What changed in this filing

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Item 1. Financial Statements

2022-08-09 compared with 2022-05-09 · 654 added, 764 removed, 82 unchanged (95% of the section changed)

Financial Statements (Unaudited)

HEALTHCARE TRUST OF AMERICA, INC.

Financial Statements

Healthcare Realty Trust Incorporated

Condensed Consolidated Balance Sheets

(In thousands, except for share and per share data)

March 31, 2022 December 31, 2021

Real estate investments:

Amounts in thousands, except per share data

JUNE 30, 2022

DECEMBER 31, 2021

Real estate properties

Land $ 456,306 $ 387,918

Building and improvements 6,744,865 6,688,516

Lease intangibles 393,756 404,714

Buildings, improvements and lease intangibles 4,673,026 4,458,119

Personal property 11,799 11,761

Investment in financing receivable, net 118,446 186,745

Financing lease right-of-use assets 71,632 31,576

Construction in progress 16,728 3,974

7,798,488 7,766,297

Accumulated depreciation and amortization ( 1,650,257 ) ( 1,598,468 )

Real estate investments, net

6,148,231 6,167,829

Assets held for sale, net — 27,070

Investment in unconsolidated joint venture 62,454 62,834

Land held for development 22,952 24,849

Total real estate properties 5,370,889 5,104,942

Less accumulated depreciation and amortization ( 1,402,509 ) ( 1,338,743 )

Total real estate properties, net 3,968,380 3,766,199

Cash and cash equivalents 34,312 13,175

Restricted cash 4,478 4,716

Receivables and other assets, net 350,781 334,941

Right-of-use assets - operating leases, net 228,009 229,226

Other intangibles, net 10,011 10,720

Assets held for sale, net — 57

Operating lease right-of-use assets 126,204 128,386

Investments in unconsolidated joint ventures 210,781 161,942

Other assets, net 209,200 189,160

Total assets $ 4,548,877 $ 4,258,919

LIABILITIES AND EQUITY

Debt $ 3,053,884 $ 3,028,122

LIABILITIES AND STOCKHOLDERS' EQUITY

Notes and bonds payable $ 2,063,755 $ 1,801,325

Accounts payable and accrued liabilities 84,210 86,108

Liabilities of assets held for sale — 294

Derivative financial instruments - interest rate swaps — 5,069

Security deposits, prepaid rent and other liabilities 78,771 86,225

Lease liabilities - operating leases 196,226 196,286

Intangible liabilities, net 30,001 31,331

Operating lease liabilities 94,748 96,138

Financing lease liabilities 62,195 22,551

Other liabilities 66,102 67,387

Total liabilities 2,371,010 2,073,803

Commitments and contingencies

Preferred stock, $ 0.01 par value;

Stockholders' equity

Preferred stock, $ .01 par value per share;

50,000 shares authorized;

none issued and outstanding

Class A common stock, $ 0.01 par value;

Common stock, $ .01 par value per share;

300,000 shares authorized;

229,076,322 and 228,879,846 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

151,637 and 150,457 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 4,002,526 3,972,917

Accumulated other comprehensive income (loss) 1,727 ( 7,041 )

Cumulative dividends in excess of earnings ( 1,971,904 ) ( 1,915,776 )

Accumulated other comprehensive loss ( 1,250 ) ( 9,981 )

Cumulative net income attributable to common stockholders 1,314,515 1,266,158

Cumulative dividends ( 3,139,440 ) ( 3,045,483 )

Total stockholders' equity 2,177,867 2,185,116

Non-controlling interests 83,674 86,712

Total equity 3,296,367 3,344,316

Total liabilities and equity $ 6,814,908 $ 6,889,689

The accompanying notes are an integral part of these condensed consolidated financial statements.

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per share data)

Three Months Ended March 31,

Total liabilities and stockholders' equity $ 4,548,877 $ 4,258,919

The accompanying notes, together with the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, are an integral part of these financial statements.

Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Income

For the Three and Six Months Ended June 30, 2022 and 2021

Amounts in thousands, except per share data

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

2022 2021 2022 2021

Rental income $ 140,632 $ 128,486 $ 279,121 $ 256,874

Interest and other operating income

Total revenues 202,002 191,493

Rental 65,884 59,579

Interest from financing receivable, net 1,957 510 3,887 510

Other operating 2,738 2,427 5,213 4,378

145,327 131,423 288,221 261,762

Property operating 57,010 51,509 114,474 103,724

General and administrative 10,540 8,545 21,576 17,044

Acquisition and pursuit costs 1,352 670 2,655 1,414

Merger-related costs 7,085 — 13,201 —

Transaction 144 96

Depreciation and amortization 55,731 49,826 109,772 99,905

Interest expense

131,718 110,550 261,678 222,087

Total expenses 183,820 169,495

Loss on sale of real estate, net ( 4 ) —

Income from unconsolidated joint venture 400 392

Other income 88 3

Net income $ 18,666 $ 22,393

Net income attributable to non-controlling interests

Other income (expense)

Gain on sales of real estate properties 8,496 20,970 53,280 39,860

Interest expense ( 15,543 ) ( 13,261 ) ( 29,204 ) ( 26,523 )

Loss on extinguishment of debt — — ( 1,429 ) —

Impairment of real estate properties — ( 5,078 ) 25 ( 5,912 )

Equity loss from unconsolidated joint ventures ( 307 ) ( 146 ) ( 652 ) ( 220 )

Interest and other (expense) income, net ( 125 ) ( 262 ) ( 206 ) 238

( 7,479 ) 2,223 21,814 7,443

Net income attributable to common stockholders $ 18,315 $ 22,030

Earnings per common share - basic:

Net income attributable to common stockholders $ 0.08 $ 0.10

Earnings per common share - diluted:

Net income attributable to common stockholders $ 0.08 $ 0.10

Weighted average common shares outstanding:

Basic 228,978 218,753

Diluted 233,046 222,268

The accompanying notes are an integral part of these condensed consolidated financial statements.

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

Three Months Ended March 31,

Net income $ 6,130 $ 23,096 $ 48,357 $ 47,118

Other comprehensive income

Change in unrealized gains on cash flow hedges 8,817 2,792

Total other comprehensive income 8,817 2,792

Total comprehensive income 27,483 25,185

Comprehensive income attributable to non-controlling interests ( 400 ) ( 407 )

Total comprehensive income attributable to common stockholders $ 27,083 $ 24,778

The accompanying notes are an integral part of these condensed consolidated financial statements.

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

Class A Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Cumulative Dividends in Excess of Earnings Total Stockholders’ Equity Non-controlling Interests Total Equity

Shares Amount

Balance as of December 31, 2020 218,578 $ 2,186 $ 4,916,784 $ ( 16,979 ) $ ( 1,727,752 ) $ 3,174,239 $ 60,680 $ 3,234,919

Share-based award transactions, net

354 3 3,334 — — 3,337 — 3,337

Repurchase and cancellation of common stock

Basic earnings per common share $ 0.04 $ 0.16 $ 0.32 $ 0.33

Diluted earnings per common share $ 0.04 $ 0.16 $ 0.32 $ 0.33

Weighted average common shares

outstanding - basic

149,676 141,917 149,321 140,354

Redemption of non-controlling interest and other 11 — 255 — — 255 ( 255 ) —

Dividends declared ($ 0.320 per common share)

Weighted average common shares

outstanding - diluted

149,739 142,049 149,397 140,468

Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Comprehensive Income

For the Three and Six Months Ended June 30, 2022 and 2021

Amounts in thousands

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

2022 2021 2022 2021

Net income $ 6,130 $ 23,096 $ 48,357 $ 47,118

Other comprehensive income

Balance as of March 31, 2021 218,824 2,188 $ 4,917,126 $ ( 14,231 ) $ ( 1,775,745 ) $ 3,129,338 $ 59,649 $ 3,188,987

Shares Amount

Balance as of December 31, 2021 228,880 $ 2,289 $ 5,178,132 $ ( 7,041 ) $ ( 1,915,776 ) $ 3,257,604 $ 86,712 $ 3,344,316

Issuance of common stock, net — — — — — — — —

Share-based award transactions, net

154 1 2,023 — — 2,024 — 2,024

Repurchase and cancellation of common stock

( 50 ) — ( 1,640 ) — — ( 1,640 ) — ( 1,640 )

Redemption of non-controlling interest and other 92 1 2,064 — — 2,065 ( 2,065 ) —

Dividends declared ($ 0.325 ) per common share)

— — — — ( 74,443 ) ( 74,443 ) ( 1,373 ) ( 75,816 )

Interest rate swaps

Reclassification adjustments for losses included in net income (interest expense) 823 1,114 1,909 2,209

Gains (losses) arising during the period on interest rate swaps 1,663 ( 807 ) 6,822 2,043

2,486 307 8,731 4,252

Other comprehensive income — — — 8,768 — 8,768 49 8,817

Balance as of March 31, 2022 229,076 $ 2,291 $ 5,180,579 $ 1,727 $ ( 1,971,904 ) $ 3,212,693 $ 83,674 $ 3,296,367

The accompanying notes are an integral part of these condensed consolidated financial statements.

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Three Months Ended March 31,

Cash flows from operating activities:

Comprehensive income $ 8,616 $ 23,403 $ 57,088 $ 51,370

Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Equity

For the Three Months Ended June 30, 2022 and 2021

Amounts in thousands, except per share data

Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Cumulative

Net Income Cumulative

Dividends Total

Stockholders’

Balance at March 31, 2022 $ 1,516 $ 3,999,060 $ ( 3,736 ) $ 1,308,385 $ ( 3,092,343 ) $ 2,212,882

Issuance of common stock, net of issuance costs — 110 — — — 110

Share-based compensation — 3,356 — — — 3,356

Net income — — — 6,130 — 6,130

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

71,009 71,671

Share-based compensation expense 2,025 3,337

Income from unconsolidated joint venture ( 400 ) ( 392 )

Distributions from unconsolidated joint venture 785 785

Loss on sale of real estate, net 4 —

Changes in operating assets and liabilities:

Receivables and other assets, net ( 3,229 ) 2,275

Accounts payable and accrued liabilities ( 34,131 ) ( 27,613 )

Security deposits, prepaid rent and other liabilities ( 5,421 ) ( 7,103 )

Net cash provided by operating activities 49,308 65,353

Cash flows from investing activities:

Investments in real estate ( 19,094 ) ( 30,472 )

Development of real estate ( 10,372 ) ( 17,096 )

Proceeds from the sale of real estate 26,791 —

Capital expenditures ( 28,560 ) ( 28,931 )

Collection of real estate notes receivable — 200

Loan origination fees 325 —

Advances on real estate notes receivable ( 2,270 ) —

Net cash used in investing activities ( 33,180 ) ( 76,299 )

Cash flows from financing activities:

Borrowings on unsecured revolving credit facility 75,000 15,000

Payments on unsecured revolving credit facility ( 50,000 ) ( 15,000 )

Deferred financing costs ( 5,355 ) —

Repurchase and cancellation of common stock ( 1,641 ) ( 3,248 )

Dividends paid ( 74,377 ) ( 70,000 )

Distributions paid to non-controlling interest of limited partners ( 1,402 ) ( 1,485 )

Net cash used in financing activities ( 57,775 ) ( 74,733 )

Net change in cash, cash equivalents and restricted cash ( 41,647 ) ( 85,679 )

Cash, cash equivalents and restricted cash - beginning of period 57,069 118,765

Cash, cash equivalents and restricted cash - end of period $ 15,422 $ 33,086

The accompanying notes are an integral part of these condensed consolidated financial statements.

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

March 31, 2022 December 31, 2021

Real estate investments:

Land $ 644,194 $ 640,382

Building and improvements 6,744,865 6,688,516

Lease intangibles 393,756 404,714

Construction in progress 15,673 32,685

7,798,488 7,766,297

Accumulated depreciation and amortization ( 1,650,257 ) ( 1,598,468 )

Real estate investments, net

Reclassification adjustments for losses included in net income (interest expense)

— — 823 — — 823

Assets held for sale, net — 27,070

Investment in unconsolidated joint venture 62,454 62,834

Cash and cash equivalents 10,944 52,353

Restricted cash 4,478 4,716

Receivables and other assets, net 350,781 334,941

Right-of-use assets - operating leases, net 228,009 229,226

Other intangibles, net 10,011 10,720

Total assets $ 6,814,908 $ 6,889,689

LIABILITIES AND PARTNERS’ CAPITAL

Debt $ 3,053,884 $ 3,028,122

Accounts payable and accrued liabilities 159,659 198,078

Liabilities of assets held for sale — 262

Derivative financial instruments - interest rate swaps — 5,069

Security deposits, prepaid rent and other liabilities 78,771 86,225

Lease liabilities - operating leases 196,226 196,286

Intangible liabilities, net 30,001 31,331

Total liabilities 3,518,541 3,545,373

Commitments and contingencies

Partners’ Capital:

Limited partners’ capital, 4,050,493 and 4,142,408 OP Units issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Gains arising during the period on

interest rate swaps

— — 1,663 — — 1,663

General partners’ capital, 229,076,322 and 228,879,846 OP Units issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

Dividends to common stockholders

($ 0.31 per share)

— — — — ( 47,097 ) ( 47,097 )

Total partners’ capital 3,296,367 3,344,316

Total liabilities and partners’ capital $ 6,814,908 $ 6,889,689

The accompanying notes are an integral part of these condensed consolidated financial statements.

