What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-03-01 compared with 2021-02-24 · 107 added, 69 removed, 432 unchanged (29% of the section changed)

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We cannot guarantee the accuracy of any such forward-looking statements contained in this Annual Report, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Forward-looking statements regarding HR and HTA, include, but are not limited to, statements related to the Proposed Transaction, including the anticipated timing, benefits and financial and operational impact thereof;

HR’s expected financing for the transaction;

other statements of management’s belief, intentions or goals;

and other statements that are not historical facts.

These forward-looking statements are based on each of the companies’ current plans, objectives, estimates, expectations and intentions and inherently involve significant risks and uncertainties.

Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks and uncertainties associated with:

HR’s and HTA’s ability to complete the Proposed Transaction on the proposed terms or on the anticipated timeline, or at all, including risks and uncertainties related to securing the necessary shareholder approvals and satisfaction of other closing conditions to consummate the Proposed Transaction;

the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive transaction agreement relating to the Proposed Transaction;

risks related to diverting the attention of HR and HTA management from ongoing business operations;

failure to realize the expected benefits of the Proposed Transaction;

significant transaction costs and/or unknown or inestimable liabilities;

the risk of shareholder litigation in connection with the Proposed Transaction, including resulting

expense or delay;

the risk that HTA’s business will not be integrated successfully or that such integration may be more difficult, time-consuming or costly than expected;

the ability to obtain the expected financing to consummate the Proposed Transaction;

risks related to future opportunities and plans for the Company, including the uncertainty of expected future financial performance and results of the Company following completion of the Proposed Transaction;

effects relating to the announcement of the Proposed Transaction or any further announcements or the consummation of the Proposed Transaction on the market price of HR’s or HTA’s common stock;

the possibility that, if HR does not achieve the perceived benefits of the Proposed Transaction as rapidly or to the extent anticipated by financial analysts or investors, the market price of HR’s common stock could decline;

general adverse economic and local real estate conditions;

the inability of significant tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business;

increases in interest rates;

increases in operating expenses and real estate taxes;

changes in the dividend policy for HR’s common stock or its ability to pay dividends;

impairment charges;

pandemics or other health crises, such as COVID-19;

and other risks and uncertainties affecting HR and HTA, including those described from time to time under the caption “Risk Factors” and elsewhere in HR’s and HTA’s SEC filings and reports, including HR’s Annual Report on Form 10-K for the year ended December 31, 2021, HTA’s Annual Report on Form 10-K for the year ended December 31, 2021, and other filings and reports by either company.

Moreover, other risks and uncertainties of which HR or HTA are not currently aware may also affect each of the companies’ forward-looking statements and may cause actual results and the timing of events to differ materially from those anticipated.

The forward-looking statements made in this communication are made only as of the date hereof or as of the dates indicated in the forward-looking statements, even if they are subsequently made available by HR or HTA on their respective websites or otherwise.

Neither HR nor HTA undertakes any obligation to update or supplement any forward-looking statements to reflect actual results, new information, future events, changes in its expectations or other circumstances that exist after the date as of which the forward-looking statements were made, except as required by law.

Any such forward-looking statements reflect our current views about future events, are subject to unknown risks, uncertainties, and other factors, and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive and market conditions, all of which are difficult or impossible to predict accurately.

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Forward-looking statements speak only as of the date made.

In addition, we undertake no obligation to update or revise

forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to projections over time, except as required by law.

In addition, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to projections over time, except as required by law.

These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

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We are concentrated in 20 to 25 key markets that are experiencing higher economic and demographic trends than other markets, on average, that we expect will drive demand for MOBs.

As of December 31, 2020, we had approximately 1 million square feet of GLA in ten of our top 20 key markets and approximately 94% of our portfolio, based on GLA, is located in the top 75 MSAs, with Dallas, Houston, Boston, Tampa and Hartford/New Haven being our largest markets by investment.

As of December 31, 2021, we had approximately 1 million square feet of GLA in ten of our top 20 key markets and approximately 95% of our portfolio, based on GLA, is located in the top 75 MSAs, with Dallas, Houston, Boston, Atlanta and Miami being our largest markets by investment.

