What changed in this filing

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Item 1. Financial Statements

2022-11-09 compared with 2022-08-09 · 497 added, 232 removed, 504 unchanged (59% of the section changed)

3 unchanged sentences

Amounts in thousands, except per share data

JUNE 30, 2022

SEPTEMBER 30, 2022

DECEMBER 31, 2021

1 unchanged sentence

Land $ 1,449,550 $ 387,918

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

Buildings and improvements 11,439,797 4,337,641

Lease intangibles 968,914 120,478

Personal property 11,680 11,761

10 unchanged sentences

Investments in unconsolidated joint ventures 327,752 161,942

Goodwill 148,891 3,487

Other assets, net 438,235 185,673

13 unchanged sentences

none issued and outstanding

Common stock, $ .01 par value per share;

Class A Common stock, $ .01 par value per share;

1,000,000 shares authorized;

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

380,572 and 150,457 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Additional paid-in capital 9,586,556 3,972,917

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

Accumulated other comprehensive income (loss) 5,524 ( 9,981 )

Cumulative net income attributable to common stockholders 1,342,819 1,266,158

1 unchanged sentence

Total stockholders' equity 7,727,213 2,185,116

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

Non-controlling interest 111,813 —

Total equity 7,839,026 2,185,116

Total liabilities and equity $ 14,195,443 $ 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.

1 unchanged sentence

Condensed Consolidated Statements of Income

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

For the Three and Nine Months Ended September 30, 2022 and 2021

Amounts in thousands, except per share data

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

2022 2021 2022 2021

Rental income $ 298,931 $ 131,746 $ 578,052 $ 388,620

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

Interest income 3,366 1,917 7,253 2,426

Other operating 4,057 2,969 9,270 7,347

14 unchanged sentences

89,477 ( 23,000 ) 111,291 ( 15,557 )

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

Net income (loss) $ 28,616 $ ( 2,066 ) $ 76,973 $ 45,052

Net income attributable to non-controlling interests ( 312 ) — ( 312 ) —

Net income (loss) attributable to common stockholders $ 28,304 $ ( 2,066 ) $ 76,661 $ 45,052

Basic earnings per common share $ 0.08 $ ( 0.02 ) $ 0.36 $ 0.31

Diluted earnings per common share $ 0.08 $ ( 0.02 ) $ 0.35 $ 0.31

Weighted average common shares

outstanding - basic

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

Weighted average common shares

outstanding - diluted

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

Weighted average common shares outstanding - basic 328,805 143,818 209,807 141,521

Weighted average common shares outstanding - diluted 332,031 143,818 210,944 141,613

1 unchanged sentence

Condensed Consolidated Statements of Comprehensive Income

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

For the Three and Nine Months Ended September 30, 2022 and 2021

Amounts in thousands

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

2022 2021 2022 2021

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

Net income (loss) $ 28,616 $ ( 2,066 ) $ 76,973 $ 45,052

Other comprehensive income

1 unchanged sentence

Reclassification adjustments for losses included in net income (interest expense) 763 1,131 2,672 3,340

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

Gains arising during the period on interest rate swaps 6,083 36 12,905 2,079

6,846 1,167 15,577 5,419

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

Comprehensive income (loss) 35,462 ( 899 ) 92,550 50,471

comprehensive income attributable to non-controlling interests ( 384 ) — ( 384 ) —

Comprehensive income (loss) attributable to common stockholders $ 35,078 $ ( 899 ) $ 92,166 $ 50,471

1 unchanged sentence

Condensed Consolidated Statements of Equity

For the Three Months Ended June 30, 2022 and 2021

For the Three Months Ended September 30, 2022 and 2021

Amounts in thousands, except per share data

6 unchanged sentences

Stockholders’

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

Equity Non-controlling Interests Total

Balance at June 30, 2022 $ 1,516 $ 4,002,525 $ ( 1,250 ) $ 1,314,515 $ ( 3,139,440 ) $ 2,177,866 $ — $ 2,177,866

Issuance of common stock, net of issuance costs — 84 — — — 84 — 84

Merger consideration transferred 2,289 5,574,174 — — — 5,576,463 110,702 5,687,165

Non-controlling interests acquired — — — — — — 1,266 1,266

Common stock redemptions — ( 41 ) — — — ( 41 ) — ( 41 )

Share-based compensation 1 9,716 — — — 9,717 — 9,717

Redemption of non-controlling interest — 98 — — — 98 ( 97 ) 1

Net income — — — 28,304 — 28,304 312 28,616

7 unchanged sentences

— — — — ( 72,052 ) ( 72,052 ) ( 442 ) ( 72,494 )

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

Balance at September 30, 2022 $ 3,806 $ 9,586,556 $ 5,524 $ 1,342,819 $ ( 3,211,492 ) $ 7,727,213 $ 111,813 $ 7,839,026

Stock Additional

5 unchanged sentences

Stockholders’

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

Equity Non-controlling Interests Total

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

Issuance of common stock, net of issuance costs 20 61,442 — — — 61,462 — 61,462

1 unchanged sentence

Share-based compensation — 2,538 — — — 2,538 — 2,538

Net income — — — 23,096 — 23,096

Net loss — — — ( 2,066 ) — ( 2,066 ) — ( 2,066 )

