Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - HEALTHCARE TRUST OF AMERICA, INC. | ex991201702.htm |
| 8-K - 8-K - HEALTHCARE TRUST OF AMERICA, INC. | hta201702158-k.htm |
99.1
Exhibit 99.2Exhibit 99.2
Company Overview
Company Information 3
Fourth Quarter 2016 Highlights 4
Full Year 2016 Highlights 5
Financial Highlights 6
Company Snapshot 7
Financial Information
FFO, Normalized FFO, Normalized FAD and Adjusted EBITDA 8
Capitalization, Interest Expense and Covenants 9
Debt Composition and Maturity Schedule 10
Portfolio Information
Investment Activity 11
Regional Portfolio Distribution and Key Markets and Top 75 MSA Concentration 12
Same-Property Performance and NOI 13
Portfolio Diversification by Type, Historical Campus Proximity and Ownership Interests 14
Tenant Lease Expirations and Historical Leased Rate 15
Key Health System Relationships and In-House Property Management and Leasing Platform 16
Health System Relationship Highlights 17
Financial Statements
Consolidated Balance Sheets 18
Consolidated Statements of Operations 19
Consolidated Statements of Cash Flows 20
Reporting Definitions 21
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 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 17.7
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
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 3
Fourth Quarter 2016 Highlights
Operating
• Net Income Attributable to Common Stockholders: Increased 59.6% to $16.6 million, compared to Q4 2015. Earnings
per diluted share increased 37.5% to $0.11 per diluted share, compared to Q4 2015.
• FFO: As defined by the National Association of Real Estate Investment Trusts (“NAREIT”), increased 22.1% to $60.9 million,
compared to Q4 2015. FFO per diluted share increased 7.7% to $0.42 per diluted share, compared to Q4 2015.
• Normalized FFO: Increased 17.3% to $59.5 million, compared to Q4 2015. Normalized FFO per diluted share increased
5.1% to $0.41 per diluted share, compared to Q4 2015.
• Normalized FAD: Increased 16.3% to $52.2 million, compared to Q4 2015.
• Same-Property Cash NOI: Increased $1.9 million, or 2.9%, to $69.7 million, compared to Q4 2015. Same-Property rental
revenue increased $2.0 million, or 2.6%, to $79.0 million, compared to Q4 2015.
Portfolio
• Investments: HTA invested $67.8 million to acquire medical office buildings totaling approximately 224,000 square feet of
gross leasable area (“GLA”) that were 94% leased as of the date of acquisition and in its key markets of Boston,
Massachusetts; Columbus, Ohio; and Raleigh-Durham, North Carolina.
• Dispositions: HTA completed the disposition of two senior care facilities located in California for an aggregate gross sales
price of $13.0 million totaling approximately 71,000 square feet of GLA, generating net gains of $4.8 million.
• Leasing: HTA entered into new and renewal leases on approximately 488,000 square feet of GLA, or 2.8% of its portfolio.
Tenant retention for the Same-Property portfolio was 84% by GLA for the quarter, which included approximately 400,000
square feet of expiring leases. Renewal leases included tenant improvements of $2.17 per square foot per year of the lease
term and ten days of free rent per year of the lease term.
Balance Sheet
• Balance Sheet: At the end of the year, HTA had total leverage of 29.4%, measured by debt to market capitalization, and 5.7x
measured as debt to Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”). Total
liquidity at the end of the quarter was $767.7 million, including $756.5 million of availability under its unsecured revolving
credit facility and $11.2 million of cash and cash equivalents.
Company Overview
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 4
Full Year 2016 Highlights
Operating
• Net Income Attributable to Common Stockholders: Increased 39.4% to $45.9 million, compared to 2015. Earnings per
diluted share increased 26.9% to $0.33 per diluted share, compared to 2015.
• FFO: As defined by NAREIT, increased 14.5% to $215.6 million, compared to 2015. FFO per diluted share increased 4.8%
to $1.54 per diluted share, compared to 2015.
• Normalized FFO: Increased 15.0% to $225.2 million, compared to 2015. Normalized FFO per diluted share increased 5.2%
to $1.61 per diluted share, compared to 2015.
• Normalized FAD: Increased 12.2% to $200.1 million, compared to 2015.
• Same-Property Cash NOI: Increased $7.3 million, or 2.9%, to $258.3 million, compared to 2015. Same-Property rental
revenue increased $6.7 million, or 2.3%, to $292.3 million, compared to 2015. Full year 2016 Same-Property Cash NOI only
includes those properties that were acquired through the end of 2014.
