(Mark One) | |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2020 | |
OR | |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period to For the transition period to | |
(State or other jurisdiction of Incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||
PART I - FINANCIAL INFORMATION | ||
PART II - OTHER INFORMATION | ||
SIGNATURE | ||
ASSETS | ||||||
Unaudited JUNE 30, 2020 | DECEMBER 31, 2019 | |||||
Real estate properties | ||||||
Land | $ | $ | ||||
Buildings, improvements and lease intangibles | ||||||
Personal property | ||||||
Construction in progress | ||||||
Land held for development | ||||||
Total real estate properties | ||||||
Less accumulated depreciation and amortization | ( | ) | ( | ) | ||
Total real estate properties, net | ||||||
Cash and cash equivalents | ||||||
Assets held for sale, net | ||||||
Operating lease right-of-use assets | ||||||
Financing lease right-of-use assets | ||||||
Net investment in sales-type leases | ||||||
Other assets, net | ||||||
Total assets | $ | $ | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Liabilities | ||||||
Notes and bonds payable | $ | $ | ||||
Accounts payable and accrued liabilities | ||||||
Liabilities of properties held for sale | ||||||
Operating lease liabilities | ||||||
Financing lease liabilities | ||||||
Other liabilities | ||||||
Total liabilities | ||||||
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; 300,000 shares authorized; 136,048 and 134,706 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | ||||||
Additional paid-in capital | ||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||
Cumulative net income attributable to common stockholders | ||||||
Cumulative dividends | ( | ) | ( | ) | ||
Total stockholders' equity | ||||||
Total liabilities and stockholders' equity | $ | $ | ||||
THREE MONTHS ENDED June 30, | SIX MONTHS ENDED June 30, | |||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Revenues | ||||||||||||
Rental income | $ | $ | $ | $ | ||||||||
Other operating | ||||||||||||
Expenses | ||||||||||||
Property operating | ||||||||||||
General and administrative | ||||||||||||
Acquisition and pursuit costs | ||||||||||||
Depreciation and amortization | ||||||||||||
Other Income (Expense) | ||||||||||||
Gain on sales of real estate assets | ||||||||||||
Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Impairment of real estate assets | — | ( | ) | — | ( | ) | ||||||
Interest and other income (expense), net | ( | ) | ( | ) | ||||||||
( | ) | ( | ) | |||||||||
Net Income | $ | $ | $ | $ | ||||||||
Basic earnings per common share | $ | $ | $ | $ | ||||||||
Diluted earnings per common share | $ | $ | $ | $ | ||||||||
Weighted average common shares outstanding - basic | ||||||||||||
Weighted average common shares outstanding - diluted | ||||||||||||
Dividends declared, per common share, during the period | $ | $ | $ | $ | ||||||||
THREE MONTHS ENDED June 30, | SIX MONTHS ENDED June 30, | |||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||
Net income | $ | $ | $ | $ | ||||||||
Other comprehensive income (loss) | ||||||||||||
Interest rate swaps | ||||||||||||
Reclassification adjustments for losses included in net income (interest expense) | ( | ) | ||||||||||
Losses arising during the period on interest rate swaps | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Losses on settlement of treasury rate locks arising during the period | ( | ) | ||||||||||
( | ) | ( | ) | ( | ) | ( | ) | |||||
Comprehensive income (loss) | $ | $ | ( | ) | $ | $ | ||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Cumulative Net Income | Cumulative Dividends | Total Stockholders’ Equity | |||||||||||||
Balance at March 31, 2020 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Issuance of common stock, net of issuance costs | — | — | — | |||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||
Net income | — | — | — | — | ||||||||||||||
Reclassification adjustments for losses included in net income (interest expense) | — | — | — | — | ||||||||||||||
Losses arising during the period on interest rate swaps | — | — | ( | ) | — | — | ( | ) | ||||||||||
Dividends to common stockholders ($0.30 per share) | — | — | — | — | ( | ) | ( | ) | ||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Cumulative Net Income | Cumulative Dividends | Total Stockholders’ Equity | |||||||||||||
Balance at March 31, 2019 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Issuance of common stock, net of issuance costs | — | — | — | — | ||||||||||||||
Share-based compensation | — | — | — | — | ||||||||||||||
Net income | — | — | — | — | ||||||||||||||
Reclassification adjustments for losses included in net income (interest expense) | — | — | ( | ) | — | — | ( | ) | ||||||||||
Losses arising during the period on interest rate swaps | — | — | ( | ) | — | — | ( | ) | ||||||||||
Dividends to common stockholders ($0.30 per share) | — | — | — | — | ( | ) | ( | ) | ||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Cumulative Net Income | Cumulative Dividends | Total Stockholders’ Equity | |||||||||||||
Balance at December 31, 2019 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Issuance of common stock, net of issuance costs | — | — | — | |||||||||||||||
Common stock redemptions | — | ( | ) | — | — | — | ( | ) | ||||||||||
Share-based compensation | — | — | — | |||||||||||||||
Net income | — | — | — | — | ||||||||||||||
Reclassification adjustments for losses included in net income (interest expense) | — | — | — | — | ||||||||||||||
Losses arising during the period on interest rate swaps | — | — | ( | ) | — | — | ( | ) | ||||||||||
Dividends to common stockholders ($0.60 per share) | — | — | — | — | ( | ) | ( | ) | ||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Cumulative Net Income | Cumulative Dividends | Total Stockholders’ Equity | |||||||||||||
Balance at December 31, 2018 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Issuance of common stock, net of issuance costs | — | — | — | |||||||||||||||
Common stock redemptions | — | ( | ) | — | — | — | ( | ) | ||||||||||
Share-based compensation | — | — | — | |||||||||||||||
Net income | — | — | — | — | ||||||||||||||
Reclassification adjustments for losses included in net income (interest expense) | — | — | — | — | ||||||||||||||
Losses arising during the period on interest rate swaps | — | — | ( | ) | — | — | ( | ) | ||||||||||
Dividends to common stockholders ($0.60 per share) | — | — | — | — | ( | ) | ( | ) | ||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
OPERATING ACTIVITIES | ||||||
SIX MONTHS ENDED June 30, | ||||||
2020 | 2019 | |||||
Net income | $ | $ | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | ||||||
Other amortization | ||||||
Share-based compensation | ||||||
Amortization of straight-line rent receivable (lessor) | ( | ) | ( | ) | ||
Amortization of straight-line rent on operating leases (lessee) | ||||||
Gain on sales of real estate assets | ( | ) | ( | ) | ||
Impairment of real estate assets | — | |||||
Loss from unconsolidated joint ventures | ||||||
Distributions from unconsolidated joint ventures | ||||||
Changes in operating assets and liabilities: | ||||||
Other assets, including right-of-use-assets | ( | ) | ( | ) | ||
Accounts payable and accrued liabilities | ( | ) | ( | ) | ||
Other liabilities | ( | ) | ( | ) | ||
Net cash provided by operating activities | ||||||
INVESTING ACTIVITIES | ||||||
Acquisitions of real estate | ( | ) | ( | ) | ||
Development of real estate | ( | ) | ( | ) | ||
Additional long-lived assets | ( | ) | ( | ) | ||
Proceeds from sales of real estate assets | — | |||||
Net cash used in investing activities | ( | ) | ( | ) | ||
FINANCING ACTIVITIES | ||||||
Net (repayments) borrowings on unsecured credit facility | ( | ) | ||||
Borrowings on term loan | ||||||
Borrowings of notes and bonds payable | — | |||||
Repayments of notes and bonds payable | ( | ) | ( | ) | ||
Dividends paid | ( | ) | ( | ) | ||
Net proceeds from issuance of common stock | ||||||
Common stock redemptions | ( | ) | ( | ) | ||
Settlement of treasury rate locks | ( | ) | — | |||
Debt issuance and assumption costs | ( | ) | ( | ) | ||
Payments made on finance leases | ( | ) | ( | ) | ||
Net cash provided by financing activities | ||||||
Increase (decrease) in cash and cash equivalents | ( | ) | ||||
Cash and cash equivalents at beginning of period | ||||||
Cash and cash equivalents at end of period | $ | |||||
Supplemental Cash Flow Information | ||||||
Interest paid | $ | $ | ||||
Invoices accrued for construction, tenant improvements and other capitalized costs | $ | $ | ||||
Mortgage notes payable assumed upon acquisition (adjusted to fair value) | $ | $ | — | |||
Capitalized interest | $ | $ | ||||
THREE MONTHS ENDED June 30, | SIX MONTHS ENDED June 30, | |||||||||||
in thousands | 2020 | 2019 | 2020 | 2019 | ||||||||
Type of Revenue | ||||||||||||
Parking income | $ | $ | $ | $ | ||||||||
Rental lease guaranty | ||||||||||||
Management fee income | ||||||||||||
Miscellaneous | ||||||||||||
$ | $ | $ | $ | |||||||||
Dollars in millions | TYPE 1 | DATE ACQUIRED | PURCHASE PRICE | MORTGAGE NOTES PAYABLE | CASH CONSIDERATION 2 | REAL ESTATE | OTHER 3 | SQUARE FOOTAGE | |||||||||||
Los Angeles, CA | MOB | 1/3/20 | $ | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
