x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Maryland | 62 – 1507028 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
3310 West End Avenue | ||
Suite 700 | ||
Nashville, Tennessee 37203 | ||
(Address of principal executive offices) | ||
(615) 269-8175 | ||
(Registrant’s telephone number, including area code) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o | ||||
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o | ||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. | ||||
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o | Emerging growth company o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o | ||||
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x |
Page | ||
(Unaudited) | |||||||
March 31, 2017 | December 31, 2016 | ||||||
ASSETS | |||||||
Real estate properties: | |||||||
Land | $ | 193,101 | $ | 199,672 | |||
Buildings, improvements and lease intangibles | 3,327,529 | 3,386,480 | |||||
Personal property | 9,998 | 10,291 | |||||
Construction in progress | 16,114 | 11,655 | |||||
Land held for development | 20,123 | 20,123 | |||||
3,566,865 | 3,628,221 | ||||||
Less accumulated depreciation and amortization | (841,296 | ) | (840,839 | ) | |||
Total real estate properties, net | 2,725,569 | 2,787,382 | |||||
Cash and cash equivalents | 1,478 | 5,409 | |||||
Restricted cash | 104,904 | 49,098 | |||||
Assets held for sale and discontinued operations, net | 15,111 | 3,092 | |||||
Other assets, net | 192,174 | 195,666 | |||||
Total assets | $ | 3,039,236 | $ | 3,040,647 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Liabilities: | |||||||
Notes and bonds payable | $ | 1,278,662 | $ | 1,264,370 | |||
Accounts payable and accrued liabilities | 62,746 | 78,266 | |||||
Liabilities of properties held for sale and discontinued operations | 93 | 614 | |||||
Other liabilities | 44,444 | 43,983 | |||||
Total liabilities | 1,385,945 | 1,387,233 | |||||
Commitments and contingencies | |||||||
Stockholders' equity: | |||||||
Preferred stock, $.01 par value per share; 50,000 shares authorized; none issued and outstanding | — | — | |||||
Common stock, $.01 par value per share; 150,000 shares authorized; 116,512 and 116,417 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 1,165 | 1,164 | |||||
Additional paid-in capital | 2,920,839 | 2,917,914 | |||||
Accumulated other comprehensive loss | (1,358 | ) | (1,401 | ) | |||
Cumulative net income attributable to common stockholders | 1,027,101 | 995,256 | |||||
Cumulative dividends | (2,294,456 | ) | (2,259,519 | ) | |||
Total stockholders' equity | 1,653,291 | 1,653,414 | |||||
Total liabilities and stockholders' equity | $ | 3,039,236 | $ | 3,040,647 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
REVENUES | |||||||
Rental income | $ | 104,088 | $ | 98,740 | |||
Other operating | 481 | 1,281 | |||||
104,569 | 100,021 | ||||||
EXPENSES | |||||||
Property operating | 37,834 | 35,406 | |||||
General and administrative | 9,280 | 10,246 | |||||
Depreciation | 31,412 | 27,693 | |||||
Amortization | 3,040 | 2,700 | |||||
Bad debts, net of recoveries | 66 | (39 | ) | ||||
81,632 | 76,006 | ||||||
OTHER INCOME (EXPENSE) | |||||||
Gain on sales of real estate assets | 23,403 | — | |||||
Interest expense | (14,272 | ) | (14,938 | ) | |||
Impairment of real estate assets | (323 | ) | — | ||||
Interest and other income, net | 113 | 86 | |||||
8,921 | (14,852 | ) | |||||
INCOME FROM CONTINUING OPERATIONS | 31,858 | 9,163 | |||||
DISCONTINUED OPERATIONS | |||||||
Loss from discontinued operations | (18 | ) | (7 | ) | |||
Gain on sales of real estate properties | 5 | — | |||||
LOSS FROM DISCONTINUED OPERATIONS | (13 | ) | (7 | ) | |||
NET INCOME | $ | 31,845 | $ | 9,156 | |||
BASIC EARNINGS PER COMMON SHARE: | |||||||
Income from continuing operations | $ | 0.28 | $ | 0.09 | |||
Discontinued operations | 0.00 | 0.00 | |||||
Net income | $ | 0.28 | $ | 0.09 | |||
DILUTED EARNINGS PER COMMON SHARE: | |||||||
Income from continuing operations | $ | 0.28 | $ | 0.09 | |||
Discontinued operations | 0.00 | 0.00 | |||||
Net income | $ | 0.28 | $ | 0.09 | |||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—BASIC | 114,675 | 101,432 | |||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING—DILUTED | 115,507 | 102,165 | |||||
DIVIDENDS DECLARED, PER COMMON SHARE, DURING THE PERIOD | $ | 0.30 | $ | 0.30 |
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
NET INCOME | $ | 31,845 | $ | 9,156 | ||||
Other comprehensive income (loss): | ||||||||
Forward starting interest rate swaps: | ||||||||
Reclassification adjustment for losses included in net income (Interest expense) | 43 | 42 | ||||||
Total other comprehensive income | 43 | 42 | ||||||
COMPREHENSIVE INCOME | $ | 31,888 | $ | 9,198 |
(Dollars in thousands, except per share data) | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Cumulative Net Income Attributable to Common Stockholders | Cumulative Dividends | Total Stockholders’ Equity | |||||||||||||||||
Balance at December 31, 2016 | $ | 1,164 | $ | 2,917,914 | $ | (1,401 | ) | $ | 995,256 | $ | (2,259,519 | ) | $ | 1,653,414 | |||||||||
Issuance of common stock | — | 815 | — | — | — | 815 | |||||||||||||||||
Common stock redemptions | — | (503 | ) | — | — | — | (503 | ) | |||||||||||||||
Stock-based compensation | 1 | 2,613 | — | — | — | 2,614 | |||||||||||||||||
Net income | — | — | — | 31,845 | — | 31,845 | |||||||||||||||||
Reclassification of loss on forward starting interest rate swaps | — | — | 43 | — | — | 43 | |||||||||||||||||
Dividends to common stockholders ($0.30 per share) | — | — | — | — | (34,937 | ) | (34,937 | ) | |||||||||||||||
Balance at March 31, 2017 | $ | 1,165 | $ | 2,920,839 | $ | (1,358 | ) | $ | 1,027,101 | $ | (2,294,456 | ) | $ | 1,653,291 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
OPERATING ACTIVITIES | |||||||
Net income | $ | 31,845 | $ | 9,156 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 35,803 | 31,211 | |||||
Stock-based compensation | 2,614 | 1,948 | |||||
Amortization of straight-line rent receivable | (1,751 | ) | (2,132 | ) | |||
Amortization of straight-line rent liability | 156 | 184 | |||||
Gain on sales of real estate assets | (23,408 | ) | — | ||||
Impairment of real estate assets | 323 | — | |||||
Provision for bad debts, net | 66 | (39 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Other assets | (1,662 | ) | 76 | ||||
Accounts payable and accrued liabilities | (14,633 | ) | (14,267 | ) | |||
Other liabilities | 19 | (2,550 | ) | ||||
Net cash provided by operating activities | 29,372 | 23,587 | |||||
INVESTING ACTIVITIES | |||||||
Acquisitions of real estate | (14,143 | ) | (37,953 | ) | |||
Development of real estate | (2,804 | ) | (7,995 | ) | |||
Additional long-lived assets | (18,997 | ) | (10,835 | ) | |||
Proceeds from sales of real estate | 79,747 | — | |||||
Proceeds from mortgages and notes receivable repayments | 3 | 5 | |||||
Net cash provided by (used in) investing activities | 43,806 | (56,778 | ) | ||||
FINANCING ACTIVITIES | |||||||
Net borrowings (repayments) on unsecured credit facility | 15,000 | (7,000 | ) | ||||
Borrowings of mortgage notes and bonds payable | — | 11,500 | |||||
Repayments on notes and bonds payable | (1,032 | ) | (11,317 | ) | |||
Dividends paid | (34,937 | ) | (30,727 | ) | |||
Net proceeds from issuance of common stock | 791 | 70,181 | |||||
Common stock redemptions | (1,125 | ) | (1,264 | ) | |||
Debt issuance and assumption costs | — | (110 | ) | ||||
Net cash provided by (used in) financing activities | (21,303 | ) | 31,263 | ||||
Increase (decrease) in cash, cash equivalents and restricted cash | 51,875 | (1,928 | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | 54,507 | 4,102 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 106,382 | $ | 2,174 | |||
Supplemental Cash Flow Information: | |||||||
Interest paid | $ | 14,536 | $ | 15,151 | |||
Invoices accrued for construction, tenant improvements and other capitalized costs | $ | 11,394 | $ | 16,177 | |||
Capitalized interest | $ | 237 | $ | 179 |
(Dollars in thousands) | 3/31/2017 | 12/31/2016 | ||||||
Cash and cash equivalents | $ | 1,478 | $ | 5,409 | ||||
Restricted cash | 104,904 | 49,098 | ||||||
Total cash, cash equivalents and restricted cash | $ | 106,382 | $ | 54,507 |