Portfolio
• Investments: HTA completed $700.8 million of investments totaling approximately 2.5 million square feet of GLA that were
93% leased as of the date of acquisition.
• Dispositions: HTA completed dispositions of six senior care facilities located in Texas and California for an aggregate gross
sales price of $39.5 million totaling approximately 226,000 square feet of GLA, generating net gains of $9.0 million.
• Leasing: HTA entered into new and renewal leases on approximately 1.6 million square feet of GLA, or 9.0% of its portfolio.
Tenant retention for the Same-Property portfolio was 80% by GLA for the year ended 2016, which included approximately 1.3
million square feet of expiring leases. For the year ended 2016, renewal leases included tenant improvements of $1.55 per
square foot per year of the lease term and six days of free rent per year of the lease term.
• Leased Rate: At the end of the year, HTA had a leased rate for its portfolio and Same-Property portfolio of 91.9% by GLA.
Capital Markets
• Equity: During the year ended 2016, HTA issued $492.5 million of equity at an average price of $29.33 per share. This was
comprised of $297.8 million from the sale of common stock in underwritten public offerings at an average gross price of
$30.64 per share, $122.9 million from the sale of common stock under the ATM at an average gross price of $27.82 per
share, and $71.8 million from the issuance of Class A operating partnership units in connection with acquisition transactions.
• 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, executed a $200.0 million 7-year unsecured term loan with net
proceeds used to refinance its $155.0 million unsecured term loan due in 2019. During the year ended 2016, HTA repaid
$110.9 million of existing mortgage loans, generating prepayment penalties of $3.0 million.
• Dividends: During the year ended 2016, HTA’s Board of Directors increased the quarterly dividend run rate by 1.7% to $0.30
per share of common stock, representing an annualized rate of $1.20 per share of common stock.
Company Overview
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 5
(1) Refer to pages 21 and 22 for the reporting definitions of Adjusted EBITDA, FFO, NOI, Normalized FAD and Normalized FFO.
(2) Refer to page 13 for a reconciliation of GAAP Net Income to NOI.
(3) Refer to page 8 for the reconciliations of GAAP Net Income Attributable to Common Stockholders to FFO, Normalized FFO, Normalized FAD and Net Income to 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 Adjusted EBITDA divided by interest expense (excluding change in fair market value of derivatives) and scheduled principal payments.
(6) 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 9 for details.
Financial Highlights
(unaudited and dollars in thousands, except per share data)
Three Months Ended
4Q16 3Q16 2Q16 1Q16 4Q15
INCOME ITEMS
Revenues $ 122,039 $ 118,340 $ 113,234 $ 107,315 $ 102,049
NOl (1)(2) 83,587 81,455 78,173 73,962 71,514
Adjusted EBITDA (1)(3) 312,340 311,776 294,256 279,916 267,476
FFO (1)(3) 60,944 53,972 53,273 47,381 49,924
Normalized FFO (1)(3) 59,513 57,132 56,461 52,115 50,737
Normalized FAD (1)(3) 52,197 49,222 50,061 48,603 44,889
Net income attributable to
common stockholders per diluted share $ 0.11 $ 0.04 $ 0.09 $ 0.08 $ 0.08
FFO per diluted share 0.42 0.38 0.38 0.36 0.39
Normalized FFO per diluted share 0.41 0.40 0.40 0.40 0.39
Same-Property Cash NOI growth (4) 2.9% 3.3% 3.1% 3.0% 3.1%
Fixed charge coverage ratio (5) 4.20x 4.08x 4.06x 3.85x 3.84x
As of
4Q16 3Q16 2Q16 1Q16 4Q15
ASSETS
Gross real estate investments $ 4,320,613 $ 4,255,076 $ 4,058,071 $ 3,806,206 $ 3,635,612
Total assets 3,747,844 3,715,890 3,532,289 3,310,519 3,172,300
CAPITALIZATION
Total debt $ 1,768,905 $ 1,712,598 $ 1,631,642 $ 1,667,320 $ 1,590,696
Total capitalization (6) 6,020,188 6,476,814 6,227,027 5,565,352 5,068,666
Total debt/market capitalization 29.4% 26.4% 26.2% 30.0% 31.4%
Company Overview
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 6
Investments in Real Estate (1) $ 4.2
Total portfolio GLA (2) 17.7
Leased rate 91.9%
Same-Property portfolio tenant retention rate (YTD) (3) 80%
% of GLA on-campus/aligned 97%
% of invested dollars in key markets & top 75 MSAs (4) 92%
Investment grade tenants (5) 41%
Credit rated tenants (5) 55%
Weighted average remaining lease term for all buildings (6) 5.1
Weighted average remaining lease term for single-tenant buildings (6) 6.6
Weighted average remaining lease term for multi-tenant buildings (6) 4.5
Credit ratings (by Moody’s and Standard & Poor’s) Baa2(Stable)/BBB(Stable)
Cash and cash equivalents (2) $ 11.2
Debt/market capitalization 29.4%
Weighted average interest rate per annum on portfolio debt (7) 3.35%
Building Type Presence in Top MSAs (8)
Company Snapshot
(as of December 31, 2016)
Company Overview
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 7
(1) Amount presented in billions. Refer to page 21 for the reporting definition of Investments in Real Estate.