Company Highlights

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These properties were approximately 85% leased as of closing, and are located within HTA's key markets.

• During the year ended December 31, 2020, we completed the disposition of one MOB located in Kansas City for an aggregate gross sales price of $16.8 million, representing approximately 69,000 square feet of GLA, and generating net gains of approximately $7.6 million.

Additionally, during the year ended December 31, 2020, we sold part of our interest in undeveloped land in Miami, Florida for a gross sales price of $7.6 million, which resulted in a net gain of approximately $2.0 million.

• During the year ended December 31, 2020, we completed the initial development started by HTA.

This 127,000 SF Class A MOB development in Raleigh, North Carolina is currently 77% leased.

HTA continued to develop three new on-campus MOBs located in the key markets of Miami, Florida;

Additionally, HTA funded approximately $80 million in loan funding commitments for MOB development projects in Houston, Texas and Charlotte, North Carolina.

• During the year ended December 31, 2021, we completed the disposition of fifteen MOBs located in non-key markets for an aggregate gross sales price of $88.3 million, representing approximately 599,000 square feet of GLA, and generating net gains of approximately $39.2 million.

• During the year ended December 31, 2021, we completed the development of three new on-campus MOBs located in the key markets of Miami, Florida;

Bakersfield, California;

and Dallas, Texas.

In total, HTA has development projects in process of approximately $110 million, totaling approximately 244,000 square feet of GLA, and that are expected to be more than 79% pre-leased upon completion.

Additionally, during 2020, HTA continued to redevelop two MOBs located in Los Angeles, California with estimated costs of approximately $20 million and totaling approximately 105,000 square feet of GLA.

Total construction costs on these developments were approximately $110 million and totaled approximately 245,000 square feet of GLA and are currently 78% leased.

Our development pipeline consists of five projects in the pre-leasing process, totaling over 850,000 square feet of GLA.

These projects are located in Houston, Orlando and Raleigh and are highlighted by HTA's previously announced strategic partnership with Medistar Corporation to co-develop the Texas A&M Innovation Plaza - Horizon Tower located in Houston, Texas, a 485,000 square foot medical office and life sciences tower with anticipated costs of $215 million expected to commence construction in 2022.

Internal Growth through Proactive In-House Property Management and Leasing

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• As of December 31, 2021, we had total leverage, measured by debt less cash and cash equivalents to total capitalization, of 27.7%.

Total liquidity was $1.4 billion, inclusive of $1.0 billion available on our unsecured revolving credit facility, $277.5 million of forward equity agreements, and cash and cash equivalents of $115.4 million as of December 31, 2020.

Total liquidity was $1.1 billion, inclusive of $1.0 billion available on our unsecured revolving credit facility and cash and cash equivalents of $52.4 million as of December 31, 2021.

• As of December 31, 2021, the weighted average remaining term of our debt portfolio was 6.6 years.

• During the year ended December 31, 2020, we paid down approximately $114.1 million of outstanding secured mortgage loans, resulting in our elimination of any secured borrowings.

Although not anticipated, we may finance transactions with secured borrowings or acquire buildings and assume debt if required or economically beneficial.

• In September 2020, our Board of Directors approved a stock repurchase plan authorizing us to purchase up to $300.0 million of our common stock from time to time prior to the expiration thereof on September 23, 2023.

As of December 31, 2020, the remaining amount of common stock available for repurchase under the stock repurchase plan was $300.0 million.

• In November 2019, we refreshed our at the market ("ATM") offering program of common stock for an additional aggregate sales amount of up to $750.0 million.

This program remains active as of December 31, 2020.

Upon expiration, it is our intention to refresh the existing ATM program or establish a new ATM offering program.

• In March 2021, we entered into equity distribution agreements with various sales agents with respect to our at-the-market ("ATM") offering program of common stock with an aggregate sales amount of up to $750.0 million, which replaced our prior ATM offering program that expired in February 2021.

As of December 31, 2021, $750.0 million remained available for issuance by us under our current ATM.