(Dollars in millions) | Type (1) | Date Acquired | Purchase Price | Cash Consideration (2) | Real Estate | Other (3) | Square Footage (unaudited) | ||||||||||||||
Real estate acquisition | |||||||||||||||||||||
St. Paul, Minnesota | MOB | 3/6/17 | $ | 13.5 | $ | 13.5 | $ | 13.3 | $ | 0.2 | 34,608 |
(1) | MOB = medical office building |
(2) | Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition. |
(3) | Includes assets acquired, liabilities assumed, and intangibles recognized at acquisition. |
(Dollars in millions) | Type (1) | Date Disposed | Sales Price | Closing Adjustments | Net Proceeds | Net Real Estate Investment | Other (including receivables)(3) | Gain | Square Footage (Unaudited) | |||||||||||||||||||||
Real estate dispositions | ||||||||||||||||||||||||||||||
Evansville, Indiana | OTH | 3/6/17 | $ | 6.4 | $ | — | $ | 6.4 | $ | 1.1 | $ | — | $ | 5.3 | 29,500 | |||||||||||||||
Columbus, Georgia (2) | MOB | 3/7/17 | 0.6 | — | 0.6 | 0.6 | — | — | 12,000 | |||||||||||||||||||||
Las Vegas, Nevada (2) | MOB | 3/30/17 | 5.5 | (0.7 | ) | 4.8 | 2.2 | 0.3 | 2.3 | 18,147 | ||||||||||||||||||||
Texas (3 properties) | IRF | 3/31/17 | 69.5 | (1.6 | ) | 67.9 | 46.9 | 5.2 | 15.8 | 169,722 | ||||||||||||||||||||
Total dispositions | $ | 82.0 | $ | (2.3 | ) | $ | 79.7 | $ | 50.8 | $ | 5.5 | $ | 23.4 | 229,369 |
(1) | OTH = Other; MOB = medical office building; IRF = inpatient rehabilitation facility |
(2) | Previously classified as held for sale. |
(3) | Includes straight-line rent receivables, leasing commissions and lease inducements. |
• | a 78,731 square foot inpatient rehabilitation facility located in Pittsburgh, Pennsylvania reclassified to held for sale in connection with the management's decision to sell the property; |
• | a 39,786 square foot inpatient rehabilitation facility located in San Antonio, Texas reclassified to held for sale in connection with the management's decision to sell the property and the Company expects to recognize a $8.5 million gain on the disposition; and |
• | a 5,100 square foot medical office building located in Chicago, Illinois reclassified to held for sale in connection with the management's decision to sell the property. The Company used level one inputs to record an impairment charge of $0.3 million, reducing the carrying value to the estimated fair value of the property less costs to sell. |
(Dollars in thousands) | March 31, 2017 | December 31, 2016 | |||||
Balance Sheet data: | |||||||
Land | $ | 1,915 | $ | 1,362 | |||
Buildings, improvements and lease intangibles | 28,991 | 4,410 | |||||
30,906 | 5,772 | ||||||
Accumulated depreciation | (16,721 | ) | (2,977 | ) | |||
Real estate assets held for sale, net | 14,185 | 2,795 | |||||
Other assets, net (including receivables) | 926 | 297 | |||||
Assets held for sale and discontinued operations, net | $ | 15,111 | $ | 3,092 | |||
Accounts payable and accrued liabilities | $ | 93 | $ | 22 | |||
Other liabilities | — | 592 | |||||
Liabilities of properties held for sale and discontinued operations | $ | 93 | $ | 614 |
Three Months Ended March 31, | |||||||
(Dollars in thousands) | 2017 | 2016 | |||||
Statements of Income data: | |||||||
Revenues | |||||||
Rental income | $ | — | $ | — | |||
— | — | ||||||
Expenses | |||||||
Property operating | 18 | 7 | |||||
18 | 7 | ||||||
Other Income (Expense) | |||||||
Interest and other income, net | — | — | |||||
— | — | ||||||
Discontinued Operations | |||||||
Loss from discontinued operations | (18 | ) | (7 | ) | |||
Gain on sales of real estate assets | 5 | — | |||||
Loss from Discontinued Operations | $ | (13 | ) | $ | (7 | ) |
Maturity Dates | Balance as of | Effective Interest Rate as of | ||||||||||
(Dollars in thousands) | March 31, 2017 | December 31, 2016 | March 31, 2017 | |||||||||
Unsecured Credit Facility | 7/20 | $ | 122,000 | $ | 107,000 | 1.98 | % | |||||
Unsecured Term Loan Facility, net of issuance costs | 2/19 | 149,550 | 149,491 | 2.18 | % | |||||||
Senior Notes due 2021, net of discount and issuance costs | 1/21 | 397,315 | 397,147 | 5.97 | % | |||||||
Senior Notes due 2023, net of discount and issuance costs | 4/23 | 247,397 | 247,296 | 3.95 | % | |||||||
Senior Notes due 2025, net of discount and issuance costs | 5/25 | 247,874 | 247,819 | 4.08 | % | |||||||
Mortgage notes payable, net of discounts and issuance costs and including premiums | 5/17-5/40 | 114,526 | 115,617 | 5.15 | % | |||||||
$ | 1,278,662 | $ | 1,264,370 |
(Dollars in thousands) | Three Months Ended March 31, | ||||||||
2017 | 2016 | ||||||||
Amount of loss reclassified from accumulated OCI into Interest Expense (effective portion) | $ | (43 | ) | $ | (42 | ) |
March 31, 2017 | December 31, 2016 | ||||
Balance, beginning of period | 116,416,900 | 101,517,009 | |||
Issuance of common stock | 31,254 | 14,063,100 | |||
Nonvested share-based awards, net of withheld shares | 63,803 | 836,791 | |||
Balance, end of period | 116,511,957 | 116,416,900 |
Forward-starting Interest Rate Swaps | ||||||||
(Dollars in thousands) | 2017 | 2016 | ||||||
Beginning balance | $ | (1,401 | ) | $ | (1,569 | ) | ||
Amounts reclassified from accumulated other comprehensive loss | 43 | 42 | ||||||
Net accumulated other comprehensive income | 43 | 42 | ||||||
Ending balance | $ | (1,358 | ) | $ | (1,527 | ) |
Three Months Ended March 31, | |||||||
(Dollars in thousands, except per share data) | 2017 | 2016 | |||||
Weighted average Common Shares outstanding | |||||||
Weighted average Common Shares outstanding | 116,470,836 | 102,634,273 | |||||
Nonvested shares | (1,795,752 | ) | (1,202,185 | ) | |||
Weighted average Common Shares outstanding—Basic | 114,675,084 | 101,432,088 | |||||
Weighted average Common Shares outstanding—Basic | 114,675,084 | 101,432,088 | |||||
Dilutive effect of restricted stock | 725,346 | 601,509 | |||||
Dilutive effect of employee stock purchase plan | 106,572 | 131,221 | |||||
Weighted average Common Shares outstanding—Diluted | 115,507,002 | 102,164,818 | |||||
Net Income | |||||||
Income from continuing operations | $ | 31,858 | $ | 9,163 | |||
Discontinued operations | (13 | ) | (7 | ) | |||
Net income | $ | 31,845 | $ | 9,156 | |||
Basic Earnings Per Common Share | |||||||
Income from continuing operations | $ | 0.28 | $ | 0.09 | |||
Discontinued operations | 0.00 | 0.00 | |||||
Net income | $ | 0.28 | $ | 0.09 | |||
Diluted Earnings Per Common Share | |||||||
Income from continuing operations | $ | 0.28 | $ | 0.09 | |||
Discontinued operations | 0.00 | 0.00 | |||||
Net income | $ | 0.28 | $ | 0.09 |
Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Stock-based awards, beginning of period | 1,786,497 | 1,092,262 | |||
Granted | 80,384 | 300,206 | |||
Vested | (52,842 | ) | (65,722 | ) | |
Stock-based awards, end of period | 1,814,039 | 1,326,746 |
Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Outstanding and exercisable, beginning of period | 316,321 | 340,958 | |||
Granted | 206,824 | 198,450 | |||
Exercised | (11,435 | ) | (26,689 | ) | |
Forfeited | (13,782 | ) | (7,682 | ) | |
Expired | (132,310 | ) | (143,082 | ) | |
Outstanding and exercisable, end of period | 365,618 | 361,955 |
March 31, 2017 | December 31, 2016 | ||||||||||||||
(Dollars in millions) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
Notes and bonds payable (1) | $ | 1,278.7 | $ | 1,281.0 | $ | 1,264.4 | $ | 1,265.1 |
(1) | Level 3 - Fair value derived from valuation techniques in which one or more significant inputs or significant value drivers is unobservable. |
• | Liquidity and Capital Resources |
• | Trends and Matters Impacting Operating Results |
• | Results of Operations |
• | The Company acquired one medical office building during the three months ended March 31, 2017 for a total purchase price and cash consideration of $13.5 million. This property is located on HealthEast Care System’s St. John’s Hospital campus. |
• | The Company disposed of six properties during the three months ended March 31, 2017 for a total sales price of $82.0 million, including $69.5 million for three inpatient rehabilitation facilities. |
• | The Company funded approximately $12.2 million at its development and redevelopment properties. |
• | Other items funded during the three months ended March 31, 2017 include the following: |
◦ | first generation tenant improvements and planned capital expenditures relating to properties acquired during the most recent two-year period totaling $1.2 million; |
