
(6) Amounts presented in years.
(7) Includes the impact of interest rate swaps.
(8) Refer to page 11 for a detailed table of our Key Markets and Top 75 MSA Concentration.
% of Portfolio (based on GLA) % of Portfolio (based on invested dollars)
FFO, Normalized FFO and Normalized FAD Three Months Ended Nine Months Ended
3Q16 3Q15 3Q16 3Q15
Net income attributable to common stockholders $ 6,427 $ 6,463 $ 29,361 $ 22,559
Depreciation and amortization expense related to investments in real
estate 47,545 40,188 129,477 114,220
Gain on sale of real estate, net — (152) (4,212) (152)
Impairment — — — 1,655
FFO attributable to common stockholders $ 53,972 $ 46,499 $ 154,626 $ 138,282
Acquisition-related expenses 1,122 907 4,997 3,365
(Gain) loss on change in fair value of derivative financial instruments, net (1,306) 2,383 2,144 3,079
Loss (gain) on extinguishment of debt, net 3,000 14 3,022 (107)
Noncontrolling income from partnership units included in diluted shares 211 71 802 348
Other normalizing items, net (1) 133 127 117 216
Normalized FFO attributable to common stockholders $ 57,132 $ 50,001 $ 165,708 $ 145,183
Other income (95) (72) (220) (91)
Non-cash compensation expense 2,103 1,358 5,136 4,462
Straight-line rent adjustments, net (1,161) (1,750) (3,636) (5,835)
Amortization of below and above market leases/leasehold interests and
corporate assets, net 323 603 1,476 1,755
Deferred revenue - tenant improvement related 7 (193) — (462)
Amortization of deferred financing costs and debt discount/premium, net 795 702 2,288 2,445
Recurring capital expenditures, tenant improvements and leasing
commissions (9,882) (5,966) (22,866) (14,022)
Normalized FAD attributable to common stockholders $ 49,222 $ 44,683 $ 147,886 $ 133,435
Net income attributable to common stockholders per diluted share $ 0.04 $ 0.05 $ 0.21 $ 0.18
FFO adjustments per diluted share, net 0.34 0.31 0.91 0.90
FFO attributable to common stockholders per diluted share $ 0.38 $ 0.36 $ 1.12 $ 1.08
Normalized FFO adjustments per diluted share, net 0.02 0.03 0.08 0.06
Normalized FFO attributable to common stockholders per diluted
share $ 0.40 $ 0.39 $ 1.20 $ 1.14
Weighted average diluted common shares outstanding 143,138 128,793 138,314 127,680
Adjusted EBITDA
Three Months
Ended
3Q16
Net income $ 6,639
Depreciation and amortization expense 47,864
Interest expense and net change in fair value of derivative financial
instruments 15,632
EBITDA $ 70,135
Acquisition-related expenses 1,122
Non-cash compensation expense 2,103
Pro forma impact of acquisitions 1,451
Loss on extinguishment of debt, net 3,000
Other normalizing items, net (1) 133
77,944
Adjusted EBITDA $ 311,776
FFO, Normalized FFO, Normalized FAD and Adjusted EBITDA
(unaudited and in thousands, except per share data)
Financial Information
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 7
(1) For the period 3Q16 and all periods thereafter, other normalizing items excludes lease termination fees as they are deemed to be generated in the ordinary course of business.