Atlanta, GA | MOB | 2/13/20 | ( | ) | |||||||||||||||
Raleigh, NC | MOB | 2/25/20 | |||||||||||||||||
Colorado Springs, CO | MOB | 3/9/20 | ( | ) | |||||||||||||||
Denver, CO 4 | MOB | 3/13/20 | ( | ) | |||||||||||||||
Total real estate acquisitions | $ | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||||
Land acquisition 5 | |||||||||||||||||||
$ | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||||
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 other assets acquired, liabilities assumed, and intangibles recognized at acquisition. |
4 | Includes |
5 | The Company acquired land parcels under |
Dollars in millions | TYPE | DATE ACQUIRED | PURCHASE PRICE | SQUARE FOOTAGE | |||
San Diego, CA | MOB | 7/1/20 | $ | ||||
Los Angeles, CA | MOB | 7/17/20 | |||||
Seattle, WA | MOB | 7/23/20 | |||||
Atlanta, GA | MOB | 7/31/20 | |||||
Total real estate acquisitions | $ | ||||||
SALES-TYPE LEASES | |||||||
In thousands | three months ended June 30, 2020 | six months ended June 30, 2020 | |||||
Profit recognized at commencement date | $ | $ | Gain on sales of real estate assets | ||||
Interest income | Rental income | ||||||
In thousands | Operating | Sales-type 1 | ||||
2020 | $ | $ | ||||
2021 | ||||||
2022 | ||||||
2023 | ||||||
2024 | ||||||
2025 and thereafter | ||||||
$ | $ | |||||
1 | See Footnote 2 to the Condensed Consolidated Financial Statements for additional information. |
In thousands | OPERATING | FINANCING | ||||
2020 | $ | $ | ||||
2021 | ||||||
2022 | ||||||
2023 | ||||||
2024 | ||||||
2025 and thereafter | ||||||
Total undiscounted lease payments | ||||||
Discount | ( | ) | ( | ) | ||
Lease liabilities | $ | $ | ||||
THREE MONTHS ENDED June 30, | SIX MONTHS ENDED June 30, | |||||||||||
In thousands | 2020 | 2019 | 2020 | 2019 | ||||||||
Operating lease cost | ||||||||||||
Operating lease expense | $ | $ | $ | $ | ||||||||
Variable lease expense | ||||||||||||
Finance lease cost | ||||||||||||
Amortization of right-of-use assets | ||||||||||||
Interest on lease liabilities | ||||||||||||
Total lease expense | $ | $ | $ | $ | ||||||||
Other information | ||||||||||||
Operating cash flows outflows related to operating leases | $ | $ | $ | $ | ||||||||
Financing cash flows outflows related to financing leases | $ | $ | $ | $ | ||||||||
Right-of-use assets obtained in exchange for new finance lease liabilities | $ | $ | $ | $ | ||||||||
Weighted-average remaining lease term (excluding renewal options) - operating leases | ||||||||||||
Weighted-average remaining lease term (excluding renewal options) -finance leases | ||||||||||||
Weighted-average discount rate - operating leases | % | % | ||||||||||
Weighted-average discount rate - finance leases | % | % | ||||||||||
MATURITY DATES | BALANCE AS OF | EFFECTIVE INTEREST RATE as of 6/30/2020 | |||||||
Dollars in thousands | 6/30/2020 | 12/31/2019 | |||||||
$700 million Unsecured Credit Facility | 5/23 | $ | $ | N/A | |||||
$200 million Unsecured Term Loan Facility, net of issuance costs 1 | 5/24 | % | |||||||
$150 million Unsecured Term Loan due 2026 2 | 6/26 | % | |||||||
Senior Notes due 2023, net of discount and issuance costs | 4/23 | % | |||||||
Senior Notes due 2025, net of discount and issuance costs 3 | 5/25 | % | |||||||
Senior Notes due 2028, net of discount and issuance costs | 1/28 | % | |||||||
Senior Notes due 2030, net of discount and issuance costs 4 | 3/30 | % | |||||||
Mortgage notes payable, net of discounts and issuance costs and including premiums | 1/21-4/27 | % | |||||||
$ | $ | ||||||||
1 | The effective interest rate includes the impact of interest rate swaps on $ |
2 | The effective interest rate includes the impact of interest rate swaps on $ |
3 | The effective interest rate includes the impact of the $ |
4 | The effective interest rate includes the impact of the $ |
DERIVATIVE INSTRUMENT | NUMBER OF INSTRUMENTS | NOTIONAL AMOUNT in millions | |
Interest rate swaps | $ | ||
BALANCE AT JUNE 30, 2020 | ||||
In thousands | BALANCE SHEET LOCATION | FAIR VALUE | ||
Derivatives designated as hedging instruments | ||||
Interest rate swaps | Other liabilities | $ | ||
Total derivatives designated as hedging instruments | $ | |||
LOSS RECOGNIZED IN AOCI ON DERIVATIVE three months ended June 30, | (GAIN) LOSS RECLASSIFIED FROM AOCI INTO INCOME three months ended June 30, | ||||||||||||
In thousands | 2020 | 2019 | 2020 | 2019 | |||||||||
Interest rate swaps | $ | $ | Interest expense | $ | $ | ( | ) | ||||||
Settled treasury hedges | Interest expense | ||||||||||||
Settled interest rate swaps | Interest expense | ||||||||||||
$ | $ | Total interest expense | $ | $ | ( | ) | |||||||
LOSS RECOGNIZED IN AOCI ON DERIVATIVE six months ended June 30, | (GAIN) LOSS RECLASSIFIED FROM AOCI INTO INCOME six months ended June 30, | ||||||||||||
In thousands | 2020 | 2019 | 2020 | 2019 | |||||||||
Interest rate swaps | $ | $ | Interest expense | $ | $ | ( | ) | ||||||
Settled treasury hedges | Interest expense | ||||||||||||
Settled interest rate swaps | Interest expense | ||||||||||||
$ | $ | Total interest expense | $ | $ | |||||||||
JUNE 30, 2020 | DECEMBER 31, 2019 | |||
Balance, beginning of period | ||||
Issuance of common stock | ||||
Nonvested share-based awards, net of withheld shares | ||||
Balance, end of period | ||||
• | During the first quarter of 2020, the Company sold |
• | During the second quarter of 2020, the Company sold |
• | In the second quarter of 2020, the Company entered into a forward equity agreement for a total of |
• | In July 2020, the Company entered into an additional forward equity agreement for a total of |
THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||||||
Dollars in thousands, except per share data | 2020 | 2019 | 2020 | 2019 | ||||||||
Weighted average common shares outstanding | ||||||||||||
Weighted average common shares outstanding | ||||||||||||
Non-vested shares | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Weighted average common shares outstanding - basic | ||||||||||||
Weighted average common shares outstanding - basic | ||||||||||||
Dilutive effect of forward equity shares | ||||||||||||
Dilutive effect of employee stock purchase plan | ||||||||||||
Weighted average common shares outstanding - diluted | ||||||||||||
Net Income | $ | $ | $ | $ | ||||||||
Dividends paid on nonvested share-based awards | ( | ) | ( | ) | ( | ) | ( | ) | ||||
Net income applicable to common stockholders | $ | $ | $ | $ | ||||||||
Basic earnings per common share - net income | $ | $ | $ | $ | ||||||||
Diluted earnings per common share - net income | $ | $ | $ | $ | ||||||||
THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Share-based awards, beginning of period | ||||||||
Granted | ||||||||
Vested | ( | ) | ( | ) | ( | ) | ( | ) |
Share-based awards, end of period | ||||||||
THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||
2020 | 2019 | 2020 | 2019 | |||||
Outstanding and exercisable, beginning of period | ||||||||
Granted | ||||||||
Exercised | ( | ) | ( | ) | ( | ) | ( | ) |
Forfeited | ( | ) | ( | ) | ( | ) | ( | ) |
Expired | ( | ) | ( | ) | ||||
Outstanding and exercisable, end of period | ||||||||
• | Cash and cash equivalents - The carrying amount approximates fair value due to the short term maturity of these investments. |
• | Borrowings under the Unsecured Credit Facility and the Term Loan Due 2024 - The carrying amount approximates fair value because the borrowings are based on variable market interest rates. |
• | Senior Notes and Mortgage 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. |
• | Interest rate swap agreements - Interest rate swap agreements are recorded in other liabilities on the Company's Consolidated Balance Sheets at fair value. Fair value is estimated by utilizing pricing models that consider forward yield curves and discount rates. |
JUNE 30, 2020 | DECEMBER 31, 2019 | |||||||||||
Dollars in millions | CARRYING VALUE | FAIR VALUE | CARRYING VALUE | FAIR VALUE | ||||||||
Notes and bonds payable 1 | $ | $ | $ | $ | ||||||||
1 | Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets. |
Dollars in millions | HEALTH SYSTEM AFFILIATION | DATE ACQUIRED | PURCHASE PRICE | SQUARE FOOTAGE | CAP RATE | MILES TO CAMPUS | |||||
Los Angeles, CA | MemorialCare Health | 1/3/20 | $ | 42.0 | 86,986 | 5.3 | % | 0.14 | |||
Atlanta, GA | Wellstar Health System | 2/13/20 | 12.0 | 64,624 | 5.6 | % | 0.10 | ||||
Raleigh, NC | WakeMed Health | 2/25/20 | 6.3 | 15,964 | 6.7 | % | 0.04 | ||||
Colorado Springs, CO | None | 3/9/20 | 8.2 | 34,210 | 6.5 | % | 1.60 | ||||
Denver, CO 1 | UCHealth | 3/13/20 | 33.5 | 136,994 | 6.1 | % | 0.24 | ||||
Total real estate acquisitions | $ | 102.0 | 338,778 | 5.8 | % | ||||||
Land acquisition 2 | 1.6 | — | |||||||||
$ | 103.6 | 338,778 | |||||||||
1 | Includes three properties. |
2 | The Company acquired land parcels under four existing buildings (previously ground leased with the hospital system). |
Dollars in millions | TYPE | DATE ACQUIRED | PURCHASE PRICE | SQUARE FOOTAGE | |||
San Diego, CA | MOB | 7/1/20 | $ | 16.7 | 46,083 | ||
Los Angeles, CA | MOB | 7/17/20 | 35.0 | 49,785 | |||
Seattle, WA | MOB | 7/23/20 | 11.0 | 21,309 | |||
Atlanta, GA | MOB | 7/31/20 | 20.5 | 48,145 | |||
Total real estate acquisitions | $ | 83.2 | 165,322 | ||||