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

4 unchanged sentences

— — — — ( 44,022 ) ( 44,022 ) — ( 44,022 )

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

Balance at September 30, 2021 $ 1,475 $ 3,882,572 $ ( 12,413 ) $ 1,244,551 $ ( 3,000,852 ) $ 2,115,333 $ — $ 2,115,333

1 unchanged sentence

Condensed Consolidated Statements of Equity

For the Six Months Ended June 30, 2022 and 2021

For the Nine Months Ended September 30, 2022 and 2021

Amounts in thousands, except per share data

6 unchanged sentences

Stockholders’

Equity Non-controlling Interest Total Equity

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

Issuance of common stock, net of issuance costs 8 22,847 — — — 22,855 — 22,855

Merger consideration transferred 2,289 5,574,174 — — — 5,576,463 110,702 5,687,165

Non-controlling interests acquired — — — — — — 1,266 1,266

Common stock redemptions — ( 248 ) — — — ( 248 ) — ( 248 )

Share-based compensation 4 16,768 — — — 16,772 — 16,772

Redemption of non-controlling interest — 98 — — — 98 ( 97 ) 1

Net Income — — — 76,661 — 76,661 312 76,973

6 unchanged sentences

— — — — ( 166,009 ) ( 166,009 ) ( 442 ) ( 166,451 )

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

Balance at September 30, 2022 $ 3,806 $ 9,586,556 $ 5,524 $ 1,342,819 $ ( 3,211,492 ) $ 7,727,213 $ 111,813 $ 7,839,026

Stock Additional

5 unchanged sentences

Stockholders’

Equity Non-controlling Interest Total Equity

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

9 unchanged sentences

— — — — ( 130,825 ) ( 130,825 ) — ( 130,825 )

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

Balance at September 30, 2021 $ 1,475 $ 3,882,572 $ ( 12,413 ) $ 1,244,551 $ ( 3,000,852 ) $ 2,115,333 $ — $ 2,115,333

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

For the Six Months Ended June 30, 2022 and 2021

For the Nine Months Ended September 30, 2022 and 2021

Amounts in thousands

OPERATING ACTIVITIES

SIX MONTHS ENDED

NINE MONTHS ENDED

September 30,

Net income $ 76,973 $ 45,052

10 unchanged sentences

Distributions from unconsolidated joint ventures 893 —

Non-cash interest from financing receivable ( 388 ) —

Non-cash interest from financing and notes receivable ( 1,901 ) ( 196 )

Changes in operating assets and liabilities:

7 unchanged sentences

Additional long-lived assets ( 97,797 ) ( 69,647 )

Funding of mortgages and notes receivable ( 3,441 ) —

Investments in unconsolidated joint ventures ( 99,586 ) ( 49,612 )

Investment in financing receivable 167 ( 104,654 )

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

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

Proceeds from sales of real estate properties and additional long-lived assets 870,806 112,029

Proceeds from notes receivable repayments 500 —

Cash assumed in Merger, including restricted cash for special dividend payment 1,149,681 —

Net cash provided by (used in) investing activities 1,425,834 ( 364,670 )

FINANCING ACTIVITIES

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

Net (repayments)/borrowings on unsecured credit facility ( 154,400 ) 90,500

Borrowings on term loans 666,500 —

Repayment on term loan ( 718,500 ) —

Repayments of notes and bonds payable ( 18,880 ) ( 2,914 )

1 unchanged sentence

Dividends paid ( 165,735 ) ( 130,825 )

Special dividend paid in relation to the Merger ( 1,123,648 ) —

Net proceeds from issuance of common stock 22,851 240,779

Common stock redemptions ( 894 ) ( 2,014 )

Distributions to non-controlling interest holders ( 442 ) —

Debt issuance and assumption costs ( 12,753 ) ( 252 )

Payments made on finance leases — ( 162 )

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

Net cash (used in) provided by financing activities ( 1,508,085 ) 195,112

Increase in cash and cash equivalents 44,408 697

2 unchanged sentences

Supplemental Cash Flow Information

NINE MONTHS ENDED

September 30,

Interest paid $ 83,382 $ 40,653

6 unchanged sentences

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.

As of September 30, 2022, the Company had gross investments of approximately $ 14.2 billion in 695 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 695 real estate properties are located in 35 states and total approximately 40.7 million square feet.

The Company provided leasing and property management services to approximately 38.9 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.

As of September 30, 2022, the Company had a weighted average ownership interest of approximately 49 % in 33 real estate properties held in joint ventures.

See Note 3 below 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

For purposes of this Quarterly Report on Form 10-Q, references to the “Company” are to Legacy HR for periods prior to the closing of the Merger and thereafter to Legacy HR and Legacy HTA after giving effect to the Merger.

The Merger is described in more detail in Note 2 to these Condensed Consolidated Financial Statements.

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.

However, except as disclosed herein and specific disclosures incorporated as a result of the Merger, 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.

3 unchanged sentences

Principles of Consolidation

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.

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

The interests not owned by the Company 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.

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”).