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per unit data)

Three Months Ended March 31,

Rental income $ 200,243 $ 191,350

Interest and other operating income

Total revenues 202,002 191,493

Rental 65,884 59,579

General and administrative 12,448 10,560

Merger-related costs 6,018 —

Transaction 144 96

Depreciation and amortization 75,386 76,274

Interest expense 23,940 22,986

Total expenses 183,820 169,495

Loss on sale of real estate, net ( 4 ) —

Income from unconsolidated joint venture 400 392

Other income 88 3

Net income $ 18,666 $ 22,393

Net income attributable to non-controlling interests — —

Net income attributable to common unitholders $ 18,666 $ 22,393

Earnings per common OP Unit - basic:

Net income attributable to common unitholders $ 0.08 $ 0.10

Earnings per common OP Unit - diluted:

Net income attributable to common unitholders $ 0.08 $ 0.10

Weighted average common OP Units outstanding:

Basic 233,046 222,268

Diluted 233,046 222,268

The accompanying notes are an integral part of these condensed consolidated financial statements.

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

Three Months Ended March 31,

Balance at June 30, 2022 $ 1,516 $ 4,002,526 $ ( 1,250 ) $ 1,314,515 $ ( 3,139,440 ) $ 2,177,867

Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Cumulative

Net Income Cumulative

Dividends Total

Stockholders’

Balance at March 31, 2021 $ 1,417 $ 3,699,867 $ ( 13,887 ) $ 1,223,521 $ ( 2,912,809 ) $ 1,998,109

Issuance of common stock, net of issuance costs 38 116,153 — — — 116,191

Common stock redemptions — ( 55 ) — — — ( 55 )

Share-based compensation — 2,627 — — — 2,627

Net income — — — 23,096 — 23,096

Other comprehensive income

Change in unrealized gains on cash flow hedges 8,817 2,792

Total other comprehensive income 8,817 2,792

Total comprehensive income 27,483 25,185

Comprehensive income attributable to non-controlling interests — —

Total comprehensive income attributable to common unitholders $ 27,483 $ 25,185

The accompanying notes are an integral part of these condensed consolidated financial statements.

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS ’ CAPITAL

(In thousands)

General Partners’ Capital Limited Partners’ Capital Total Partners’ Capital

Units Amount Units Amount

Balance as of December 31, 2020 218,578 $ 3,174,509 3,520 $ 60,410 $ 3,234,919

Share-based award transactions, net

354 3,337 — — 3,337

Redemption and cancellation of general partner OP Units

Reclassification adjustments for losses included in net income (interest expense)

— — 1,114 — — 1,114

Redemption of limited partner OP Units and other

Losses arising during the period on interest rate swaps

— — ( 807 ) — — ( 807 )

Distributions declared ($ 0.320 per common OP Unit)

Dividends to common stockholders ($ 0.3025 per share)

— — — — ( 44,021 ) ( 44,021 )

Balance at June 30, 2021 $ 1,455 $ 3,818,592 $ ( 13,580 ) $ 1,246,617 $ ( 2,956,830 ) $ 2,096,254

Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Equity

For the Six Months Ended June 30, 2022 and 2021

Amounts in thousands, except per share data

Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Cumulative

Net Income Cumulative

Dividends Total

Stockholders’

Balance at December 31, 2021 $ 1,505 $ 3,972,917 $ ( 9,981 ) $ 1,266,158 $ ( 3,045,483 ) $ 2,185,116

Issuance of common stock, net of issuance costs 7 22,764 — — — 22,771

Common stock redemptions — ( 206 ) — — — ( 206 )

Share-based compensation 4 7,051 — — — 7,055

Net Income — — — 48,357 — 48,357

Other comprehensive income — 2,748 — 44 2,792

Balance as of March 31, 2021 218,824 $ 3,129,608 3,509 $ 59,379 $ 3,188,987

General Partners’ Capital Limited Partners’ Capital Total Partners’ Capital

Units Amount Units Amount

Balance as of December 31, 2021 228,880 $ 3,257,874 4,142 $ 86,442 $ 3,344,316

Share-based award transactions, net

Reclassification adjustments for losses included in net income (interest expense)

— — 1,909 — — 1,909

Redemption and cancellation of general partner OP Units

Gains arising during the period on

interest rate swaps — — 6,822 — — 6,822

Dividends to common stockholders

($ 0.62 per share)

— — — — ( 93,957 ) ( 93,957 )

Redemption of limited partner OP Units and other

Balance at June 30, 2022 $ 1,516 $ 4,002,526 $ ( 1,250 ) $ 1,314,515 $ ( 3,139,440 ) $ 2,177,867

Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Cumulative

Net Income Cumulative

Dividends Total

Stockholders’

Balance at December 31, 2020 $ 1,395 $ 3,635,341 $ ( 17,832 ) $ 1,199,499 $ ( 2,870,027 ) $ 1,948,376

Issuance of common stock, net of issuance costs 59 179,216 — — — 179,275

Common stock redemptions ( 1 ) ( 1,610 ) — — — ( 1,611 )

Share-based compensation 2 5,645 — — — 5,647

Net income — — — 47,118 — 47,118

Reclassification adjustments for losses included in net income (interest expense)

— — 2,209 — — 2,209

Distributions declared ($ 0.325 per common OP Unit)

Gains arising during the period on interest rate swaps

— — 2,043 — — 2,043

Dividends to common stockholders ($ 0.6050 per share)

— — — — ( 86,803 ) ( 86,803 )

Other comprehensive income — 8,768 — 49 8,817

Balance as of March 31, 2022 229,076 $ 3,212,963 4,050 $ 83,404 $ 3,296,367

The accompanying notes are an integral part of these condensed consolidated financial statements.

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

Balance at June 30, 2021 $ 1,455 $ 3,818,592 $ ( 13,580 ) $ 1,246,617 $ ( 2,956,830 ) $ 2,096,254

Healthcare Realty Trust Incorporated

Condensed Consolidated Statements of Cash Flows

(In thousands)

Three Months Ended March 31,

Cash flows from operating activities:

For the Six Months Ended June 30, 2022 and 2021

Amounts in thousands

OPERATING ACTIVITIES

SIX MONTHS ENDED

Net income $ 48,357 $ 47,118

1 unchanged sentence

Depreciation and amortization 109,772 99,905

71,009 71,671

Share-based compensation expense 2,025 3,337

Income from unconsolidated joint venture ( 400 ) ( 392 )

Distributions from unconsolidated joint venture 785 785

Loss on sale of real estate, net 4 —

Other amortization 2,680 1,728

Share-based compensation 7,055 5,647

Amortization of straight-line rent receivable (lessor) ( 3,292 ) ( 3,024 )

Amortization of straight-line rent on operating leases (lessee) 756 735

Gain on sales of real estate properties ( 53,280 ) ( 39,860 )

Loss on extinguishment of debt 1,429 —

Impairment of real estate properties ( 25 ) 5,912

Equity loss from unconsolidated joint ventures 652 220

Distributions from unconsolidated joint ventures 108 —

Non-cash interest from financing receivable ( 388 ) —

Changes in operating assets and liabilities:

Receivables and other assets, net ( 3,229 ) 2,275

Other assets, including right-of-use-assets 540 ( 4,746 )

Accounts payable and accrued liabilities ( 3,166 ) ( 10,418 )

Security deposits, prepaid rent and other liabilities ( 5,421 ) ( 7,103 )

Other liabilities 2,923 2,412

Net cash provided by operating activities 114,121 105,629

Cash flows from investing activities:

Investments in real estate ( 19,094 ) ( 30,472 )

INVESTING ACTIVITIES

Acquisitions of real estate ( 287,004 ) ( 100,121 )

Development of real estate ( 7,475 ) ( 1,415 )

Proceeds from the sale of real estate 26,791 —

Capital expenditures ( 28,560 ) ( 28,931 )

Collection of real estate notes receivable — 200

Loan origination fees 325 —

Advances on real estate notes receivable ( 2,270 ) —

Additional long-lived assets ( 45,631 ) ( 41,839 )

Investments in unconsolidated joint ventures ( 49,599 ) ( 45,018 )

Investment in financing receivable 498 ( 104,648 )

Proceeds from sales of real estate properties 108,044 90,144

Net cash used in investing activities ( 281,167 ) ( 202,897 )

Cash flows from financing activities:

Borrowings on unsecured revolving credit facility 75,000 15,000

Payments on unsecured revolving credit facility ( 50,000 ) ( 15,000 )

Deferred financing costs ( 5,355 ) —

Repurchase and cancellation of general partner units ( 1,641 ) ( 3,248 )

Distributions paid to general partner ( 74,377 ) ( 70,000 )

Distributions paid to limited partners and redeemable non-controlling interests ( 1,402 ) ( 1,485 )

Net cash used in financing activities ( 57,775 ) ( 74,733 )

Net change in cash, cash equivalents and restricted cash ( 41,647 ) ( 85,679 )

Cash, cash equivalents and restricted cash - beginning of period 57,069 118,765

Cash, cash equivalents and restricted cash - end of period $ 15,422 $ 33,086

The accompanying notes are an integral part of these condensed consolidated financial statements.

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unless otherwise indicated or unless the context requires otherwise the use of the words “we,” “us,” or “our” refers to Healthcare Trust of America, Inc.

and Healthcare Trust of America Holdings, LP, collectively.

Organization and Description of Business

HTA, a Maryland corporation, and HTALP, a Delaware limited partnership, were incorporated or formed, as applicable, on April 20, 2006.

HTA operates as a REIT and is the general partner of HTALP, which is the operating partnership, in an umbrella partnership, or “UPREIT” structure.

HTA has qualified and intends to continue to be taxed as a REIT for federal income tax purposes under the applicable sections of the Internal Revenue Code.

We own real estate primarily consisting of medical office buildings (“MOBs”) located on or adjacent to hospital campuses or in off-campus, community core outpatient locations across 32 states within the United States, and we lease space to tenants primarily consisting of health systems, research and academic institutions, and various sized physician practices.

Through our full-service operating platform, we provide leasing, asset management, acquisitions, development and other related services for our properties.

Our primary objective is to maximize stockholder value with growth through strategic investments that provide an attractive risk-adjusted return for our stockholders by consistently increasing our cash flow.

In pursuing this objective, we:

(i) seek internal growth through proactive asset management, leasing, building services and property management oversight;

(ii) target accretive acquisitions and developments of MOBs in markets with attractive demographics that complement our existing portfolio;

and (iii) actively manage our balance sheet to maintain flexibility with conservative leverage.

Additionally, from time to time we consider, on an opportunistic basis, significant portfolio acquisitions that we believe fit our core business and we expect to enhance our existing portfolio.

Merger with Healthcare Realty Trust Incorporated

On February 28, 2022, Healthcare Trust of America, Inc.

(the “Company”), a Maryland corporation, Healthcare Trust of America Holdings, LP, a Delaware limited partnership (the “Company OP”) of which the Company is the sole general partner, HR Acquisition 2, LLC, a Maryland limited liability company and a direct, wholly owned subsidiary of the Company (“Merger Sub”), and Healthcare Realty Trust Incorporated, a Maryland corporation (“HR”), entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”).

Upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into HR, with HR surviving the merger (the “Merger”).

Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the effective time, each outstanding share of Common Stock, $ 0.01 par value per share, of HR (“HR Common Stock”) will be converted into the right to receive 1.0 (the “Exchange Ratio”) share of Class A Common Stock, $ 0.01 par value per share, of the Company (“Company Common Stock” and, such consideration, the “Merger Consideration”).

Subject to the closing of the Merger and the other transactions contemplated therein, the holders of shares of Company Common Stock issued and outstanding on the last business day prior to the closing date of the Merger will receive a special distribution in the amount of $ 4.82 in cash per share of Company Common Stock held on such date (the “Special Distribution Payment”).