(2) Amounts presented in millions.
(3) Refer to page 22 for the reporting definition of Retention.
(4) Refer to page 21 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 12 for a detailed table of our Key Markets and Top 75 MSA Concentration.
% of Portfolio (based on GLA) % of Portfolio (based on invested dollars)
Medical Office Buildings
94%
Hospitals
4%
Senior Care
2%
Additional Top 75
MSAs
40.8%All Other Markets
7.7%
Boston, MA
9.7%
Hartford/
New Haven, CT
6.2%
Dallas, TX
5.8%
Houston, TX
4.6%
Phoenix, AZ
4.5%
Orange County/Los
Angeles, CA
4.5%
Albany, NY
4.2% Greenville, SC
4.2%
Miami, FL
4.1%
Atlanta, GA
3.7%
FFO, Normalized FFO and Normalized FAD Three Months Ended Year Ended
4Q16 4Q15 4Q16 4Q15
Net income attributable to common stockholders $ 16,551 $ 10,372 $ 45,912 $ 32,931
Depreciation and amortization expense related to investments in real
estate 46,067 38,626 175,544 152,846
Gain on sales of real estate, net (4,754) — (8,966) (152)
Impairment 3,080 926 3,080 2,581
FFO attributable to common stockholders $ 60,944 $ 49,924 $ 215,570 $ 188,206
Acquisition-related expenses 1,541 1,190 6,538 4,555
(Gain) loss on change in fair value of derivative financial instruments, net (3,488) (2,310) (1,344) 769
Loss (gain) on extinguishment of debt, net 3 (16) 3,025 (123)
Noncontrolling income from partnership units included in diluted shares 513 166 1,315 514
Other normalizing items, net (1)(2) — 1,783 117 1,999
Normalized FFO attributable to common stockholders $ 59,513 $ 50,737 $ 225,221 $ 195,920
Other income (66) (23) (286) (114)
Non-cash compensation expense 1,935 1,262 7,071 5,724
Straight-line rent adjustments, net (523) (1,082) (4,159) (6,917)
Amortization of below and above market leases/leasehold interests and
corporate assets, net 554 595 2,030 2,350
Deferred revenue - tenant improvement related (1) — (183) — (645)
Amortization of deferred financing costs and debt discount/premium, net 816 683 3,104 3,128
Recurring capital expenditures, tenant improvements and leasing
commissions (10,032) (7,100) (32,898) (21,122)
Normalized FAD attributable to common stockholders $ 52,197 $ 44,889 $ 200,083 $ 178,324
Net income attributable to common stockholders per diluted share $ 0.11 $ 0.08 $ 0.33 $ 0.26
FFO adjustments per diluted share, net 0.31 0.31 1.21 1.21
FFO attributable to common stockholders per diluted share $ 0.42 $ 0.39 $ 1.54 $ 1.47
Normalized FFO adjustments per diluted share, net (0.01) 0.00 0.07 0.06
Normalized FFO attributable to common stockholders per diluted
share $ 0.41 $ 0.39 $ 1.61 $ 1.53
Weighted average diluted common shares outstanding 146,050 128,965 140,259 128,004
Adjusted EBITDA
Three
Months Ended
4Q16
Net income $ 17,154
Depreciation and amortization expense 46,436
Interest expense and net change in fair value of derivative financial
instruments 12,299
EBITDA $ 75,889
Acquisition-related expenses 1,541
Impairment 3,080
Gain on sale of real estate, net (4,754)
Non-cash compensation expense 1,935
Pro forma impact of acquisitions/dispositions 391
Loss on extinguishment of debt, net 3
78,085
Adjusted EBITDA $ 312,340
FFO, Normalized FFO, Normalized FAD and Adjusted EBITDA
(unaudited and in thousands, except per share data)
Financial Information
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 8
(1) For the three months and year ended December 31, 2016, deferred revenue - tenant improvement related items are excluded from Normalized FAD and other normalizing items
excludes lease termination fees as they are both deemed to be generated in the ordinary course of business.