◦ | second generation tenant improvements totaling $5.3 million; and |
◦ | capital expenditures totaling $2.5 million. |
Gross Real Estate Investment as of March 31, 2017 | |||||||||||||||
Year Exercisable | Number of Properties | Fair Market Value Method (1) | Non Fair Market Value Method (2) | Total | |||||||||||
Current | 5 | $ | 114,510 | $ | — | $ | 114,510 | ||||||||
Remainder of 2017 (3) | 7 | — | 49,146 | 49,146 | |||||||||||
2018 | — | — | — | — | |||||||||||
2019 | 2 | 41,521 | — | 41,521 | |||||||||||
2020 | — | — | — | — | |||||||||||
2021 | 1 | — | 14,984 | 14,984 | |||||||||||
2022 | — | — | — | — | |||||||||||
2023 | — | — | — | — | |||||||||||
2024 | — | — | — | — | |||||||||||
2025 | 5 | 18,883 | 221,929 | 240,812 | |||||||||||
2026 | — | — | — | — | |||||||||||
2027 and thereafter | 3 | 92,870 | — | 92,870 | |||||||||||
Total | 23 | $ | 267,784 | $ | 286,059 | $ | 553,843 |
(1) | The purchase option price includes a fair market value component that is determined by an appraisal process. |
(2) | Includes properties with stated purchase prices or prices based on fixed capitalization rates. These properties have purchase prices that are on average 13% greater than the Company's current gross investment. |
(3) | These seven properties are covered by one purchase option with a stated purchase price of $44.5 million, which is greater than the Company's net book value of $24.6 million at March 31, 2017. The Company recognized net operating income of approximately $1.5 million in the first quarter of 2017 from these properties. |
Three Months Ended March 31, | |||||||
(Amounts in thousands, except per share data) | 2017 | 2016 | |||||
Net Income | $ | 31,845 | $ | 9,156 | |||
Gain on sales of properties | (23,408 | ) | — | ||||
Impairments of real estate assets | 323 | — | |||||
Real estate depreciation and amortization | 35,555 | 30,800 | |||||
Total adjustments | 12,470 | 30,800 | |||||
Funds from Operations Attributable to Common Stockholders | $ | 44,315 | $ | 39,956 | |||
Acquisition costs (1) | 610 | 1,618 | |||||
Revaluation of awards upon retirement | — | 89 | |||||
Normalized Funds from Operations Attributable to Common Stockholders | $ | 44,925 | $ | 41,663 | |||
Non-real estate depreciation and amortization | 1,355 | 1,390 | |||||
Provision for bad debt, net | 66 | (39 | ) | ||||
Straight-line rent, net | (1,595 | ) | (1,948 | ) | |||
Stock-based compensation | 2,614 | 1,859 | |||||
Total non-cash items | 2,440 | 1,262 | |||||
2nd generation TI | (5,277 | ) | (4,202 | ) | |||
Leasing commissions paid | (1,584 | ) | (1,079 | ) | |||
Capital additions | (2,520 | ) | (2,098 | ) | |||
Funds Available for Distribution | $ | 37,984 | $ | 35,546 | |||
Funds from Operations per Common Share—Diluted | $ | 0.38 | $ | 0.39 | |||
Normalized Funds from Operations per Common Share—Diluted | $ | 0.39 | $ | 0.41 | |||
Weighted Average Common Shares Outstanding—Diluted | 115,507 | 102,165 |
(1) | The Company adopted ASU 2017-01 effective January 1, 2017. As a result of the adoption of this standard, the majority of the Company's acquisitions will be accounted for as asset acquisitions and therefore, incremental costs that are directly related to the asset acquisition will be capitalized. Beginning in the first quarter of 2017, acquisition costs also include direct incremental costs that were expensed during the period related to transactions that have not closed. |
Same Store NOI for the | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||
(Dollars in thousands) | Number of Properties | Gross Investment at March 31, 2017 | 2017 | 2016 | ||||||||||
Multi-tenant Properties | 138 | $ | 2,493,309 | $ | 45,020 | $ | 43,753 | |||||||
Single-tenant Net Lease Properties | 24 | 524,268 | 12,571 | 12,435 | ||||||||||
Total | 162 | $ | 3,017,577 | $ | 57,591 | $ | 56,188 |
• | Properties having less than 60% occupancy that is expected to last at least two quarters; |
• | Properties that experience a loss of occupancy over 30% in a single quarter; |
• | Properties with negative net operating income that is expected to last at least two quarters; or |
• | Condemnation. |
Reconciliation of Same Store NOI: | |||||||
Three Months Ended March 31, | |||||||
(Dollars in thousands) | 2017 | 2016 | |||||
Net income | $ | 31,845 | $ | 9,156 | |||
Loss (income) from discontinued operations | 13 | 7 | |||||
Income from continuing operations | 31,858 | 9,163 | |||||
General and administrative expense | 9,280 | 10,246 | |||||
Depreciation expense | 31,412 | 27,693 | |||||
Amortization expense | 3,040 | 2,700 | |||||
Bad debts, net of recoveries | 66 | (39 | ) | ||||
Other Income (expense) | (8,921 | ) | 14,852 | ||||
Straight-line rent adjustment | (1,588 | ) | (1,948 | ) | |||
Interest and other income (a) | (256 | ) | (279 | ) | |||
Amortization of leasing costs (1) | (6 | ) | (148 | ) | |||
Lease termination fees | (14 | ) | (22 | ) | |||
Amortization of acquired above/below market leases | 646 | 64 | |||||
NOI | 65,517 | 62,282 | |||||
NOI not included in same store | (7,926 | ) | (6,094 | ) | |||
Same store NOI | $ | 57,591 | $ | 56,188 | |||
(a) Other operating income reconciliation | |||||||
Other operating | $ | 481 | $ | 1,281 | |||
Less: Rental lease guaranty income | (225 | ) | (1,002 | ) | |||
$ | 256 | $ | 279 |
(1) | Leasing costs include lease inducements, tenant improvement overages and leasing commissions. |
Reconciliation of Same Store Property Count: | ||
Property Count as of March 31, 2017 | ||
Same Store Properties | 162 | |
Acquisitions | 18 | |
Development Conversion | 1 | |
Reposition | 14 | |
Total Owned Real Estate Properties | 195 |
Three Months Ended March 31, | Change | |||||||||||||
(Dollars in thousands) | 2017 | 2016 | $ | % | ||||||||||
Property operating | $ | 88,067 | $ | 80,501 | $ | 7,566 | 9.4 | % | ||||||
Single-tenant net lease | 14,270 | 16,107 | (1,837 | ) | (11.4 | )% | ||||||||
Straight-line rent | 1,751 | 2,132 | (381 | ) | (17.9 | )% | ||||||||
Total rental income | $ | 104,088 | $ | 98,740 | $ | 5,348 | 5.4 | % |
• | Acquisitions and developments in 2016 and 2017 contributed $5.1 million. |
• | Leasing activity including contractual rent increases contributed $3.4 million. |
• | Dispositions in 2016 and 2017 caused a decrease of $0.9 million. |
• | Dispositions in 2016 and 2017 caused a decrease of $1.6 million. |
• | Reduction in lease revenue of $0.5 million upon tenant vacate and classification to held for sale. |
• | Acquisitions in 2017 contributed to $0.1 million. |
• | Contractual rent increases contributed $0.2 million. |
• | Net leasing activity including contractual rent increases and the effects of prior year rent abatements that expired resulted in a decrease of $0.6 million. |
• | Acquisitions in 2016 and 2017 caused an increase of $0.2 million. |
• | Acquisitions in 2016 and 2017 caused an increase of $1.7 million. |
• | Increases in portfolio property tax of approximately $0.6 million, compensation-related expenses of approximately $0.2 million, janitorial expense of approximately $0.2 million, and utilities expense of approximately $0.1 million. |
• | Dispositions in 2016 and 2017 caused a decrease of $0.4 million. |
• | Decrease in expenses related to actual and potential acquisitions and developments of $1.6 million. |
• | Increase in performance-based compensation expense of $0.4 million. |
• | Increase in payroll compensation of $0.1 million. |
• | Increase in professional fees and other administrative costs of $0.1 million. |
• | Acquisitions and developments in 2016 and 2017 caused an increase of $2.2 million. |
• | Various building and tenant improvement expenditures caused an increase of $2.5 million. |
• | Dispositions in 2016 and 2017 caused a decrease of $0.6 million. |
• | Assets that became fully depreciated resulted in a decrease of $0.4 million. |
Three Months Ended March 31, | Change | |||||||||||||
(Dollars in thousands) | 2017 | 2016 | $ | % | ||||||||||
Contractual interest | $ | 13,803 | $ | 14,364 | $ | (561 | ) | (3.9 | )% | |||||
Net discount/premium accretion | 52 | (29 | ) | 81 | (279.3 | )% | ||||||||
Deferred financing costs amortization | 611 | 740 | (129 | ) | (17.4 | )% | ||||||||
Interest rate swap amortization | 43 | 42 | 1 | 2.4 | % | |||||||||
Interest cost capitalization | (237 | ) | (179 | ) | (58 | ) | 32.4 | % | ||||||