Capitalization
Unsecured revolving credit facility $ 27,000
Unsecured term loans 500,000
Unsecured senior notes 950,000
Secured mortgage loans 248,937
Deferred financing costs, net (9,853)
Discount, net (3,486)
Total debt $ 1,712,598
Stock price (as of September 30, 2016) $ 32.62
Total diluted common shares outstanding 146,052
Equity capitalization $ 4,764,216
Total capitalization $ 6,476,814
Total undepreciated assets $ 4,495,268
Debt/capitalization 26.4%
Debt/undepreciated assets 38.1%
Debt/adjusted EBITDA ratio 5.5x
Equity - 73%
Secured debt - 4%
Unsecured debt - 23%
Financial Information
Capitalization, Interest Expense and Covenants
(as of September 30, 2016, dollars and shares in thousands, except stock price)
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 8
Interest Expense
Covenants
Three Months Ended Nine Months Ended
3Q16 3Q15 3Q16 3Q15
Interest related to derivative financial instruments $ 552 $ 903 $ 1,856 $ 2,278
(Gain) loss on change in fair value of derivative financial instruments, net (1,306) 2,383 2,144 3,079
Total interest related to derivative financial instruments, including net change
in fair value of derivative financial instruments
(754) 3,286 4,000 5,357
Interest related to debt (1) 16,386 13,536 44,503 41,499
Total interest expense $ 15,632 $ 16,822 $ 48,503 $ 46,856
Interest expense excluding net change in fair value of derivative financial
instruments $ 16,938 $ 14,439 $ 46,359 $ 43,777
Bank Loans Required 3Q16
Total leverage ≤ 60% 38%
Secured leverage ≤ 30% 5%
Fixed charge coverage ≥ 1.50x 4.08x
Unencumbered leverage ≤ 60% 38%
Unencumbered coverage ≥ 1.75x 4.94x
Senior Notes Required 3Q16
Total leverage ≤ 60% 39%
Secured leverage ≤ 40% 6%
Unencumbered asset coverage ≥ 150% 255%
Interest coverage ≥ 1.50x 3.83x
(1) Includes the acceleration of deferred loan fees from the execution of our $200.0 million unsecured term loan due in 2023, proceeds from which were used to refinance our $155.0
million unsecured term loan due in 2019, for the three and nine months ended September 30, 2016.
Financial Information
Debt Composition and Maturity Schedule
(as of September 30, 2016, dollars in thousands)
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 9
Unsecured
Revolving
Credit Facility
due 2020 (1)
Secured
Mortgage
Loans
Unsecured
Term Loan
due 2019 (2)
Unsecured
Senior Notes
due 2021
Unsecured
Senior Notes
due 2023
Unsecured
Term Loan due
2023
Unsecured
Senior Notes
due 2026 Total
2016 $ — $ 1,433 $ — $ — $ — $ — $ — 1,433
2017 — 87,268 — — — — — 87,268
2018 — 4,333 — — — — — 4,333
2019 — 4,580 300,000 — — — — 304,580
2020 27,000 49,795 — — — — — 76,795
Thereafter — 101,528 — 300,000 300,000 200,000 350,000 1,251,528
Subtotal 27,000 248,937 300,000 300,000 300,000 200,000 350,000 1,725,937
Deferred
financing costs,
net — (397) (1,719) (2,060) (2,223) (1,945) (1,509) (9,853)
Premiums
(discounts), net — 1,913 — (1,535) (1,630) — (2,234) (3,486)
Total $ 27,000 $ 250,453 $ 298,281 $ 296,405 $ 296,147 $ 198,055 $ 346,257 1,712,598
Stated rate (3) 1.55% 5.03% 1.65% 3.38% 3.70% 2.15% 3.50% 3.22%
Hedged rate (4) 1.55% 5.43% 1.65% 3.38% 3.70% 2.76% 3.50% 3.35%
Debt Composition
(1) Rate does not include the 20 basis point facility fee that is payable on the entire $850 million revolving credit facility.
(2) Does not reflect the 1-year extension at the option of the borrower which could extend the term loan to 2020.
(3) The stated rate on the debt instrument as of the end of the period.
(4) The effective rate incorporates any swap instruments that serve to fix variable rate debt, as of the end of the period.