• | $12.6 million toward development and redevelopment of properties; |
• | $7.7 million toward first generation tenant improvements and planned capital expenditures for acquisitions; |
• | $12.0 million toward second generation tenant improvements; and |
• | $8.2 million toward capital expenditures. |
• | During the first quarter of 2020, the Company sold 196,250 shares under the Company's at-the-market equity offering program generating approximately $7.0 million in net proceeds at prices to the public ranging from $33.00 to $36.15 per share (weighted average of $36.09 per share). |
• | During the second quarter of 2020, the Company sold 1,071,987 shares under the Company's at-the-market equity offering program generating approximately $32.9 million in net proceeds at prices to the public ranging from $30.50 to $31.29 per share (weighted average of $31.08 per share). |
• | In the second quarter of 2020, the Company entered into a forward equity agreement for a total of 1,579,371 shares at an aggregate price of $31.66 per share, subject to adjustments as provided in the forward equity agreements. This agreement matures in June 2021. |
• | In July 2020, the Company entered into an additional forward equity agreement for a total of 764,472 shares at an aggregate price of $31.84 per share, subject to adjustments as provided in the forward equity agreements. This agreement matures in July 2021. |
EFFECTIVE DATE | AMOUNT | WEIGHTED AVERAGE RATE | EXPIRATION DATE | |||
December 18, 2017 | $ | 25,000 | 2.18 | % | December 16, 2022 | |
February 1, 2018 | 50,000 | 2.46 | % | December 16, 2022 | ||
May 1, 2019 | 50,000 | 2.33 | % | May 1, 2026 | ||
June 3, 2019 | 50,000 | 2.13 | % | May 1, 2026 | ||
$ | 175,000 | 2.29 | % | |||
NUMBER OF PROPERTIES | GROSS REAL ESTATE INVESTMENT AS OF JUNE 30, 2020 | ||||||||||||
YEAR EXERCISABLE | MOB | INPATIENT | FAIR MARKET VALUE METHOD 1 | NON FAIR MARKET VALUE METHOD 2 | TOTAL | ||||||||
Current 3 | 3 | 1 | $ | 96,613 | $ | — | $ | 96,613 | |||||
2021 | 1 | — | — | 14,984 | 14,984 | ||||||||
2022 | — | — | — | — | — | ||||||||
2023 | — | — | — | — | — | ||||||||
2024 | — | — | — | — | — | ||||||||
2025 | 4 | — | 48,165 | 19,459 | 67,624 | ||||||||
2026 | — | — | — | — | — | ||||||||
2027 | — | — | — | — | — | ||||||||
2028 | 1 | — | 43,957 | — | 43,957 | ||||||||
2029 | 1 | — | 26,494 | — | 26,494 | ||||||||
2030 and thereafter | 4 | — | 100,718 | — | 100,718 | ||||||||
Total | 14 | 1 | $ | 315,947 | $ | 34,443 | $ | 350,390 | |||||
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. |
3 | These purchase options have been exercisable for an average of 11.9 years. |
THREE MONTHS ENDED JUNE 30, | SIX MONTHS ENDED JUNE 30, | |||||||||||
Amounts in thousands, except per share data | 2020 | 2019 | 2020 | 2019 | ||||||||
Net income | $ | 75,513 | $ | 4,484 | $ | 79,828 | $ | 9,375 | ||||
(Gain) on sales of real estate assets | (68,267 | ) | (4,849 | ) | (68,218 | ) | (4,865 | ) | ||||
Impairment of real estate assets | — | 5,610 | — | 5,610 | ||||||||
Real estate depreciation and amortization | 48,657 | 44,682 | 97,269 | 88,066 | ||||||||
FFO attributable to common stockholders | $ | 55,903 | $ | 49,927 | $ | 108,879 | $ | 98,186 | ||||
Acquisition and pursuit costs 1 | 431 | 422 | 1,181 | 726 | ||||||||
Lease intangible amortization | (16 | ) | 54 | 729 | 138 | |||||||
Debt financing costs | — | 760 | — | 760 | ||||||||
Normalized FFO attributable to common stockholders | $ | 56,318 | $ | 51,163 | $ | 110,789 | $ | 99,810 | ||||
Non-real estate depreciation and amortization | 822 | 829 | 1,645 | 1,592 | ||||||||
Non-cash interest expense amortization 2 | 1,035 | 707 | 1,781 | 1,409 | ||||||||
Provision for bad debt, net | 945 | 150 | 862 | 75 | ||||||||
Straight-line rent, net | (382 | ) | (1 | ) | (1,042 | ) | (271 | ) | ||||
Stock-based compensation | 2,405 | 2,372 | 5,003 | 5,011 | ||||||||
Normalized FFO adjusted for non-cash items | $ | 61,143 | $ | 55,220 | $ | 119,038 | $ | 107,626 | ||||
2nd generation TI | (6,005 | ) | (6,124 | ) | (12,045 | ) | (10,450 | ) | ||||
Leasing commissions paid | (2,258 | ) | (2,315 | ) | (5,082 | ) | (3,662 | ) | ||||
Capital additions | (4,777 | ) | (4,993 | ) | (8,247 | ) | (8,455 | ) | ||||
FAD | $ | 48,103 | $ | 41,788 | $ | 93,664 | $ | 85,059 | ||||
FFO per common share - diluted | $ | 0.42 | $ | 0.39 | $ | 0.81 | $ | 0.78 | ||||
Normalized FFO per common share - diluted | $ | 0.42 | $ | 0.40 | $ | 0.83 | $ | 0.79 | ||||
FFO weighted average common shares outstanding - diluted 3 | 134,464 | 128,279 | 134,221 | 126,615 | ||||||||
1 | Acquisition and pursuit costs include third party and travel costs related to the pursuit of acquisitions and developments. |
2 | Includes the amortization of deferred financing costs, discounts and premiums. |
3 | The Company utilizes the treasury stock method which includes the dilutive effect of nonvested share-based awards outstanding of 767,760 and 800,255, respectively for the three and six months ended June 30, 2020. |
• | 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; or |
• | Properties with negative net operating income that is expected to last at least two quarters. |
NUMBER OF PROPERTIES | GROSS INVESTMENT at June 30, 2020 | SAME STORE CASH NOI for the three months ended June 30, | |||||||||
Dollars in thousands | 2020 | 2019 | |||||||||
Multi-tenant properties | 161 | $ | 3,314,437 | $ | 58,998 | $ | 58,258 | ||||
Single-tenant net lease properties | 12 | 256,795 | 5,799 | 5,887 | |||||||
Total | 173 | $ | 3,571,232 | $ | 64,797 | $ | 64,145 | ||||
THREE MONTHS ENDED JUNE 30, | ||||||
Dollars in thousands | 2020 | 2019 | ||||
Net income | $ | 75,513 | $ | 4,484 | ||
Other income (expense) | (53,959 | ) | 15,354 | |||
General and administrative expense | 7,434 | 7,845 | ||||
Depreciation and amortization expense | 47,691 | 43,926 | ||||
Other expenses 1 | 2,185 | 1,965 | ||||
Straight-line rent revenue | (390 | ) | (8 | ) | ||
Other revenue 2 | (3,213 | ) | (1,447 | ) | ||
Cash NOI | 75,261 | 72,119 | ||||
Cash NOI not included in same store | (10,464 | ) | (7,974 | ) | ||
Same store cash NOI | 64,797 | 64,145 | ||||
Reposition NOI | 374 | 550 | ||||
Same store and reposition cash NOI | $ | 65,171 | $ | 64,695 | ||
1 | Includes acquisition and pursuit costs, bad debt, above and below market ground lease intangible amortization, leasing commission amortization and ground lease straight-line rent expense. |
2 | Includes management fee income, interest, above and below market lease intangible amortization, lease inducement amortization, lease terminations and tenant improvement overage amortization. |
AS OF JUNE 30, 2020 | |||||||||
PROPERTY COUNT | GROSS INVESTMENT | SQUARE FEET | OCCUPANCY | ||||||
Same store properties | 173 | $ | 3,571,232 | 13,330,771 | 88.4 | % | |||
Acquisitions | 26 | 535,170 | 1,455,265 | 89.2 | % | ||||
Development completions | 1 | 51,677 | 151,031 | 60.5 | % | ||||
Reposition | 10 | 85,991 | 523,159 | 46.9 | % | ||||
Total owned real estate properties | 210 | $ | 4,244,070 | 15,460,226 | 86.8 | % | |||
THREE MONTHS ENDED JUNE 30, | CHANGE | ||||||||||
Dollars in thousands | 2020 | 2019 | $ | % | |||||||
Property operating | $ | 111,076 | $ | 102,818 | $ | 8,258 | 8.0 | % | |||
Single-tenant net lease | 10,518 | 11,138 | (620 | ) | (5.6 | )% | |||||
Straight-line rent | 764 | 395 | 369 | 93.4 | % | ||||||
Rental income | 122,358 | 114,351 | 8,007 | 7.0 | % | ||||||
Other operating | 1,332 | 1,966 | (634 | ) | (32.2 | )% | |||||
Total revenues | $ | 123,690 | $ | 116,317 | $ | 7,373 | 6.3 | % | |||
• | Acquisitions in 2019 and 2020 and a development in 2020 contributed $8.4 million. |
• | Leasing activity, including contractual rent increases, contributed $0.5 million. |
• | Dispositions in 2019 resulted in a decrease of $0.6 million. |
• | Dispositions in 2019 resulted in a decrease of $0.8 million. |
• | Leasing activity contributed $0.2 million. |
• | Acquisitions in 2019 and 2020 and a development in 2020 contributed $0.4 million. |
• | Leasing, including contractual rent increases, contributed $0.1 million. |
• | Dispositions in 2019 resulted in a decrease of $0.1 million. |
• | Acquisitions in 2019 and 2020 and a development in 2020 resulted in an increase of $3.6 million. |
• | Increases in portfolio operating expenses as follows: |
• | Portfolio property tax expense of $0.2 million; |
• | Compensation related expenses of $0.2 million; and |
• | Portfolio insurance expense of $0.2 million. |
• | Maintenance and repair expense decreased $0.6 million. |
• | Utilities expense decreased $0.6 million. |
• | Administrative and legal fees decreased approximately $0.1 million. |
• | Dispositions in 2019 resulted in a decrease of $0.6 million. |
• | Decrease in compensation expense of approximately $0.2 million. |
• | Decrease in travel expense of $0.2 million. |
• | Acquisitions in 2019 and 2020 and a development in 2020 resulted in an increase of $4.9 million. |
• | Various building and tenant improvement expenditures resulted in an increase of $2.6 million. |
• | Dispositions in 2019 resulted in a decrease of $0.7 million. |
• | Assets that became fully depreciated resulted in a decrease of $3.0 million. |
THREE MONTHS ENDED JUNE 30, | CHANGE | ||||||||||
Dollars in thousands | 2020 | 2019 | $ | % | |||||||