Total interest expense | $ | 14,272 | $ | 14,938 | $ | (666 | ) | (4.5 | )% |
• | Unsecured Credit Facility repayments resulted in a decrease in interest expense of approximately $0.2 million. |
• | Mortgage notes payable repayments resulted in a decrease in interest expense of approximately $0.3 million. |
• | Unsecured Term Loan repayments resulted in a decrease in interest expense of approximately $0.1 million. |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | |||||
January 1 - January 31 | 15,695 | $ | 30.31 | — | — | ||||
February 1 - February 28 | 886 | 30.35 | — | — | |||||
March 1 - March 31 | — | — | — | — | |||||
Total | 16,581 |
Exhibit | Description | |
Exhibit 3.1 | Second Articles of Amendment and Restatement of the Company, as amended(1) | |
Exhibit 3.2 | Amended and Restated Bylaws of the Company, as amended(1) | |
Exhibit 4.1 | Specimen Stock Certificate(2) | |
Exhibit 4.2 | Indenture, dated as of May 15, 2001, by and between the Company and Regions Bank, as trustee(3) | |
Exhibit 4.3 | Fourth Supplemental Indenture, dated December 13, 2010, by and between the Company and Regions Bank, as Trustee(4) | |
Exhibit 4.4 | Form of 5.750% Senior Notes due 2021 (set forth in Exhibit B to the Fourth Supplemental Indenture filed as Exhibit 4.5 thereto)(4) | |
Exhibit 4.5 | Fifth Supplemental Indenture, dated March 26, 2013, by and between the Company and Regions Bank, as Trustee(5) | |
Exhibit 4.6 | Form of 3.75% Senior Notes due 2023 (set forth in Exhibit B to the Fifth Supplemental Indenture filed as Exhibit 4.7 thereto)(5) | |
Exhibit 4.7 | Sixth Supplemental Indenture, dated April 24, 2015, by and between the Company and Regions Bank, as Trustee(6) | |
Exhibit 4.8 | Form of 3.875% Senior Notes due 2025 (set forth in Exhibit B to the Sixth Supplemental Indenture filed as Exhibit 4.9 thereto)(6) | |
Exhibit 10.1 | Third Amended and Restated Employment Agreement, dated February 15, 2017, between John M. Bryant, Jr. and the Company. (7) | |
Exhibit 10.2 | Amended and Restated Employment Agreement, dated January 1, 2017, between Robert E. Hull and the Company. (7) | |
Exhibit 10.3 | Third Amended and Restated Employment Agreement, dated February 15, 2017, between B. Douglas Whitman, II and the Company. (7) | |
Exhibit 11 | Statement re: Computation of per share earnings (filed herewith in Note 6 to the Condensed Consolidated Financial Statements) | |
Exhibit 31.1 | Certification of the Chief Executive Officer of Healthcare Realty Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) | |
Exhibit 31.2 | Certification of the Chief Financial Officer of Healthcare Realty Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) | |
Exhibit 32 | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) | |
Exhibit 101.INS | XBRL Instance Document (filed herewith) | |
Exhibit 101.SCH | XBRL Taxonomy Extension Schema Document (filed herewith) | |
Exhibit 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith) | |
Exhibit 101.LAB | XBRL Taxonomy Extension Labels Linkbase Document (filed herewith) | |
Exhibit 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (filed herewith) | |
Exhibit 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith) |
(1) | Filed as an exhibit to the Company's Form 10-Q for the quarter ended June 30, 2015 and hereby incorporated by reference. |
(2) | Filed as an exhibit to the Company’s Registration Statement on Form S-11 (Registration No. 33-60506) previously filed pursuant to the Securities Act of 1933 and hereby incorporated by reference. |
(3) | Filed as an exhibit to the Company's Form 8-K filed May 17, 2001 and hereby incorporated as reference. |
(4) | Filed as an exhibit to the Company’s Form 8-K filed December 13, 2010 and hereby incorporated by reference. |
(5) | Filed as an exhibit to the Company's Form 8-K filed March 26, 2013 and hereby incorporated by reference. |
(6) | Filed as an exhibit to the Company's Form 8-K filed April 24, 2015 and hereby incorporated by reference. |
(7) | Filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2016 and hereby incorporated by reference. |
HEALTHCARE REALTY TRUST INCORPORATED | |||
By: | /s/ J. CHRISTOPHER DOUGLAS | ||
J. Christopher Douglas Executive Vice President and Chief Financial Officer | |||
Date: | May 3, 2017 |
Exhibit | Description | |
Exhibit 3.1 | Second Articles of Amendment and Restatement of the Company, as amended(1) | |
Exhibit 3.2 | Amended and Restated Bylaws of the Company, as amended(1) | |
Exhibit 4.1 | Specimen Stock Certificate(2) | |
Exhibit 4.2 | Indenture, dated as of May 15, 2001, by and between the Company and Regions Bank, as trustee(3) | |
Exhibit 4.3 | Fourth Supplemental Indenture, dated December 13, 2010, by and between the Company and Regions Bank, as Trustee(4) | |
Exhibit 4.4 | Form of 5.750% Senior Notes due 2021 (set forth in Exhibit B to the Fourth Supplemental Indenture filed as Exhibit 4.5 thereto)(4) | |
Exhibit 4.5 | Fifth Supplemental Indenture, dated March 26, 2013, by and between the Company and Regions Bank, as Trustee(5) | |
Exhibit 4.6 | Form of 3.75% Senior Notes due 2023 (set forth in Exhibit B to the Fifth Supplemental Indenture filed as Exhibit 4.7 thereto)(5) | |
Exhibit 4.7 | Sixth Supplemental Indenture, dated April 24, 2015, by and between the Company and Regions Bank, as Trustee(6) | |
Exhibit 4.8 | Form of 3.875% Senior Notes due 2025 (set forth in Exhibit B to the Sixth Supplemental Indenture filed as Exhibit 4.9 thereto)(6) | |
Exhibit 10.1 | Third Amended and Restated Employment Agreement, dated February 15, 2017, between John M. Bryant, Jr. and the Company. (7) | |
Exhibit 10.2 | Amended and Restated Employment Agreement, dated January 1, 2017, between Robert E. Hull and the Company. (7) | |
Exhibit 10.3 | Third Amended and Restated Employment Agreement, dated February 15, 2017, between B. Douglas Whitman, II and the Company. (7) | |
Exhibit 11 | Statement re: Computation of per share earnings (filed herewith in Note 6 to the Condensed Consolidated Financial Statements) | |
Exhibit 31.1 | Certification of the Chief Executive Officer of Healthcare Realty Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) | |
Exhibit 31.2 | Certification of the Chief Financial Officer of Healthcare Realty Trust Incorporated pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith) | |
Exhibit 32 | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith) | |
Exhibit 101.INS | XBRL Instance Document (filed herewith) | |
Exhibit 101.SCH | XBRL Taxonomy Extension Schema Document (filed herewith) | |
Exhibit 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith) | |
Exhibit 101.LAB | XBRL Taxonomy Extension Labels Linkbase Document (filed herewith) | |
Exhibit 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (filed herewith) | |
Exhibit 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith) |
(1) | Filed as an exhibit to the Company's Form 10-Q for the quarter ended June 30, 2015 and hereby incorporated by reference. |
(2) | Filed as an exhibit to the Company’s Registration Statement on Form S-11 (Registration No. 33-60506) previously filed pursuant to the Securities Act of 1933 and hereby incorporated by reference. |
(3) | Filed as an exhibit to the Company's Form 8-K filed May 17, 2001 and hereby incorporated as reference. |
(4) | Filed as an exhibit to the Company’s Form 8-K filed December 13, 2010 and hereby incorporated by reference. |
(5) | Filed as an exhibit to the Company's Form 8-K filed March 26, 2013 and hereby incorporated by reference. |
(6) | Filed as an exhibit to the Company's Form 8-K filed April 24, 2015 and hereby incorporated by reference. |
(7) | Filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2016 and hereby incorporated by reference. |
1. | I have reviewed this quarterly report on Form 10-Q of Healthcare Realty Trust Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 3, 2017 | |
/s/ TODD J. MEREDITH | ||
Todd J. Meredith | ||
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Healthcare Realty Trust Incorporated; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | May 3, 2017 | |
/s/ J. CHRISTOPHER DOUGLAS | ||
J. Christopher Douglas | ||
Executive Vice President and Chief Financial Officer |
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | May 3, 2017 | |
/s/ TODD J. MEREDITH | ||
Todd J. Meredith | ||