(2) For the three months and year ended December 31, 2015, other normalizing items primarily includes the acceleration of management fees paid in connection with an acquisition-
related management agreement that was entered into at the time of acquisition for our Florida portfolio that was acquired in December 2013.
Capitalization
Unsecured revolving credit facility $ 88,000
Unsecured term loans 500,000
Unsecured senior notes 950,000
Secured mortgage loans 243,466
Deferred financing costs, net (9,527)
Discount, net (3,034)
Total debt $ 1,768,905
Stock price (as of December 31, 2016) $ 29.11
Total diluted common shares outstanding 146,042
Equity capitalization $ 4,251,283
Total capitalization $ 6,020,188
Total undepreciated assets $ 4,565,437
Debt/market capitalization 29.4%
Debt/undepreciated assets 38.7%
Debt/Adjusted EBITDA ratio 5.7x
Financial Information
Capitalization, Interest Expense and Covenants
(as of December 31, 2016, dollars and shares in thousands, except stock price)
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 9
Interest Expense
Covenants
Three Months Ended Year Ended
4Q16 4Q15 4Q16 4Q15
Interest related to derivative financial instruments $ 521 $ 862 $ 2,377 $ 3,140
(Gain) loss on change in fair value of derivative financial instruments, net (3,488) (2,310) (1,344) 769
Total interest related to derivative financial instruments, including net
change in fair value of derivative financial instruments
(2,967) (1,448) 1,033 3,909
Interest related to debt (1) 15,266 13,468 59,769 54,967
Total interest expense $ 12,299 $ 12,020 $ 60,802 $ 58,876
Interest expense excluding net change in fair value of derivative financial
instruments $ 15,787 $ 14,330 $ 62,146 $ 58,107
Bank Loans Required 4Q16
Total leverage ≤ 60% 38%
Secured leverage ≤ 30% 5%
Fixed charge coverage ≥ 1.50x 4.20x
Unencumbered leverage ≤ 60% 37%
Unencumbered coverage ≥ 1.75x 5.41x
Senior Notes Required 4Q16
Total leverage ≤ 60% 40%
Secured leverage ≤ 40% 5%
Unencumbered asset coverage ≥ 150% 260%
Interest coverage ≥ 1.50x 4.43x
(1) Includes the acceleration of deferred loan fees from the execution of our $200.0 million unsecured term loan due in 2023, the net proceeds of which were used to refinance our $155.0
million unsecured term loan due in 2019, for the year ended December 31, 2016.
Equity
71%
Secured
Debt
4%
Unsecured
Debt
25%
Financial Information
Debt Composition and Maturity Schedule
(as of December 31, 2016, dollars in thousands)
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 10
Unsecured
Revolving
Credit Facility
due 2020 (1)
Secured
Mortgages
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
2017 $ — $ 76,582 $ — $ — $ — $ — $ — $ 76,582
2018 — 4,722 — — — — — 4,722
2019 — 10,839 300,000 — — — — 310,839
2020 88,000 49,795 — — — — — 137,795
2021 — 3,842 — 300,000 — — — 303,842
Thereafter — 97,686 — — 300,000 200,000 350,000 947,686
Subtotal 88,000 243,466 300,000 300,000 300,000 200,000 350,000 1,781,466
Deferred
financing costs,
net — (336) (1,593) (1,953) (2,142) (1,943) (1,560) (9,527)
Discounts, net — 2,187 — (1,463) (1,572) — (2,186) (3,034)
Total $ 88,000 $ 245,317 $ 298,407 $ 296,584 $ 296,286 $ 198,057 $ 346,254 $ 1,768,905
Stated rate (3) 1.80% 5.07% 1.90% 3.38% 3.70% 2.40% 3.50% 3.25%
Hedged rate (4) 1.80% 5.44% 1.90% 3.38% 3.70% 2.82% 3.50% 3.35%
Debt Composition
(1) Rate does not include the 20 basis points 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 Secured Mortgage Loans
Unsecured Term Loan due 2019 Unsecured Term Loan due 2023
Unsecured Senior Notes due 2021 Unsecured Senior Notes due 2023
Unsecured Senior Notes due 2026
$1,000,000
$800,000
$600,000
$400,000
$200,000
$0
2017 2018 2019 2020 2021 Thereafter
$76,582
$4,722
$310,839
$137,795
$303,842
$947,686
(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 (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 (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
OhioHealth MOB Columbus, OH October 100 7,218 35
Duke Health MOB (2 buildings) Raleigh-Durham, NC November 100 34,750 98
Pearl Street MOB (2 buildings) Boston, MA December 86 25,830 91
Total $ 700,764 2,471
Portfolio Information
Investment Activity
(as of December 31, 2016, dollars and GLA in thousands)
2016 Acquisitions
Annual Investments (1)
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 11
Acquisitions Dispositions
$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 note receivables, expansions and corporate assets.