Contractual interest | $ | 13,453 | $ | 13,292 | $ | 161 | 1.2 | % | |||
Net discount/premium accretion | 204 | 51 | 153 | 300.0 | % | ||||||
Deferred financing costs amortization | 682 | 613 | 69 | 11.3 | % | ||||||
Interest rate swap amortization | 42 | 42 | — | — | % | ||||||
Treasury hedge amortization | 107 | — | 107 | — | % | ||||||
Interest cost capitalization | (286 | ) | (344 | ) | 58 | (16.9 | )% | ||||
Right-of-use assets financing amortization | 240 | 196 | 44 | 22.4 | % | ||||||
Total interest expense | $ | 14,442 | $ | 13,850 | $ | 592 | 4.3 | % | |||
• | The Senior Notes due 2030 accounted for an increase of $1.8 million. |
• | The Term Loan due 2024 and the initial funding of the Term Loan due 2026, net of swaps, accounted for an increase of approximately $0.4 million. |
• | The Unsecured Credit Facility principal and rate decreases accounted for a decrease of approximately $2.0 million. |
SIX MONTHS ENDED JUNE 30, | CHANGE | ||||||||||
Dollars in thousands | 2020 | 2019 | $ | % | |||||||
Property operating | $ | 222,223 | $ | 201,799 | $ | 20,424 | 10.1 | % | |||
Single-tenant net lease | 20,971 | 22,184 | (1,213 | ) | (5.5 | )% | |||||
Straight-line rent | 1,807 | 1,063 | 744 | 70.0 | % | ||||||
Rental income | 245,001 | 225,046 | 19,955 | 8.9 | % | ||||||
Other operating | 3,496 | 3,928 | (432 | ) | (11.0 | )% | |||||
Total revenues | $ | 248,497 | $ | 228,974 | $ | 19,523 | 8.5 | % | |||
• | Acquisitions in 2019 and 2020 and a development in 2020 contributed $17.9 million. |
• | Leasing activity, including contractual rent increases, contributed $4.1 million. |
• | Dispositions in 2019 resulted in a decrease of $1.6 million. |
• | Dispositions in 2019 resulted in a decrease of $1.5 million. |
• | Leasing activity, including contractual increases, contributed $0.3 million. |
• | Acquisitions in 2019 and 2020 and a development in 2020 resulted in an increase of $7.8 million. |
• | Increases in portfolio operating expenses as follows: |
• | Portfolio property tax expense of $1.4 million; |
• | Compensation related expenses of $0.3 million; |
• | Portfolio insurance expense of $0.4 million; |
• | Portfolio security expense of $0.3 million; and |
• | Portfolio janitorial expense of $0.1 million. |
• | Utilities expense resulted in a decrease of $0.7 million. |
• | Administrative and legal fees increased approximately $0.2 million. |
• | Maintenance and repair expense resulted in a decrease of $0.2 million. |
• | Increase in intangible amortization expense totaling $0.7 million. |
• | Dispositions in 2019 resulted in a decrease of $1.2 million. |
• | Acquisitions in 2019 and 2020 and a development in 2020 resulted in an increase of $11.0 million. |
• | Various building and tenant improvement expenditures resulted in an increase of $5.3 million. |
• | Dispositions in 2019 resulted in a decrease of $2.2 million. |
• | Assets that became fully depreciated resulted in a decrease of $5.5 million. |
SIX MONTHS ENDED JUNE 30, | CHANGE | ||||||||||
Dollars in thousands | 2020 | 2019 | $ | % | |||||||
Contractual interest | $ | 26,850 | $ | 26,485 | $ | 365 | 1.4 | % | |||
Net discount/premium accretion | 256 | 102 | 154 | 151.0 | % | ||||||
Deferred financing costs amortization | 1,319 | 1,222 | 97 | 7.9 | % | ||||||
Interest rate swap amortization | 84 | 84 | — | — | % | ||||||
Treasury hedge amortization | 122 | — | 122 | — | % | ||||||
Interest cost capitalization | (706 | ) | (651 | ) | (55 | ) | 8.4 | % | |||
Right-of-use assets financing amortization | 477 | 196 | 281 | 143.4 | % | ||||||
Total interest expense | $ | 28,402 | $ | 27,438 | $ | 964 | 3.5 | % | |||
• | Senior Notes due 2030 accounted for an increase of approximately $2.1 million. |
• | The Term Loan due 2024 and the initial funding of the Term Loan due 2026, net of swaps, accounted for an increase of approximately $0.8 million. |
• | The Unsecured Credit Facility principal and rate decrease accounted for a decrease of approximately $2.4 million. |
• | Mortgage notes repayments accounted for a decrease of $0.1 million. |
• | the relevant forward purchaser is unable to establish, maintain or unwind its hedge position with respect to that particular forward equity agreement; |
• | a termination event occurs as a result of us declaring a dividend or distribution on our common stock with a cash value in excess of a specified amount per calendar quarter, or with an ex-dividend date prior to the anticipated ex-dividend date for such cash dividend; |
• | an extraordinary event (as such term is defined in that particular forward equity agreement and which includes certain mergers and tender offers and the delisting of our common stock) occurs or our board of directors votes to approve or there is a public announcement of, in either case, any action that, if consummated, would constitute such an extraordinary event; or |
• | certain other events of default, termination events, or other specified events occur, including, among other things, any material misrepresentation made by us in connection with entering into that particular forward equity agreement, or a nationalization, a bankruptcy termination event or a change in law (as such terms are defined in that particular forward equity agreement). |
EXHIBIT | DESCRIPTION |
Exhibit 4.1 | Specimen Stock Certificate 2 |
Exhibit 4.9 | Eighth Supplemental Indenture, dated March 18, 2020, by and between the Company and Branch Banking and Trust Company, as Trustee.7 |
Exhibit 4.10 | Form of 2.400% Senior Note due 2030 (set forth in Exhibit B to the Eighth Supplemental Indenture filed as Exhibit 4.9 hereto). |
Exhibit 101.INS | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. |
Exhibit 101.SCH | XBRL Taxonomy Extension Schema Document (furnished electronically herewith) |
Exhibit 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (furnished electronically herewith) |
Exhibit 101.LAB | XBRL Taxonomy Extension Labels Linkbase Document (furnished electronically herewith) |
Exhibit 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (furnished electronically herewith) |
Exhibit 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (furnished electronically herewith) |
1 | Filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2018 filed February 13, 2019 and hereby incorporated by reference. |
2 | Filed as an exhibit to the Company’s Registration Statement on Form S-11 (Registration No. 33-60506) filed April 2, 1993 and hereby incorporated by reference. |
3 | Filed as an exhibit to the Company's Current Report on Form 8-K filed May 17, 2001 and hereby incorporated by reference. |
4 | Filed as an exhibit to the Company's Current Report on Form 8-K filed March 26, 2013 and hereby incorporated by reference. |
5 | Filed as an exhibit to the Company's Current Report on Form 8-K filed April 24, 2015 and hereby incorporated by reference. |
6 | Filed as an exhibit to the Company’s Current Report on Form 8-K filed December 11, 2017 and hereby incorporated by reference. |
7 | Filed as an exhibit to the Company's Current Report on Form 8-K filed March 18, 2020 and hereby incorporated by reference. |
8 | Filed as an exhibit to the Company's Annual Report on Form 10-K filed February 12, 2020 and hereby incorporated by reference. |
HEALTHCARE REALTY TRUST INCORPORATED | ||
By: | /s/ J. CHRISTOPHER DOUGLAS | |
J. Christopher Douglas | ||
Executive Vice President and Chief Financial Officer | ||
August 5, 2020 | ||
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: | August 5, 2020 | |
/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: | August 5, 2020 | |
/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: | August 5, 2020 | |
/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 | ||
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| 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) | 300,000,000 | 300,000,000 |
| Common stock, issued (shares) | 136,048,000 | 134,706,000 |
| Common stock, outstanding (shares) | 136,048,000 | 134,706,000 |
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Revenues | ||||
| Rental income | $ 122,358 | $ 114,351 | $ 245,001 | $ 225,046 |
| Other operating | 1,332 | 1,966 | 3,496 | 3,928 |
| Revenues | 123,690 | 116,317 | 248,497 | 228,974 |
| Expenses | ||||
| Property operating | 46,580 | 44,286 | 96,134 | 87,012 |
| General and administrative | 7,434 | 7,845 | 16,199 | 16,355 |
| Acquisition and pursuit costs | 431 | 422 | 1,181 | 726 |
| Depreciation and amortization | 47,691 | 43,926 | 95,188 | 86,588 |
| Expenses | 102,136 | 96,479 | 208,702 | 190,681 |
| Other Income (Expense) | ||||
| Gain on sales of real estate assets | 68,267 | 4,849 | 68,218 | 4,865 |
| Interest expense | (14,442) | (13,850) | (28,402) | (27,438) |
| Impairment of real estate assets | (5,610) | (5,610) | ||
| Interest and other income (expense), net | 134 | (743) | 217 | (735) |
| Total other income (expense) | 53,959 | (15,354) | 40,033 | (28,918) |
| Net Income | $ 75,513 | $ 4,484 | $ 79,828 | $ 9,375 |
| Basic earnings per common share (in dollars per share) | $ 0.56 | $ 0.03 | $ 0.59 | $ 0.07 |
| Diluted earnings per common share (in dollars per share) | $ 0.56 | $ 0.03 | $ 0.59 | $ 0.07 |
| Weighted average common shares outstanding - basic | 133,633,646 | 127,449,454 | 133,334,946 | 125,798,715 |