President and Chief Executive Officer | ||
/s/ J. CHRISTOPHER DOUGLAS | ||
J. Christopher Douglas | ||
Executive Vice President and Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Apr. 30, 2017 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HEALTHCARE REALTY TRUST INC | |
Entity Central Index Key | 0000899749 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 116,512,124 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 50,000,000 | 50,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 150,000,000 | 150,000,000 |
Common stock, issued shares | 116,512,000 | 116,417,000 |
Common stock, outstanding shares | 116,512,000 | 116,417,000 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||
NET INCOME | $ 31,845 | $ 9,156 |
Forward starting interest rate swaps: | ||
Reclassification adjustment for losses included in net income (Interest expense) | 43 | 42 |
Total other comprehensive income | 43 | 42 |
COMPREHENSIVE INCOME | $ 31,888 | $ 9,198 |
Condensed Consolidated Statements of Equity (Unaudited) Statement - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands |
Total |
Common Stock |
Additional Paid-in Capital [Member] |
Accumulated Other Comprehensive Loss [Member] |
Cumulative Net Income Attributable to Common Stockholders [Member] |
Cumulative Dividends [Member] |
---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2016 | $ 1,653,414 | $ 1,164 | $ 2,917,914 | $ (1,401) | $ 995,256 | $ (2,259,519) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock | 815 | 815 | ||||
Common stock redemptions | (503) | (503) | ||||
Stock-based compensation | 2,614 | 1 | 2,613 | |||
Net Income | 31,845 | 31,845 | ||||
Reclassification of loss on forward starting interest rate swaps | 43 | 43 | ||||
Dividends to common stockholders ($0.30 per share) | (34,937) | (34,937) | ||||
Ending balance at Mar. 31, 2017 | $ 1,653,291 | $ 1,165 | $ 2,920,839 | $ (1,358) | $ 1,027,101 | $ (2,294,456) |
Condensed Consolidated Statements of Equity (Unaudited) Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) |
3 Months Ended |
---|---|
Mar. 31, 2017
$ / shares
| |
Statement of Stockholders' Equity [Abstract] | |
Dividend per share to common Stockholders (in dollars per share) | $ 0.30 |
Summary of Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Business Overview Healthcare Realty Trust Incorporated (the "Company") is a real estate investment trust ("REIT") that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of March 31, 2017, the Company had gross investments of approximately $3.5 billion in 195 real estate properties located in 27 states totaling approximately 14.3 million square feet. The Company provided leasing and property management services to approximately 10.8 million square feet nationwide. Basis of Presentation The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. However, except as disclosed herein, management believes there has been no material change in the information disclosed in the Notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2016. All material intercompany transactions and balances have been eliminated in consolidation. This interim financial information should be read in conjunction with the financial statements included in this report and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. In addition, the interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2017 for many reasons including, but not limited to, acquisitions, dispositions, capital financing transactions, changes in interest rates and the effects of other trends, risks and uncertainties. Use of Estimates in the Condensed Consolidated Financial Statements Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents includes short-term investments with original maturities of three months or less when purchased. Restricted cash includes cash held in escrow in connection with proceeds from the sales of certain real estate properties. These sales proceeds will be disbursed as the Company acquires real estate investments under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The carrying amount approximates fair value due to the short term maturity of these investments. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company's Consolidated Balance Sheets the same amounts shown on the Company's Consolidated Statements of Cash Flows:
New Accounting Pronouncements Accounting Standards Update No. 2014-09 and No. 2015-14 In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09, "Revenue from Contracts with Customers," a comprehensive new revenue recognition standard that supersedes most existing revenue recognition guidance, including sales of real estate. This standard's core principle is that a company will recognize revenue when it transfers goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. However, leasing contracts, representing the major source of the Company's revenues, are not within the scope of the new standard and will continue to be accounted for under other standards. In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers (Topic 606); Deferral of the Effective Date." This standard is effective for the Company for annual and interim periods beginning after December 15, 2017 with early adoption permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that year. The Company plans on adopting this standard by using the full retrospective adoption method beginning on January 1, 2018. The Company's revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, the Company does not expect the adoption of this standard to have a material impact on the timing and measurement of the Company's leasing revenues. The Company is continuing to evaluate the impact on other revenue sources. However, the Company does expect additional disclosures that are required from the adoption of this standard. Accounting Standards Update No. 2016-02 In February 2016, the FASB issued ASU No. 2016-02, "Leases." For lessees, the new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company expects that all of the leases where the Company is the lessee will be recorded on the Company's balance sheet. For lessors, the new standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as financing. If the lessor doesn't convey risks and rewards or control, then the lease would be classified as an operating lease. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted. A modified retrospective transition approach is required for lessors for sales-type, direct financing, and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the initial stages of evaluating the impact from the adoption of this new standard on the Consolidated Financial Statements and related notes. Accounting Standards Update No. 2016-13 In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments." This update is intended to improve financial reporting by requiring timelier recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. This update requires that financial statement assets measured at an amortized cost and certain other financial instruments be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. This standard is effective for the fiscal for annual and interim periods beginning after December 15, 2019 with early adoption permitted. The Company is in the initial stages of evaluating the impact from the adoption of this new standard on the Consolidated Financial Statements and related notes. Accounting Standards Update No. 2016-15 In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments." This update clarifies whether the following items should be classified as operating, investing or financing in the statement of cash flows: (i) debt prepayments and extinguishment costs, (ii) settlement of zero-coupon debt, (iii) settlement of contingent consideration, (iv) insurance proceeds, (v) settlement of corporate-owned life insurance and bank-owned life insurance policies, (vi) distributions from equity method investees, (vii) beneficial interest in securitization transactions and (viii) receipts and payments with aspects of more than one class of cash flows. This standard is effective for the Company for annual and interim periods beginning on January 1, 2018 with early adoption permitted on a retrospective transition method to each period presented. The Company adopted this standard effective January 1, 2017. There was not a material impact on the Company's