![]() | PRESS RELEASE | |
Financial Contact: | ||
Robert A. Milligan | ||
Chief Financial Officer | ||
480.998.3478 |
• | 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. |
• | 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: 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. |
• | 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. |
• | 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 of 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. |
• | 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. |
• | Investments: After the quarter end, HTA acquired an investment with a purchase price of $7.2 million. |
• | Dividends: On October 25, 2016, HTA’s Board of Directors approved a quarterly cash dividend of $0.30 per common share. The dividend will be paid on January 10, 2017 to stockholders of record of its common stock on January 3, 2017. The dividend represents an annualized rate of $1.20 per share. |
September 30, 2016 | December 31, 2015 | |||||||
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 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
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 |
Nine Months Ended September 30, | ||||||||
2016 | 2015 | |||||||
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 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 6,639 | $ | 6,554 | $ | 30,191 | $ | 22,984 | |||||||
General and administrative expenses | 7,293 | 6,430 | 20,879 | 19,229 | |||||||||||
Acquisition-related expenses | 1,122 | 907 | 4,997 | 3,365 | |||||||||||
Depreciation and amortization expense | 47,864 | 40,518 | 130,430 | 115,179 | |||||||||||
Impairment | — | — | — | 1,655 | |||||||||||
Interest expense and net change in fair value of derivative financial instruments | 15,632 | 16,822 | 48,503 | 46,856 | |||||||||||
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 | ) | |||||||
NOI | $ | 81,455 | $ | 71,021 | $ | 233,590 | $ | 208,918 | |||||||
NOI percentage growth | 14.7 | % | 11.8 | % | |||||||||||
NOI | $ | 81,455 | $ | 71,021 | $ | 233,590 | $ | 208,918 | |||||||
Straight-line rent adjustments, net | (1,161 | ) | (1,750 | ) | (3,636 | ) | (5,835 | ) | |||||||
Amortization of below and above market leases/leasehold interests, net and lease termination fees (1) | 3 | 598 | 497 | 1,739 | |||||||||||
Cash NOI | $ | 80,297 | $ | 69,869 | $ | 230,451 | $ | 204,822 | |||||||
Notes receivable interest income | (68 | ) | — | (68 | ) | — | |||||||||
Non Same-Property Cash NOI | (11,590 | ) | (3,398 | ) | (37,569 | ) | (17,615 | ) | |||||||
Same-Property Cash NOI (2) | $ | 68,639 | $ | 66,471 | $ | 192,814 | $ | 187,207 | |||||||
Same-Property Cash NOI percentage growth | 3.3 | % | 3.0 | % | |||||||||||
(1) For the three and nine months ended September 30, 2016 and all periods thereafter, Cash NOI includes lease termination fees as they are deemed to be generated in the ordinary course of business. | |||||||||||||||
(2) Same-Property includes 283 and 275 buildings for the three and nine months ended September 30, 2016 and 2015. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
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 | |||||||||||
(1) For the three and nine months ended September 30, 2016 and all periods thereafter, other normalizing items excludes lease termination fees as they are deemed to be generated in the ordinary course of business. |