Debt Maturity Schedule
Unsecured Revolving Credit Facility due 2020 Unsecured Term Loan due 2023
Unsecured Term Loan due 2019 Unsecured Senior Notes due 2021
Unsecured Senior Notes due 2023 Unsecured Senior Notes due 2026
Secured Mortgages Loans
$1,500,000
$1,200,000
$900,000
$600,000
$300,000
$0
2016 2017 2018 2019 2020 Thereafter
$1,433
$87,268
$4,333
$304,580
$76,795
$1,251,528
(2)
(1)
Property Market Date Acquired
% Leased at
Acquisition Purchase Price GLA
Yale One Long Wharf MOB New Haven, CT January 99% $ 73,810 287
Texas MOB Portfolio (7 buildings) Texas (Various) February 86 82,027 483
Charleston MOB Charleston, SC February 100 6,170 22
Hilliard II MOB Columbus, OH April 75 8,450 35
Connecticut MOB Portfolio (26 buildings) Connecticut (Various) April 98 180,286 579
Polaris MOB Columbus, OH April 100 14,600 45
Legacy MOB Portland, OR May 100 7,750 22
Independence MOB Dallas, TX May 90 24,000 72
Simon Williamson MOB Birmingham, AL June 100 27,750 102
Middletown MOB (2 buildings) Hartford, CT June 80 11,000 64
Mission Viejo MOB (4 buildings) Orange County, CA August 100 150,000 262
Birmingham MOB (3 buildings) Birmingham, AL August 82 36,730 217
Riverside MOB Tampa, FL September 98 10,393 57
Total $ 632,966 2,247
Portfolio Information
Investment Activity
(as of September 30, 2016, dollars and GLA in thousands)
2016 Acquisitions
Annual Investments (1)
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 10
Dispositions Acquisitions
$900,000
$700,000
$500,000
$300,000
$100,000
-$100,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
$413,150
$542,976
$455,950
$802,148
$68,314
$294,937
$397,826
$439,530
(1) Excludes real estate notes receivable.
(2) Excludes $9.4 million of additional investments which include the expansion of HTA’s Raleigh Medical Center Campus and a corporate office building in Charleston.
$271,510 (2)
$(35,685)
$632,966
Property Location Date Disposed Disposition Price GLA
SWLTC Portfolio (4 buildings) Texas (Various) June $ 26,500 155
2016 Dispositions
$(26,500) $(82,885)
As of September 30, 2016, HTA has invested $4.2 billion primarily in MOBs and other healthcare assets comprising 17.6 million square feet of GLA.
Region Investment % of Investment Total GLA % of Portfolio
Annualized
Base Rent (1)
% of
Annualized
Base Rent
Southwest $ 1,286,774 30.8% 4,968 28.3% $ 109,041 29.6%
Northeast 1,150,560 27.5 4,420 25.2 99,631 27.0
Southeast 1,127,367 27.0 5,180 29.5 105,217 28.5
Midwest 608,894 14.5 2,961 16.9 54,799 14.8
Northwest 7,750 0.2 23 0.1 514 0.1
Total $ 4,181,345 100% 17,552 100% $ 369,202 100%
Portfolio Information
Regional Portfolio Distribution and Key Markets and Top 75 MSA Concentration
(as of September 30, 2016, dollars and GLA in thousands)
Regional Portfolio Distribution
Key Markets and Top 75 MSA Concentration (2)
(1) Refer to page 20 for the reporting definition of Annualized Base Rent.
(2) Key markets are titled as such based on HTA’s concentration in the respective MSA.