Once the conditions to close the Merger have been satisfied or waived, the Merger Agreement requires HR and the Company to exchange irrevocable certifications that all such closing conditions have been satisfied or waived.

At such time, the Company OP will transfer or cause the transfer, on the business day before the effective time, to HR or its designees certain of the Company OP’s assets as specified by HR for a cash purchase price equal to the reasonably equivalent fair market value of the assets transferred.

To the extent the net proceeds to the Company of the asset transfer or joint venture transactions relating to such assets are insufficient to pay the full amount of the Special Distribution Payment, the Merger Agreement requires the Company to utilize new financing to fund the balance of the Special Distribution Payment.

The Company has obtained a commitment letter from JPMorgan Chase Bank, N.A.

for a $ 1.7 billion bridge financing facility.

HTA and HR have received letters of intent from, and are in advanced negotiations with, three institutional investors for a combination of joint ventures and asset sales totaling $ 1.7 billion at a weighted average cap rate of approximately 4.8 %.

Net proceeds from these transactions are expected to be approximately $ 1.6 billion.

The transactions may occur in separate tranches, with the initial transactions targeted to close prior to the vote on the contemplated Merger by HR and HTA stockholders and the remainder to be completed on or around the closing date of the contemplated Merger.

These transactions are subject to execution of definitive documentation and customary closing conditions.

In addition, HTA and HR have secured initial commitments for amended and restated credit facilities, including the following:

(i) a $ 1.5 billion revolving credit facility;

(ii) $ 1.5 billion of term loans, including $ 650 million of new capacity;

and (iii) a $ 1.1 billion asset sale term loan to replace the transaction bridge loan commitment and to backstop the $ 1.1 billion special dividend to HTA stockholders, if needed, depending on the timing of asset sales and joint ventures.

Additionally, on May 2, 2022, HTA and HR filed a Form S-4 Registration Statement with the SEC in connection with the contemplated Merger.

Please review this Form S-4 for more information about the contemplated Merger.

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The Merger Agreement contains customary representations, warranties and covenants by each party.

The Merger is subject to certain conditions which are set forth in the Merger Agreement, including the approval of both companies’ stockholders.

The boards of directors of the Company and HR have unanimously approved the Merger Agreement.

The Merger is expected to close during the third quarter of 2022.

COVID-19 Pandemic

On March 11, 2020 the novel coronavirus disease (“COVID-19”) was declared a pandemic by the World Health Organization.

As the virus continued to spread throughout the United States and other countries across the world, Federal, state and local governments took various actions including the issuance of “stay-at-home” orders, social distancing guidelines and ordering the temporary closure of non-essential businesses to limit the spread of COVID-19.

While many businesses have reopened and vaccinations are becoming more widely available to the general population, the economic uncertainty created by the COVID-19 pandemic continue to present risks to the Company and the future results of our operations.

Although we did not experience significant disruptions from the COVID-19 pandemic during the three months ended March 31, 2022, should current and planned measures, including further development and delivery of vaccines and other measures intended to reduce or eliminate the spread of COVID-19, past and/or proposed economic stimulus, and other laws, acts and orders proposed or enacted by these various governmental agencies ultimately not be successful or limited in their efficacy, our business and the broader real estate industry may experience significant adverse consequences.

These consequences include loss of revenues, increased expenses, increased costs of materials, difficulty in maintaining an active workforce, and constraints on our ability to secure capital or financing, among other factors.

FINANCING ACTIVITIES

Net borrowings on unsecured credit facility 280,500 13,000

Repayments of notes and bonds payable ( 18,224 ) ( 1,925 )

Redemption of notes and bonds payable ( 2,184 ) —

Dividends paid ( 93,774 ) ( 86,803 )

Net proceeds from issuance of common stock 22,768 179,381

Common stock redemptions ( 852 ) ( 2,014 )

Debt issuance and assumption costs — ( 252 )

Payments made on finance leases ( 51 ) ( 683 )

Net cash provided by financing activities 188,183 100,704

Increase in cash and cash equivalents 21,137 3,436

Cash and cash equivalents at beginning of period 13,175 15,303

Cash and cash equivalents at end of period $ 34,312 $ 18,739

Supplemental Cash Flow Information

Interest paid $ 26,641 $ 24,659

Invoices accrued for construction, tenant improvements and other capitalized costs $ 18,874 $ 19,506

Capitalized interest $ 145 $ 154

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Summary of Significant Accounting Policies

The summary of significant accounting policies presented below is designed to assist in understanding our condensed consolidated financial statements.

Such condensed consolidated financial statements and the accompanying notes are the representations of our management, who are responsible for their integrity and objectivity.

These accounting policies conform to generally accepted accounting principles in the U.S.

(“GAAP”) in all material respects and have been consistently applied in preparing our accompanying condensed consolidated financial statements.

Business Overview

Healthcare Realty Trust Incorporated 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.

References to the Company in these Notes to the Condensed Consolidated Financial Statements are to Legacy HR as the "accounting acquiror" in the Merger defined and described in more detail in Note 9 to these Condensed Consolidated Financial Statements.

As of June 30, 2022, the Company had gross investments of approximately $ 5.4 billion in 255 real estate properties, construction in progress, redevelopments, financing receivables, financing lease right-of-use assets, land held for development and corporate property.

The Company's 255 real estate properties are located in 23 states and total approximately 17.2 million square feet.

The Company provided leasing and property management services to approximately 15.4 million square feet nationwide.

The Company owns 50 % of an unconsolidated joint venture with Teachers Insurance and Annuity Association (the "TIAA Joint Venture") and earns certain fees as the managing member.

As of June 30, 2022, the TIAA Joint Venture owned 21 real estate properties.

See Note 2 for more details regarding the Company's unconsolidated joint ventures.

Any references to square footage or occupancy percentage, and any amounts derived from these values in these notes to the Company's Condensed Consolidated Financial Statements, are outside the scope of our independent registered public accounting firm’s review.

Basis of Presentation

Our accompanying condensed consolidated financial statements include our accounts and those of our subsidiaries and any consolidated variable interest entities (“VIEs”).

All inter-company balances and transactions have been eliminated in the accompanying condensed consolidated financial statements.

Interim Unaudited Financial Data

Our accompanying condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the SEC.

Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations.

Accordingly, our accompanying condensed consolidated financial statements (i) do not include all information and footnotes required by GAAP for complete financial statements, and (ii) reflect all adjustments, which are, in our opinion, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods.

Interim results of operations are not necessarily indicative of the results to be expected for the full year;

such results may be less favorable for the full year.

Our accompanying condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our 2021 Annual Report on Form 10-K.

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 Company's Annual Report on Form 10-K for the year ended December 31, 2021.

All material intercompany transactions and balances have been eliminated in consolidation.

This interim financial information should be read in conjunction with the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

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, 2022 for many reasons including, but not limited to, the Merger (as discussed in more detail in Note 9 below), acquisitions, dispositions, capital financing transactions, changes in interest rates and the effects of other trends, risks and uncertainties.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of our subsidiaries and consolidated joint venture arrangements.

The portions of the HTALP operating partnership not owned by us are presented as non-controlling interests on the accompanying condensed consolidated balance sheets and statements of operations, condensed consolidated statements of comprehensive income, and condensed consolidated statements of equity and changes in partners’ capital.

Holders of OP Units are considered to be non-controlling interest holders in HTALP and their ownership interests are reflected as equity on the accompanying condensed consolidated balance sheets.

Further, a portion of the earnings and losses of HTALP are allocated to non-controlling interest holders based on their respective ownership percentages.

Upon conversion of OP Units to common stock, any difference between the fair value of the common stock issued and the carrying value of the OP Units converted to common stock is recorded as a component of equity.

As of both March 31, 2022 and December 31, 2021, there were approximately 4.1 million of OP Units issued and outstanding held by non-controlling interest holders.

VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following:

(i) the power to direct the activities that most significantly impact the entity’s economic performance;

(ii) the obligation to absorb the expected losses of the entity;

and (iii) the right to receive the expected returns of the entity.

We consolidate our investment in VIEs when we determine that we are the primary beneficiary.

A primary beneficiary is one that has both:

(i) the power to direct the activities

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

of the VIE that most significantly impacts the entity’s economic performance;

and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity.

The HTALP operating partnership and our other joint venture arrangements are VIEs because the limited partners in those partnerships, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights.

Additionally, we determined that we are the primary beneficiary of our VIEs.

Accordingly, we consolidate our interests in the HTALP operating partnership and in our other joint venture arrangements.

However, because we hold what is deemed a majority voting interest in the HTALP operating partnership and our other joint venture arrangements, it qualifies for the exemption from providing certain disclosure requirements associated with investments in VIEs.

Use of Estimates

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that effect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent asset and liabilities.

These estimates are made and evaluated on an ongoing basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances.

Actual results could differ from those estimates, perhaps in adverse ways, and those estimates could be different under different assumptions or conditions.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of all highly liquid investments with a maturity of three months or less when purchased.

Restricted cash is typically comprised of:

(i) reserve accounts for property taxes, insurance, capital and tenant improvements;

(ii) collateral accounts for debt and interest rate swaps;

(iii) 1031 exchange funds;

and (iv) deposits for future investments.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying condensed consolidated balance sheets to the combined amounts shown on the accompanying condensed consolidated statements of cash flows (in thousands):

Cash and cash equivalents $ 10,944 $ 29,990

Restricted cash 4,478 3,096

Total cash, cash equivalents and restricted cash $ 15,422 $ 33,086

Revenue Recognition

Minimum annual rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays).

Differences between rental income recognized and amounts contractually due under the lease agreements are recorded as straight-line rent receivables.

Tenant reimbursements, which is comprised of additional amounts recoverable from tenants for real estate taxes, common area maintenance and other certain operating expenses are recognized as revenue on a gross basis in the period in which the related recoverable expenses are incurred.

We accrue revenue corresponding to these expenses on a quarterly basis to adjust recorded amounts to our best estimate of the final annual amounts to be billed.

Subsequent to year-end, on a calendar year basis, we perform reconciliations on a lease-by-lease basis and bill or credit each tenant for any differences between the estimated expenses we billed and the actual expenses that were incurred.

We recognize lease termination fees when there is a signed termination letter agreement, all of the conditions of the agreement have been met, and the tenant is no longer occupying the property.

Rental income is reported net of amortization of inducements.

The revenue recognition process is based on a five-step model to account for revenue arising from contracts with customers as outlined in Topic 606.

We 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.

We have identified all of our revenue streams and we have concluded that rental income from leasing arrangements represents a substantial portion of our revenue and is governed and evaluated with the adoption of Topic 842.

Investments in Real Estate

Depreciation expense of buildings and improvements for the three months ended March 31, 2022 and 2021 was $ 62.3 million and $ 61.2 million, respectively.

As a lessor, we lease space in our MOBs primarily to medical enterprises for terms generally ranging from three to seven years in length.

The assets underlying these leases consist of buildings and associated land which are included as real estate investments on our accompanying condensed consolidated balance sheets.

All of our leases for which we are the lessor are classified as operating leases under Topic 842.

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AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Leases, for which we are the lessee, are classified as separate components on our accompanying condensed consolidated balance sheets.

Operating leases are included as right-of-use (“ROU”) assets - operating leases, net, with a corresponding lease liability.

Financing lease assets are included in receivables and other assets, net, with a corresponding lease liability in security deposits, prepaid rent and other liabilities.

A lease liability is recognized for our obligation related to the lease and an ROU asset represents our right to use the underlying asset over the lease term.

Refer to Note 7 - Leases in the accompanying notes to the condensed consolidated financial statements for more detail relating to our leases.

Real Estate Held for Sale

We consider properties held for sale once management commits to a plan to sell the property and has determined that the sale is probable and expected to occur within one year.

Upon classification as held for sale, we record the property at the lower of its carrying amount or fair value, less costs to sell, and cease depreciation and amortization.

The fair value is generally based on a discounted cash flow analysis, which involves management's best estimate of market participants' holding periods, market comparables, future occupancy levels, rental rates, capitalization rates, lease-up periods and capital requirements.

As of March 31, 2022, the Company had no properties classified as held for sale.

As of December 31, 2021, the Company had one property classified as held for sale.

Real Estate Notes Receivable

Real estate notes receivable consists of mezzanine and other real estate loans, which are generally collateralized by a pledge of the borrower’s ownership interest in the respective real estate owner and/or corporate guarantees .

Real estate notes receivable are intended to be held-to-maturity and are recorded at amortized cost, net of unamortized loan origination costs and fees and allowance for credit losses.

As of March 31, 2022, real estate notes receivable, net totaled $ 72.7 million.