6 unchanged sentences

The Company performs this analysis on an ongoing basis.

As of September 30, 2022, the Company

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

identified three entities that qualified as VIE's because the limited partners in these partnerships, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights.

Two of the entities are consolidated and one is unconsolidated.

Holders of operating partnership units (“OP Units”) are considered to be non-controlling interest holders in the OP and their ownership interests are reflected as equity on the accompanying Condensed Consolidated Balance Sheets.

Further, a portion of the earnings and losses of the OP 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 September 30, 2022, there were approximately 4.0 million, or 1.1 %, of OP Units issued and outstanding held by non-controlling interest holders.

Additionally, the Company is the primary beneficiary of this VIE.

Accordingly, the Company consolidates the interests in the OP.

However, because the Company holds what is deemed to be significantly all of the OP, it qualifies for the exemption from providing certain disclosure requirements associated with investments in VIEs.

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.

As of September 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 3 below for more details regarding the Company's unconsolidated joint ventures.

Use of Estimates in the Condensed Consolidated Financial Statements

1 unchanged sentence

Actual results may differ from those estimates.

Reclassifications

Certain reclassifications have been made on the Company's prior year Condensed Consolidated Balance Sheet to conform to current year presentation.

Previously, the Company's Lease intangibles were included in Building, improvements and lease intangibles and Goodwill was included with Other assets, net.

These amounts are now classified as separate line items on the Company's Condensed Consolidated Balance Sheets.

Investments in Leases - Financing Receivables, Net

3 unchanged sentences

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.

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, a mortgage or deed of trust, 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 September 30, 2022, real estate notes receivable, net totaled $ 79.0 million.

Interest Income

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.

For the three and nine months ended September 30, 2022, the Company recognized the related income from two financing receivables totaling $ 2.0 million and $ 5.9 million, respectively, based on an imputed interest rate over the

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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.

2 unchanged sentences

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

Income from Real Estate Notes Receivable

During the three and nine months ended September 30, 2022, the Company recognized interest income of $ 1.3 million related to real estate notes receivable.

Unpaid interest is capitalized, with principal and any unpaid interest due on the maturity date.

Revenue from Contracts with Customers (Topic 606)

7 unchanged sentences

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

in thousands 2022 2021 2022 2021

8 unchanged sentences

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

3 unchanged sentences

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.

The Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR and Term SOFR-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.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Merger with HTA

On July 20, 2022 (the “Closing Date”), pursuant to the 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”), 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”), 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”).

On the Closing Date, each outstanding share of Legacy HR common stock, $ 0.01 par value per share (the “Legacy HR Common Stock”), was cancelled and converted into the right to receive one share of Legacy HTA class A common stock at a fixed ratio of 1.00 to 1.00.

Per the terms of the Merger Agreement, Legacy HTA declared a special dividend of $ 4.82 (the “Special Dividend”) for each outstanding share of Legacy HTA class A common stock, $ 0.01 par value per share ( the “Legacy HTA Common Stock”), and the OP declared a corresponding distribution to the holders of its partnership units, payable to Legacy HTA stockholders and OP unitholders of record on July 19, 2022.

Immediately following the Merger, 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.

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”.

The primary reason for the Merger was to expand the Company’s size, scale, diversification, liquidity and access to capital, in order to further enhance its competitive advantages and accelerate its investment activities.

For accounting purposes, the Merger was treated as a “reverse acquisition” in which Legacy HTA was considered the legal acquirer and Legacy HR was considered the accounting acquirer based on various factors, including, but not limited to:

(i) the composition of the board of directors of the Combined Company, (ii) the composition of senior management of the Combined Company, and (iii) the premium transferred to the Legacy HTA stockholders.

As a result, the historical financial statements of the accounting acquirer, Legacy HR, became the historical financial statements of the Combined Company.

The acquisition was accounted for using the acquisition method of accounting in accordance with ASC 805, which requires, among other things, the assets acquired and the liabilities assumed to be recognized at their acquisition date fair value.

The consideration transferred on the Closing Date is as follows:

Dollars in thousands

Shares of Legacy HTA Common Stock outstanding as of July 20, 2022 as adjusted (a)

Exchange ratio 1.00

Implied shares of Legacy HR Common Stock issued 228,520,990

Adjusted closing price of Legacy HR Common Stock on July 20, 2022 (b)

Value of implied Legacy HR Common Stock issued $ 5,569,057

Fair value of Legacy HTA restricted stock awards attributable to pre-Merger services (c)

Consideration transferred $ 5,576,463

(a) Includes 228,520,990 shares of Legacy HTA Common Stock as of July 20, 2022.

The number of shares of HTA Common Stock presented above was based on 228,857,717 total shares of Legacy HTA Common Stock outstanding as of the Closing Date, less 192 HTA fractional shares that were paid in cash less 336,535 shares of Legacy HTA restricted stock (net of 215,764 shares of Legacy HTA restricted stock withheld).

For accounting purposes, these shares and units were converted to Legacy HR Common Stock, at an exchange ratio of 1.00 per share of HTA Common Stock.

(b) For accounting purposes, the fair value of Legacy HR Common Stock issued to former holders of Legacy HTA Common Stock was based on the per share closing price of Legacy HR Common Stock on July 20, 2022.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

(c) Represents the fair value of Legacy HTA restricted shares which fully vested prior to the closing of the Merger or became fully vested as a result of the closing of the Merger and which are attributable to pre-combination services.

Preliminary Purchase Price Allocation

The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed at the Closing Date:

Dollars in thousands

Real estate investments

Land $ 985,926

Buildings and improvements 6,960,418

Lease intangible assets (a)

Financing lease right-of-use assets 9,874

Construction in progress 10,071

Land held for development 46,538

Total real estate investments $ 8,844,747

Assets held for sale, net 707,442

Investments in unconsolidated joint ventures 67,892

Cash and cash equivalents 26,034

Restricted cash 1,123,647

Operating lease right-of-use assets 198,261

Other assets, net (b) (c)

Total assets acquired $ 11,177,186

Notes and bonds payable $ 3,991,300

Accounts payable and accrued liabilities 1,227,570

Liabilities of assets held for sale 28,677

Operating lease liabilities 173,948

Financing lease liabilities 10,720

Other liabilities 203,210

Total liabilities assumed $ 5,635,425

Net identifiable assets acquired $ 5,541,761

Non-controlling interest $ 110,702

Goodwill $ 145,404

(a) The weighted average amortization period for the acquired lease intangible assets is 5.5 years.

(b) Includes $ 34.6 million of gross contractual accounts receivable, which approximates fair value, of which the Company preliminarily did not expect $ 12.3 million to be collected as of Closing Date.

(c) Includes $ 78.7 million of gross contractual real estate notes receivable, the fair value of which was $ 74.8 million, and the Company preliminarily expects to collect substantially all of the real estate notes receivable proceeds as of the Closing Date.

As of September 30, 2022, the Company had not finalized the determination of fair value of certain tangible and intangible assets acquired and liabilities assumed including, but not limited to real estate assets and liabilities, notes receivables and goodwill.

As such, the assessment of fair value of assets acquired and liabilities assumed is preliminary and was based on information that was available at the time the Condensed Consolidated Financial Statements were prepared.

The finalization of the purchase accounting assessment could result in material changes in the Company’s determination of the fair value of assets acquired and liabilities assumed, which will be recorded as measurement period adjustments in the period in which they are identified, up to one year from the Closing Date.

A preliminary estimate of approximately $ 145.4 million has been allocated to goodwill.

Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and liabilities assumed.

The recognized goodwill is attributable to expected synergies and benefits arising from the Merger, including anticipated general and administrative cost savings and potential economies of scale benefits in both tenant

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

and vendor relationships following the closing of the Merger.

None of the goodwill recognized is expected to be deductible for tax purposes.

Merger related Costs

In conjunction with the Merger, the Company incurred Merger-related costs of $ 79.4 million during the three months ended September 30, 2022 and $ 92.6 million during the nine months ended September 30, 2022, which were included within Merger-related costs in results of operations.

The Merger-related costs primarily consist of legal, consulting, banking services, and other Merger-related costs.

Unaudited Pro Forma Financial Information

The Condensed Consolidated Statements of Income for the three months ended September 30, 2022 include $ 157.4 million of revenues and $ 20.6 million of net loss and for the nine months ended September 30, 2022 include $ 157.4 million of revenues and $ 20.6 million of net loss associated with the results of operations of Legacy HTA from the Merger closing date to September 30, 2022.

The following unaudited pro forma information presents a summary of our Condensed Consolidated Statements of Income for the three months and nine months ended September 30, 2022 and 2021, as if the Merger had occurred on January 1, 2021.

Adjustments in the pro forma financial information include but are not limited to the following:

(i) additional depreciation and amortization expense related to the acquired tangible and intangible assets,

(ii) additional interest expense on transaction-related borrowings, including assumed debt in connection with the Merger,

(iii) additional rental income related to the assumed above and below-market leases, and straight-line rent and

(iv) Merger-related costs and other one-time, non-recurring costs.

The pro forma financial information excludes adjustments for estimated cost synergies or other effects of the integration of the Merger.

The following pro forma financial information is not necessarily indicative of the results of operations had the acquisition been effected on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the pro forma information, cost savings from operating efficiencies, potential synergies, and the impact of incremental costs incurred in integrating the businesses.

THREE MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

Dollars in thousands 2022 2021 2022 2021

Total revenues $ 352,744 $ 332,465 $ 1,054,809 $ 982,192

Net income $ 115,496 $ ( 14,930 ) $ 160,120 $ ( 79,754 )

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Real Estate Investments

2022 Company Acquisitions

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

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

Dollars in thousands DATE ACQUIRED PURCHASE PRICE CASH

4 unchanged sentences

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

Q1 2022 subtotal 122,175 121,171 116,889 4,282 184,396

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

9 unchanged sentences

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

Q2 2022 subtotal 163,762 162,457 153,407 9,050 359,706

Seattle, WA 8/1/22 4,850 4,806 4,882 ( 76 ) 10,593

Raleigh, NC 8/9/22 3,783 3,878 3,932 ( 54 ) 11,345

Jacksonville, FL 8/9/22 18,195 18,508 18,583 ( 75 ) 34,133

Atlanta, GA 8/10/22 11,800 11,525 12,038 ( 513 ) 43,496

Denver, CO 8/11/22 14,800 13,902 13,918 ( 16 ) 34,785

Raleigh, NC 8/18/22 11,375 10,670 10,547 123 31,318

Nashville, TN 9/15/22 21,000 20,764 20,572 192 61,932

Austin, TX 9/29/22 5,450 5,449 5,572 ( 123 ) 15,000

Q3 2022 subtotal 91,253 89,502 90,044 ( 542 ) 242,602

Total real estate acquisitions $ 377,190 $ 373,130 $ 360,340 $ 12,790 786,704

4 unchanged sentences

5 Includes two properties.

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

Subsequent to September 30, 2022, 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:

Jacksonville, FL 10/12/22 $ 3,600 6,200

2022 Joint Venture Acquisitions

The following table details the joint venture acquisitions for the nine months ended September 30, 2022.

These joint venture acquisitions are not consolidated for purposes of the Company's Condensed Consolidated Financial Statements.

Dollars in thousands DATE ACQUIRED PURCHASE PRICE CASH

6 unchanged sentences

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

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

Total joint venture 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.

1 unchanged sentence

3 Includes three properties.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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:

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

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

Dollars in thousands 2022 2021 2022 2021

Investments in unconsolidated joint ventures, beginning of period $ 210,781 $ 117,935 $ 161,942 $ 73,137

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

New investments during the period 1

Equity loss recognized during the period 1

117,880 4,593 167,479 49,612

Equity loss recognized during the period ( 124 ) ( 183 ) ( 776 ) ( 404 )

Owner distributions ( 785 ) — ( 893 ) —

1 unchanged sentence

$ 327,752 $ 122,345 $ 327,752 $ 122,345

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.

1 Includes unconsolidated joint ventures acquired as part of the Merger, as well as investments in two joint ventures representing a 20 % and 40 % ownership interest in portfolios in Los Angeles, California and Dallas, Texas, respectively.

Also, see 2022 Real Estate Asset Dispositions below for additional information.

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

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

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

GAIN/(IMPAIRMENT) SQUARE FOOTAGE

3 unchanged sentences

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

GA, FL, PA 3, 8

7/29/22 133,100 ( 8,109 ) 124,991 124,991 — — 316,739

GA, FL, TX 5, 8

8/4/22 160,917 ( 5,893 ) 155,024 151,819 3,205 — 343,545

Los Angeles, CA 3, 6, 8

8/5/22 134,845 ( 3,102 ) 131,743 131,332 411 — 283,780

Dallas, TX 5, 7, 8

8/30/22 114,290 ( 682 ) 113,608 113,608 — — 189,385

Indianapolis, IN 4, 9

8/31/22 238,845 ( 5,846 ) 232,999 84,767 4,324 143,908 506,406

Total dispositions $ 892,447 $ ( 25,949 ) $ 866,498 $ 660,993 $ 8,228 $ 197,277 1,991,669

1 unchanged sentence

2 Includes two properties.

3 Includes four properties.

4 Includes five properties.

5 Includes six properties.

6 Values and square feet are represented at 100 %.

The Company retained a 20 % ownership interest in the joint venture that purchased these properties.

7 Values and square feet are represented at 100 %.

The Company retained a 40 % ownership interest in the joint venture that purchased these properties.

8 These properties were acquired as part of the Merger and were included as assets held for sale in the purchase price allocation.

9 Two of the five properties included in this portfolio were acquired in the Merger and were included as assets held for sale in the purchase price allocation.

Subsequent to September 30, 2022, the Company disposed of the following properties:

Dollars in thousands DATE DISPOSED SALE PRICE SQUARE FOOTAGE

Dallas, TX 1, 2

10/4/22 $ 104,025 291,328

Houston, TX 2

10/21/22 32,000 134,910

Total dispositions $ 136,025 426,238

1 Includes two properties.

2 These properties were classified as assets held for sale as of September 30, 2022.

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

The Company had six properties classified as assets held for sale as of September 30, 2022 and no properties classified as assets held for sale as of December 31, 2021.

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

Dollars in thousands September 30, 2022 December 31, 2021

Balance Sheet data:

Land $ 10,594 $ —

Building and improvements 199,821 —

Lease intangibles 11,389 —

Personal property 211 —

Financing lease right-of-use assets 307 —

Accumulated depreciation ( 47,051 ) —

Real estate assets held for sale, net 175,271 —

Operating lease right-of-use assets 1,193 —

Other assets, net 8,610 57

1 unchanged sentence

Accounts payable and accrued liabilities $ 3,768 $ 169

Operating lease liabilities $ 864 $ —

Financing lease liabilities $ 2,427 $ —

Other liabilities 3,585 125

10 unchanged sentences

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.

Lease income for the Company's operating leases recognized for the three and nine months ended September 30, 2022 was $ 298.9 million and $ 578.1 million, respectively.

Lease income for the Company's operating leases recognized for the three and nine months ended September 30, 2021 was $ 131.7 million and $ 388.6 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.

1 unchanged sentence

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:

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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

Dollars in thousands OPERATING

2 unchanged sentences

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.

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

As of September 30, 2022, the Company had 243 properties totaling 17.8 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.

1 unchanged sentence

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:

The Company had 75 prepaid ground leases as of September 30, 2022.

The amortization of the prepaid rent, included in the operating lease right-of-use asset, represented approximately $ 0.5 million and $ 0.1 million of the Company’s rental expense for the three months ended September 30, 2022 and 2021, respectively, and $ 0.8 million and $ 0.4 million for the nine months ended September 30, 2022 and 2021, respectively.

The Company’s future lease payments (primarily for its 168 non-prepaid ground leases) as of September 30, 2022 were as follows:

Dollars in thousands OPERATING FINANCING

8 unchanged sentences

Lease liabilities $ 268,840 $ 72,378

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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

THREE MONTHS ENDED

June 30, SIX MONTHS ENDED

September 30, NINE MONTHS ENDED

September 30,

Dollars in thousands 2022 2021 2022 2021

11 unchanged sentences

Right-of-use assets obtained in exchange for new finance lease liabilities $ 9,874 $ 1,420 $ 50,463 $ 1,420

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

Right-of-use assets obtained in exchange for new operating lease liabilities $ 198,261 $ 8,298 $ 198,261 $ 8,298

Weighted-average years remaining lease term (excluding renewal options) - operating leases 50.2 47.8

Weighted-average years remaining lease term (excluding renewal options) - finance leases 60.1 63.2

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

1 unchanged sentence

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Other Assets and Liabilities

Other assets consist primarily of intangible assets, prepaid assets, real estate notes receivable, straight-line rent receivables, accounts receivable, additional long-lived assets and interest rate swaps.

Items included in "Other assets, net" on the Company's Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 are detailed in the table below:

Dollars in thousands September 30, 2022 December 31, 2021

Above-market intangible assets, net $ 86,410 $ 4,966

Prepaid assets 85,053 58,618

Real estate notes receivable, net 1

Straight-line rent receivables 78,038 70,784

Accounts receivable, net 36,103 14,072

Additional long-lived assets, net 21,722 20,048

Interest rate swap assets 16,136 —

Ground lease modification, net 8,170 8,511

Other receivables, net 7,258 —

Debt issuance costs, net 6,504 1,813

Project costs 4,001 5,129

Net investment in lease 1,828 —

Customer relationship intangible assets, net 1,134 1,174

Other 6,842 558

$ 438,235 $ 185,673

1 In October 2022, an additional amount of $ 15.0 million was funded for a real estate loan transaction.

Accounts Payable and Accrued Liabilities

The following table provides details of the items included in "Accounts payable and accrued liabilities" on the Company's Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021:

Dollars in thousands September 30, 2022 December 31, 2021

Accrued property taxes $ 86,192 $ 35,295

Accounts payable and capital expenditures 61,461 17,036

Accrued interest 24,959 12,060

Accrued income and franchise taxes 2,685 983

Retainage accrued on construction invoices 1,304 2,215

Other operating accruals 54,417 18,519

$ 231,018 $ 86,108

Other Liabilities

The following table provides details of the items included in "Other liabilities" on the Company's Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021:

Dollars in thousands September 30, 2022 December 31, 2021

Below-market intangible liabilities, net $ 113,118 $ 4,931

Deferred revenue 60,675 45,130

Security deposits 28,299 11,116

Interest rate swap liability — 5,917

Other 1,306 293

$ 203,398 $ 67,387

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

The table below details the Company’s notes and bonds payable as of September 30, 2022 and December 31, 2021.

MATURITY DATES 1

BALANCE 2 AS OF

EFFECTIVE INTEREST RATE

as of 9/30/2022

Dollars in thousands 9/30/2022 12/31/2021

$ 1.5 billion Unsecured Credit Facility 3

10/27 $ 190,600 $ — 3.99 %

$ 700 million Unsecured Credit Facility 3

5/23 — 210,000 — %

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

$ 1.125 billion Asset Sale Term Loan 4

7/24 421,919 — 4.07 %

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

$ 350 million Unsecured Term Loan 3

7/25 348,735 — 4.10 %

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

$ 200 million Unsecured Term Loan 4

5/26 199,611 199,460 3.51 %

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

$ 300 million Unsecured Term Loan 4 5

10/26 299,930 — 2.47 %

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 %

$ 150 million Unsecured Term Loan 5

5/26 149,458 149,376 3.32 %

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).

$ 200 million Unsecured Term Loan 4 5

7/27 199,328 — 2.27 %

$ 300 million Unsecured Term Loan 3

1/28 297,764 — 3.56 %

Senior Notes due 2025 5/25 249,025 249,040 4.12 %

Senior Notes due 2026 4

8/26 569,786 — 4.94 %

Senior Notes due 2027 4

7/27 478,541 — 4.76 %

Senior Notes due 2028 1/28 296,711 296,612 3.85 %

Senior Notes due 2030 4

2/30 562,974 — 5.30 %

Senior Notes due 2030 3/30 296,787 296,813 2.72 %

Senior Notes due 2031 4

3/31 628,617 — 5.13 %

Senior Notes due 2031 3/31 295,424 295,374 2.25 %

Mortgage notes payable 8/23-12/26 84,929 104,650 3.97 %

$ 5,570,139 $ 1,801,325

1 Includes extension options.

2 Balance is presented net of discounts and issuance costs and inclusive of premiums, where applicable.

3 On July 20, 2022, the Company entered into an amended and restated credit facility which included a $ 1.5 billion revolving credit facility, replacing Legacy HR's $ 700 million credit facility.

4 Debt instruments assumed as part of the Merger with Legacy HTA on July 20, 2022.

Amounts shown represent fair value adjustments.

5 The effective interest rate includes the impact of interest rate swaps on $ 675.0 million at a weighted average rate of 1.57 % (plus the applicable margin rate, currently 105 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

6 unchanged sentences

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

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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 %

Senior Notes Assumed with the Merger

In connection with the Merger, the Company assumed senior notes ("Legacy Senior Notes") that were originated on various dates prior to the date of the Merger by the OP (formerly, Healthcare Trust of America Holdings, LP).

These notes are all fully and unconditionally guaranteed by the Company and have semi-annual payment requirements.

In addition, the Legacy Senior Notes carry customary restrictive financial covenants, including limitations on our ability to incur additional indebtedness and requirements to maintain a pool of unencumbered assets.

In addition, the corresponding indentures provide for the ability to redeem the Legacy Senior Notes, subject to certain "make whole" call provisions.

The Legacy Senior Notes assumed by the Company consist of the following:

COUPON PRINCIPAL OUTSTANDING AS OF

Dollars in thousands FACE VALUE 9/30/2022 12/31/2021

Senior Notes due 2026 3.50 % $ 600,000 $ 600,000 $ —

Senior Notes due 2027 3.75 % 500,000 500,000 —

Senior Notes due 2030 3.10 % 650,000 650,000 —

Senior Notes due 2031 2.00 % 800,000 800,000 —

$ 2,550,000 $ 2,550,000 $ —

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 restructured the parties’ existing bank facilities and added additional borrowing capacities for the 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 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.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

• 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.

As of September 30, 2022, the $ 350.0 million Credit Facility was drawn in full.

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 date 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.

Derivative Financial Instruments

5 unchanged sentences

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.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

Cash Flow Hedges of Interest Rate Risk

3 unchanged sentences

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

As of September 30, 2022, the Company had 15 outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

EXPIRATION DATE AMOUNT WEIGHTED

December 16, 2022 75,000 2.37 %

January 31, 2023 $ 300,000 1.42 %

January 15, 2024 1

200,000 1.21 %

May 1, 2026 1

100,000 2.15 %

$ 675,000 1.57 %

1 Derivatives hedge one-month term SOFR.

Subsequent to September 30, 2022, the Company entered into two additional interest rate swaps totaling $ 250.0 million with multiple counterparties, with both expiring in 2027.

The Company designated these interest rate swaps as cash flow hedges of interest rate risk in the fourth quarter of 2022.

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

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 September 30, 2022.

BALANCE AT SEPTEMBER 30, 2022

In thousands BALANCE SHEET LOCATION FAIR VALUE

Derivatives designated as hedging instruments

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

Interest rate swaps Other assets $ 16,136

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

The table below presents the effect of cash flow hedge accounting on AOCI during the three and nine months ended September 30, 2022 and 2021 related to the Company's outstanding interest rate swaps.

GAIN RECOGNIZED IN

AOCI ON DERIVATIVE

three months ended June 30, LOSS RECLASSIFIED FROM

three months ended September 30, LOSS RECLASSIFIED FROM

AOCI INTO INCOME

three months ended June 30,

three months ended September 30,

In thousands 2022 2021 2022 2021

3 unchanged sentences

$ ( 6,083 ) $ ( 36 ) Total interest expense $ 763 $ 1,131

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

GAIN RECOGNIZED IN

AOCI ON DERIVATIVE

six months ended June 30, LOSS RECLASSIFIED FROM

nine months ended September 30, LOSS RECLASSIFIED FROM

AOCI INTO INCOME

six months ended June 30,

nine months ended September 30,

In thousands 2022 2021 2022 2021

6 unchanged sentences

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.

As of September 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 $ 16.5 million.

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

Commitments and Contingencies

2 unchanged sentences

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.

Development and Redevelopment Activity

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

As of September 30, 2022, the Company had funded approximately $ 11.1 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.

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

As of September 30, 2022, the Company had funded approximately $ 10.3 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 Company continued the development of a medical office building in Nashville, Tennessee.

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

As of September 30, 2022, the Company had funded approximately $ 15.3 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.

The Company is financing the construction of a two building medical office complex in Orlando, Florida.

The 156,566 square foot development is expected to be complete in the second quarter of 2024.

As of September 30, 2022, the Company had funded approximately $ 10.6 million towards the project costs.

The Company, through a joint venture partnership, continued the development of a medical office building in Raleigh, North Carolina.

This joint venture expects to construct a new 120,694 square foot medical office building that is projected to be complete in the fourth quarter of 2024.

As of September 30, 2022, the joint venture had funded approximately $ 15.3 million towards the project costs.

The Company is redeveloping three medical office buildings totaling 259,290 square feet in Washington, DC.

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

As of September 30, 2022, the Company had funded $ 2.0 million in project costs .

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

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

NINE MONTHS ENDED SEPTEMBER 30, 2022 TWELVE MONTHS ENDED DECEMBER 31, 2021

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

2 unchanged sentences

Balance, end of period 380,572,290 150,457,433

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

$ — — — — $ —

The Company has equity distribution agreements with various sales agents with respect to the at-the-market (“ATM”) offering program of common stock with an aggregate sales amount of up to $ 750.0 million.

As of September 30, 2022, $ 750.0 million remained available for issuance under our current ATM offering program.

Common Stock Dividends

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 .

During the nine months ended September 30, 2022, the Company declared and paid common stock dividends totaling $ 0.93 per share.

On November 2, 2022, the Company declared a quarterly common stock dividend in the amount of $ 0.31 per share payable on November 30, 2022 to stockholders of record on November 15, 2022.

Earnings Per Common Share

1 unchanged sentence

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,

During the three and nine months ended September 30, 2022, the Company did not enter into any forward sale agreements to sell shares of common stock through the Company's ATM offering program.

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

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

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

5 unchanged sentences

Dilutive effect of forward equity shares — — — 14,036

Dilutive effect of OP Units 3,167,668 — 1,067,493 —

Dilutive effect of employee stock purchase plan 58,461 — 69,687 78,200

Weighted average common shares outstanding - diluted 332,031,384 143,817,619 210,943,990 141,613,429

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

Net Income (loss) attributable to common stockholders $ 28,304 $ ( 2,066 ) $ 76,661 $ 45,052

Dividends paid on nonvested share-based awards ( 610 ) ( 537 ) ( 1,817 ) ( 1,617 )

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

Net income (loss) applicable to common stockholders- basic $ 27,694 $ ( 2,603 ) $ 74,844 $ 43,435

Net income attributable to OP units 312 — 312 —

Net income (loss) applicable to common stockholders - diluted $ 28,006 $ ( 2,603 ) $ 75,156 $ 43,435

Basic earnings per common share - net income $ 0.08 $ ( 0.02 ) $ 0.36 $ 0.31

Diluted earnings per common share - net income $ 0.08 $ ( 0.02 ) $ 0.35 $ 0.31

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

The effect of non-vested stock awards totaling 911,594 shares, options under the Company's Employee Stock Purchase Plan (the "ESPP") to purchase the Company's stock totaling 63,383 shares, and the dilutive impact of forward-equity contracts outstanding for 14,734 shares of common stock for the three months ended September 30, 2021 were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive due to the loss from continuing operations incurred during that period.

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,

During the nine months ended September 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 $ 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 eight of its 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.

• During the third quarter of 2022, the Company granted non-vested stock awards to its 12 non-employee directors with a grant date fair value of $ 1.8 million, which consisted of an aggregate of 70,816 non-vested shares, with vesting periods ranging from one to three years .

The Company also granted non-vested stock awards to an employee, which consisted of 1,036 non-vested shares as a discretionary grant.

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

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

2022 2021 2022 2021

4 unchanged sentences

Share-based awards, end of period 2,001,997 1,775,351 2,001,997 1,775,351

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.

During the nine months ended September 30, 2022 and 2021, the Company withheld 8,745 and 51,972 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested.

Restricted Stock Units

2 unchanged sentences

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.

On January 3, 2022, the Company granted RSUs to its named executive officers and certain other 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.

1 unchanged sentence

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:

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

THREE MONTHS ENDED MARCH 31,

1 unchanged sentence

Dividend assumption Accrued

Expected term in years 3 years

Expected term 3 years

Risk-free rate 1.02 %

3 unchanged sentences

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,

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

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

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

2 unchanged sentences

Vested — — — —

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

Non-vested as of September 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,

Legacy HR maintained an ESPP prior to the completion of the Merger.

The outstanding options to purchase shares of the common stock of Legacy HR became options to purchase Class A Common Stock of the Company upon completion of the Merger.

No new options will be granted under the ESPP.

A summary of the activity under the ESPP for the three and nine months ended September 30, 2022 and 2021 is included in the table below.

THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,

2022 2021 2022 2021

8 unchanged sentences

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

• Real estate notes receivabl e - Real estate notes receivable are recorded in other assets on the Company's Condensed Consolidated Balance Sheets.

Fair value is estimated using cash flow analyses, based on current interest rates for similar types of arrangements.

• 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.

2 unchanged sentences

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

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, cont.

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

September 30, 2022 December 31, 2021

Dollars in millions CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE

1 unchanged sentence

$ 5,570.1 $ 5,321.0 $ 1,801.3 $ 1,797.4

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”.

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

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 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

Real estate notes receivable 1

$ 79.0 $ 79.0 $ — $ —

Credit Facilities

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”).

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.

◦ 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;

• 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.

The existing maturity in October 2025 remains unchanged 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 $ 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.

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.

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

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