Consolidated Financial Statements and related notes resulting from the adoption of this standard. Accounting Standards Update No. 2017-01 In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations: Clarifying the Definition of a Business." This update modifies the requirements to meet the definition of a business under Topic 805, "Business Combinations." The amendments provide a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that will need to be further evaluated. The Company believes that this amendment will result in most of its real estate acquisitions being accounted for as asset acquisitions rather than business combinations. This standard is effective for the Company for annual and interim periods beginning after December 15, 2017 with early adoption permitted. The Company adopted this standard effective January 1, 2017. The impact to the Consolidated Financial Statements and related notes as a result of the adoption of this standard is primarily related to the difference in the accounting of acquisition costs. When accounting for these costs as a part of an asset acquisition, the Company will be permitted to capitalize the costs. The adoption of this standard did not have a material impact on the Consolidated Financial Statements and related notes. Accounting Standards Update No. 2017-04 In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment." This update eliminates Step 2 of the goodwill impairment test. As such, an entity will perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the reporting unit's carrying amount exceeds its fair value. This standard is effective for the Company for annual and interim periods beginning after December 15, 2019. The Company does not expect a material impact on the Consolidated Financial Statements and related notes from the adoption of this standard. Accounting Standards Update No. 2017-05 In February 2017, the FASB issued ASU 2017-05, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets." This update defines an in-substance nonfinancial asset, unifies guidance related to partial sales of nonfinancial assets, eliminates rules specifically addressing the sales of real estate, removes exception to the financial asset derecognition model and clarifies the accounting for contributions of nonfinancial assets to joint ventures. This standard is effective for the Company for annual and interim periods beginning after December 15, 2017 with early adoption permitted. The Company does not expect a material impact on the Consolidated Financial Statements and related notes from the adoption of this standard. |
Real Estate Investments |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Investments | Real Estate Investments 2017 Acquisitions The following table details the Company's acquisition for the three months ended March 31, 2017:
2017 Dispositions The following table details the Company's dispositions for the three months ended March 31, 2017:
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Assets Held for Sale At March 31, 2017 and December 31, 2016, the Company had three and two properties, respectively, classified as held for sale. During the first quarter of 2017, the Company reclassified three properties to held for sale that are summarized below:
The table below reflects the assets and liabilities of the properties classified as held for sale and discontinued operations as of March 31, 2017 and December 31, 2016:
Discontinued Operations The following table represents the results of operations of the properties included in discontinued operations on the Company's Condensed Consolidated Statements of Income for the three months ended March 31, 2017 and 2016.
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Notes and Bonds Payable |
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Notes and Bonds Payable | Notes and Bonds Payable The table below details the Company’s notes and bonds payable.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial Instruments Risk Management Objective of Using Derivatives In addition to operational risks which arise in the normal course of business, the Company is exposed to economic risks such as interest rate, liquidity and credit risk. In certain situations, the Company may enter into derivative financial instruments such as interest rate swap and interest rate cap agreements to manage interest rate risk exposure arising from variable rate debt transactions that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company's objective in using interest rate derivatives is to manage its exposure to interest rate movements on its variable rate debt. Cash Flow Hedges of Interest Rate Risk Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without changing the underlying notional amount. As of March 31, 2017, the Company did not have any outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk. The effective portion of changes in the fair value of derivatives designated as, and that qualify as, cash flow hedges is recorded in accumulated other comprehensive income or loss (“OCI”) and is reclassified into earnings as interest expense in the period that the hedged forecasted transaction affects earnings. The effective portion of the Company’s interest rate swaps that was recorded in the accompanying Condensed Consolidated Statements of Income for the three months ended March 31, 2017 and 2016 respectively, was as follows:
The Company estimates that an additional $0.2 million will be reclassified from accumulated other comprehensive loss as an increase to interest expense over the next 12 months. |
Commitments and Contingencies |
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Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings The Company is, from time to time, involved in litigation arising in the ordinary course of business. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. Redevelopment Activity The Company is in the process of finalizing the redevelopment of a medical office building in Nashville, Tennessee, which includes a 70,000 square foot expansion. During the three months ended March 31, 2017, the Company funded approximately $7.5 million on the redevelopment of this property, including approximately $1.9 million related to overages on tenant improvement projects that have yet to be finalized and collected from the tenant. The Company expects to spend an additional $3.8 million throughout the remainder of 2017. Development Activity The Company is developing a 98,000 square foot medical office building in Denver, Colorado. The total development budget is $26.5 million, of which $16.1 million has been spent as of March 31, 2017. The Company expects to receive the certificate of occupancy in the second quarter of 2017. Tenants are expected to begin taking occupancy in the third quarter of 2017. |
Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders' Equity Common Stock The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the three months ended March 31, 2017 and the year ended December 31, 2016:
Common Stock Authorization On May 2, 2017, the Company's shareholders approved an amendment to the Company's Articles of Incorporation to increase the number of authorized shares of common stock from 150,000,000 to 300,000,000. At-The-Market Equity Offering Program No shares were sold under this program during the first quarter of 2017. The Company has 5,868,697 authorized shares remaining available to be sold under the current sales agreements as of April 30, 2017. Common Stock Dividends During the three months ended March 31, 2017, the Company declared and paid common stock dividends totaling $0.30 per share. On May 2, 2017, the Company declared a quarterly common stock dividend in the amount of $0.30 per share payable on May 31, 2017 to stockholders of record on May 16, 2017. Accumulated Other Comprehensive Loss The following table represents the changes in balances of each component and the amounts reclassified out of accumulated other comprehensive loss related to the Company during the three months ended March 31, 2017 and 2016:
Earnings Per Common Share The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2017 and 2016.
Incentive Plans A summary of the activity under the stock-based incentive plans for the three months ended March 31, 2017 and 2016 is included in the table below.