• During the year ended December 31, 2021, we issued approximately 9.4 million shares of our common stock under our ATM program for net proceeds of approximately $251.3 million, adjusted for costs to borrow equating to a net price to us of $26.68 per share of common stock.

Additionally, we have four outstanding forward sale arrangements pursuant to forward equity agreements, with anticipated net proceeds of $277.5 million, and with an average share price of $29.46, subject to adjustments as provided in the forward equity agreements.

All four of these forward sale arrangements mature in accordance with their applicable contract terms by the middle of 2021, however, the agreements provide for mechanisms to extend settlement upon mutual agreement by us and the counterparty/distribution agent.

Critical Accounting Policies

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At the inception of a new lease we assess the terms and conditions to determine proper classification.

If the estimates utilized by us in our assessment were different, then our lease classification for

accounting purposes may have been different, which could impact the timing and amount of revenue recognized.

If the estimates utilized by us in our assessment were different, then our lease classification for accounting purposes may have been different, which could impact the timing and amount of revenue recognized.

We recognize rental revenue from operating leases on a straight-line basis over the term of the related lease (including rent holidays).

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Recoverability of Real Estate Investments

Real estate investments are evaluated for potential impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

Real estate investments are evaluated for potential impairment at least annually, or whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

Impairment losses are recorded when indicators of impairment are present and the carrying amount of the asset is greater than the sum of future undiscounted cash flows expected to be generated by that asset over the remaining expected holding period.

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Rental income $ 763,923 $ 738,414 $ 25,509 3.5 %

Interest and other operating income 551 513 38 7.4

Interest and other operating income 3,150 551 2,599 NM

Total revenues 767,073 738,965 28,108 3.8

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Interest expense 92,762 94,613 (1,851) (2.0)

Impairment 22,938 — 22,938 NM

Total expenses 706,500 669,234 37,266 5.6

Gain (loss) on sale of real estate, net 39,228 9,590 29,638 NM

Loss on extinguishment of debt, net (27,726) (21,646) (6,080) (28.1)

Loss on sale of corporate asset, net (2,106) — (2,106) NM

Loss on extinguishment of debt, net — (27,726) 27,726 NM

Income from unconsolidated joint venture 1,604 1,612 (8) (0.5)

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Same-Property Cash NOI $ 460,792 $ 452,972 $ 7,820 1.7 %

*NM- not meaningful

Comparison of the years ended December 31, 2020 and 2019, respectively, and related discussions can be found in the Item 7.

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For the years ended December 31, 2021 and 2020 general and administrative expenses were $49.7 million and $43.0 million, respectively.

These increases were primarily due to inflationary salary adjustments and normal annual vendor increases.

General and administrative expenses include such costs as salaries, corporate overhead and professional fees, among other items.

This increase was driven by costs related to the Company’s:

(i) whistleblower investigation (as further outlined in the Company’s Current Report on Form 8-K filed November 4, 2021), (ii) CEO search costs, (iii) the announced strategic review process, and (iv) employee retention costs and administrative costs with respect to having an interim CEO.

Costs related to these matters primarily included:

(i) an increase in compensation and employee expenses including $0.9 million of increased bonus accruals related to Company out-performance on total shareholder return in Q3 2021, $0.7 million of CEO search fees, and $0.5 million of short-term consulting and other employee retention costs;

(ii) increased legal and professional fees of $2.3 million primarily related to ongoing whistleblower and strategic review matters;

(iii) increased corporate-related travel costs of $0.5 million;

and (iv) increased board fees of $0.6 million as a result of a significant increase in board and committee meetings pertaining to the CEO search and whistleblower and strategic review matters, as well as additional compensation for the lead independent director in his appointed role as board chairman.

Transaction Expenses

For the years ended December 31, 2021 and 2020, transaction expenses were $0.4 million and $1.0 million, respectively.

The decrease in 2020 compared to 2019 was primarily due to decreased acquisition activity in 2020 as compared to 2019.

The decrease in 2021 compared to 2020 was primarily due to decreased acquisition costs in 2021 as compared to 2020.

Depreciation and Amortization Expense

For the years ended December 31, 2020 and 2019, depreciation and amortization expense was $303.8 million and $290.4 million, respectively.

