Per Share Data of HTA

3 Months Ended

Mar. 31, 2020

During the first quarter of 2020, we issued approximately 1.7 million shares of our common stock under our ATM for net proceeds of approximately $50.0 million, adjusted for costs to borrow equating to a net price to us of $29.86 per share of common stock.

Additionally, we have four outstanding forward sale arrangements pursuant to forward equity agreements, with total anticipated net proceeds of $277.5 million, with an average share price of $29.46, subject to adjustments as provided in the forward equity agreements. Three of the arrangements mature in late 2020 with the last one maturing in early 2021.

To account for the forward equity agreements, we considered the accounting guidance governing financial instruments and derivatives and concluded that our forward equity agreement was not a liability as it did not embody obligations to repurchase our shares of common stock nor did it embody obligations to issue a variable number of shares for which the monetary value was predominately fixed, varying with something other than the fair value of the shares, or varying inversely in relation to our shares. We also evaluated whether the agreement met the derivatives and hedging guidance scope exception to be accounted for as an equity instrument and concluded that the agreement can be classified as an equity contract based on the following assessment: (i) none of the agreements’ exercise contingencies were based on observable markets or indices besides those related to the market for our own stock price and operations; and (ii) none of the settlement provisions precluded the agreement from being indexed to our own common stock.

In addition, we considered the potential dilution resulting from the forward equity agreements mentioned above on our earnings per common share calculations. We use the treasury method to determine the dilution resulting from the forward equity agreements during the period of time prior to settlement. The impact to our weighted-average shares - diluted was approximately 255,000 for the three months ended March 31, 2020.

We include unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents as “participating securities” pursuant to the two-class method. The resulting classes are our common stock and restricted stock. Our forward equity agreement is not considered a participating security and, therefore, is not included in the computation of earnings per share using the two-class method. For the three months ended March 31, 2020 and 2019, all of our earnings were distributed and the calculated earnings per share amount would be the same for all classes.

The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per share of HTA for the three months ended March 31, 2020 and 2019, respectively (in thousands, except per share data):


	Three Months Ended March 31,
	2020		2019
Numerator:
Net income	$	18,208	$	13,701
Net income attributable to noncontrolling interests	(307)		(261)
Net income attributable to common stockholders	$	17,901	$	13,440
Denominator:
Weighted average shares outstanding - basic	216,692		205,080
Dilutive shares - OP Units convertible into common stock	3,676		3,919
Dilutive effect of forward equity sales agreement	255		—
Adjusted weighted average shares outstanding - diluted	220,623		208,999
Earnings per common share - basic
Net income attributable to common stockholders	$	0.08	$	0.07
Earnings per common share - diluted
Net income attributable to common stockholders	$	0.08	$	0.06