During the three months ended March 31, 2017 and 2016, the Company withheld 16,581 and 13,878 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested. In addition to the stock-based incentive plans, the Company maintains the 2000 Employee Stock Purchase Plan (the "Purchase Plan"). A summary of the activity under the Purchase Plan for the three months ended March 31, 2017 and 2016 is included in the table below.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practical to estimate that value. Cash and cash equivalents - The carrying amount approximates fair value. Borrowings under the Unsecured Credit Facility and Unsecured Term Loan - The carrying amount approximates fair value because the borrowings are based on variable market interest rates. Senior unsecured notes payable - The fair value of notes and bonds payable is estimated using cash flow analyses, based on the Company’s current interest rates for similar types of borrowing arrangements. Mortgage notes payable - The fair value is estimated using cash flow analyses, based on the Company’s current interest rates for similar types of borrowing arrangements. The table below details the fair values and carrying values for notes and bonds payable at March 31, 2017 and December 31, 2016.
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Summary of Significant Accounting Policies (Policies) |
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Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Business Overview | Business Overview Healthcare Realty Trust Incorporated (the "Company") is a real estate investment trust ("REIT") that integrates owning, managing, financing and developing income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of March 31, 2017, the Company had gross investments of approximately $3.5 billion in 195 real estate properties located in 27 states totaling approximately 14.3 million square feet. The Company provided leasing and property management services to approximately 10.8 million square feet nationwide. |
Basis of Presentation | Basis of Presentation The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. However, except as disclosed herein, management believes there has been no material change in the information disclosed in the Notes to the Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2016. All material intercompany transactions and balances have been eliminated in consolidation. This interim financial information should be read in conjunction with the financial statements included in this report and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. In addition, the interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2017 for many reasons including, but not limited to, acquisitions, dispositions, capital financing transactions, changes in interest rates and the effects of other trends, risks and uncertainties. |
Use of Estimates in the Condensed Consolidated Financial Statements | Use of Estimates in the Condensed Consolidated Financial Statements Preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents includes short-term investments with original maturities of three months or less when purchased. Restricted cash includes cash held in escrow in connection with proceeds from the sales of certain real estate properties. These sales proceeds will be disbursed as the Company acquires real estate investments under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). The carrying amount approximates fair value due to the short term maturity of these investments. |
New Accounting Pronouncements | New Accounting Pronouncements Accounting Standards Update No. 2014-09 and No. 2015-14 In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-09, "Revenue from Contracts with Customers," a comprehensive new revenue recognition standard that supersedes most existing revenue recognition guidance, including sales of real estate. This standard's core principle is that a company will recognize revenue when it transfers goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods and services. However, leasing contracts, representing the major source of the Company's revenues, are not within the scope of the new standard and will continue to be accounted for under other standards. In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers (Topic 606); Deferral of the Effective Date." This standard is effective for the Company for annual and interim periods beginning after December 15, 2017 with early adoption permitted only as of annual reporting periods beginning after December 15, 2016, including interim periods within that year. The Company plans on adopting this standard by using the full retrospective adoption method beginning on January 1, 2018. The Company's revenue-producing contracts are primarily leases that are not within the scope of this standard. As a result, the Company does not expect the adoption of this standard to have a material impact on the timing and measurement of the Company's leasing revenues. The Company is continuing to evaluate the impact on other revenue sources. However, the Company does expect additional disclosures that are required from the adoption of this standard. Accounting Standards Update No. 2016-02 In February 2016, the FASB issued ASU No. 2016-02, "Leases." For lessees, the new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company expects that all of the leases where the Company is the lessee will be recorded on the Company's balance sheet. For lessors, the new standard requires a lessor to classify leases as either sales-type, finance or operating. A lease will be treated as a sale if it transfers all of the risks and rewards, as well as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as financing. If the lessor doesn't convey risks and rewards or control, then the lease would be classified as an operating lease. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted. A modified retrospective transition approach is required for lessors for sales-type, direct financing, and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the initial stages of evaluating the impact from the adoption of this new standard on the Consolidated Financial Statements and related notes. Accounting Standards Update No. 2016-13 In June 2016, the FASB issued ASU 2016-13, "Measurement of Credit Losses on Financial Instruments." This update is intended to improve financial reporting by requiring timelier recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. This update requires that financial statement assets measured at an amortized cost and certain other financial instruments be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. This standard is effective for the fiscal for annual and interim periods beginning after December 15, 2019 with early adoption permitted. The Company is in the initial stages of evaluating the impact from the adoption of this new standard on the Consolidated Financial Statements and related notes. Accounting Standards Update No. 2016-15 In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments." This update clarifies whether the following items should be classified as operating, investing or financing in the statement of cash flows: (i) debt prepayments and extinguishment costs, (ii) settlement of zero-coupon debt, (iii) settlement of contingent consideration, (iv) insurance proceeds, (v) settlement of corporate-owned life insurance and bank-owned life insurance policies, (vi) distributions from equity method investees, (vii) beneficial interest in securitization transactions and (viii) receipts and payments with aspects of more than one class of cash flows. This standard is effective for the Company for annual and interim periods beginning on January 1, 2018 with early adoption permitted on a retrospective transition method to each period presented. The Company adopted this standard effective January 1, 2017. There was not a material impact on the Company's Consolidated Financial Statements and related notes resulting from the adoption of this standard. Accounting Standards Update No. 2017-01 In January 2017, the FASB issued ASU No. 2017-01, "Business Combinations: Clarifying the Definition of a Business." This update modifies the requirements to meet the definition of a business under Topic 805, "Business Combinations." The amendments provide a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that will need to be further evaluated. The Company believes that this amendment will result in most of its real estate acquisitions being accounted for as asset acquisitions rather than business combinations. This standard is effective for the Company for annual and interim periods beginning after December 15, 2017 with early adoption permitted. The Company adopted this standard effective January 1, 2017. The impact to the Consolidated Financial Statements and related notes as a result of the adoption of this standard is primarily related to the difference in the accounting of acquisition costs. When accounting for these costs as a part of an asset acquisition, the Company will be permitted to capitalize the costs. The adoption of this standard did not have a material impact on the Consolidated Financial Statements and related notes. Accounting Standards Update No. 2017-04 In January 2017, the FASB issued ASU 2017-04, "Simplifying the Test for Goodwill Impairment." This update eliminates Step 2 of the goodwill impairment test. As such, an entity will perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the reporting unit's carrying amount exceeds its fair value. This standard is effective for the Company for annual and interim periods beginning after December 15, 2019. The Company does not expect a material impact on the Consolidated Financial Statements and related notes from the adoption of this standard. Accounting Standards Update No. 2017-05 In February 2017, the FASB issued ASU 2017-05, "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets." This update defines an in-substance nonfinancial asset, unifies guidance related to partial sales of nonfinancial assets, eliminates rules specifically addressing the sales of real estate, removes exception to the financial asset derecognition model and clarifies the accounting for contributions of nonfinancial assets to joint ventures. This standard is effective for the Company for annual and interim periods beginning after December 15, 2017 with early adoption permitted. The Company does not expect a material impact on the Consolidated Financial Statements and related notes from the adoption of this standard. |
Summary of Significant Accounting Policies (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of cash, cash equivalents and restricted cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Company's Consolidated Balance Sheets the same amounts shown on the Company's Consolidated Statements of Cash Flows:
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Real Estate Investments (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquisitions | The following table details the Company's acquisition for the three months ended March 31, 2017:
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Schedule of Dispositions | The following table details the Company's dispositions for the three months ended March 31, 2017:
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Discontinued Operations and Assets Held for Sale | The table below reflects the assets and liabilities of the properties classified as held for sale and discontinued operations as of March 31, 2017 and December 31, 2016:
Discontinued Operations The following table represents the results of operations of the properties included in discontinued operations on the Company's Condensed Consolidated Statements of Income for the three months ended March 31, 2017 and 2016.
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Notes and Bonds Payable (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The table below details the Company’s notes and bonds payable.
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Derivative Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The effective portion of the Company’s interest rate swaps that was recorded in the accompanying Condensed Consolidated Statements of Income for the three months ended March 31, 2017 and 2016 respectively, was as follows:
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Stockholders' Equity (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of beginning and ending common stock outstanding | Common Stock The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the three months ended March 31, 2017 and the year ended December 31, 2016:
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Schedule of accumulated other comprehensive income (loss) | The following table represents the changes in balances of each component and the amounts reclassified out of accumulated other comprehensive loss related to the Company during the three months ended March 31, 2017 and 2016:
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Earnings (loss) per share | Earnings Per Common Share The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2017 and 2016.
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Summary of the activity under the Incentive Plan | A summary of the activity under the stock-based incentive plans for the three months ended March 31, 2017 and 2016 is included in the table below.
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Summary of employee stock purchase plan activity | A summary of the activity under the Purchase Plan for the three months ended March 31, 2017 and 2016 is included in the table below.
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Fair Value of Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value and carrying values for notes and bonds payable, mortgage notes receivable, and notes receivable | The table below details the fair values and carrying values for notes and bonds payable at March 31, 2017 and December 31, 2016.
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Summary of Significant Accounting Policies (Details) ft² in Millions, $ in Billions |
Mar. 31, 2017
USD ($)
ft²
state
property
|
---|---|
Business Overview: | |
Gross investment amount, total | $ | $ 3.5 |
Number of real estate properties | property | 195 |
Number of states that the Company owns real estate in, whole units | state | 27 |
Square footage of owned real estate properties | 14.3 |
Approximate square feet for which Nationwide property management services provided by company | 10.8 |
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 1,478 | $ 5,409 | ||
Restricted cash | 104,904 | 49,098 | ||
Total cash, cash equivalents and restricted cash | $ 106,382 | $ 54,507 | $ 2,174 | $ 4,102 |
Real Estate Investments - Acquisitions (Details) - MINNESOTA - Real Estate Acquisition $ in Millions |
Mar. 06, 2017
USD ($)
ft²
|
---|---|
Business Acquisition [Line Items] | |
Date Acquired | Mar. 06, 2017 |
Purchase price | $ 13.5 |
Cash consideration | 13.5 |
Real Estate | 13.3 |
Other | $ 0.2 |
Square footage | ft² | 34,608 |
Real Estate Investments - Assets Held for Sale (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017
USD ($)
ft²
property
|
Dec. 31, 2016
property
|
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Real Estate [Line Items] | ||
Number of properties held for sale | property | 3 | 2 |
PENNSYLVANIA | Inpatient Rehabilitation Facility | ||
Real Estate [Line Items] | ||
Area of real estate property held for sale | 78,731 | |
TEXAS | Inpatient Rehabilitation Facility | ||
Real Estate [Line Items] | ||
Area of real estate property held for sale | 39,786 | |
Expected gain on disposition | $ | $ 8.5 | |
ILLINOIS | Medical Office Building | ||
Real Estate [Line Items] | ||
Area of real estate property held for sale | 5,100 | |
Impairment charge | $ | $ 0.3 |
Real Estate Investments - Discontinued Operations and Assets Held for Sale - Income Statement (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
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Revenues | ||
Rental income | $ 104,088 | $ 98,740 |
Expenses | ||
Property operating | 37,834 | 35,406 |
Other Income (Expense) | ||
Interest and other income, net | 113 | 86 |
Discontinued Operations | ||
Loss from discontinued operations | (18) | (7) |
Gain on sale of properties | 5 | |
LOSS FROM DISCONTINUED OPERATIONS | (13) | (7) |
Discontinued Operations | ||
Revenues | ||
Rental income | 0 | 0 |
Revenues | 0 | 0 |
Expenses | ||
Property operating | 18 | 7 |
Total Expenses | 18 | 7 |
Other Income (Expense) | ||
Interest and other income, net | 0 | 0 |
Total other income (expense) | 0 | 0 |
Discontinued Operations | ||
Loss from discontinued operations | (18) | (7) |
Gain on sale of properties | 5 | 0 |
LOSS FROM DISCONTINUED OPERATIONS | $ (13) | $ (7) |
Derivative Financial Instruments (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
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Derivative [Line Items] | ||
Interest rate cash flow hedge gain (loss) to be reclassified to interest expense during the next 12 months | $ (200) | |
Interest Expense | Interest Rate Swap | ||
Derivative [Line Items] | ||
Amount of loss reclassified from accumulated OCI into Interest Expense (effective portion) | $ (43) | $ (42) |
Commitments and Contingencies - Construction Activity (Details) $ in Millions |
Mar. 31, 2017
USD ($)
ft²
|
---|---|
Other Commitments [Line Items] | |
Approximate Square Feet | ft² | 14,300,000 |
Medical Office Building Expansion | TENNESSEE | |
Other Commitments [Line Items] | |
Approximate Square Feet | ft² | 70,000 |
Total amount funded | $ 7.5 |
Tenant improvements included in construction funded | 1.9 |
Construction activity, estimated remaining fundings | $ 3.8 |
Medical Office Building | COLORADO | |
Other Commitments [Line Items] | |
Approximate Square Feet | ft² | 98,000 |
Total amount funded | $ 16.1 |
Estimated total investment | $ 26.5 |
Stockholders' Equity - Reconciliation of beginning and ending common stock outstanding (Details) - shares |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
|
Reconciliation of the beginning and ending common stock outstanding | ||
Balance, beginning of period | 116,417,000 | |
Balance, end of period | 116,512,000 | 116,417,000 |
Common Stock | ||
Reconciliation of the beginning and ending common stock outstanding | ||
Balance, beginning of period | 116,416,900 | 101,517,009 |
Issuance of common stock | 31,254 | 14,063,100 |
Nonvested share-based awards, net of withheld shares | 63,803 | 836,791 |
Balance, end of period | 116,511,957 | 116,416,900 |
Stockholders' Equity (Stock Transactions - Narrative) (Details) - $ / shares |
3 Months Ended | |||||
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May 02, 2017 |
Mar. 31, 2017 |
Mar. 31, 2016 |
May 01, 2017 |
Apr. 30, 2017 |
Dec. 31, 2016 |
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Class of Stock [Line Items] | ||||||
Common stock, authorized shares | 150,000,000 | 150,000,000 | ||||
Dividends declared per common share, during the period (in dollars per share) | $ 0.30 | $ 0.30 | ||||
At The Market Equity Offering Program | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock (shares) | 0 | |||||
Subsequent Event | ||||||
Class of Stock [Line Items] | ||||||
Dividends declared per common share, during the period (in dollars per share) | $ 0.30 | |||||
Subsequent Event | Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock, authorized shares | 300,000,000 | 150,000,000 | ||||
Subsequent Event | At The Market Equity Offering Program | ||||||
Class of Stock [Line Items] | ||||||
Number of authorized shares remaining under offering program (shares) | 5,868,697 |
Stockholders' Equity - Changes in accumulated other comprehensive income (Details) - Forward-starting Interest Rate Swaps - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ (1,401) | $ (1,569) |
Amounts reclassified from accumulated other comprehensive loss | 43 | 42 |
Net accumulated other comprehensive income | 43 | 42 |
Ending balance | $ (1,358) | $ (1,527) |
Stockholders' Equity - Summary of activity under stock-based incentive plans (Details) - Stock Incentive Plan - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Summary of the activity under the incentive plans | ||
Stock-based awards, beginning of period (shares) | 1,786,497 | 1,092,262 |
Granted (shares) | 80,384 | 300,206 |
Vested (shares) | (52,842) | (65,722) |
Stock-based awards, end of period (shares) | 1,814,039 | 1,326,746 |
Restricted Stock | ||
Summary of the activity under the incentive plans | ||
Shares withheld to pay estimated withholding taxes | 16,581 | 13,878 |
Stockholders' Equity - Summary of activity under Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Summary of the Employee Stock Purchase Plan activity | ||
Outstanding and exercisable, beginning of period (shares) | 316,321 | 340,958 |
Granted (shares) | 206,824 | 198,450 |
Exercised (shares) | (11,435) | (26,689) |
Forfeited (shares) | (13,782) | (7,682) |
Expired (shares) | (132,310) | (143,082) |
Outstanding and exercisable, end of period (shares) | 365,618 | 361,955 |
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Carrying Value | ||
Derivative [Line Items] | ||
Notes and bonds payable | $ 1,278.7 | $ 1,264.4 |
Fair Value | ||
Derivative [Line Items] | ||
Notes and bonds payable | $ 1,281.0 | $ 1,265.1 |
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