$271,510
2016 Dispositions
Property Location Date Disposed Disposition Price GLA
SWLTC Senior Care Facility (4 buildings) Texas (Various) June $ 26,500 155
NAH Senior Care Facility (2 Buildings) California (Various) December 12,983 71
Total $ 39,483 226
$35,685
$700,764
$39,483$82,885
As of December 31, 2016, HTA has invested $4.2 billion primarily in MOBs and other healthcare assets comprising approximately 17.7 million square feet of GLA.
Region Investment % of Investment Total GLA % of Portfolio
Annualized
Base Rent (1)
% of
Annualized
Base Rent
Southwest $ 1,277,074 30.1% 4,895 27.6% $ 107,919 28.9%
Northeast 1,176,390 27.7 4,514 25.5 100,390 26.8
Southeast 1,165,867 27.5 5,294 29.9 109,198 29.2
Midwest 616,112 14.5 2,993 16.9 55,957 15.0
Northwest 7,750 0.2 23 0.1 528 0.1
Total $ 4,243,193 100% 17,719 100% $ 373,992 100%
Portfolio Information
Regional Portfolio Distribution and Key Markets and Top 75 MSA Concentration
(as of December 31, 2016, dollars and GLA in thousands)
Regional Portfolio Distribution
Key Markets and Top 75 MSA Concentration (2)
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 12
(1) Refer to page 21 for the reporting definition of Annualized Base Rent.
(2) Key markets are titled as such based on HTA’s concentration in the respective MSA.
Key Markets Investment
% of
Investment Total GLA % of Portfolio
Annualized
Base Rent
% of
Annualized
Base Rent
Boston, MA $ 410,730 9.7% 1,037 5.9% $ 32,049 8.6%
Hartford/New Haven, CT 265,095 6.2 936 5.3 19,740 5.3
Dallas, TX 244,778 5.8 728 4.1 17,685 4.7
Houston, TX 196,295 4.6 874 4.9 20,373 5.4
Phoenix, AZ 189,641 4.5 1,018 5.7 19,203 5.1
Orange County/Los Angeles, CA 189,500 4.5 432 2.4 11,983 3.2
Albany, NY 179,253 4.2 880 5.0 16,045 4.3
Greenville, SC 179,070 4.2 965 5.4 18,050 4.8
Miami, FL 173,807 4.1 888 5.0 18,249 4.9
Atlanta, GA 156,743 3.7 663 3.7 13,232 3.5
Indianapolis, IN 155,700 3.7 977 5.5 15,345 4.1
Pittsburgh, PA 148,612 3.5 1,095 6.2 19,394 5.2
Raleigh, NC 135,010 3.2 532 3.0 12,611 3.4
Tampa, FL 133,986 3.2 439 2.5 9,692 2.6
Denver, CO 111,700 2.6 371 2.1 8,465 2.3
White Plains, NY 92,750 2.2 276 1.6 6,839 1.8
Columbus, OH 77,068 1.8 323 1.8 5,034 1.3
Charleston, SC 75,021 1.8 290 1.6 5,946 1.6
Orlando, FL 62,300 1.5 289 1.6 6,158 1.6
Honolulu, HI 47,250 1.1 143 0.8 3,886 1.0
Top 20 MSAs 3,224,309 76.1 13,156 74.1 279,979 74.7
Additional Top 75 MSAs 692,198 16.3 3,098 17.5 63,937 17.1
Total Key Markets & Top 75
MSAs $ 3,916,507 92.4% 16,254 91.6% $ 343,916 91.8%
Three Months Ended Sequential Year-Over-Year
4Q16 3Q16 4Q15 $ Change % Change $ Change % Change
Rental revenue $ 79,015 $ 78,454 $ 77,045 $ 561 0.7% $ 1,970 2.6%
Tenant recoveries 21,157 20,619 19,560 538 2.6 1,597 8.2
Total rental income 100,172 99,073 96,605 1,099 1.1 3,567 3.7
Expenses 30,435 29,969 28,804 466 1.6 1,631 5.7
Same-Property Cash NOI $ 69,737 $ 69,104 $ 67,801 $ 633 0.9% $ 1,936 2.9%
As of
4Q16 3Q16 4Q15
Number of buildings 285 285 285
GLA 14,569 14,571 14,571
Leased GLA, end of period 13,394 13,363 13,429
Leased %, end of period 91.9% 91.7% 92.2%