These increases were associated with our 2019 and 2020 investments, partially offset by buildings we sold during 2019 and 2020.

For each of the years ended December 31, 2021 and 2020, depreciation and amortization expense was $303.8 million.

Depreciation and amortization for 2021 was neutral compared to 2020 as most of our investments were in the last half of 2021 and a 13 property portfolio was disposed of in the first half of 2021.

Interest Expense

Interest expense decreased by $1.9 million during the year ended December 31, 2021 compared to 2020.

For the year ended December 31, 2020, the decrease was primarily due to lower average interest rates as compared to 2019 and the payoff of secured mortgage loans.

For the year ended December 31, 2021, the decrease was primarily due to lower average interest rates as compared to 2020.

To achieve our objectives, we borrow at both fixed and variable rates.

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Gain (loss) on Sale of Real Estate

For the year ended December 31, 2020, we realized a net gain of $9.6 million from the disposition of one MOB located in Kansas as well as the sale of part of our interest in undeveloped land in Miami, Florida.

For the year ended December 31, 2019, we realized a net loss on the sale of real estate of $0.2 million from the disposition of four MOBs located in South Carolina and New Mexico.

For the year ended December 31, 2021, we realized a net gain of $39.2 million from the disposition of fifteen MOBs located in non-key markets in Tennessee, Virginia, Minnesota and Ohio.

For the year ended December 31, 2020, we realized a net gain on the sale of real estate of $7.6 million from the disposition of one MOB Kansas City.

See Note 4 - Dispositions and Impairment in the accompanying consolidated financial statements in Part IV, Item 15 for more detail on the dispositions.

Loss on Extinguishment of Debt

For the years ended December 31, 2020 and 2019, we realized a net loss on the extinguishment of debt of $27.7 million and $21.6 million, respectively, related to make-whole provisions in the redemption of senior unsecured notes.

For the year ended December 31, 2020, we realized a net loss on the extinguishment of debt of $27.7 million, related to make-whole provisions in the redemption of senior unsecured notes.

For the year ended December 31, 2021 there was no extinguishment of debt.

Net income increased $46.3 million to $99.8 million for the year ended December 31, 2021, compared to $53.5 million for the year ended December 31, 2020.

This increase was primarily the result of continued new investment activity, growth in operations and improved operating efficiencies.

This increase was primarily the result of additional gains recognized on the sale of assets in non-core markets of $29.6 million and a loss in 2020 on extinguishment of debt of $27.7 million.

NOI and Same-Property Cash NOI

NOI increased $18.1 million to $530.2 million for the year ended December 31, 2021, compared to the year ended December 31, 2020.

The increase was primarily due to $28.0 million of additional NOI from our 2019 and 2020 acquisitions for the year ended December 31, 2020.

The increase was primarily due to $19.1 million of additional NOI from our 2020 and 2021 acquisitions for the year ended December 31, 2021, partially offset by $4.2 million of reduced NOI from our 2020 and 2021 dispositions for the year ended December 31, 2021.

Same-Property Cash NOI increased $7.8 million, or 1.7%, to $460.8 million for the year ended December 31, 2021, compared to $453.0 million for the year ended December 31, 2020.

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We compute FFO in accordance with the current standards established by NAREIT.

NAREIT defines FFO as net income or loss attributable to common stockholders/unitholders (computed in accordance with GAAP), excluding gains or losses from sales of real estate property and impairment write-downs of depreciable assets, plus depreciation and amortization related to investments in real estate, and after adjustments for unconsolidated partnerships and joint ventures.

FFO is defined as net income or loss attributable to common stockholders/unitholders (computed in accordance with GAAP), excluding gains or losses from sales of real estate property and impairment write-downs of depreciable assets, plus depreciation and amortization related to investments in real estate, and after adjustments for unconsolidated partnerships and joint ventures.

Additionally, with respect to gains and losses on the sale of assets incidental to the main business of a REIT, the REIT has the option to include or exclude such gains and losses in the calculation of FFO.

Since FFO excludes depreciation and amortization unique to real estate, among other items, it provides a perspective not immediately apparent from net income or loss attributable to common stockholders/unitholders.