| Weighted average common shares outstanding - diluted | 133,695,912 | 127,524,607 | 133,420,312 | 125,889,355 |
| Dividends declared, per common share, during the period (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.60 | $ 0.60 |
| Revenue, Product and Service [Extensible List] | us-gaap:OtherOperatingRevenueMember | us-gaap:OtherOperatingRevenueMember | us-gaap:OtherOperatingRevenueMember | us-gaap:OtherOperatingRevenueMember |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Net income | $ 75,513 | $ 4,484 | $ 79,828 | $ 9,375 |
| Interest rate swaps | ||||
| Reclassification adjustments for losses included in net income (interest expense) | 938 | (1) | 1,267 | 15 |
| Losses arising during the period on interest rate swaps | 1,455 | 4,577 | 15,386 | 5,301 |
| Total other comprehensive income (loss) | (517) | (4,578) | (14,119) | (5,286) |
| Comprehensive income (loss) | 74,996 | (94) | 65,709 | 4,089 |
| Interest Rate Swaps | ||||
| Interest rate swaps | ||||
| Losses arising during the period on interest rate swaps | (1,455) | $ (4,577) | (11,119) | (5,301) |
| Treasury Rate Locks | ||||
| Interest rate swaps | ||||
| Losses arising during the period on interest rate swaps | $ 0 | $ (4,267) | $ 0 | |
Condensed Consolidated Statements of Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Statement of Stockholders' Equity [Abstract] | ||||
| Dividend per share to common Stockholders (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.60 | $ 0.60 |
Summary of Significant Accounting Policies |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of significant accounting policies | Business Overview Healthcare Realty Trust Incorporated (the "Company") is a real estate investment trust ("REIT") that owns, leases, manages, acquires, finances, develops and redevelops income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of June 30, 2020, the Company had gross investments of approximately $4.2 billion in 210 real estate properties located in 24 states totaling approximately 15.5 million square feet. The Company provided leasing and property management services to approximately 12.0 million square feet nationwide. Square footage and property count disclosures in these Notes to the Company's Condensed Consolidated Financial Statements are unaudited. Basis of Presentation The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States ("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, 2019. All material intercompany transactions and balances have been eliminated in consolidation. This interim financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. 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, 2020 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, such as the impact of the COVID-19 pandemic. 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. The Company considered the impact of COVID-19 on these assumptions and estimates used and determined that there were no material adverse impacts on the Company's results of operations and financial position at June 30, 2020. There can be no assurance that COVID-19 will not have a future material adverse impact on the financial results and business operations of the Company. COVID-19 Update Since being reported in December 2019, COVID-19 has spread globally, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. In response to the COVID-19 pandemic, all of the states and cities in which the Company owns properties, manages properties, and/or has development or redevelopment projects instituted quarantines, restrictions on travel, “shelter in place” rules, restrictions on types of businesses that may continue to operate, and/or restrictions on the types of construction projects that may continue. As a result, a number of the Company's tenants temporarily closed their offices or clinical space or operated on a reduced basis in response to government requirements or recommendations. Many of these restrictions have been lifted, but could be reimposed. In response to these disruptions, the Company provided some of its tenants with deferred rent arrangements. Through July 31, 2020, the Company has collected 97% of second quarter 2020 aggregate tenant billings and has agreed to various forms of rent deferrals representing approximately 2% of second quarter 2020 aggregate tenant billings. The tenant deferral agreements require the deferred amounts to be repaid in the third and fourth quarters of 2020. For accounting purposes, in accordance with ASC 842: Leases, normally a company would be required to assess a lease modification to determine if the modification should be treated as a separate lease and if not, modification accounting would be applied which would require a company to reassess the classification of the lease. However, in light of the COVID-19 pandemic in which many leases are being modified, the Financial Accounting Standards Board (the "FASB") and U.S. Securities and Exchange Commission (the "SEC") have provided relief that will allow companies to make a policy election as to whether they treat COVID-19 related lease amendments as a provision included in the pre-concession arrangement, and therefore, not a lease modification, or to treat the lease amendment as a modification. The Company has elected to use this relief where applicable and therefore will have no change in the current classification of its leases in connection with many of the leases impacted by negotiations with its tenants. In order to be considered COVID-19 related, cash flows must be substantially the same or less than those prior to the concession. If the cash flows are substantially the same or less, there are two methods to potentially account for such rent deferrals under the relief. The first would be as if no changes to the lease contract were made. Under that accounting, a lessor would increase its lease receivable and a lessee would increase its accounts payable as receivables/payments accrue. In its income statement, a lessor would continue to recognize revenue during the deferral period. The second method would be to treat the deferred payments as variable lease payments (i.e., revenue recognized when cash received). The Company has elected the first method described above, which results in the revenue being recognized on an accrual basis. If tenants are unable to timely repay deferred rent, or repay at all, request additional rent deferrals or abatements, decide not to renew leases, or renew leases at lower cash leasing spreads, the impact on the Company’s results of operations and financial condition could be material. In the second quarter of 2020, the Company recognized approximately $0.7 million general reserve against an approximate $2.9 million deferred rent balance as of July 17, 2020. Given the daily evolution of the COVID-19 pandemic and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 pandemic on its results of operations, financial condition, or liquidity for the fiscal year 2020. The Company continues to evaluate the impact of various forms of governmental assistance that may be or become available to the Company or its tenants. Revenue from Contracts with Customers (Topic 606) The Company recognizes certain revenue under the core principle of Topic 606. This requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Lease revenue is not within the scope of Topic 606. To achieve the core principle, the Company applies the five step model specified in the guidance. Revenue that is accounted for under Topic 606 is segregated on the Company’s Condensed Consolidated Statements of Income in the Other operating line item. This line item includes parking income, rental lease guaranty income, management fee income and other miscellaneous income. Below is a detail of the amounts by category:
The Company’s major types of revenue that are accounted for under Topic 606 that are listed above are all accounted for as the performance obligation is satisfied. The performance obligations that are identified for each of these items are satisfied over time, and the Company recognizes revenue monthly based on this principle. New Accounting Pronouncements 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 annual and interim periods beginning after December 15, 2019 with early adoption permitted. Operating lease receivables, representing the majority of the Company's receivables, are not within the scope of the new standard. The Company adopted this standard as of January 1, 2020. There was not a material impact to the Condensed Consolidated Financial Statements resulting from the adoption of this standard. 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 adopted this standard as of January 1, 2020. There was not a material impact to the Condensed Consolidated Financial Statements resulting from the adoption of this standard. Accounting Standards Update No. 2020-04 On March 12, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
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Real Estate Investments |
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| Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real Estate Investments | Real Estate Investments 2020 Acquisitions The following table details the Company's acquisitions for the six months ended June 30, 2020:
Subsequent Acquisitions Subsequent to the end of the second quarter of 2020, the Company acquired the following properties:
Subsequent Dispositions In May 2020, the Company and Mercy Health negotiated the sale of two single-tenant net leased properties, a medical office building in Oklahoma and an orthopedic specialty hospital in Missouri, for $244.5 million. The sale was structured through amendments to the leases to allow for the early exercise of existing purchase options. The amendments resulted in the application of lease modification accounting under ASC Topic 842, which resulted in lease classification changes from operating to sales-type. During the second quarter, the Company derecognized the real estate assets on the Condensed Consolidated Balance Sheets and recognized the net investment in sales-type leases, resulting in a gain of $68.3 million. See Note 3 to the Condensed Consolidated Financial Statements for additional disclosures of the sales-type leases. The Company disposed of these properties on July 30, 2020. Assets Held for Sale As of June 30, 2020 and December 31, 2019, the Company had no properties classified as held for sale.
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Leases |
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| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | Leases Lessor Accounting The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2035. Some leases provide for fixed rent renewal terms in addition to market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property. The Company's leases typically have escalators that are either based on a stated percentage or an index such as CPI (consumer price index). In addition, most of the Company's leases include nonlease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and nonlease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases recognized for the three and six months ended June 30, 2020 was $122.4 million and $245.0 million, respectively. Tabular Disclosure of the Components of Sales-Type Leases The table below presents the components of sale-type leases for the thee and six months ended June 30, 2020:
Future lease payments under the non-cancelable operating and sales-type leases, excluding any reimbursements, as of June 30, 2020 were as follows:
Lessee Accounting As of June 30, 2020, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of June 30, 2020, the Company had 104 properties totaling 8.7 million square feet that were held under ground leases. Some of the ground leases' renewal terms are based on fixed rent renewal terms and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally either stated or based on the CPI. The Company had 42 prepaid ground leases as of June 30, 2020. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.2 million of the Company’s rental expense for the three months ended June 30, 2020 and 2019, respectively and $0.3 million for the six months ended June 30, 2020 and 2019, respectively. The Company’s future lease payments (primarily for its 62 non-prepaid ground leases) as of June 30, 2020 were as follows:
The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2020 and 2019:
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| Leases | Leases Lessor Accounting The Company’s properties generally are leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2035. Some leases provide for fixed rent renewal terms in addition to market rent renewal terms. Some leases provide the lessee, during the term of the lease, with an option or right of first refusal to purchase the leased property. The Company’s single-tenant net leases generally require the lessee to pay minimum rent and all taxes (including property tax), insurance, maintenance and other operating costs associated with the leased property. The Company's leases typically have escalators that are either based on a stated percentage or an index such as CPI (consumer price index). In addition, most of the Company's leases include nonlease components, such as reimbursement of operating expenses as additional rent, or include the reimbursement of expected operating expenses as part of the lease payment. The Company adopted an accounting policy to combine lease and nonlease components. Rent escalators based on indices and reimbursements of operating expenses that are not included in the lease rate are considered variable lease payments. Variable payments are recognized in the period earned. Lease income for the Company's operating leases recognized for the three and six months ended June 30, 2020 was $122.4 million and $245.0 million, respectively. Tabular Disclosure of the Components of Sales-Type Leases The table below presents the components of sale-type leases for the thee and six months ended June 30, 2020:
Future lease payments under the non-cancelable operating and sales-type leases, excluding any reimbursements, as of June 30, 2020 were as follows:
Lessee Accounting As of June 30, 2020, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases. As of June 30, 2020, the Company had 104 properties totaling 8.7 million square feet that were held under ground leases. Some of the ground leases' renewal terms are based on fixed rent renewal terms and others have market rent renewal terms. These ground leases typically have initial terms of 40 to 99 years with expiration dates through 2119. Any rental increases related to the Company’s ground leases are generally either stated or based on the CPI. The Company had 42 prepaid ground leases as of June 30, 2020. The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $0.2 million of the Company’s rental expense for the three months ended June 30, 2020 and 2019, respectively and $0.3 million for the six months ended June 30, 2020 and 2019, respectively. The Company’s future lease payments (primarily for its 62 non-prepaid ground leases) as of June 30, 2020 were as follows:
The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2020 and 2019:
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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.
Changes in Debt Structure On February 3, 2020, the Company repaid in full a mortgage note payable bearing interest at a rate of 6.10% per annum with an outstanding principal of $5.9 million. The mortgage note encumbered a 68,860 square foot property in Oklahoma. On March 4, 2020, the Company issued $300.0 million of unsecured senior notes due 2030 (the "Senior Notes due 2030") in a registered public offering. The Senior Notes due 2030 bear interest at 2.40%, payable semi-annually on March 15 and September 15, beginning September 15, 2020, and are due on March 15, 2030, unless redeemed earlier by the Company. The notes were issued at a discount of approximately $1.0 million and the Company incurred approximately $2.8 million in debt issuance costs. Concurrent with this transaction, the Company settled two treasury rate locks for $4.3 million. Inclusive of the discount, debt issuance costs and settlement of the treasury rate locks, the effective interest rate was 2.71%. The Senior Notes due 2030 have various financial covenants that are required to be met on a quarterly and annual basis. On May 4, 2020, the Company repaid in full a mortgage note payable bearing interest at a rate of 5.74% per annum with an outstanding principal of $0.3 million. The mortgage note encumbered an 83,318 square foot property in Iowa. On May 29, 2020, the Company borrowed $150.0 million from its unsecured term loan due 2026. On June 2, 2020, the Company repaid in full a mortgage note payable bearing interest at a rate of 6.44% per annum with an outstanding principal of $12.6 million. The mortgage note encumbered a 67,510 square foot property in Washington. On June 25, 2020, the Company repaid in full three bonds bearing interest at rates of 5.63%, 6.63% and 6.88% per annum with outstanding principal of $0.5 million, $2.8 million, and $7.0 million, respectively. The bonds encumbered a 60,476 square foot property in Minnesota.
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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 The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities 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 derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income (Loss) ("AOCI") and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. On February 24 and 25, 2020, the Company entered into two treasury rate locks totaling $75.0 million and $40.0 million, respectively. The treasury rate locks were settled for an aggregate amount of $4.3 million on March 4, 2020 concurrent with the Company's issuance of its Senior Notes due 2030. The settlement will be amortized over the 10-year term of the notes. As of June 30, 2020, the Company had eight outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet The table below presents the fair value of the Company's derivative financial instruments, as well as their classification on the Condensed Consolidated Balance Sheet as of June 30, 2020.
Tabular Disclosure of the Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss) The table below presents the effect of cash flow hedge accounting on AOCI during the three and six months ended June 30, 2020 and 2019 related to the Company's outstanding interest rate swaps.
The Company estimates that $4.4 million will be reclassified from AOCI to interest expense over the next 12 months. Credit-risk-related Contingent Features The Company's agreements with each of its derivative counterparties contain a cross-default provision under which the Company could be declared in default of its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness. As of June 30, 2020, the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $16.0 million. As of June 30, 2020, the Company has not posted any collateral related to these agreements and was not in breach of any agreement.
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Commitments and Contingencies |
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Jun. 30, 2020 | |
| 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 initiated the redevelopment of a 110,883 square foot medical office building in Memphis, Tennessee ("Memphis Redevelopment") in December 2019. As of June 30, 2020, the Company funded approximately $2.3 million, excluding the purchase price of $8.7 million for the land and building. The building will continue to operate with in-place leases during construction. The Memphis Redevelopment is expected to be completed in the first quarter of 2021. Development Activity The Company completed the development of a 151,031 square foot medical office building in Seattle, Washington. As of June 30, 2020, the Company had funded approximately $58.8 million towards the development and additional tenant improvements. The Company expects to fund an additional amount of approximately $5.3 million for additional tenant improvements associated with this project. The first tenant took occupancy in the first quarter of 2020.
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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 six months ended June 30, 2020 and the year ended December 31, 2019:
At-The-Market Equity Offering Program On February 14, 2020, the Company entered into sales agreements with six investment banks to allow sales under its at-the-market equity offering program of up to an aggregate of $500.0 million of common stock. The Company sold 1,268,237 shares under the Company's at-the market equity offering program during the six months ended June 30, 2020. The sales generated $39.9 million in net proceeds at prices to the public ranging from $30.50 to $36.15 per share (weighted average of $31.86 per share). The sales occurred during the following time periods:
In addition, the Company entered into two forward equity agreements:
Including the forward equity contracts discussed above, the Company has approximately $385.3 million remaining available to be sold under the current sales agreements at the date of this filing. Common Stock Dividends During the six months ended June 30, 2020, the Company declared and paid common stock dividends totaling $0.60 per share. On August 4, 2020, the Company declared a quarterly common stock dividend in the amount of $0.30 per share payable on August 31, 2020 to stockholders of record on August 17, 2020. Earnings Per Common Share The Company uses the two-class method of computing net earnings per common shares. The Company's nonvested share-based awards are considered participating securities pursuant to the two-class method. In June 2020, the Company entered into a forward sale agreement pursuant to a forward equity arrangement to sell approximately 1.6 million shares of common stock through the Company's at-the-market equity offering program. The Company considered the accounting guidance governing financial instruments and derivatives to account for this agreement and concluded that it was not a liability as it did not embody obligations to repurchase our shares of common stock nor did it embody obligations to issue a variable number of shares for which the monetary value was predominately fixed, varying with something other than the fair value of the shares or varying inversely in relation to the shares. In addition, the Company evaluated whether the agreement met the derivative and hedging guidance scope exception to be accounted for as an equity instrument and concluded that the agreement can be classified as equity. The Company used the treasury method to determine the dilution from the forward equity agreement during the period of time prior to settlement. The number of weighted-average shares outstanding used in the computation of earnings per common share for the three and six months ended June 30, 2020, included the effect from the assumed issuance of 1.6 million shares of common stock pursuant to the settlement of the forward equity agreements at the contractual price, less the assumed repurchase of the common stock at the average market price using the proceeds of approximately $50.0 million, adjusted for costs to borrow. For the three months ended June 30, 2020, 11,331 weighted-average incremental shares of common stock were excluded from the computation of weighted-average common shares outstanding - diluted, as the impact was anti-dilutive. The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2020 and 2019.
Incentive Plans A summary of the activity under the Company's share-based incentive plans for the three and six months ended June 30, 2020 and 2019 is included in the table below.
During the six months ended June 30, 2020 and 2019, the Company withheld 23,563 and 19,546 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested. In addition to the share-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 and six months ended June 30, 2020 and 2019 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.
The table below details the fair values and carrying values for notes and bonds payable at June 30, 2020 and December 31, 2019.
1 Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.
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Summary of Significant Accounting Policies (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business overview | Business Overview Healthcare Realty Trust Incorporated (the "Company") is a real estate investment trust ("REIT") that owns, leases, manages, acquires, finances, develops and redevelops income-producing real estate properties associated primarily with the delivery of outpatient healthcare services throughout the United States. As of June 30, 2020, the Company had gross investments of approximately $4.2 billion in 210 real estate properties located in 24 states totaling approximately 15.5 million square feet. The Company provided leasing and property management services to approximately 12.0 million square feet nationwide.
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| 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 ("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, 2019. All material intercompany transactions and balances have been eliminated in consolidation. This interim financial information should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. 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, 2020 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, such as the impact of the COVID-19 pandemic. |
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| 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.
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| Revenue from contract with customers (topic 606) | Revenue from Contracts with Customers (Topic 606) The Company recognizes certain revenue under the core principle of Topic 606. This requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Lease revenue is not within the scope of Topic 606. To achieve the core principle, the Company applies the five step model specified in the guidance. Revenue that is accounted for under Topic 606 is segregated on the Company’s Condensed Consolidated Statements of Income in the Other operating line item. This line item includes parking income, rental lease guaranty income, management fee income and other miscellaneous income. Below is a detail of the amounts by category:
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| New accounting pronouncements | New Accounting Pronouncements 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 annual and interim periods beginning after December 15, 2019 with early adoption permitted. Operating lease receivables, representing the majority of the Company's receivables, are not within the scope of the new standard. The Company adopted this standard as of January 1, 2020. There was not a material impact to the Condensed Consolidated Financial Statements resulting from the adoption of this standard. 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 adopted this standard as of January 1, 2020. There was not a material impact to the Condensed Consolidated Financial Statements resulting from the adoption of this standard. Accounting Standards Update No. 2020-04 On March 12, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
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Summary of Significant Accounting Policies (Tables) |
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| Disaggreation of revenue | Below is a detail of the amounts by category:
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Real Estate Investments (Tables) |
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| Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of acquisitions | The following table details the Company's acquisitions for the six months ended June 30, 2020:
Subsequent Acquisitions Subsequent to the end of the second quarter of 2020, the Company acquired the following properties:
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Leases (Tables) |
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| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Sales-type Leases | The table below presents the components of sale-type leases for the thee and six months ended June 30, 2020:
|
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| Future Minimum Operating Lease Payments Receivable | Future lease payments under the non-cancelable operating and sales-type leases, excluding any reimbursements, as of June 30, 2020 were as follows:
|
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| Future Sales-type Lease Payments Receivable | Future lease payments under the non-cancelable operating and sales-type leases, excluding any reimbursements, as of June 30, 2020 were as follows:
|
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| Future Minimum Operating Lease Payments | The Company’s future lease payments (primarily for its 62 non-prepaid ground leases) as of June 30, 2020 were as follows:
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| Future Minimum Financing Lease Payments | The Company’s future lease payments (primarily for its 62 non-prepaid ground leases) as of June 30, 2020 were as follows:
|
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| Lease Cost | The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2020 and 2019:
|
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Notes and Bonds Payable (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of debt | The table below details the Company’s notes and bonds payable.
4 The effective interest rate includes the impact of the $4.3 million settlement of forward interest rate hedges that is included in Accumulated other comprehensive loss on the Company's Condensed Consolidated Balance Sheets.
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Derivative Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of cash flow hedges included in accumulated other comprehensive income (loss) | The table below presents the effect of cash flow hedge accounting on AOCI during the three and six months ended June 30, 2020 and 2019 related to the Company's outstanding interest rate swaps.
As of June 30, 2020, the Company had eight outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
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| Schedule of derivative instruments in statement of financial position, fair value | The table below presents the fair value of the Company's derivative financial instruments, as well as their classification on the Condensed Consolidated Balance Sheet as of June 30, 2020.
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Stockholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of beginning and ending common stock outstanding | The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the six months ended June 30, 2020 and the year ended December 31, 2019:
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| Earnings (loss) per share | The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2020 and 2019.
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| Summary of the activity under the incentive plan | A summary of the activity under the Company's share-based incentive plans for the three and six months ended June 30, 2020 and 2019 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 and six months ended June 30, 2020 and 2019 is included in the table below.
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Fair Value of Financial Instruments (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 June 30, 2020 and December 31, 2019.