NOI (1) Three Months Ended
4Q16 4Q15
Net income $ 17,154 $ 10,573
General and administrative expenses 7,894 6,349
Acquisition-related expenses 1,541 1,190
Depreciation and amortization expense 46,436 38,955
Impairment 3,080 926
Interest expense and net change in fair value of derivative financial instruments 12,299 12,020
Gain on sales of real estate, net (4,754) —
Loss (gain) on extinguishment of debt, net 3 (16)
Other (income) expense (66) 1,517
NOI $ 83,587 $ 71,514
NOI percentage growth 16.9%
NOI $ 83,587 $ 71,514
Straight-line rent adjustments, net (523) (1,082)
Amortization of below and above market leases/leasehold interests, net and lease termination fees (2) 185 578
Cash NOI $ 83,249 $ 71,010
Notes receivable interest income (115) —
Non Same-Property Cash NOI (13,397) (3,209)
Same-Property Cash NOI $ 69,737 $ 67,801
Same-Property Cash NOI percentage growth 2.9%
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 13
Portfolio Information
Same-Property Performance and NOI
(as of December 31, 2016, unaudited and dollars and GLA in thousands)
Same-Property Performance
(1) Refer to pages 21 and 22 for the reporting definitions of NOI, Cash NOI and Same-Property Cash NOI.
(2) For the period 4Q16, Cash NOI includes lease termination fees as they are deemed to be generated in the ordinary course of business.
As of
4Q16 3Q16 2Q16 1Q16 4Q15
Off-campus aligned 30% 29% 30% 27% 27%
On-campus 67 68 67 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 83 20 4,121 23.3% $ 88,364 23.6%
Multi-tenant 259 26 12,588 71.0 257,314 68.8
Other Healthcare Facilities
Hospitals 10 4 655 3.7 23,200 6.2
Senior care 3 1 355 2.0 5,114 1.4
Total 355 31 17,719 100% $ 373,992 100%
Number of
Buildings
Number of
States GLA
% of Total
GLA
Annualized
Base Rent
% of
Annualized
Base Rent
Net-Lease/Gross-Lease
Net-lease 227 29 11,012 62.1% $ 241,764 64.6%
Gross-lease 128 18 6,707 37.9 132,228 35.4
Total 355 31 17,719 100% $ 373,992 100%
Portfolio Information
Portfolio Diversification by Type, Historical Campus Proximity and Ownership Interests
(as of December 31, 2016, dollars and GLA in thousands)
Portfolio Diversification by Type
Historical Campus Proximity (1)(2)
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 14
Ownership Interests (3)
Number of
Buildings GLA
Annualized
Base Rent
% of
Annualized
Base Rent
As of (1)
4Q16 3Q16 2Q16 1Q16 4Q15
Fee Simple 255 12,135 $ 251,574 68% 68% 68% 68% 68% 68%
Customary Health System
Restrictions 85 4,594 100,935 26 26 26 26 25 25
Economic with Limited
Restrictions 5 262 6,976 2 2 2 2 2 2
Occupancy Health System
Restrictions 10 728 14,507 4 4 4 4 5 5
Leasehold Interest Subtotal 100 5,584 122,418 32 32 32 32 32 32
Total 355 17,719 $ 373,992 100% 100% 100% 100% 100% 100%
(1) Percentages shown as percent of total GLA.
(2) Refer to page 22 for the reporting definitions of Off-campus/non-aligned and On-campus/aligned.
(3) Refer to pages 21 and 22 for the reporting definitions of Customary Health System Restrictions, Economic with Limited Restrictions and Occupancy Health System Restrictions.