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 11
Key Markets Investment
% of
Investment Total GLA % of Portfolio
Annualized
Base Rent
% of
Annualized
Base Rent
Boston, MA $ 384,900 9.2% 947 5.4% $ 30,394 8.2%
Hartford/New Haven, CT 265,095 6.3 934 5.3 19,744 5.3
Dallas, TX 244,778 5.9 730 4.2 17,701 4.8
Orange County/Los Angeles, CA 199,200 4.8 503 2.9 13,026 3.5
Houston, TX 196,295 4.7 874 5.0 20,207 5.5
Phoenix, AZ 189,641 4.5 1,018 5.8 19,532 5.3
Albany, NY 179,253 4.3 880 5.0 16,148 4.4
Greenville, SC 179,070 4.3 965 5.5 17,728 4.8
Miami, FL 173,807 4.2 888 5.1 18,401 5.0
Atlanta, GA 156,743 3.7 663 3.8 13,046 3.5
Indianapolis, IN 155,700 3.7 976 5.6 14,999 4.1
Pittsburgh, PA 148,612 3.6 1,094 6.2 20,203 5.5
Tampa, FL 133,986 3.2 439 2.5 9,643 2.6
Denver, CO 111,700 2.7 371 2.1 8,541 2.3
Raleigh, NC 100,260 2.4 434 2.5 9,917 2.7
White Plains, NY 92,750 2.2 276 1.6 6,851 1.9
Charleston, SC 71,271 1.7 275 1.6 5,802 1.6
Columbus, OH 69,850 1.7 288 1.6 4,551 1.2
Orlando, FL 62,300 1.5 289 1.6 6,057 1.6
Honolulu, HI 47,250 1.1 143 0.8 3,795 1.0
Top 20 MSAs 3,162,461 75.7 12,987 74.1 276,286 74.8
Additional Top 75 MSAs 692,198 16.6 3,101 17.7 63,667 17.2
Total Key Markets & Top 75
MSAs $ 3,854,659 92.3% 16,088 91.8% $ 339,953 92.0%
Three Months Ended Sequential Year-Over-Year
3Q16 2Q16 3Q15 $ Change % Change $ Change % Change
Rental revenue $ 77,711 $ 77,195 $ 75,587 $ 516 0.7% $ 2,124 2.8%
Tenant recoveries 20,644 19,821 21,773 823 4.2 (1,129) (5.2)
Total rental income 98,355 97,016 97,360 1,339 1.4 995 1.0
Expenses 29,716 29,024 30,889 692 2.4 (1,173) (3.8)
Same-Property Cash NOI $ 68,639 $ 67,992 $ 66,471 $ 647 1.0% $ 2,168 3.3%
As of
3Q16 2Q16 3Q15
Number of buildings 283 283 283
GLA 14,479 14,479 14,479
Leased GLA, end of period 13,271 13,348 13,301
Leased %, end of period 91.7% 92.2% 91.9%
NOI (1) Three Months Ended
3Q16 3Q15
Net income $ 6,639 $ 6,554
General and administrative expenses 7,293 6,430
Acquisition-related expenses 1,122 907
Depreciation and amortization expense 47,864 40,518
Interest expense and net change in fair value of derivative financial instruments 15,632 16,822
Gain on sale of real estate, net — (152)
Loss (gain) on extinguishment of debt, net 3,000 14
Other income (95) (72)
NOI $ 81,455 $ 71,021
NOI percentage growth 14.7%
NOI $ 81,455 $ 71,021
Straight-line rent adjustments, net (1,161) (1,750)
Amortization of below and above market leases/leasehold interests, net and lease termination fees (2) 3 598
Cash NOI $ 80,297 $ 69,869
Notes receivable interest income (68) —
Non Same-Property Cash NOI (11,590) (3,398)
Same-Property Cash NOI $ 68,639 $ 66,471
Same-Property Cash NOI percentage growth 3.3%
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 12
Portfolio Information
Same-Property Performance and NOI
(as of September 30, 2016, unaudited and dollars and GLA in thousands)
Same-Property Performance
(1) Refer to pages 20 and 21 for the reporting definitions of NOI, Cash NOI and Same-Property Cash NOI.
(2) For the period 3Q16 and all periods thereafter, Cash NOI includes lease termination fees as they are deemed to be generated in the ordinary course of business.
As of
3Q16 2Q16 1Q16 4Q15 3Q15
Off-campus aligned 29% 30% 27% 27% 27%
On-campus 68 67 70 70 70
On-campus/aligned 97% 97% 97% 97% 97%
Off-campus/non-aligned 3 3 3 3 3
Total 100% 100% 100% 100% 100%
Number of
Buildings
Number of
States GLA
% of Total
GLA
Annualized
Base Rent
% of
Annualized
Base Rent
Medical Office Buildings
Single-tenant 80 18 4,059 23.1% $ 86,979 23.5%
Multi-tenant 256 26 12,412 70.8 252,892 68.5
Other Healthcare Facilities
Hospitals 10 4 655 3.7 23,200 6.3
Senior care 5 2 426 2.4 6,131 1.7
Total 351 31 17,552 100% $ 369,202 100%
Number of
Buildings
Number of
States GLA
% of Total
GLA
Annualized
Base Rent
% of
Annualized
Base Rent
Net-Lease/Gross-Lease
Net-lease 226 29 11,020 62.8% $ 240,238 65.1%
Gross-lease 125 17 6,532 37.2 128,964 34.9
Total 351 31 17,552 100% $ 369,202 100%
(1) Percentages shown as percent of total GLA.
(2) Refer to page 21 for the reporting definitions of Off-campus/non-aligned and On-campus/aligned.
(3) Refer to pages 20 and 21 for the reporting definitions of Customary Health System Restrictions, Economic with Limited Restrictions and Occupancy Based Restrictions.
Portfolio Information
Portfolio Diversification by Type, Historical Campus Proximity and Ownership Interests
(as of September 30, 2016, dollars and GLA in thousands)
Portfolio Diversification by Type
Historical Campus Proximity (1)(2)
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 13
Ownership Interests (3)
Number of
Buildings GLA
Annualized
Base Rent
% of
Annualized
Base Rent
As of (1)
3Q16 2Q16 1Q16 4Q15 3Q15
Fee Simple 251 11,968 $ 247,258 67% 68% 68% 68% 68% 68%
Customary health system
restrictions 85 4,595 100,804 27 26 26 25 25 25
Economic with limited
restrictions 5 261 6,901 2 2 2 2 2 2
Occupancy based restrictions 10 728 14,239 4 4 4 5 5 5
Leasehold Interest Subtotal 100 5,584 121,944 33 32 32 32 32 32
Total 351 17,552 $ 369,202 100% 100% 100% 100% 100% 100%
As of
3Q16 2Q16 1Q16 4Q15 3Q15
Total portfolio leased rate 91.8% 92.2% 92.1% 92.0% 92.0%
On-campus/aligned leased rate 91.8% 92.3% 92.2% 92.1% 92.1%
Off-campus/non-aligned leased rate 90.8% 89.4% 88.3% 88.7% 88.4%
Total portfolio occupancy rate 91.3% 91.6% 91.4% 91.4% 91.2%
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 168 401 2.5% $ 7,181 1.9%
2016 101 270 1.7 5,833 1.6
2017 489 1,636 10.2 37,422 10.1
2018 383 1,838 11.4 38,668 10.5
2019 361 1,669 10.4 44,012 11.9
2020 266 1,243 7.7 30,271 8.2
2021 365 2,062 12.8 44,506 12.1
2022 153 1,259 7.8 29,784 8.1
2023 102 955 5.9 19,503 5.3
2024 100 1,476 9.2 32,421 8.8
2025 107 616 3.8 13,533 3.7
Thereafter 182 2,677 16.6 66,068 17.8
Total 2,777 16,102 100% $ 369,202 100%
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 14
Portfolio Information
Tenant Lease Expirations and Historical Leased Rate
(as of September 30, 2016, dollars and GLA in thousands)
Tenant Lease Expirations
Historical Leased Rate
Health System
Weighted
Average
Remaining
Lease Term (2)
Credit
Rating
Total Leased
GLA
% of
Leased
GLA
Annualized
Base Rent
% of
Annualized
Base Rent
Highmark-Allegheny Health Network (3) 6 A- 877 5.5% $ 16,414 4.5%
Greenville Hospital System 7 A1 798 5.0 15,113 4.1
Tufts Medical Center 11 BBB 252 1.6 9,952 2.7
Hospital Corporation of America 3 BB 352 2.2 8,952 2.4
Providence St. Joseph Health 2 Aa3 262 1.6 8,682 2.4
Steward Health Care System 11 B2 321 2.0 7,904 2.1
Community Health Systems (TN) 2 B2 332 2.1 7,877 2.1
Aurora Health Care 8 A2 277 1.7 6,385 1.7
Tenet Healthcare 3 B2 264 1.6 5,930 1.6
Boston Medical Center 5 Baa2 87 0.5 4,804 1.3
Rush University Medical Center 3 A1 137 0.9 4,800 1.3
Indiana University Health 2 Aa3 313 1.9 4,589 1.2
Deaconess Health System 7 AA- 261 1.6 4,087 1.1
Boston University 4 A1 74 0.5 4,021 1.1
Mercy Health 11 Aa3 112 0.7 3,540 1.0
Community Health Network (IN) 5 A2 187 1.2 3,455 0.9
Banner Health 3 AA- 137 0.9 3,402 0.9
Total 5,043 31.5% $ 119,907 32.4%
As of September 30, 2016, HTA’s in-house property management and leasing platform operated approximately 16.0 million square feet of GLA, or 91%, of
HTA’s total portfolio.
Portfolio Information
Key Health System Relationships and In-House Property Management and Leasing Platform
(as of September 30, 2016, dollars and GLA in thousands, except as otherwise noted)
Key Health System Relationships (1)
In-House Property Management and Leasing Platform
(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 health system tenants.
(2) Amounts presented in years.
(3) Credit rating refers to Highmark, Inc.
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 15
Key Market
Portfolio Property
HTA Management Office
HTA Regional Headquarter
Boston Medical Center (Baa2), located in the historic South End Medical cluster of Boston, Massachusetts, is a private, not-for-profit academic
center seeing more than one million patient visits a year. BMC is the primary teaching affiliate for the Boston University’s School of Medicine,
and is the busiest trauma and emergency services center in New England. They have initiated a $300 million campus redesign which will
include an additional 400,000 SF for inpatient services. As a recognized leader in groundbreaking medical research, BMC received
approximately $120 million in 2015 to fund over 500 research and service projects.
Community Health Systems, Inc. (B2), headquartered in Franklin, Tennessee, is one of the nation’s leading operators of general acute care
hospitals. The organization includes 158 affiliated hospitals in 22 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.
Highmark-Allegheny Health Network (A-), 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. Highmark is the fourth largest Blue
Cross and Blue Shield-affiliated company. 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.
Hospital Corporation of America (BB), based in Nashville, Tennessee, HCA was one of the nation’s first hospital companies. Today, they are
a company comprised of locally managed facilities that includes approximately 165 hospitals, 115 freestanding surgery centers in 20 states and
England employing approximately 233,000 people. Approximately four to five percent of all inpatient care delivered in the country today is
provided by HCA facilities. HCA is committed to the care and improvement of human life and strives to deliver high quality, cost effective
healthcare in the communities they serve.
Indiana University Health (Aa3), based in Indianapolis, Indiana, is Indiana’s most comprehensive healthcare system. A unique partnership
with Indiana University School of Medicine, one of the nation’s leading medical schools, gives patients access to innovative treatments and
therapies. IU Health is comprised of hospitals, physicians and allied services dedicated to providing preeminent care throughout Indiana and
beyond.
Providence St. Joseph Health (Aa3), based in Seattle, Washington and Irvine, California, is held together by Providence Health and Services
and St. Joseph Health, a not-for-profit health and social services system that will serve as the parent organization for more than 100,000
caregivers (employees) across seven states.
Steward Health Care System (B2), located in Boston, Massachusetts, is a community-based accountable care organization and community
hospital network with 3,000 physicians, 10 hospital campuses, 24 affiliated urgent care providers, home care, hospice and other services. The
system serves more than one million patients annually in over 150 communities in the greater Boston area. Other Steward Health Care entities
include Steward Medical Group, Steward Health Care Network, and Steward Home Care.
Tenet Healthcare System (B2), located in Dallas, Texas, is a leading health care services company. Through its network, Tenet operates 79
hospitals, over 400 outpatient centers and has over 130,000 employees. Across the network, compassionate, quality care is provided to millions
of patients through a wide range of services. Tenet is affiliated with Conifer Health Solutions, which helps hospitals, employers and health
insurance companies improve the efficiency and performance of their operations and the health of the people they serve.
Tufts Medical Center (BBB), located in Boston, Massachusetts, is a 415-bed academic medical center, providing everything from routine and
emergency care to treating the most complex diseases and injuries affecting adults and children throughout New England. Tufts Medical Center
is the principal teaching hospital for Tufts University School of Medicine, and has consistently been ranked in the top quartile of major academic
medical centers in the country by The University Health System Consortium.
WellStar Health System (A2), located in Atlanta, Georgia, is a leading not-for-profit health system with over 3,200 beds in the Southeast.
Today, the WellStar Health System is comprised of 11 hospitals, eight urgent care centers, 16 satellite diagnostic imaging centers, over 1,000
medical providers, and over 20,000 employees. With the acquisition of Tenet Healthcare’s five Georgia-based hospitals and a new partnership
with West Georgia Health in LaGrange, GA., WellStar becomes the largest health system in Georgia and one of the largest not-for-profit health
systems in the country.
Portfolio Information
Health System Relationship Highlights
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 16
As of
3Q16 4Q15
ASSETS
Real estate investments:
Land $ 381,745 $ 303,706
Building and improvements 3,406,897 2,901,157
Lease intangibles 466,434 430,749
4,255,076 3,635,612
Accumulated depreciation and amortization (779,378) (676,144)
Real estate investments, net 3,475,698 2,959,468
Cash and cash equivalents 17,938 13,070
Restricted cash and escrow deposits 13,689 15,892
Receivables and other assets, net 160,837 141,703
Other intangibles, net 47,728 42,167
Total assets $ 3,715,890 $ 3,172,300
LIABILITIES AND EQUITY
Liabilities:
Debt $ 1,712,598 $ 1,590,696
Accounts payable and accrued liabilities 104,202 94,933
Derivative financial instruments - interest rate swaps 4,866 2,370
Security deposits, prepaid rent and other liabilities 44,828 46,295
Intangible liabilities, net 36,928 26,611
Total liabilities 1,903,422 1,760,905
Commitments and contingencies
Redeemable noncontrolling interests 9,215 4,437
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; 141,728,448 and
127,026,839 shares issued and outstanding as of September 30, 2016 and December 31,
2015, respectively 1,417 1,270
Additional paid-in capital 2,753,566 2,328,806
Cumulative dividends in excess of earnings (1,042,977) (950,652)
Total stockholders’ equity 1,712,006 1,379,424
Noncontrolling interests 91,247 27,534
Total equity 1,803,253 1,406,958
Total liabilities and equity $ 3,715,890 $ 3,172,300
Financial Statements
Condensed Consolidated Balance Sheets
(unaudited and in thousands, except share data)
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 17
Three Months Ended Nine Months Ended
3Q16 3Q15 3Q16 3Q15
Revenues:
Rental income $ 118,252 $ 103,875 $ 338,646 $ 301,570
Interest and other operating income 88 67 243 203
Total revenues 118,340 103,942 338,889 301,773
Expenses:
Rental 36,885 32,921 105,299 92,855
General and administrative 7,293 6,430 20,879 19,229
Acquisition-related 1,122 907 4,997 3,365
Depreciation and amortization 47,864 40,518 130,430 115,179
Impairment — — — 1,655
Total expenses 93,164 80,776 261,605 232,283
Income before other income (expense) 25,176 23,166 77,284 69,490
Interest expense:
Interest related to derivative financial instruments (552) (903) (1,856) (2,278)
Gain (loss) on change in fair value of derivative financial instruments, net 1,306 (2,383) (2,144) (3,079)
Total interest related to derivative financial instruments, including net
change in fair value of derivative financial instruments 754 (3,286) (4,000) (5,357)
Interest related to debt (16,386) (13,536) (44,503) (41,499)
Gain on sale of real estate, net — 152 4,212 152
(Loss) gain on extinguishment of debt, net (3,000) (14) (3,022) 107
Other income 95 72 220 91
Net income $ 6,639 $ 6,554 $ 30,191 $ 22,984
Net income attributable to noncontrolling interests (212) (91) (830) (425)
Net income attributable to common stockholders $ 6,427 $ 6,463 $ 29,361 $ 22,559
Earnings per common share - basic:
Net income attributable to common stockholders $ 0.05 $ 0.05 $ 0.22 $ 0.18
Earnings per common share - diluted:
Net income attributable to common stockholders $ 0.04 $ 0.05 $ 0.21 $ 0.18
Weighted average common shares outstanding:
Basic 138,807 126,863 134,905 125,750
Diluted 143,138 128,793 138,314 127,680
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 18
Financial Statements
Condensed Consolidated Statements of Operations
(unaudited and in thousands, except per share data)
Nine Months Ended
3Q16 3Q15
Cash flows from operating activities:
Net income $ 30,191 $ 22,984
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other 128,728 112,711
Share-based compensation expense 5,136 4,462
Bad debt expense 508 743
Gain on sale of real estate, net (4,212) (152)
Impairment — 1,655
Loss (gain) on extinguishment of debt, net 3,022 (107)
Change in fair value of derivative financial instruments 2,144 3,079