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(ii) gain or loss on extinguishment of debt;

(iii) noncontrolling income or loss from OP Units included in diluted shares (only applicable to the Company);

(iii) non-controlling income or loss from OP Units included in diluted shares (only applicable to the Company);

and (iv) other normalizing adjustments, which include items that are unusual and infrequent in nature.

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FFO and Normalized FFO should be reviewed in connection with other GAAP measurements.

In addition, the amounts included in the calculation of FFO and Normalized FFO are generally the same for HTALP and HTA, except for net income or loss attributable to common stockholders/unitholders, noncontrolling income or loss from OP Units included in diluted shares (only applicable to the Company) and the weighted average shares of our common stock or HTALP OP Units outstanding.

In addition, the amounts included in the calculation of FFO and Normalized FFO are generally the same for HTALP and HTA, except for net income or loss attributable to common stockholders/unitholders, non-controlling income or loss from OP Units included in diluted shares (only applicable to the Company) and the weighted average shares of our common stock or HTALP OP Units outstanding.

The following is the reconciliation of HTA’s FFO and Normalized FFO to net income attributable to common

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300,605 299,722

(Gain) loss on sale of real estate, net (9,590) 154

Gain on sale of real estate, net (39,228) (9,590)

Loss on sale of corporate asset, net 2,106 —

Proportionate share of joint venture depreciation and amortization

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Loss on extinguishment of debt, net — 27,726

Noncontrolling income from OP Units included in diluted shares

Non-controlling income from OP Units included in diluted shares 1,768 890

Other normalizing adjustments (1)

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224,215 221,666

(1) Other normalizing adjustments includes the following:

Non-recurring bad debt of $4,672 thousand, incremental hazard pay to facilities employees of $314 thousand, and incremental personal protective equipment of $45 thousand for the year ended December 31, 2020.

(1) For the year ended December 31, 2021, other normalizing adjustments includes the following:

costs related to whistleblower investigation of $1,645;

CEO search fees of $743;

costs related to strategic matters of $387;

and corresponding additional board and consulting fees of $509.

For the year ended December 31, 2020, other normalizing adjustments includes the following:

non-recurring bad debt of $4,672, incremental hazard pay to facilities employees of $314, and incremental personal protective equipment of $45.

The following is the reconciliation of HTALP’s FFO and Normalized FFO to net income attributable to common unitholders for the years ended December 31, 2021 and 2020, respectively (in thousands, except per unit data):

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300,605 299,722

(Gain) loss on sale of real estate, net (9,590) 154

Gain on sale of real estate, net (39,228) (9,590)

Loss on sale of corporate asset, net 2,106 —

Proportionate share of joint venture depreciation and amortization

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Weighted average diluted common OP units outstanding 224,215 221,666

(1) Other normalizing adjustments includes the following:

(1) For the year ended December 31, 2021, other normalizing adjustments includes the following:

costs related to whistleblower investigation of $1,645;

CEO search fees of $743;

costs related to strategic matters of $387;

and corresponding additional board and consulting fees of $509.

For the year ended December 31, 2020, other normalizing adjustments includes the following:

non-recurring bad debt of $4,672, incremental hazard pay to facilities employees of $314, and incremental personal protective equipment of $45.

NOI, Cash NOI and Same-Property Cash NOI

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(v) interest expense;

(vi) gain or loss on sales of real estate;

(vi) gain or loss on sales of real estate and corporate assets;

(vii) gain or loss on extinguishment of debt;

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92,762 94,613

(Gain) loss on sale of real estate, net (9,590) 154

Gain on sale of real estate, net (39,228) (9,590)

Loss on sale of corporate asset, net 2,106 —

Loss on extinguishment of debt, net — 27,726

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Amortization of (below) and above market leases/leasehold interests, net and other GAAP adjustments (1,899) (2,722)

(2,722) (3,347)

Notes receivable interest income (2,730) (161)

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$ 460,792 $ 452,972

(1) The presentation includes certain adjustments to allow for the consistent treatment of items impacted by Topic 842-Leases.