During the three months ended March 31, 2022, we recognized interest income of $ 1.6 million related to real estate note receivable.

The following table summarizes real estate notes receivable as of March 31, 2022 (in thousands):

Stated Interest Rate Maximum Loan Commitment Outstanding Loan Amount

Origination Date Maturity Date March 31, 2022

Mezzanine Loans - Texas (1)

The Company’s Condensed Consolidated Financial Statements include, as of June 30, 2022, the accounts of the Company, its wholly owned subsidiaries, and joint ventures and partnerships where the Company controls the operating activities.

GAAP requires us to identify entities for which control is achieved through means other than voting rights and to determine which business enterprise is the primary beneficiary of variable interest entities (“VIEs”).

Accounting Standards Codification 810 broadly defines a VIE as an entity in which either (i) the equity investors as a group, if any, lack the power through voting or similar rights to direct the activities of such entity that most significantly impact such entity’s economic performance or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support.

The Company identifies the primary beneficiary of a VIE as the enterprise that has both of the following characteristics:

(i) the power to direct the activities of the VIE that most significantly impact the entity’s economic performance;

and (ii) the obligation to absorb losses or receive benefits of the VIE that could potentially be significant to the entity.

The Company consolidates its investment in a VIE when it determines that it is the VIE’s primary beneficiary.

The Company may change its original assessment of a VIE upon subsequent events such as the modification of contractual arrangements that affect the characteristics or adequacy of the entity’s equity investments at risk and the disposition of all or a portion of an interest held by the primary beneficiary.

The Company performs this analysis on an ongoing basis.

For property holding entities not determined to be VIEs, the Company consolidates such entities in which it owns 100 % of the equity or has a controlling financial interest evidenced by ownership of a majority voting interest.

All intercompany balances and transactions are eliminated in consolidation.

For any entity in which the Company owns

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

less than 100 % of the equity interest, the Company consolidates the entity if it has the direct or indirect ability to control the entities’ activities based upon the terms of the respective entities’ ownership agreements.

As of June 30, 2022, the Company's unconsolidated joint venture arrangements were accounted for using the equity method of accounting as the Company exercised significant influence over but did not control these entities.

See Note 2 for more details regarding the Company's unconsolidated joint ventures.

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.

Investments in Leases - Financing Receivables, Net

In accordance with Accounting Standards Codification ("ASC") 842, for transactions in which the Company enters into a contract to acquire an asset and leases it back to the seller (i.e., a sale leaseback transaction), control of the asset is not considered to have transferred when the seller-lessee has a purchase option.

As a result, the Company does not recognize the underlying real estate asset but instead recognizes a financial asset in accordance with ASC 310 “Receivables”.

During the first quarter of 2022, the Company reclassified the two medical office buildings in Nashville, Tennessee that were acquired in separate sale-leaseback transactions in the fourth quarter of 2021.

The leases with the sellers commenced in the first quarter, which resulted in the allocation of the financing receivable totaling $ 73.9 million to land and building and improvements.

Income from Lease Financing Receivables

The Company recognizes the related income from the financing receivable based on an imputed interest rate over the terms of the applicable lease.

As a result, the interest recognized from the financing receivable will not equal the cash payments from the lease agreement.

Acquisition costs incurred in connection with entering into the financing receivable are treated as loan origination fees.

These costs are classified with the financing receivable and are included in the balance of the net investment.

Amortization of these amounts will be recognized as a reduction to Income from financing receivable, net over the life of the lease.

Revenue from Contracts with Customers (Topic 606)

The Company recognizes certain revenue under the core principle of Topic 606.

This topic 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, management fee income and other miscellaneous income.

Below is a detail of the amounts by category:

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

in thousands 2022 2021 2022 2021

Type of Revenue

Parking income $ 1,919 $ 1,880 $ 3,672 $ 3,538

Management fee income 1

783 419 1,438 658

Mezzanine Loan - North Carolina 12/22/2021 12/22/2024 8 % 6,000 6,000

Mortgage Loan - Texas 6/30/2021 7/1/2022 10 % 15,000 15,000

Accrued interest receivable 159

Unamortized fees and costs ( 762 )

Unearned revenue ( 358 )

(1) Interest on these mezzanine loans is accrued and funded utilizing interest reserves, which is included in the maximum loan commitment, and such accrued interest is added to the note receivable balance.

Pursuant to Topic 326 - Financial Instruments - Credit Losses, we adopted a policy to evaluate current expected credit losses at the inception of loans qualifying for treatment under Topic 326.

We utilize a probability of default method approach for estimating current expected credit losses and have determined that the current risk of credit loss is remote.

Accordingly, we have recorded no reserve for credit loss as of March 31, 2022.

Unconsolidated Joint Ventures

We account for our investments in unconsolidated joint ventures using the equity method of accounting because we have the ability to exercise significant influence, but not control, over the financial and operational policy decisions of the investments.

Using the equity method of accounting, the initial investment is recognized at cost and subsequently adjusted for our share of the net income and any distributions from the joint venture.

As of March 31, 2022 and December 31, 2021, we had a 50 % interest in one such investment with a carrying value and maximum exposure to risk of $ 62.5 million and $ 62.8 million, respectively, which is recorded in investment in unconsolidated joint venture on the accompanying condensed consolidated balance sheets.

We record our share of net income in income from unconsolidated joint venture on the accompanying condensed consolidated statements of operations.

For each of the three months ended March 31, 2022 and 2021, we recognized income of $ 0.4 million.

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Recently Issued or Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

ASU 2021-05, Leases (Topic 842):

Lessors - Certain Leases with Variable Lease Payments

In July 2021, the FASB issued ASU 2021-05, which amends the lease classification requirements for lessors when classifying and accounting for a lease with variable lease payments that do not depend on a reference index or a rate.

The update provides criteria, that if met, the lease would be classified and accounted for as an operating lease.

The update is effective for reporting periods beginning after December 15, 2021, with early adoption permitted.

We adopted ASU 2021-05 effective as of January 1, 2022.

The adoption of this standard did not have a material impact on our financial statements.

Recently Issued Accounting Pronouncements

ASU 2021-01, Reference Rate Reform (Topic 848)

In January 2021, the FASB issued ASU 2021-01, which amends the scope of ASU 2020-04.

The amendments of ASU 2021-01 clarify that certain optional expedients and exceptions to Topic 848 for contract modification and hedge accounting apply to derivatives that are affected by the discounting transition.

For information related to the Company's current cash flow hedges, refer to Note 9 - Derivative Financial Instruments and Hedging Activities.

The amendments are elective and effective immediately for contract modifications made through December 31, 2022.

The Company is evaluating how the transition away from LIBOR will effect the Company and if the guidance with respect to this standard will be adopted, however, if adopted, we do not expect that this ASU will have a material impact on our financial statements.

Investments in Real Estate

For the three months ended March 31, 2022, our investments had an aggregate purchase price of $ 19.1 million.

As part of these investments, we incurred approximately $ 0.1 million of capitalized costs.

The allocations for these investments, in which we own a controlling financial interest, are set forth below in the aggregate for the three months ended March 31, 2022 and 2021, respectively (in thousands):

Three Months Ended March 31,

Land $ 3,812 $ 1,093

Building and improvements 13,189 26,819

In place leases 2,121 3,449

Below market leases ( 28 ) ( 79 )

Above market leases — 66

ROU assets — ( 876 )

Net real estate assets acquired 19,094 30,472

Other, net — 2,397

Aggregate purchase price $ 19,094 $ 32,869

The acquired intangible assets and liabilities referenced above had weighted average lives of the following terms for the three months ended March 31, 2022 and 2021, respectively (in years):

Three Months Ended March 31,

Acquired intangible assets 4.4 6.4

Acquired intangible liabilities 4.3 5.7

Dispositions and Impairment

During the three months ended March 31, 2022, we closed the sale of a tenant purchase option on one of our MOBs located in Georgia for a gross sales price of $ 26.8 million, resulting in a net loss to us of approximately $ 4 thousand.

During the three months ended March 31, 2021, we had no dispositions.

During the three months ended March 31, 2022, and 2021, we recorded no impairment charges.

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Intangible Assets and Liabilities

Intangible assets and liabilities consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands, except with respect to the weighted average remaining amortization terms):

March 31, 2022 December 31, 2021

Balance Weighted Average Remaining

Amortization in Years Balance Weighted Average Remaining

Amortization in Years

In place leases

Miscellaneous 36 128 103 182

$ 2,738 $ 2,427 $ 5,213 $ 4,378

Tenant relationships

1 Includes the recovery of certain expenses under the financing receivable as outlined in the management agreement.

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.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

New Accounting Pronouncements

Accounting Standards Update No.

On March 12, 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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.

Management continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

Real Estate Investments

2022 Company Acquisitions

The following table details the Company's acquisitions for the six months ended June 30, 2022:

Dollars in thousands DATE ACQUIRED PURCHASE PRICE CASH

CONSIDERATION 1

SQUARE FOOTAGE

Dallas, TX 2/11/22 $ 8,175 $ 8,185 $ 8,202 $ ( 17 ) 18,000

San Francisco, CA 4

3/7/22 114,000 112,986 108,687 4,299 166,396

Above market leases

Atlanta, GA 4/7/22 6,912 7,054 7,178 ( 124 ) 21,535

Denver, CO 4/13/22 6,320 5,254 5,269 ( 15 ) 12,207

Colorado Springs, CO 5

4/13/22 13,680 13,686 13,701 ( 15 ) 25,800

Seattle, WA 4/28/22 8,350 8,334 8,370 ( 36 ) 13,256

Houston, TX 4/28/22 36,250 36,299 36,816 ( 517 ) 76,781

Los Angeles, CA 4/29/22 35,000 35,242 25,400 9,842 34,282

Oklahoma City, OK 4/29/22 11,100 11,259 11,334 ( 75 ) 34,944

Raleigh, NC 4

5/31/22 27,500 26,710 27,127 ( 417 ) 85,113

Accumulated amortization ( 211,034 ) ( 213,801 )

Total $ 203,546 9.3 $ 212,450 9.3

Below market leases $ 54,040 14.5 $ 55,073 14.3

Accumulated amortization ( 24,039 ) ( 23,742 )

Total $ 30,001 14.5 $ 31,331 14.3

The following is a summary of the net intangible amortization for the three months ended March 31, 2022 and 2021, respectively (in thousands):

Three Months Ended March 31,

Amortization recorded against rental income related to above and (below) market leases

6/9/22 18,650 18,619 18,212 407 55,788

Amortization expense related to in place leases and tenant relationships

Total real estate acquisitions $ 285,937 $ 283,628 $ 270,296 $ 13,332 544,102

1 Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition.

2 Excludes financing right of use assets.

3 Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition.

4 Includes three properties.

5 Includes two properties.

Subsequent to June 30, 2022 and unrelated to the Merger, the Company acquired the following property:

Dollars in thousands DATE ACQUIRED PURCHASE PRICE SQUARE FOOTAGE

Seattle, WA 8/1/22 $ 4,850 10,593

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

2022 TIAA Joint Venture Acquisitions

The TIAA Joint Venture is not consolidated for purposes of the Company's Condensed Consolidated Financial Statements.

The following table details the TIAA Joint Venture acquisitions for the six months ended June 30, 2022:

Dollars in thousands DATE ACQUIRED PURCHASE PRICE CASH

CONSIDERATION 1

ESTATE OTHER 2

SQUARE FOOTAGE COMPANY OWNERSHIP %

San Francisco, CA 3

3/7/22 $ 67,175 $ 66,789 $ 65,179 $ 1,610 110,865 50 %

Receivables and Other Assets

Receivables and other assets consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):

March 31, 2022 December 31, 2021

Tenant receivables, net

Los Angeles, CA 4

3/7/22 33,800 32,384 32,390 ( 6 ) 103,259 50 %

Other receivables, net

Deferred financing costs, net

Deferred leasing costs, net

Total real estate acquisitions $ 100,975 $ 99,173 $ 97,569 $ 1,604 214,124

1 Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition.

2 Includes other assets acquired, liabilities assumed, and intangibles recognized at acquisition.

3 Includes three properties.

4 Includes two properties.

Unconsolidated Joint Ventures

The Company's investment in and loss recognized for the three and six months ended June 30, 2022 and 2021 related to its joint ventures accounted for under the equity method are shown in the table below:

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

Dollars in thousands 2022 2021 2022 2021

Investments in unconsolidated joint ventures, beginning of period 1

$ 211,195 $ 83,943 $ 161,942 $ 73,137

Straight-line rent receivables, net 146,378 142,604

Prepaid expenses, deposits, equipment and other, net 42,734 38,301

Derivative financial instruments - interest rate swaps 3,692 —

Real estate notes receivable, net 72,701 69,114

Finance ROU asset, net 16,196 16,284

Total $ 350,781 $ 334,941

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AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The following is a summary of the amortization of deferred leasing costs and financing costs for the three months ended March 31, 2022 and 2021, respectively (in thousands):

Three Months Ended March 31,

Amortization expense related to deferred leasing costs

New investments during the period — 34,138 49,599 45,018

Equity loss recognized during the period 1

( 307 ) ( 146 ) ( 652 ) ( 220 )

Interest expense related to deferred financing costs 1,353 431

For the three months ended March 31, 2022, we added one new office lease that commences in April 2022.

Lessee - Maturity of Lease Liabilities

The following table summarizes the future minimum lease obligations of our operating and finance leases as of March 31, 2022 (in thousands):

Year Operating Leases Finance Leases

Owner Distributions ( 107 ) — ( 108 ) —

Investments in unconsolidated joint ventures, end of period 1

$ 210,781 $ 117,935 $ 210,781 $ 117,935

1 In addition to the TIAA Joint Venture, the Company also has a 55 % and 27 % ownership interest, respectively, in two limited liability companies that each own a parking garage in Atlanta, Georgia.

2022 Real Estate Asset Dispositions

The following table details the Company's dispositions for the six months ended June 30, 2022:

Dollars in millions DATE DISPOSED SALE PRICE CLOSING ADJUSTMENTS NET PROCEEDS NET REAL ESTATE INVESTMENT OTHER (INCLUDING RECEIVABLES) 1

GAIN/(IMPAIRMENT) SQUARE FOOTAGE

Loveland, CO 2

2/24/22 $ 84,950 $ ( 45 ) $ 84,905 $ 40,095 $ 4 $ 44,806 150,291

San Antonio, TX 2

4/15/22 25,500 ( 2,272 ) 23,228 14,381 284 8,563 201,523

Total dispositions $ 110,450 $ ( 2,317 ) $ 108,133 $ 54,476 $ 288 $ 53,369 351,814

1 Includes straight-line rent receivables, leasing commissions and lease inducements.

2 Includes two properties.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Assets Held for Sale

The Company did not have any properties classified as assets held for sale as of June 30, 2022 and December 31, 2021.

The table below reflects the assets and liabilities of the properties classified as held for sale as of June 30, 2022 and December 31, 2021:

Dollars in thousands June 30, 2022 December 31, 2021

Other assets, net $ — $ 57

Assets held for sale, net $ — $ 57

Accounts payable and accrued liabilities $ — $ 169

Other liabilities — 125

Liabilities of assets held for sale $ — $ 294

Lessor Accounting

The Company’s properties generally were leased pursuant to non-cancelable, fixed-term operating leases with expiration dates through 2040.

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 the consumer price index ("CPI").

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, 2022 was $ 140.6 million and $ 279.1 million, respectively.

On March 30, 2022, the Company executed a lease as a ground lessor for a 1.9 acre parcel of land in Texas previously recorded in land held for development.

The lease is classified as a sales-type lease under Topic 842 as the present value of lease payments equals or exceeds substantially all of the fair value of the underlying asset.

The land value of $ 1.8 million was reclassified from Land held for development to Other assets.

Future lease payments under the non-cancelable operating leases, excluding any reimbursements and the sale-type lease, as of June 30, 2022 were as follows:

Dollars in thousands OPERATING

2022 $ 214,083

2027 and thereafter 566,038

Lessee Accounting

As of June 30, 2022, the Company was obligated, as the lessee, under operating lease agreements consisting primarily of the Company’s ground leases.

As of June 30, 2022, the Company had 108 properties totaling 8.9 million square feet that were held under ground leases.

Some of the ground lease 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 CPI.

The Company had 41 prepaid ground leases as of June 30, 2022.

The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $ 0.1

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

million and $ 0.2 million of the Company’s rental expense for the three months ended June 30, 2022 and 2021, respectively, and $ 0.3 million for the six months ended June 30, 2022 and 2021, respectively.

The Company’s future lease payments (primarily for its 67 non-prepaid ground leases) as of June 30, 2022 were as follows:

Dollars in thousands OPERATING FINANCING

2022 $ 2,118 $ 735

2023 5,071 1,654

Thereafter 590,018 36,856

2024 5,130 1,692

2025 5,174 1,723

2026 5,201 1,749

2027 and thereafter 306,956 368,730

Total undiscounted lease payments 329,650 376,283

Interest ( 452,598 ) ( 23,665 )

Present value of lease liabilities $ 196,226 $ 16,908

Lessor - Lease Revenues and Maturity of Future Minimum Rents

For the three months ended March 31, 2022 and 2021, we recognized $ 199.3 million and $ 190.4 million, respectively, of rental and other lease-related income related to our operating leases, of which $ 48.1 million and $ 45.1 million, respectively, were variable lease payments.

The following table summarizes the future minimum rent contractually due under operating leases, excluding tenant reimbursements of certain costs, as of March 31, 2022 (in thousands):

Discount ( 234,902 ) ( 314,088 )

Lease liabilities $ 94,748 $ 62,195

The following table provides details of the Company's total lease expense for the three and six months ended June 30, 2022 and 2021:

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

Dollars in thousands 2022 2021 2022 2021

Operating lease cost

Operating lease expense $ 1,194 $ 1,182 $ 2,409 $ 2,360

Variable lease expense 1,038 972 2,062 1,868

Finance lease cost

Amortization of right-of-use assets 331 88 503 176

Interest on lease liabilities 765 247 1,052 493

Total lease expense $ 3,328 $ 2,489 $ 6,026 $ 4,897

Other information

Operating cash flows outflows related to operating leases $ 1,799 $ 2,587 $ 4,596 $ 4,431

Operating cash flows outflows related to financing leases $ 509 $ — $ 767 $ —

Financing cash flows outflows related to financing leases $ — $ 321 $ 51 $ 683

Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ — $ 40,589 $ —

Weighted-average remaining lease term (excluding renewal options) - operating leases 47.4 48.1

Weighted-average remaining lease term (excluding renewal options) - finance leases 61.7 64.5

Weighted-average discount rate - operating leases 5.6 % 5.7 %

Weighted-average discount rate - finance leases 5.0 % 5.4 %

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Notes and Bonds Payable

The table below details the Company’s notes and bonds payable as of June 30, 2022 and 2021.

MATURITY DATES BALANCE AS OF EFFECTIVE INTEREST RATE

as of 6/30/2022

Dollars in thousands 6/30/2022 12/31/2021

$ 700 million Unsecured Credit Facility

5/23 $ 490,500 $ 210,000 2.69 %

Thereafter 1,044,334

Total $ 3,582,822

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Debt consisted of the following as of March 31, 2022 and December 31, 2021, respectively (in thousands):

March 31, 2022 December 31, 2021

Unsecured revolving credit facility $ 25,000 $ —

Unsecured term loans 500,000 500,000

Unsecured senior notes 2,550,000 2,550,000

Fixed rate mortgages — —

$ 200 million Unsecured Term Loan due 2024, net of issuance costs 1

5/24 199,572 199,460 2.55 %

Deferred financing costs, net ( 17,199 ) ( 17,975 )

Discount, net ( 3,917 ) ( 3,903 )

Total $ 3,053,884 $ 3,028,122

Unsecured Credit Agreement

Unsecured Revolving Credit Facility due 2025

On October 6, 2021, we entered into a third amended and restated revolving credit and term loan agreement (the “Credit Agreement”), which includes an unsecured revolving credit facility in an aggregate maximum principal amount of $ 1.0 billion (the “Revolver”) and a term loan facility in an aggregate maximum principal amount of $ 300.0 million (the “Term Loan”).

The Credit Agreement extended the maturities of the unsecured revolving credit facility and the unsecured term loan to October 31, 2025.

The maximum principal amount of the Unsecured Credit Agreement may be increased by up to $ 750.0 million, subject to certain conditions, for a total principal amount of $ 2.05 billion.

Borrowings under the Revolver bear interest at a per annum rate equal to LIBOR plus a margin ranging from 0.725 % to 1.40 % based on our credit rating.

We are also required to pay a facility fee on the aggregate commitments under the Revolver at a per annum rate ranging from 0.125 % to 0.30 % based on our credit rating.

We incurred financing costs of $ 6.2 million in relation to the credit facility, which are being amortized through the maturity date.

As of March 31, 2022, we had $ 25.0 million outstanding under this unsecured revolving credit facility.

The margin associated with our borrowings was 0.85 % per annum and the facility fee was 0.20 % per annum.

Unsecured Term Loan due 2025

Under the Unsecured Credit Agreement as noted above, we have a $ 300.0 million unsecured term loan, guaranteed by HTA, with a maturity date of October 31, 2025.

Borrowings under this unsecured term loan bear interest at a per annum rate equal to LIBOR, plus a margin ranging from 0.80 % to 1.60 % per annum based on our credit rating.

The margin associated with our borrowings as of March 31, 2022 was 0.95 % per annum.

We incurred financing costs of $ 1.8 million in relation to the unsecured term loan, which are being amortized through the maturity date.

We have interest rate swaps hedging the floating interest rate, which resulted in a fixed rate of 2.37 % per annum, based on our current credit rating.

The current hedging arrangement matures on February 1, 2023.

As of March 31, 2022, we had $ 300.0 million under this unsecured term loan outstanding.

$ 200.0 Million Unsecured Term Loan due 2024

In 2018, HTALP entered into a modification of our $ 200.0 million unsecured term loan previously due in 2023.

The modification decreased pricing at our current credit rating by 65 basis points and extended the maturity date to January 15, 2024.

The other material terms of the unsecured term loan prior to the modification remained substantially unchanged.

Borrowings under the unsecured term loan accrue interest at a rate equal to LIBOR, plus a margin ranging from 0.75 % to 1.65 % per annum based on our credit rating.

The margin associated with our borrowings as of March 31, 2022 was 1.00 % per annum.

HTALP had interest rate swaps on the balance, which resulted in a fixed interest rate at 2.32 % per annum.

As of March 31, 2022, we had $ 200.0 million under this unsecured term loan outstanding.

$ 600.0 Million Unsecured Senior Notes due 2026

In September 2019, in connection with the $ 650.0 million unsecured senior notes due 2030 referenced below, HTALP issued $ 250.0 million as additional unsecured senior notes to the $ 350.0 million aggregate principal of senior notes issued on July 12, 2016, all of which are guaranteed by HTA.

These unsecured senior notes are registered under the Securities Act, and bear interest at 3.50 % per annum which is payable semi-annually.

Additionally, these unsecured senior notes were offered at 103.66 % and 99.72 %, respectively, of the principal amount thereof, with an effective yield to maturity of 2.89 % and 3.53 % per annum, respectively.

As of March 31, 2022, we had $ 600.0 million of these unsecured senior notes outstanding that mature on August 1, 2026.

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

$ 500.0 Million Unsecured Senior Notes due 2027

In 2017, HTALP issued $ 500.0 million of unsecured senior notes that are guaranteed by HTA.

These unsecured senior notes are registered under the Securities Act, and bear interest at 3.75 % per annum which is payable semi-annually.

Additionally, these unsecured senior notes were offered at 99.49 % of the principal amount thereof, with an effective yield to maturity of 3.81 % per annum.

As of March 31, 2022, we had $ 500.0 million of these unsecured senior notes outstanding that mature on July 1, 2027.

$ 650.0 million Unsecured Senior Notes due 2030

In September 2019, in connection with the $ 250.0 million additional unsecured senior notes due 2026 referenced above, HTALP issued $ 650.0 million of unsecured senior notes that are guaranteed by HTA.

These unsecured senior notes are registered under the Securities Act, and bear interest at 3.10 % per annum which is payable semi-annually.

Additionally, these unsecured senior notes were offered at 99.66 % of the principal amount thereof, with an effective yield to maturity of 3.14 % per annum.

Proceeds from the issuance of $ 900.0 million of these notes were used, in part, to redeem a total of $ 700.0 million of unsecured senior notes.

During the year ended December 31, 2019, the make-whole fees required per the terms of the indenture agreements upon our calling the notes totaling $ 18.3 million was recorded in loss on extinguishment of debt in the accompanying consolidated statements of operations.

As of March 31, 2022, HTALP had $ 650.0 million of these unsecured senior notes outstanding that mature on February 15, 2030.

$ 800.0 million Unsecured Senior Notes due 2031

In September 2020, HTALP issued $ 800.0 million of unsecured senior notes that are guaranteed by HTA.

These unsecured senior notes are registered under the Securities Act, and bear interest at 2.00 % per annum which is payable semi-annually.

Additionally, these unsecured senior notes were offered at 99.20 % of the principal amount thereof, with an effective yield to maturity of 2.09 % per annum.

We incurred financing costs of $ 6.8 million in relation to this transaction, which are being amortized through the maturity date.

Proceeds from the issuance of these unsecured notes were used, in part, to redeem $ 300.0 million of unsecured senior notes.

During the year ended December 31, 2020, the make-whole fee that was required per the terms of the indenture agreement upon our calling the notes of $ 24.7 million was recorded in loss on extinguishment of debt in the accompanying consolidated statements of operations.

As of March 31, 2022, we had $ 800.0 million of these unsecured senior notes outstanding that mature on March 15, 2031.

Future Debt Maturities

The following table summarizes the debt maturities and scheduled principal repayments of our indebtedness as of March 31, 2022 (in thousands):

Thereafter 1,950,000

Total $ 3,075,000

Deferred Financing Costs

As part of the $ 1.7 billion bridge financing commitment secured in connection with the pending Merger with HR as further described in Note 1 - Organization and Description of Business, we incurred commitment fees of approximately $ 5.4 million, which are being amortized through the commitment expiration date of September 2, 2022.

As of March 31, 2022, the future amortization of our deferred financing costs is as follows (in thousands):

Thereafter 4,597

Total $ 17,199

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Debt Covenants

We are required by the terms of our applicable loan agreements to meet various affirmative and negative covenants that we believe are customary for these types of facilities, such as limitations on the incurrence of debt by us and our subsidiaries that own unencumbered assets, limitations on the nature of HTALP’s business, and limitations on distributions by HTALP and its subsidiaries that own unencumbered assets.

Our loan agreements also impose various financial covenants on us, such as a maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a minimum tangible net worth covenant, a maximum ratio of unsecured indebtedness to unencumbered asset value, rent coverage ratios and a minimum ratio of unencumbered Net Operating Income to unsecured interest expense.

As of March 31, 2022, we believe that we were in compliance with all such financial covenants and reporting requirements.

In addition, certain of our loan agreements include events of default provisions that we believe are customary for these types of facilities, including restricting us from making dividend distributions to our stockholders in the event we are in default thereunder, except to the extent necessary for us to maintain our REIT status.

We have also concluded as of March 31, 2022, that we were not aware of non-compliance with any of our financial or non-financial covenants in light of the ongoing COVID-19 pandemic.

Derivative Financial Instruments and Hedging Activities

Risk Management Objective of Using Derivative Financial Instruments

We may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with our borrowings.

The principal objective of such arrangements is to minimize the risks and/or costs associated with our operating and financial structure as well as to hedge specific anticipated transactions.

We do not intend to utilize derivatives for speculative or other purposes other than interest rate risk management.

The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements.

To mitigate this risk, we only enter into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which we and our affiliates may also have other financial relationships.

We do not anticipate that any of the counterparties will fail to meet their obligations.

We record counterparty credit risk valuation adjustments on interest rate swap derivative assets in order to properly reflect the credit quality of the counterparty.

In addition, the fair value of derivative financial instruments designated as cash flow hedges are adjusted to reflect the impact of our credit quality.

$ 150 million Unsecured Term Loan due 2026, net of issuance costs 2

6/26 149,447 149,376 2.79 %

Senior Notes due 2025, net of discount and issuance costs 3

5/25 249,176 249,040 4.08 %

Senior Notes due 2028, net of discount and issuance costs 1/28 296,864 296,612 3.84 %

Senior Notes due 2030, net of discount and issuance costs 4

3/30 296,989 296,813 2.71 %

Senior Notes due 2031, net of discount and issuance costs 3/31 295,601 295,374 2.24 %

Mortgage notes payable, net of discounts and issuance costs and including premiums 8/23-12/26 85,606 104,650 3.97 %

$ 2,063,755 $ 1,801,325

1 The effective interest rate includes the impact of interest rate swaps on $ 75.0 million at a weighted average rate of 2.37 % (plus the applicable margin rate, currently 100 basis points).

2 The effective interest rate includes the impact of interest rate swaps on $ 100.0 million at a weighted average rate of 2.23 % (plus the applicable margin rate, currently 95 basis points).

3 The effective interest rate includes the impact of the $ 1.7 million settlement of forward-starting interest rate swaps that is included in Accumulated other comprehensive loss on the Company's Condensed Consolidated Balance Sheets.

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.

Changes in Debt Structure

Mortgage payoffs

On February 18, 2022, the Company repaid in full a mortgage note payable bearing interest at a rate of 4.70 % that encumbered a 56,762 square foot property in California.

The aggregate payoff price of $ 12.6 million consisted of outstanding principal of $ 11.0 million and a "make-whole" amount of approximately $ 1.6 million.

The unamortized premium of $ 0.8 million and the unamortized cost on this note of $ 0.1 million were written off upon payoff.

On February 24, 2022, the Company repaid in full a mortgage note payable bearing interest at a rate of 6.17 % that encumbered a 80,153 square foot property in Colorado, in conjunction with the disposition of the property.

The aggregate payoff price of $ 6.4 million consisted of outstanding principal of $ 5.8 million and a "make-whole" amount of approximately $ 0.6 million.

The unamortized premium of $ 0.1 million was written off upon payoff.

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

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements.

To accomplish this objective, we primarily use interest rate swaps and treasury locks as part of our interest rate risk management strategy.

Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for us making fixed rate payments over the life of the agreements without an exchange of the underlying notional amount.

A treasury lock is a synthetic forward sale of a U.S.

treasury note, which is settled in cash based upon the difference between an agreed upon treasury rate and the prevailing treasury rate at settlement.

Such treasury locks are entered into to effectively fix the treasury component of an upcoming debt issuance.

Amounts reported in accumulated other comprehensive income in the accompanying condensed consolidated balance sheets related to derivatives will be reclassified to interest expense as interest payments are made on our variable rate debt.

During the next twelve months, we estimate that an additional $ 1.2 million will be reclassified from other comprehensive income in the accompanying condensed consolidated balance sheets as an increase to interest related to derivative financial instruments in the accompanying condensed consolidated statements of operations.

As of March 31, 2022, we had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (in thousands, except number of instruments):

Interest Rate Swaps March 31, 2022

Number of instruments 7

Notional amount $ 500,000

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

The table below presents the fair value of our derivative financial instruments designated as cash flow hedges as well as the classification in the accompanying condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021, respectively (in thousands):

Asset Derivatives Liability Derivatives

Fair Value at:

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.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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.

As of June 30, 2022, the Company had eight outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

DERIVATIVE INSTRUMENT NUMBER OF INSTRUMENTS NOTIONAL AMOUNT

Interest rate swaps 8 $ 175.0

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, 2022.

BALANCE AT JUNE 30, 2022

In thousands BALANCE SHEET LOCATION FAIR VALUE

Derivatives designated as hedging instruments

Balance Sheet

Location March 31, 2022 December 31, 2021 Balance Sheet

Location March 31, 2022 December 31, 2021

Interest rate swaps Receivables and other assets $ 3,692 $ — Derivative financial instruments $ — $ 5,069

The table below presents the gain or loss recognized on our derivative financial instruments designated as cash flow hedges as well as the classification in the accompanying condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021, respectively (in thousands):

Three Months Ended March 31,

Effect of Derivative Instruments Location in Statement of Operations and Comprehensive Income (Loss) 2022 2021

Gain (loss) recognized in OCI Change in unrealized losses on cash flow hedges $ 7,218 $ 1,163

Gain (loss) reclassified from accumulated OCI into income Interest expense ( 1,599 ) ( 1,629 )

Interest rate swaps 2017, 2018, and 2019 Other assets $ 2,516

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, 2022 and 2021 related to the Company's outstanding interest rate swaps.

(GAIN) LOSS RECOGNIZED IN

AOCI ON DERIVATIVE

three months ended June 30, LOSS RECLASSIFIED FROM

AOCI INTO INCOME

three months ended June 30,

In thousands 2022 2021 2022 2021

Interest rate swaps $ ( 1,663 ) $ 807 Interest expense $ 674 $ 965

Settled treasury hedges — — Interest expense 107 107

Settled interest rate swaps — — Interest expense 42 42

$ ( 1,663 ) $ 807 Total interest expense $ 823 $ 1,114

GAIN RECOGNIZED IN

AOCI ON DERIVATIVE

six months ended June 30, LOSS RECLASSIFIED FROM

AOCI INTO INCOME

six months ended June 30,

In thousands 2022 2021 2022 2021

Interest rate swaps $ ( 6,822 ) $ ( 2,043 ) Interest expense $ 1,612 $ 1,912

Settled treasury hedges — — Interest expense 213 213

Settled interest rate swaps — — Interest expense 84 84

$ ( 6,822 ) $ ( 2,043 ) Total interest expense $ 1,909 $ 2,209

The Company estimates that $ 1.0 million related to active interest rate swaps will be reclassified from AOCI as a decrease to interest expense over the next 12 months, and that $ 0.6 million related to settled interest rate swaps will be amortized from AOCI as an increase to interest expense over the next 12 months.

Credit-risk-related Contingent Features

We have agreements with each of our derivative counterparties that contain a provision that if we default on any of our indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender, then we could also be declared in default on our derivative obligations.

We also have agreements with each of our derivative counterparties that incorporate provisions from our indebtedness with a lender affiliate of the derivative counterparty requiring it to maintain certain minimum financial covenant ratios on our indebtedness.

Failure to comply with the covenant provisions would result in us being in default on any derivative instrument obligations covered by these agreements.

As of March 31, 2022, the fair value of derivatives in a net asset position, including accrued interest, but excluding any adjustment for nonperformance risk related to these agreements, was $ 3.6 million.

As of March 31, 2022, we have not posted any collateral related to these agreements and we were not in breach of any of the provisions of these agreements.

If we had breached any of the provisions of these agreements, we could have been required to settle our obligations, if any, under these agreements.

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, 2022, the fair value of derivatives in a net asset position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $ 2.4 million.

As of June 30, 2022, the Company has not posted any collateral related to these agreements and was not in breach of any agreement.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Commitments and Contingencies

On May 6, 2022, a purported stockholder of the Company filed a lawsuit in the United States District Court for the Southern District of New York against us and seven of our current directors, captioned Shiva Stein v.

Healthcare Trust of America, Inc., et al., Case No.

1:22-cv-03703 (the “Complaint”).

The Complaint alleges that the preliminary proxy statement issued in connection with the Merger omits material information or contains misleading disclosures and that, as a result, (i) all of the defendants violated Section 14(a) of the Securities Exchange Act of 1934 (the Exchange Act) and (ii) our directors violated section 20(a) of the Exchange Act.

The Complaint seeks, among other things, (i) injunctive relief preventing the consummation of the transactions contemplated by the Merger Agreement;

(ii) rescission or rescissory damages to the extent the transactions contemplated by the Merger Agreement have been implemented;

(iii) dissemination of a proxy statement that does not omit material information or contain any misleading disclosures;

(iv) an accounting to plaintiff for all damages suffered as a result of the alleged wrongdoing;

and (v) an award of plaintiff’s expenses, including attorneys’ and experts’ fees.

We believe the claims asserted in the Complaint are without merit.

Additional lawsuits may be filed against us, our Board of Directors, and/or other parties to the Merger in connection with the transactions contemplated by the Merger Agreement.

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

In addition, we are, from time to time, also subject to claims and litigation arising in the ordinary course of business with respect to tenant litigation and threatened or asserted labor matters.

We do not believe liability from any reasonably foreseeable disposition of the aforementioned claims and litigation, individually or in the aggregate, would have a material effect on our consolidated financial position, results of operations or cash flows.

Environmental Matters

We routinely monitor our properties for the presence of hazardous or toxic substances.

While there can be no assurance that a material environmental liability does not exist at our properties, we are not currently aware of any environmental liability with respect to our properties that would have a material effect on our condensed consolidated financial position, results of operations or cash flows.

Further, we are not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability at our properties that we believe would require additional disclosure or the recording of a loss contingency.

Our other commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business.

In our opinion, these matters are not expected to have a material adverse effect on our condensed consolidated financial position, results of operations or cash flows.

Stockholders’ Equity and Partners’ Capital

HTALP’s operating partnership agreement provides that it will distribute cash flow from operations and net sale proceeds to its partners in accordance with their overall ownership interests at such times and in such amounts as the general partner thereof determines.

Dividend distributions are made such that a holder of one OP Unit in HTALP will receive distributions from HTALP in an amount equal to the dividend distributions paid to the holder of one share of our common stock.

In addition, for each share of common stock issued or redeemed by HTA, HTALP issues or redeems a corresponding number of OP Units.

Common Stock Offerings

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 March 31, 2022, $ 750.0 million remained available for issuance by us under our current ATM.

Stock Repurchase Plan

In September 2020, our Board of Directors approved the reactivation of 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 22, 2023.

As of March 31, 2022, the remaining amount of common stock available for repurchase under our stock repurchase plan was $ 300.0 million.

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

During the second quarter of 2022, the Company continued the redevelopment of a 217,114 square foot medical office building in Dallas, Texas.

As of June 30, 2022, the Company had funded approximately $ 10.2 million in project costs.

The building continues to operate with in-place leases during construction.

The first new tenant lease of the redevelopment commenced in the first quarter of 2022.

During the second quarter of 2022, the Company continued the redevelopment of a medical office building in Tacoma, Washington.

As of June 30, 2022, the Company had funded approximately $ 9.5 million in project costs.

The redevelopment includes interior and exterior improvements to the existing building, plus the addition of 23,000 square feet.

The Company expects the 23,000 square foot tenant lease for the expansion space to commence in the fourth quarter of 2022.

During the second quarter of 2022, the Company continued the development of a medical office building in Nashville, Tennessee.

The Company began construction of a 106,194 square foot medical office building with the initial tenant lease expected to commence in the third quarter of 2023.

As of June 30, 2022, the Company had funded approximately $ 7.4 million in project costs.

The redevelopment includes the demolition of an existing 81,000 square foot medical office building.

The Company recognized an impairment charge of $ 5.0 million related to the existing building in 2021.

During the second quarter of 2022, the Company continued redevelopment projects related to the following:

• Two medical office buildings totaling 158,338 square feet in Washington, DC.

The Company has approved a leasing plan with a capital outlay that is expected to be completed in the first quarter of 2024.

As of June 30, 2022, the Company has funded $ 0.1 million in project costs.

• A medical office building totaling 145,365 square feet in Dallas, Texas.

The Company has approved a capital and leasing plan that is expected to be completed in the first quarter of 2024.

As of June 30, 2022, the Company has funded $ 0.6 million in project costs.

• A medical office building totaling 93,992 square feet in Denver, Colorado that is expected to be a part of a larger redevelopment plan that was initiated in the first quarter of 2022.

Stockholders' Equity

The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the six months ended June 30, 2022 and the twelve months ended December 31, 2021:

SIX MONTHS ENDED JUNE 30, 2022 TWELVE MONTHS ENDED DECEMBER 31, 2021

Balance, beginning of period 150,457,433 139,487,375

Issuance of common stock 745,483 10,899,301

Non-vested share-based awards, net of withheld shares 434,001 70,757

Balance, end of period 151,636,917 150,457,433

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

At-The-Market Equity Offering Program

On August 6, 2021 and November 5, 2021, the Company entered into equity distribution agreements with 12 investment banks to allow for issuance and sale under its at-the-market equity offering program of up to an aggregate of $ 750.0 million of common stock.

These agreements are no longer in effect following the closing of the Merger on July 20, 2022.

The following table details the Company's forward at-the-market activity:

WEIGHTED AVERAGE SALE PRICE

per share FORWARD SHARE CONTRACTS SHARES SETTLED SHARES REMAINING TO BE SETTLED NET PROCEEDS

Balance at December 31, 2021

$ — — — 727,400 $ —

$ 31.73 — 727,400 — $ 22.3

$ — — — — $ —

Common Stock Dividends

See our accompanying condensed consolidated statements of equity and condensed statements of changes in partners’ capital for the dividends declared during the three months ended March 31, 2022 and 2021.

As of March 31, 2022, declared, but unpaid, dividends totaling $ 75.8 million were included in accounts payable and accrued liabilities.

On May 5, 2022, our Board of Directors announced a quarterly cash dividend of $ 0.325 per share of common stock and per OP Unit to be paid on July 15, 2022 to stockholders and unitholders of record on July 6, 2022.

Incentive Plan

Our Incentive Plan permits the grant of incentive awards to our employees, officers, non-employee directors and consultants as selected by our Board of Directors.

This Plan authorizes us to grant awards in any of the following forms:

stock appreciation rights;

restricted stock;

restricted or deferred stock units;

performance awards;

dividend equivalents;

other stock-based awards, including units in HTALP;

and cash-based awards.

Subject to adjustment as provided in the Plan, the aggregate number of awards reserved and available for issuance under the Plan is 10,000,000 shares.

As of March 31, 2022, there were 9,646,504 awards available for grant under the Plan.

Restricted Common Stock

We recognized compensation expense, equal to the fair market value of HTA’s stock on the grant date, over the service period which is generally three to four years .

For the three months ended March 31, 2022 and 2021 we recognized compensation expense of $ 2.0 million and $ 3.3 million, respectively.

Substantially all compensation expense was recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations.

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

As of March 31, 2022, we had $ 7.9 million of unrecognized compensation expense, net of estimated forfeitures, which we will recognize over a remaining weighted average period of 1.9 years.

The following is a summary of our restricted common stock activity as of March 31, 2022 and 2021, respectively:

March 31, 2022 March 31, 2021

Restricted Common Stock Weighted

Average Grant

Date Fair Value Restricted Common Stock Weighted

Average Grant

Date Fair Value

Beginning balance 529,862 $ 28.83 436,399 $ 28.27

During the six months ended June 30, 2022, the Company declared and paid common stock dividends totaling $ 0.62 per share.

On July 1, 2022, the Company declared a prorated quarterly common stock dividend in the amount of $ 0.2010 per share payable on July 19, 2022 to stockholders of record on July 14, 2022.

The remaining quarterly common stock dividend portion of $ 0.1090 per share was declared August 2, 2022 and is payable on August 30, 2022 to stockholders of record on August 15, 2022 .

Earnings Per Common Share

The Company uses the two-class method of computing net earnings per common shares.

The Company's non-vested share-based awards are considered participating securities pursuant to the two-class method.

During the three and six months ended June 30, 2022, the Company did not enter into any forward sale agreements to sell shares of common stock through the Company's at-the market equity offering program.

The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2022 and 2021.

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

Dollars in thousands, except per share data 2022 2021 2022 2021

Weighted average common shares outstanding

Weighted average common shares outstanding 151,620,897 143,700,491 151,230,064 142,142,577

Non-vested shares ( 1,945,042 ) ( 1,783,278 ) ( 1,908,652 ) ( 1,788,410 )

Weighted average common shares outstanding - basic 149,675,855 141,917,213 149,321,412 140,354,167

Dilutive effect of forward equity shares — 61,064 — 27,896

Dilutive effect of employee stock purchase plan 62,694 70,711 75,394 85,714

Weighted average common shares outstanding - diluted 149,738,549 142,048,988 149,396,806 140,467,777

Net Income $ 6,130 $ 23,096 $ 48,357 $ 47,118

Dividends paid on nonvested share-based awards ( 601 ) ( 539 ) ( 1,207 ) ( 1,080 )

Net income applicable to common stockholders $ 5,529 $ 22,557 $ 47,150 $ 46,038

Basic earnings per common share - net income $ 0.04 $ 0.16 $ 0.32 $ 0.33

Diluted earnings per common share - net income $ 0.04 $ 0.16 $ 0.32 $ 0.33

Incentive Plans

Restricted Common Shares

During the six months ended June 30, 2022, the Company made the following stock awards:

• During the first quarter of 2022, the Company granted non-vested stock awards to its named executive officers and other members of senior management and employees with a grant date fair value of

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

$ 13.0 million, which consisted of an aggregate of 415,184 non-vested shares with vesting periods ranging from three to eight years.

• During the second quarter of 2022, the Company granted non-vested stock awards to its eight directors with a grant date fair value of $ 0.8 million, which consisted of an aggregate of 26,840 non-vested shares, with a one -year vesting period.

A summary of the activity under the Company's share-based incentive plans for the three and six months ended June 30, 2022 and 2021 is included in the table below.

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

2022 2021 2022 2021

Share-based awards, beginning of period 1,951,551 1,786,371 1,562,028 1,766,061

Granted 26,840 37,978 442,024 203,701

1 unchanged sentence

Forfeited — — ( 1,296 ) —

Ending balance 560,010 $ 29.71 532,354 $ 27.45

Fair Value of Financial Instruments

Financial Instruments Reported at Fair Value - Recurring

The table below presents the carrying amounts and fair values of our financial instruments on a recurring basis as of March 31, 2022 and December 31, 2021, respectively (in thousands):

March 31, 2022 December 31, 2021

Carrying Amount Fair Value Carrying Amount Fair Value

Level 2 - Assets:

Real estate notes receivable, net $ 72,701 $ 70,135 $ 69,114 $ 68,476

Derivative financial instruments 3,692 3,692 — —

Level 2 - Liabilities:

Derivative financial instruments $ — $ — $ 5,069 $ 5,069

Debt 3,053,884 2,944,166 3,028,122 3,117,602

The carrying amounts of cash and cash equivalents, tenant and other receivables, restricted cash, accounts payable, and accrued liabilities approximate fair value.

There have been no transfers of assets or liabilities between levels.

We will record any such transfers at the end of the reporting period in which a change of event occurs that results in a transfer.

Although we have determined that the majority of the inputs used to value our cash flow hedges fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties.

However, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our cash flow hedge positions and have determined that the credit valuation adjustments are not significant to their overall valuation.

As a result, we have determined that our cash flow hedge valuations in their entirety are classified in Level 2 of the fair value hierarchy.

For further discussion of the assumptions considered, refer to Note 2 - Summary of Significant Accounting Policies.

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Financial Instruments Reported at Fair Value - Non-Recurring

We also have assets that under certain conditions are subject to measurement at fair value on a non-recurring basis.

This category generally includes assets subject to impairment.

We estimate fair value relating to impairment assessments based upon discounted cash flow and direct capitalization models that include all projected cash inflows and outflows over a specific holding period, or the contractual sales price, if applicable.

Such projected cash flows are comprised of contractual rental revenues and forecasted rental revenues and expenses based on market conditions and expectations for growth.

Capitalization rates and discount rates utilized in these models are based on a reasonable range of current market rates for each property analyzed.

Based on these inputs, we determined that our valuation of properties using a discounted cash flow or a direct capitalization model were classified within Level 3 of the fair value hierarchy.

For assets for which the estimated fair value was based on contractual sales prices, we determined that our valuation was classified within Level 2 of the fair value hierarchy.

As of March 31, 2022 we had no assets subject to impairment.

The table below presents our assets measured at fair value on a non-recurring basis as of March 31, 2022 and December 31, 2021 (in thousands):

March 31, 2022 December 31, 2021

Fair Value Fair Value

Level 2 - Assets:

Real estate investment $ — $ 26,768

Level 3 - Assets:

Real estate investments $ — $ 4,970

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Per Share Data of HTA

For the three months ended March 31, 2022 and 2021, all of our earnings were distributed and the calculated earnings per share amount would be the same for all classes.

The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per share of HTA for the three months ended March 31, 2022 and 2021, respectively (in thousands, except per share data):

Three Months Ended March 31,

Net income $ 18,666 $ 22,393

Net income attributable to non-controlling interests ( 351 ) ( 363 )

Net income attributable to common stockholders $ 18,315 $ 22,030

Weighted average shares outstanding - basic 228,978 218,753

Dilutive shares - OP Units convertible into common stock 4,068 3,515

Adjusted weighted average shares outstanding - diluted 233,046 222,268

Earnings per common share - basic

Net income attributable to common stockholders $ 0.08 $ 0.10

Earnings per common share - diluted

Net income attributable to common stockholders $ 0.08 $ 0.10

Per Unit Data of HTALP

The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per unit of HTALP for the three months ended March 31, 2022 and 2021, respectively (in thousands, except per unit data):

Three Months Ended March 31,

Net income $ 18,666 $ 22,393

Net income attributable to non-controlling interests — —

Net income attributable to common unitholders $ 18,666 $ 22,393

Weighted average OP Units outstanding - basic 233,046 222,268

Dilutive units - OP Units convertible into common units — —

Adjusted weighted average units outstanding - diluted 233,046 222,268

Earnings per common unit - basic:

Net income attributable to common unitholders $ 0.08 $ 0.10

Earnings per common unit - diluted:

Net income attributable to common unitholders $ 0.08 $ 0.10

HEALTHCARE TRUST OF AMERICA, INC.

AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Supplemental Cash Flow Information

The following is the supplemental cash flow information for the three months ended March 31, 2022 and 2021, respectively (in thousands):

Share-based awards, end of period 1,941,709 1,778,308 1,941,709 1,778,308

During the six months ended June 30, 2022 and 2021, the Company withheld 6,727 and 51,972 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested.

Restricted Stock Units

Prior to 2022, the Company granted long-term incentive awards, comprised of restricted stock, based on backward-looking performance measured at the end of the calendar year.

The Company adopted a new incentive compensation structure effective January 2022, comprised of restricted stock and restricted stock units ("RSUs").

The RSUs are granted at the beginning of the year with three-year forward-looking performance targets.

On January 3, 2022, the Company granted restricted stock units to its named executive officers and certain other members of senior management and officers, with a grant date fair value of $ 9.7 million, which consisted of an aggregate 294,932 RSUs with a five-year vesting period.

Approximately 43 % of the RSUs vest based on two market performance conditions.

Relative and absolute total shareholder return ("TSR") awards containing these market performance conditions were valued using independent specialists.

The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair values of $ 30.56 for the absolute TSR component and $ 41.30 for the relative TSR component for the January 2022 grant using the following assumptions:

THREE MONTHS ENDED MARCH 31,

Supplemental Disclosure of Cash Flow Information:

Interest paid, net of capitalized interest $ 39,025 $ 38,605

Cash paid for operating leases 4,335 4,554

Supplemental Disclosure of Noncash Investing and Financing Activities:

Accrued capital expenditures

Volatility 30.0 %

Dividend assumption Accrued

Expected term in years 3 years

Risk-free rate 1.02 %

Stock price (per share) $ 31.68

The remaining 57 % of the restricted stock units vest upon certain operating performance conditions.

With respect to the operating performance conditions of the January grant, the grant date fair value was $ 31.68 based on the Company's share price on the date of grant.

The combined weighted average grant date fair value of the January restricted stock units was $ 33.04 per share.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

The following is a summary of the RSU activity during the three and six months ended June 30, 2022:

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

Restricted Stock Units Weighted Average Grant Date Fair Value Restricted Stock Units Weighted Average Grant Date Fair Value

Non-vested, beginning of period 294,932 — — —

Granted — — 294,932 $ 33.04

Vested — — — —

Non-vested as of June 30, 2022 294,932 — 294,932

Employee Stock Purchase Plan

In addition to the share-based incentive plans, the Company maintains the Employee Stock Purchase Plan.

A summary of the activity under the Purchase Plan for the three and six months ended June 30, 2022 and 2021 is included in the table below.

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,

2022 2021 2022 2021

Dividend distributions declared, but not paid

Outstanding and exercisable, beginning of period 427,802 415,299 348,514 341,647

Granted — — 255,960 253,200

Exercised ( 1,965 ) ( 3,012 ) ( 12,518 ) ( 18,977 )

Forfeited ( 20,303 ) ( 22,873 ) ( 45,789 ) ( 42,034 )

Expired — — ( 140,633 ) ( 144,422 )

Outstanding and exercisable, end of period 405,534 389,414 405,534 389,414

Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practical to estimate that value.

• Cash and cash equivalents - The carrying amount approximates fair value due to the short term maturity of these investments.

• Borrowings under the Unsecured Credit Facility and the Term Loans Due 2024 and 2026 - 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 Condensed Consolidated Balance Sheets at fair value.

Fair value is estimated by utilizing pricing models that consider forward yield curves and discount rates.

The table below details the fair values and carrying values for notes and bonds payable at June 30, 2022 and December 31, 2021.

June 30, 2022 December 31, 2021

Dollars in millions CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE

Notes and bonds payable 1

$ 2,063.8 $ 1,955.6 $ 1,801.3 $ 1,797.4

Redemption of non-controlling interest 2,065 255

ROU assets obtained in exchange for lease obligations

1 Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.

Subsequent Events

On July 20, 2022, pursuant to that certain Agreement and Plan of Merger, dated as of February 28, 2022 (the “Merger Agreement”), by and among Healthcare Realty Trust Incorporated, a Maryland corporation (now known as HRTI, LLC, a Maryland limited liability company) (“Legacy HR” or the "Company"), Healthcare Trust of America, Inc., a Maryland corporation (now known as Healthcare Realty Trust Incorporated) (“Legacy HTA”), Healthcare Trust of America Holdings, LP, a Delaware limited partnership (now known as Healthcare Realty Holdings, L.P.) (the “OP”), and HR Acquisition 2, LLC, a Maryland limited liability company (“Merger Sub”).

Pursuant to the Merger Agreement, on the Closing Date, Merger Sub merged with and into Legacy HR, with Legacy HR continuing as the surviving entity and a wholly-owned subsidiary of Legacy HTA (the “Merger”).

Immediately following the Merger,

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Legacy HR converted to a Maryland limited liability company and changed its name to “HRTI, LLC” and Legacy HTA changed its name to “Healthcare Realty Trust Incorporated”.

In addition, the equity interests of Legacy HR were contributed by Legacy HTA by means of a contribution and assignment agreement to the OP such that Legacy HR became a wholly-owned subsidiary of the OP.

As a result, Legacy HR became a part of an umbrella partnership REIT (“UPREIT”) structure, which is intended to align the corporate structure of the combined company after giving effect to the Merger and the UPREIT reorganization (the “Combined Company”) and to provide a platform for the Combined Company to more efficiently acquire properties in a tax-deferred manner.

The Combined Company operates under the name “Healthcare Realty Trust Incorporated” and its shares of class A common stock, $ 0.01 par value per share, trade on the New York Stock Exchange (the “NYSE”) under the ticker symbol “HR”.

Executive Officers and Directors

The executive officers of the Company immediately preceding the Merger serve as the executive officers of the Combined Company.

The board of directors of the Combined Company is comprised of all nine directors from the Company's board and four directors from HTA’s board.

Exchange Offer

In connection with the Merger, the OP offered to exchange all validly tendered and accepted notes of each series previously issued by Legacy HR (the “Old HR Notes”) for (i) up to $ 250,000,000 of 3.875 % Senior Notes due 2025 (the “2025 Notes”), (ii) up to $ 300,000,000 of 3.625 % Senior Notes due 2028 (the “2028 Notes”), (iii) up to $ 300,000,000 of 2.400 % Senior Notes due 2030 (the “2030 Notes”) and (iv) up to $ 300,000,000 of 2.050 % Senior Notes due 2031 to be issued by the OP (the “2031 Notes” and, collectively, the “New HR Notes”) and solicited consents from holders of the Old HR Notes to amend the indenture governing the Old HR Notes to eliminate substantially all of the restrictive covenants in such indenture (the “Exchange Offers”).

The New HR Notes were issued pursuant to an indenture dated July 22, 2022, among the OP, Legacy HTA and U.S.

Bank Trust Company, National Association, as trustee, as supplemented by the first supplemental indenture, dated as of July 22, 2022, the second supplemental indenture, dated as of July 22, 2022, the third supplemental indenture, dated as of July 22, 2022 and the fourth supplemental indenture, dated as of July 22, 2022.

Legacy HTA guaranteed the New HR Notes pursuant to (i) a guarantee of the 2025 Notes, (ii) a guarantee of the 2028 Notes, (iii) a guarantee of the 2030 Notes, and (iv) a guarantee of the 2031 Notes, each dated July 22, 2022.

Legacy HTA and the OP filed a registration statement on Form S-4 (File No.

333-265593) relating to the issuance of the New HR Notes with the Securities and Exchange Commission (the “SEC”) on June 14, 2022, which was declared effective by the SEC on June 28, 2022.

The following sets forth the results of the Exchange Offers:

Series of Old HR Notes Tenders and Consents Received as of the Expiration Date Percentage of Total Outstanding Principal Amount of Such Series of Old HR Notes

3.875 % Senior Notes due 2025

$ 235,016,000 94.01 %

3.625 % Senior Notes due 2028

$ 290,246,000 96.75 %

2.400 % Senior Notes due 2030

$ 297,507,000 99.17 %

2.050 % Senior Notes due 2031

$ 298,858,000 99.62 %

Credit Facilities

In connection with the effectiveness of the Merger, Legacy HR (in a limited capacity), Legacy HTA and the OP entered into the Fourth Amended and Restated Credit and Term Loan Agreement (the “Credit Facility”) with Wells Fargo Bank, National Association, as Administrative Agent;

Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., and Citibank, N.A., as Joint Book Runners;

Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., U.S.

Bank National Association, Citibank, N.A., The Bank of Nova Scotia, Capital One, National Association, U.S.

Bank National Association, and PNC Capital Markets LLC, as Joint Lead Arrangers;

and the other lenders named therein.

The Credit Facility restructures the parties’ existing bank facilities and adds additional borrowing capacities for the Combined Company following the Merger.

The OP is the borrower under the Credit Facility (in such capacity, the “Borrower”).

• Legacy HR’s existing $ 700.0 million revolving credit facility under the Amended and Restated Credit Agreement, dated as of May 31, 2019 (as amended, restated, replaced, supplemented, or otherwise modified

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

from time to time prior to July 20, 2022, the “Existing HR Revolving Credit Agreement”), by and among Legacy HR, the lenders party thereto from time to time and their assignees, as lenders, and Wells Fargo Bank, National Association, as the administrative agent (the “WF Administrative Agent”), was terminated, all outstanding obligations in respect thereof were deemed paid in full and all commitments thereunder were permanently reduced to zero and terminated.

• Legacy HR’s existing $ 200.0 million term loan facility and existing $ 150.0 million term loan facility under the Amended and Restated Term Loan Agreement, dated as of May 31, 2019 (as amended, restated, replaced, supplemented, or otherwise modified from time to time prior to July 20, 2022, the “Existing HR Term Loan Agreement”), by and among Legacy HR, the lenders party thereto from time to time and their assignees, as lenders, and the WF Administrative Agent, in each, case, were deemed continued and assumed by the Borrower under the Credit Facility, and the Existing HR Term Loan Agreement was terminated.

◦ The existing $ 200.0 million term loan facility was amended to:

(a) conform to the terms of the Borrower’s other term loan facilities under the Credit Facility;

(b) include two one-year extension options, resulting in a latest final maturity in May 2026;

and (c) reprice to align with the pricing for the Borrower’s other term loan facilities under the Credit Facility;

◦ The existing $ 150.0 million term loan facility was amended to conform to the terms of the Borrower’s other term loan facilities under the Credit Facility, and the existing maturity in June 2026 remains unchanged under the Credit Facility.

• Legacy HTA’s and the OP’s existing $ 1.0 billion revolving credit facility was upsized to $ 1.5 billion (the “Revolver”) pursuant to the Credit Facility.

The Revolver currently matures in October 2025, and the Credit Facility adds an additional one-year extension option for the Revolver, for a total of two one-year extension options.

• Legacy HTA’s and the OP’s existing $ 300.0 million term loan facility was deemed continued pursuant to the Credit Facility and was amended to conform to the terms of the Borrower’s other term loan facilities under the Credit Facility.

The existing maturity in October 2025 remains unchanged under the Credit Facility.

• Legacy HTA’s and the OP’s existing $ 200.0 million term loan facility was deemed continued pursuant to the Credit Facility and was amended to (a) conform to the terms of the Borrower’s other term loan facilities under the Credit Facility;

(b) extend the maturity from January 2024 to July 20, 2027;

and (c) reprice to align with the pricing for the Borrower’s other term loan facilities under the Credit Facility.

• The Credit Facility provides for a new $ 350.0 million delayed-draw term loan facility that is available to be drawn for 12 months after July 20, 2022 and has an initial maturity date of July 20, 2023, with two one-year extension options.

The terms of any delayed draw term loans funded thereunder conform to the terms of the Borrower’s other term loan facilities under the Credit Facility, and the pricing for such delayed draw term loans aligns with the pricing for the Borrower’s other term loan facilities under the Credit Facility.

• The Credit Facility provides for a new $ 300.0 million term loan facility that was funded on July 20, 2022 and has a maturity of January 20, 2028, with no extension options.

The terms of such term loan facility conform to the terms of the Borrower’s other term loan facilities under the Credit Facility, and the pricing for such term loan facility aligns with the pricing for the Borrower’s other term loan facilities under the Credit Facility.

Special Dividend

On May 13, 2022, Legacy HTA entered into a new $ 1.125 billion term loan agreement to fund the special dividend pursuant to the terms of the Merger Agreement.

Prior to the Merger, Legacy HTA drew against the term loan to fund the special dividend of $ 4.82 that was declared on July 6, 2022 for shareholders of record on July 19, 2022.

The special dividend was paid to all Legacy HTA shareholders on July 27, 2022.

The Company plans to repay the term loan with proceeds from asset sales and joint ventures.

As of the date of this report, the Company has closed on $ 433 million in joint ventures and asset sales.

The remainder is expected to close in the third quarter of 2022.

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-Q

Item 1. Financial Statements