1 Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.
|
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Summary of Significant Accounting Policies (Details) ft² in Millions, $ in Millions |
3 Months Ended | 4 Months Ended | |
|---|---|---|---|
|
Jun. 30, 2020
USD ($)
ft²
state
property
|
Jul. 31, 2020 |
Jul. 17, 2020
USD ($)
|
|
| Business Overview: | |||
| Gross investment amount, total | $ 4,200.0 | ||
| Number of real estate properties | property | 210 | ||
| Number of states that the company owns real estate in, whole units | state | 24 | ||
| Square footage of owned real estate properties | ft² | 15.5 | ||
| Approximate square feet for which Nationwide property management services provided by company | ft² | 12.0 | ||
| Second quarter 2020 tenant billings deferred under rent deferral agreements (percent) | 2.00% | ||
| Deferred rent reserve recognized in the period | $ 0.7 | ||
| Subsequent event | |||
| Revenue Recognition, Multiple-deliverable Arrangements [Line Items] | |||
| Aggregate second quarter 2020 tenant billings collected (percent) | 97.00% | ||
| Deferred rent receivable | $ 2.9 |
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Disaggregation of Revenue [Line Items] | ||||
| Type of Revenue | $ 1,332 | $ 1,966 | $ 3,496 | $ 3,928 |
| Parking income | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Type of Revenue | 1,227 | 1,870 | 3,278 | 3,603 |
| Rental lease guaranty | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Type of Revenue | 0 | 0 | 0 | 128 |
| Management fee income | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Type of Revenue | 69 | 64 | 147 | 133 |
| Miscellaneous | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Type of Revenue | $ 36 | $ 32 | $ 71 | $ 64 |
Leases - Lease Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Leases [Abstract] | ||||
| Rental income | $ 122,358 | $ 114,351 | $ 245,001 | $ 225,046 |
| Profit recognized at commencement date | 68,267 | 68,267 | ||
| Interest income | $ 1,553 | $ 1,553 | ||
Leases - Lessor Accounting (Details) $ in Thousands |
Jun. 30, 2020
USD ($)
|
|---|---|
| Future Operating Lease Payments Receivable [Abstract] | |
| 2020 | $ 181,180 |
| 2021 | 332,072 |
| 2022 | 290,524 |
| 2023 | 242,546 |
| 2024 | 185,184 |
| 2025 and thereafter | 476,791 |
| Total | 1,708,297 |
| Future Sales-type Lease Payments Receivable [Abstract] | |
| 2020 | 249,042 |
| 2021 | 0 |
| 2022 | 0 |
| 2023 | 0 |
| 2024 | 0 |
| 2025 and thereafter | 0 |
| Total | $ 249,042 |
Leases - Ground Leases (Details) ft² in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
|
Jun. 30, 2020
USD ($)
property
Lease
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
ft²
property
Lease
|
Jun. 30, 2019
USD ($)
|
|
| Lessee, Lease, Description [Line Items] | ||||
| Number of properties subject to ground leases | property | 104 | 104 | ||
| Square feet subject to ground leases | ft² | 8.7 | |||
| Number of prepaid ground leases | 42 | |||
| Amortization of prepaid rent | $ | $ 0.2 | $ 0.2 | $ 0.3 | $ 0.3 |
| Number of non-prepaid ground leases | 62 | 62 | ||
| Minimum | ||||
| Lessee, Lease, Description [Line Items] | ||||
| Ground lease, initial term | 40 years | 40 years | ||
| Maximum | ||||
| Lessee, Lease, Description [Line Items] | ||||
| Ground lease, initial term | 99 years | 99 years | ||
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| OPERATING | ||
| 2020 | $ 2,012 | |
| 2021 | 4,844 | |
| 2022 | 4,875 | |
| 2023 | 4,913 | |
| 2024 | 4,969 | |
| 2025 and thereafter | 307,665 | |
| Total undiscounted lease payments | 329,278 | |
| Discount | (238,019) | |
| Lease liabilities | 91,259 | $ 91,574 |
| FINANCING | ||
| 2020 | 286 | |
| 2021 | 930 | |
| 2022 | 783 | |
| 2023 | 793 | |
| 2024 | 815 | |
| 2025 and thereafter | 88,808 | |
| Total undiscounted lease payments | 92,415 | |
| Discount | (73,820) | |
| Lease liabilities | $ 18,595 | $ 18,037 |
Derivative Financial Instruments - Fair Value of Derivative Instruments on the Balance Sheet (Details) - Designated as hedging instrument - Settled interest rate swaps $ in Thousands |
Jun. 30, 2020
USD ($)
|
|---|---|
| Derivative [Line Items] | |
| Liability derivatives | $ 15,339 |
| Other liabilities | |
| Derivative [Line Items] | |
| Liability derivatives | $ 15,339 |
Commitments and Contingencies - Construction Activity (Details) $ in Millions |
6 Months Ended |
|---|---|
|
Jun. 30, 2020
USD ($)
ft²
| |
| Other Commitments [Line Items] | |
| Approximate square feet | ft² | 15,500,000 |
| Medical office building expansion | Memphis, Tennessee | |
| Other Commitments [Line Items] | |
| Approximate square feet | ft² | 110,883 |
| Medical office building | Memphis, Tennessee | |
| Other Commitments [Line Items] | |
| Construction activity, total funding during the period, excluding purchase of land and building | $ 2.3 |
| Medical office building | Washington | |
| Other Commitments [Line Items] | |
| Approximate square feet | ft² | 151,031 |
| Total amount funded | $ 58.8 |
| Estimated amount to complete project | 5.3 |
| Land and building | Medical office building | Memphis, Tennessee | |
| Other Commitments [Line Items] | |
| Construction activity, total funding during the period | $ 8.7 |
Stockholders' Equity - Reconciliation of beginning and ending common stock outstanding (Details) - shares |
6 Months Ended | 12 Months Ended |
|---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
| Reconciliation of the beginning and ending common stock outstanding | ||
| Balance, beginning of period | 134,706,000 | |
| Balance, end of period | 136,048,000 | 134,706,000 |
| Common Stock | ||
| Reconciliation of the beginning and ending common stock outstanding | ||
| Balance, beginning of period | 134,706,154 | 125,279,455 |
| Issuance of common stock | 1,286,743 | 9,251,440 |
| Nonvested share-based awards, net of withheld shares | 55,274 | 175,259 |
| Balance, end of period | 136,048,171 | 134,706,154 |
Stockholders' Equity - Computation of basic and diluted earnings (loss) per common share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Weighted average Common Shares outstanding | ||||
| Weighted average common shares outstanding | 135,367,081 | 129,228,102 | 135,062,708 | 127,577,389 |
| Non-vested shares | (1,733,435) | (1,778,648) | (1,727,762) | (1,778,674) |
| Weighted average common shares outstanding - basic | 133,633,646 | 127,449,454 | 133,334,946 | 125,798,715 |
| Dilutive effect of forward equity shares | 0 | 0 | 2,149 | 0 |
| Dilutive effect of employee stock purchase plan | 62,266 | 75,153 | 83,217 | 90,640 |
| Weighted average Common Shares outstanding—Diluted | 133,695,912 | 127,524,607 | 133,420,312 | 125,889,355 |
| Net Income | $ 75,513 | $ 4,484 | $ 79,828 | $ 9,375 |
| Dividends paid on nonvested share-based awards | (521) | (534) | (1,039) | (1,070) |
| Net income applicable to common stockholders | $ 74,992 | $ 3,950 | $ 78,789 | $ 8,305 |
| Basic earnings per common share (in dollars per share) | $ 0.56 | $ 0.03 | $ 0.59 | $ 0.07 |
| Diluted earnings per common share (in dollars per share) | $ 0.56 | $ 0.03 | $ 0.59 | $ 0.07 |
Stockholders' Equity - Summary of activity under stock-based incentive plans (Details) - Stock incentive plan - shares |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Summary of the activity under the incentive plans | ||||
| Share-based awards, beginning of period | 1,724,761 | 1,784,127 | 1,754,066 | 1,769,863 |
| Granted (shares) | 39,493 | 24,996 | 78,837 | 89,767 |
| Vested (shares) | (24,996) | (30,989) | (93,645) | (81,496) |
| Share-based awards, end of period | 1,739,258 | 1,778,134 | 1,739,258 | 1,778,134 |
| Restricted stock | ||||
| Summary of the activity under the incentive plans | ||||
| Shares withheld to pay estimated withholding taxes | 23,563 | 19,546 | ||
Stockholders' Equity - Summary of activity under Employee Stock Purchase Plan (Details) - Employee stock purchase plan - shares |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
| Summary of the Employee Stock Purchase Plan activity | ||||
| Outstanding and exercisable, beginning of period (in shares) | 370,696 | 390,776 | 332,659 | 328,533 |
| Granted (in shares) | 0 | 0 | 212,716 | 235,572 |
| Exercised (in shares) | (2,463) | (4,386) | (14,367) | (19,016) |
| Forfeited (in shares) | (6,514) | (23,172) | (29,495) | (39,797) |
| Expired (in shares) | 0 | 0 | (139,794) | (142,074) |
| Outstanding and exercisable, end of period (in shares) | 361,719 | 363,218 | 361,719 | 363,218 |
Fair Value of Financial Instruments (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| CARRYING VALUE | ||
| Derivative [Line Items] | ||
| Notes and bonds payable | $ 1,554.9 | $ 1,414.1 |
| FAIR VALUE | ||
| Derivative [Line Items] | ||
| Notes and bonds payable | $ 1,622.8 | $ 1,425.8 |