(2) Other normalizing adjustments includes the following:

(1) For the year ended December 31, 2020, other normalizing adjustments includes the following:

Non-recurring bad debt of $4,672, incremental hazard pay to facilities employees of $314, and incremental personal protective equipment of $45.

(2) Same-Property includes 414 buildings for the years ended December 31, 2021 and 2020.

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Investments and maturing indebtedness may require funds from the issuance of debt and/or equity securities or proceeds from sales of real estate.

As of December 31, 2020, we had liquidity of $1.4 billion, including $1.0 billion available under our unsecured revolving credit facility, $277.5 million of forward equity agreements, and $115.4 million of cash and cash equivalents.

As of December 31, 2021, we had liquidity of $1.1 billion, including $1.0 billion available under our unsecured revolving credit facility and $52.4 million of cash and cash equivalents.

In addition, we had unencumbered assets with a gross book value of $7.9 billion.

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The capital plan for each investment will be adjusted through ongoing, regular reviews of our portfolio or as necessary to respond to unanticipated additional capital needs.

As of December 31, 2020, we estimate that our expenditures for capital improvements for 2021 will range from $85 million to $95 million depending on leasing activity.

As of December 31, 2021, we estimate that our expenditures for capital improvements including lease commissions for 2022 will range from $115 million to $135 million depending on leasing activity.

In addition, we have approximately $110 million inclusive of costs to complete on active development projects and incremental tenant improvements as part of our recently completed development projects.

Although we cannot provide assurance that we will not exceed these estimated expenditure levels, our liquidity of $1.1 billion allows us the flexibility to fund such capital expenditures.

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Net cash provided by operating activities 385,616 387,962 340,394 (2,346) 47,568

Net cash (used in) provided by investing activities (319,260) (667,289) 176,309 348,029 (843,598)

Net cash provided by (used in) financing activities 12,447 230,981 (498,735) (218,534) 729,716

Net cash used in investing activities (399,855) (319,260) (667,289) (80,595) 348,029

Net cash (used in) provided by financing activities (47,457) 12,447 230,981 (59,904) (218,534)

Cash, cash equivalents and restricted cash - end of year $ 57,069 $ 118,765 $ 37,616 $ (61,696) $ 81,149

Net cash provided by operating activities increased in 2020 primarily due to the impact of our 2020 and 2019 acquisitions, contractual rent increases and improved operating efficiencies.

We anticipate cash flows from operating activities to increase as a result of the above items and continued leasing activity in our existing portfolio.

For the year ended December 31, 2020, net cash used in investing activities primarily related to the investment in real estate of $185.3 million, capital expenditures of $74.7 million and development costs of $77.1 million, partially offset by proceeds from the sale of real estate of $22.9 million.

Net cash provided by operating activities in 2021 was flat compared to 2020 as most of our 2021investments were in the last half of 2021 and a 13 property portfolio was disposed of in the first half of 2021.

We do anticipate cash flows from operating activities to increase from the impact of those later investments, contractual increases and continued leasing activity in our existing portfolio.

For the year ended December 31, 2021, net cash used in investing activities primarily related to the investment in real estate of $264.3 million, capital expenditures of $97.2 million, advances on real estate notes receivable of $82.2 million and development costs of $63.3 million, partially offset by proceeds from the sale of real estate of $87.6 million and collection of real estate notes receivable of $15.4 million.

For the year ended December 31, 2020, net cash used in investing activities primarily related to investments in real estate of $185.3 million, capital expenditures of $74.7 million and development costs of $77.1 million, partially offset by proceeds from the sale of real estate of $22.9 million.

For the year ended December 31, 2018, net cash provided by investing activities primarily related to proceeds from the sale of real estate of $305.1 million, which was partially offset by capital expenditures of $77.9 million and development of costs of $34.3 million.

For the year ended December 31, 2020, net cash provided by financing activities primarily related to the proceeds from unsecured senior notes of $793.6 million and net proceeds of shares of common stock issued of $50.0 million, offset by payments on our unsecured senior notes of $300.0 million, dividends paid to holders of our common stock of $275.8 million, payments on our secured mortgage loans of $114.1 million, net payments under our revolving credit facility of $100.0 million, and the repurchase and cancellation of common stock of $5.2 million.