As of
4Q16 3Q16 2Q16 1Q16 4Q15
Total portfolio leased rate 91.9% 91.8% 92.2% 92.1% 92.0%
On-campus/aligned leased rate 91.9% 91.8% 92.3% 92.2% 92.1%
Off-campus/non-aligned leased rate 90.1% 90.8% 89.4% 88.3% 88.7%
Total portfolio occupancy rate 91.2% 91.3% 91.6% 91.4% 91.4%
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 164 404 2.5% $ 8,871 2.4%
2017 519 1,750 10.8 40,375 10.8
2018 385 1,812 11.1 38,071 10.2
2019 372 1,717 10.5 44,123 11.8
2020 264 1,222 7.5 29,782 8.0
2021 389 2,159 13.2 46,896 12.4
2022 158 1,262 7.8 30,218 8.1
2023 106 977 6.0 20,131 5.4
2024 117 1,573 9.7 34,398 9.2
2025 125 684 4.2 13,579 3.6
2026 64 584 3.6 11,460 3.1
Thereafter 122 2,131 13.1 56,088 15.0
Total 2,785 16,275 100% $ 373,992 100%
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 15
Portfolio Information
Tenant Lease Expirations and Historical Leased Rate
(as of December 31, 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 Baa2 914 5.6% $ 16,446 4.4%
Greenville Health System 7 A1 798 4.9 15,415 4.1
Tufts Medical Center 11 BBB 252 1.6 9,952 2.7
Hospital Corporation of America 3 B1 352 2.2 9,024 2.4
Providence St. Joseph Health 3 Aa3 262 1.6 8,682 2.3
Steward Health Care System 10 B2 321 2.0 7,904 2.1
Community Health Systems (TN) 2 B2 332 2.0 7,889 2.1
Aurora Health Care 7 A2 277 1.7 6,385 1.7
Boston Medical Center 4 Baa2 87 0.5 4,804 1.3
Rush University Medical Center 3 A1 137 0.8 4,800 1.3
Indiana University Health 2 Aa3 309 1.9 4,541 1.2
Deaconess Health System 7 AA- 261 1.6 4,130 1.1
Tenet Healthcare 3 B2 173 1.1 4,072 1.1
Boston University 4 A1 74 0.5 4,021 1.1
Banner Health 3 AA- 141 0.9 3,553 1.0
Community Health Network (IN) 4 A2 187 1.2 3,544 1.0
Mercy Health 11 Aa3 112 0.7 3,540 1.0
Total 4,989 30.8% $ 118,702 31.9%
As of December 31, 2016, HTA’s in-house property management and leasing platform operated approximately 16.1 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 December 31, 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 are not inclusive of all health system tenants.
(2) Amounts presented in years.
(3) Credit rating refers to Highmark, Inc.
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 16
Key Market
Portfolio Property
Regional Offices
(includes corporate headquarters)
Onsite Management Offices
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 (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. 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 (B1), 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 169 hospitals, 116 freestanding surgery centers in 20 states and
the United Kingdom 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 80
hospitals, over 470 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
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 17
As of
4Q16 4Q15
ASSETS
Real estate investments:
Land $ 386,526 $ 303,706
Building and improvements 3,466,516 2,901,157
Lease intangibles 467,571 430,749
4,320,613 3,635,612
Accumulated depreciation and amortization (817,593) (676,144)
Real estate investments, net 3,503,020 2,959,468
Cash and cash equivalents 11,231 13,070
Restricted cash and escrow deposits 13,814 15,892
Receivables and other assets, net 173,461 141,703
Other intangibles, net 46,318 42,167
Total assets $ 3,747,844 $ 3,172,300
LIABILITIES AND EQUITY
Liabilities:
Debt $ 1,768,905 $ 1,590,696
Accounts payable and accrued liabilities 105,034 94,933
Derivative financial instruments - interest rate swaps 1,920 2,370
Security deposits, prepaid rent and other liabilities 49,859 46,295
Intangible liabilities, net 37,056 26,611
Total liabilities 1,962,774 1,760,905
Commitments and contingencies
Redeemable noncontrolling interests 4,653 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; 141,719,134 and
127,026,839 shares issued and outstanding as of December 31, 2016 and 2015,
respectively 1,417 1,270
Additional paid-in capital 2,754,818 2,328,806
Cumulative dividends in excess of earnings (1,068,961) (950,652)
Total stockholders’ equity 1,687,274 1,379,424
Noncontrolling interests 93,143 27,534
Total equity 1,780,417 1,406,958
Total liabilities and equity $ 3,747,844 $ 3,172,300
Financial Statements
Consolidated Balance Sheets
(unaudited and in thousands, except share data)
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 18
Three Months Ended Year Ended
4Q16 4Q15 4Q16 4Q15
Revenues:
Rental income $ 121,917 $ 101,983 $ 460,563 $ 403,553
Interest and other operating income 122 66 365 269
Total revenues 122,039 102,049 460,928 403,822
Expenses:
Rental 38,452 30,535 143,751 123,390
General and administrative 7,894 6,349 28,773 25,578
Acquisition-related 1,541 1,190 6,538 4,555
Depreciation and amortization 46,436 38,955 176,866 154,134
Impairment 3,080 926 3,080 2,581
Total expenses 97,403 77,955 359,008 310,238
Income before other income (expense) 24,636 24,094 101,920 93,584
Interest expense:
Interest related to derivative financial instruments (521) (862) (2,377) (3,140)
Gain (loss) on change in fair value of derivative financial instruments,
net 3,488 2,310 1,344 (769)
Total interest related to derivative financial instruments, including net
change in fair value of derivative financial instruments 2,967 1,448 (1,033) (3,909)
Interest related to debt (15,266) (13,468) (59,769) (54,967)
Gain on sales of real estate, net 4,754 — 8,966 152
(Loss) gain on extinguishment of debt, net (3) 16 (3,025) 123
Other income (expense) 66 (1,517) 286 (1,426)
Net income $ 17,154 $ 10,573 $ 47,345 $ 33,557
Net income attributable to noncontrolling interests (603) (201) (1,433) (626)
Net income attributable to common stockholders $ 16,551 $ 10,372 $ 45,912 $ 32,931
Earnings per common share - basic:
Net income attributable to common stockholders $ 0.12 $ 0.08 $ 0.34 $ 0.26
Earnings per common share - diluted:
Net income attributable to common stockholders $ 0.11 $ 0.08 $ 0.33 $ 0.26
Weighted average common shares outstanding:
Basic 141,727 127,035 136,620 126,074
Diluted 146,050 128,965 140,259 128,004
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 19
Financial Statements
Consolidated Statements of Operations
(unaudited and in thousands, except per share data)
Year Ended
4Q16 4Q15 4Q14
Cash flows from operating activities:
Net income $ 47,345 $ 33,557 $ 45,994
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other 175,285 151,614 137,188
Share-based compensation expense 7,071 5,724 4,383
Bad debt expense 846 828 312
Gain on sales of real estate, net (8,966) (152) (27,894)
Impairment 3,080 2,581 —
Loss (gain) on extinguishment of debt, net 3,025 (123) 4,663
Change in fair value of derivative financial instruments (1,344) 769 2,870
Changes in operating assets and liabilities:
Receivables and other assets, net (22,080) (7,508) (9,252)
Accounts payable and accrued liabilities 2,171 (6,284) 12,262
Security deposits, prepaid rent and other liabilities (2,738) 10,089 (2,027)
Net cash provided by operating activities 203,695 191,095 168,499
Cash flows from investing activities:
Investments in real estate (591,954) (279,334) (307,271)
Acquisition of note receivable — — (11,924)
Proceeds from the sales of real estate 26,555 34,629 78,854
Capital expenditures (42,994) (29,270) (29,037)
Collection of real estate notes receivable — — 28,520
Restricted cash, escrow deposits and other assets 2,078 4,711 (18,844)
Net cash used in investing activities (606,315) (269,264) (259,702)
Cash flows from financing activities:
Borrowings on unsecured revolving credit facility 574,000 454,000 294,000
Payments on unsecured revolving credit facility (704,000) (272,000) (313,000)
Proceeds from unsecured senior notes 347,725 — 297,615
Borrowings on unsecured term loans 200,000 100,000 —
Payments on unsecured term loans (155,000) — (100,000)
Payments on secured mortgage loans (110,935) (94,856) (92,236)
Deferred financing costs (3,191) (204) (12,112)
Derivative financial instrument termination payments — — (1,675)
Security deposits 924 (243) (1,025)
Proceeds from issuance of common stock 418,891 44,324 152,014
Issuance of operating partnership units 2,706 — —
Repurchase and cancellation of common stock (2,642) (1,667) (1,056)
Redemption of redeemable noncontrolling interests (4,572) — —
Dividends paid (159,174) (146,372) (137,158)
Distributions to noncontrolling interest of limited partners (3,951) (2,156) (1,832)
Net cash provided by financing activities 400,781 80,826 83,535
Net change in cash and cash equivalents (1,839) 2,657 (7,668)
Cash and cash equivalents - beginning of year 13,070 10,413 18,081
Cash and cash equivalents - end of year $ 11,231 $ 13,070 $ 10,413
Financial Statements
Consolidated Statements of Cash Flows
(unaudited and in thousands)
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 20
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 21
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. 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) 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 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.
4Q 2016 I Supplemental Information
Healthcare Trust of America, Inc. I 22
Reporting Definitions
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.