Changes in operating assets and liabilities:
Receivables and other assets, net (14,051) (6,021)
Accounts payable and accrued liabilities 3,598 (4,124)
Prepaid rent and other liabilities (6,807) 3,429
Net cash provided by operating activities 148,257 138,659
Cash flows from investing activities:
Investments in real estate (532,527) (253,107)
Proceeds from the sale of real estate 23,368 33,279
Capital expenditures (34,064) (17,330)
Restricted cash, escrow deposits and other assets 2,143 2,994
Net cash used in investing activities (541,080) (234,164)
Cash flows from financing activities:
Borrowings on unsecured revolving credit facility 513,000 387,000
Payments on unsecured revolving credit facility (704,000) (247,000)
Proceeds from unsecured senior notes 347,725 —
Borrowings on unsecured term loans 200,000 100,000
Payments on unsecured term loans (155,000) —
Payments on secured mortgage loans (98,453) (76,149)
Deferred financing costs (3,039) (289)
Security deposits 862 145
Proceeds from issuance of common stock 418,891 44,324
Repurchase and cancellation of common stock (2,425) (1,322)
Dividends paid (116,655) (108,891)
Distributions paid to noncontrolling interest of limited partners (2,724) (1,580)
Redemption of redeemable noncontrolling interest (491) —
Net cash provided by financing activities 397,691 96,238
Net change in cash and cash equivalents 4,868 733
Cash and cash equivalents - beginning of period 13,070 10,413
Cash and cash equivalents - end of period $ 17,938 $ 11,146
Financial Statements
Condensed Consolidated Statements of Cash Flows
(unaudited and in thousands)
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 19
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 20
Reporting Definitions
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”): Is presented on an assumed annualized basis.
We define Adjusted EBITDA for HTA as net income computed in accordance with GAAP plus: (i) depreciation and amortization; (ii) interest
expense and net change in the fair value of derivative financial instruments; (iii) acquisition-related expenses; (iv) gain or loss on the sales of
real estate; (v) non-cash compensation expense; (vi) pro forma impact of our acquisitions/dispositions; and (vii) other normalizing items. We
consider Adjusted EBITDA an important measure because it provides additional information to allow management, investors, and our current
and potential creditors to evaluate and compare our core operating results and our 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 and lease termination fees. 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 our financial performance. Cash NOI should be reviewed in
connection with other GAAP measurements.
Credit Ratings: Credit ratings of our 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.
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, 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) acquisition-related 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; and (viii) 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 our financial performance. NOI should be reviewed
in connection with other GAAP measurements.
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) deferred revenue - tenant improvement related; (vi) amortization of deferred financing costs
and debt premium/discount; and (vii) recurring capital expenditures, tenant improvements and leasing commissions. HTA believes this non-
GAAP financial measure provides a meaningful supplemental measure of our 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 our financial
performance, nor is it indicative of cash available to fund cash needs. Normalized FAD should be reviewed in connection with other GAAP
measurements.
3Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 21
Reporting Definitions - Continued
Normalized Funds From Operations (“Normalized FFO”): HTA computes Normalized FFO, which excludes from FFO: (i) acquisition-related
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 our 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 our 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 our 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: Tenant Retention is defined as 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 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, 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 our financial performance. Same-Property Cash
NOI should be reviewed in connection with other GAAP measurements.