For the year ended December 31, 2019, net cash provided financing activities primarily related to the proceeds from unsecured senior notes of $906.9 million, net proceeds of shares of common stock issued of $323.4 million, and net borrowings under our revolving credit facility of $100.0 million which was partially offset by payments on our unsecured senior notes of $700.0 million, dividends paid to holders of our common stock of $256.1 million, payments on our secured mortgage loans of $97.4 million, and repurchase and cancellation of our common stock of $12.2 million.

For the year ended December 31, 2018, net cash used in financing activities primarily related to dividends paid to holders of our common stock of $252.7 million, payments on our secured mortgage loans of $241.0 million, and the repurchases of our common stock of $70.3 million, which was partially offset by net proceeds of shares of common stock issued of $72.8 million.

For the year ended December 31, 2019, net cash used in investing activities primarily related to investments in real estate of $553.3 million, capital expenditures of $91.5 million and development costs of $28.1 million, partially offset by proceeds from the sale of real estate of $4.9 million.

For the year ended December 31, 2021, net cash used in financing activities primarily related to dividends paid to holders of our common stock of $281.8 million, deferred financing costs of $8.1 million, and distributions paid to non-controlling interest of limited partners of $5.4 million, partially offset by net proceeds of shares of common stock issued of $251.3 million.

For the year ended December 31, 2020, net cash provided by financing activities primarily related to the proceeds from unsecured senior notes of $793.6 million and net proceeds of shares of common stock issued of $50.0 million, offset by payments on our unsecured senior notes of $300.0 million, dividends paid to holders of our common stock of $275.8 million, payments on our secured mortgage loans of $114.1 million, net payments under our revolving credit facility of $100.0 million and the repurchase and cancellation of our common stock of $5.2 million.

For the year ended December 31, 2019, net cash provided by financing activities primarily related to the proceeds from unsecured notes of $906.9 million, net proceeds of shares of common stock issued of $323.4 million, and net borrowings under our revolving credit facility of $100.0 million which was partially offset by payments on our unsecured notes of $700.0 million, dividends paid to holders of our common stock of $256.1 million, payments on our secured mortgage loans of $97.4 million, and the repurchase and cancellation of our common stock of $12.2 million.

The amount of dividends we pay to our stockholders is determined by our Board of Directors, in their sole discretion, and is dependent on a number of factors, including funds available, our financial condition, capital expenditure requirements and annual dividend distribution requirements needed to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended.

We have paid monthly or quarterly dividends since February 2007, and if our investments produce sufficient cash flow, we expect to continue to pay dividends to our stockholders.

Because our cash available for dividend distributions in any

year may be less than 90% of our taxable income for the year, we may obtain the necessary funds through borrowings, issuing new securities or selling assets to pay out enough of our taxable income to satisfy our dividend distribution requirement.

Because our cash available for dividend distributions in any year may be less than 90% of our taxable income for the year, we may obtain the necessary funds through borrowings, issuing new securities or selling assets to pay out enough of our taxable income to satisfy our dividend distribution requirement.

Our organizational documents do not establish a limit on dividends that may constitute a return of capital for federal income tax purposes.

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Unsecured Revolving Credit Facility

As of December 31, 2020, the full $1.0 billion was available on our $1.0 billion unsecured revolving credit facility.

Our unsecured revolving credit facility matures in June 2022.

As of December 31, 2021, the full $1.0 billion was available on our unsecured revolving credit facility.

Our unsecured revolving credit facility matures in October 2025.

Unsecured Term Loans

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As of December 31, 2021, we had $2.55 billion of unsecured senior notes outstanding, comprised of $600.0 million of senior notes maturing in 2026, $500.0 million of senior notes maturing in 2027, $650.0 million of senior notes maturing in 2030, and $800.0 million of senior notes maturing in 2031.

Fixed Rate Mortgages

During the year ended December 31, 2020, we made payments on our fixed rate mortgages of $114.1 million and as of December 31, 2020, we had no fixed rate mortgages outstanding.

Commitments and Contingencies

21 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis