Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that the information required to be disclosed is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, to allow for timely decisions regarding required disclosure.
The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act.
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Changes in Internal Control over Financial Reporting
On July 20, 2022, the Merger of Legacy HR and Legacy HTA was completed, and the Company is currently integrating Legacy HTA into its operations, compliance program and internal control processes. SEC regulations allow companies to exclude acquisitions from their assessment of internal control over financial reporting during the first year following an acquisition. Legacy HTA makes up 65% of the Company's total assets and 38% of total revenue. Based on the significance of the acquisition, the Company has excluded the acquired operations of Legacy HTA from management's assessment of internal control over financial reporting for the twelve months ended December 31, 2022. Excluding the Merger, there have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Management’s Annual Report on Internal Control Over Financial Reporting
The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting, excluding Legacy HTA, as of December 31, 2022 using the principles and other criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on that assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2022. The Company’s independent registered public accounting firm, BDO USA, LLP, has also issued an attestation report on the effectiveness of the Company’s internal control over financial reporting included herein.
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Report of
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Stockholders and Board of Directors
Healthcare Realty Trust Incorporated
Nashville, Tennessee
Opinion on Internal Control over Financial Reporting
We have audited Healthcare Realty Trust Incorporated’s (the “Company’s”) internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedules and our report dated March 1, 2023 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
As indicated in the accompanying Item 9A, Management’s Annual Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Healthcare Trust of America, Inc. (“Legacy HTA”), which was acquired on July 20, 2022, and which is included in the consolidated balance sheet of the Company as of December 31, 2022, and the related consolidated statements of income, comprehensive income, equity, and cash flows for the year then ended. Legacy HTA constituted 65% of total assets as of December 31, 2022, and 38% of revenues for the year then ended. Management did not assess the effectiveness of internal control over financial reporting of Legacy HTA because of the timing of the acquisition which was completed on July 20, 2022. Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Legacy HTA.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ BDO USA, LLP
Nashville, Tennessee
March 1, 2023
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
Directors
Information with respect to the Company’s directors, set forth in the Company’s Proxy Statement relating to the Annual Meeting of Shareholders to be held on June 5, 2023 under the caption “Election of Directors,” is incorporated herein by reference.
Executive Officers
The executive officers of the Company are:
NAME AGE POSITION
Todd J. Meredith 48 President and Chief Executive Officer
J. Christopher Douglas 47 Executive Vice President and Chief Financial Officer
John M. Bryant, Jr. 56 Executive Vice President and General Counsel
Robert E. Hull 50 Executive Vice President - Investments
Julie F. Wilson 51 Executive Vice President - Operations
Mr. Meredith was appointed President and Chief Executive Officer effective December 30, 2016. He served as the Company's Executive Vice President - Investments from February 2011 until December 30, 2016 and was responsible for overseeing the Company’s investment activities, including the acquisition, financing and development of medical office and other primarily outpatient medical facilities. Prior to February 2011, he led the Company’s development activities as a Senior Vice President. Before joining the Company in 2001, Mr. Meredith worked in investment banking.
Mr. Douglas was appointed Chief Financial Officer effective March 1, 2016 and has been employed by the Company since 2003. He served as the Company’s Senior Vice President, Acquisitions and Dispositions managing the Company’s acquisition and disposition team from 2011 until March 1, 2016. Prior to that, Mr. Douglas served as Senior Vice President, Asset Administration, administering the Company’s master lease portfolio and led a major disposition strategy in 2007. Mr. Douglas has a background in commercial and investment banking.
Mr. Bryant became the Company’s General Counsel in November 2003. From April 2002 until November 2003, Mr. Bryant was Vice President and Assistant General Counsel. Prior to joining the Company, Mr. Bryant was a shareholder with the law firm of Baker Donelson Bearman & Caldwell in Nashville, Tennessee.
Mr. Hull was appointed Executive Vice President - Investments effective January 1, 2017 and has been employed by the Company since 2004. He served as Senior Vice President - Investments from March 2011 until January 2017, managing the Company's development and acquisition activity. Prior to that, Mr. Hull served in various capacities on the Company's investments team. Before joining the Company, Mr. Hull worked in the senior living and commercial banking industries.
Ms. Wilson was appointed Executive Vice President - Operations effective July 1, 2021 and has been employed by the Company since 2001. She previously served as Senior Vice President - Leasing and Management from March 2008 until July 2021. Prior to that, Ms. Wilson worked in the leasing, property management and investments groups. Before joining the Company, Ms. Wilson worked in investment banking and commercial real estate brokerage.
Code of Ethics
The Company has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”) that applies to its principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions, as well as all directors, officers and employees of the Company. The Code of Ethics is posted on the Company’s website ( www.healthcarerealty.com ) and is available in print free of charge to any stockholder who requests a copy. Interested parties may address a written request for a printed copy of the Code of Ethics to: Investor Relations, Healthcare Realty Trust Incorporated, 3310 West End Avenue, Suite 700, Nashville, Tennessee 37203. The Company intends to satisfy the disclosure requirement regarding any amendment to, or a waiver of, a provision of the
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Code of Ethics for the Company’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions by posting such information on the Company’s website.
Section 16(a) Compliance
Information with respect to compliance with Section 16(a) of the Exchange Act set forth in the Company’s Proxy Statement relating to the Annual Meeting of Shareholders to be held on June 5, 2023 under the caption “Security Ownership of Certain Beneficial Owners and Management – Delinquent Section 16(a) Reports,” is incorporated herein by reference.
Stockholder Recommendation of Director Candidates
Information with respect to the Company’s policy relating to stockholder recommendations of director candidates is set forth in the Company’s Proxy Statement relating to the Annual Meeting of Stockholders to be held on June 5, 2023 under the caption “Shareholder Recommendation or Nomination of Director Candidates,” and is incorporated herein by reference.
Audit Committee
Information relating to the Company’s Audit Committee, its members and the Audit Committee’s financial experts, set forth in the Company’s Proxy Statement relating to the Annual Meeting of Shareholders to be held on June 5, 2023 under the caption “Committee Membership,” is incorporated herein by reference.
Item 11. Executive Compensation
Information relating to executive compensation, set forth in the Company’s Proxy Statement relating to the Annual Meeting of Shareholders to be held on June 5, 2023 under the captions “Compensation Discussion and Analysis,” “Executive Compensation,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Committee Report” and “Director Compensation,” is incorporated herein by reference, except with respect to the disclosure under the heading "Executive Compensation - Pay Versus Performance."
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information relating to the security ownership of management and certain beneficial owners, set forth in the Company’s Proxy Statement relating to the Annual Meeting of Shareholders to be held on June 5, 2023 under the caption “Security Ownership of Certain Beneficial Owners and Management,” is incorporated herein by reference.
Information relating to securities authorized for issuance under the Company’s equity compensation plans, set forth in Item 5 of this report under the caption “Equity Compensation Plan Information,” is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information relating to certain relationships and related transactions, and director independence, set forth in the Company’s Proxy Statement relating to the Annual Meeting of Shareholders to be held on June 5, 2023 under the captions “Certain Relationships and Related Transactions” and “Corporate Governance – Independence of Directors,” is incorporated herein by reference.
103
Item 14. Principal Accountant Fees and Services
Our independent registered public accounting firm is BDO USA, LLP , Nashville, TN , PCAOB ID# 243 .
Information relating to the fees paid to the Company’s accountants, set forth in the Company’s Proxy Statement relating to the Annual Meeting of Shareholders to be held on June 5, 2023 under the caption “Ratification of Appointment of Independent Registered Public Accounting Firm,” is incorporated herein by reference.
Item 15. Exhibits and Financial Statement Schedules
Index to Historical Financial Statements, Financial Statement Schedules and Exhibits
1. Financial Statements
The following financial statements of Healthcare Realty Trust Incorporated are included in Item 8 of this Annual Report on Form 10-K.
• Consolidated Balance Sheets – December 31, 2022 and December 31, 2021.
• Consolidated Statements of Income for the years ended December 31, 2022, December 31, 2021 and December 31, 2020.
• Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, December 31, 2021 and December 31, 2020.
• Consolidated Statements of Equity for the years ended December 31, 2022, December 31, 2021 and December 31, 2020.
• Consolidated Statements of Cash Flows for the years ended December 31, 2022, December 31, 2021 and December 31, 2020.
• Notes to Consolidated Financial Statements.
2. Financial Statement Schedules
Schedule II — Valuation and Qualifying Accounts for the years ended December 31, 2022, 2021, and 2020 110
Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2022 111
Schedule IV — Mortgage Loans on Real Estate Assets as of December 31, 2022 112
All other schedules are omitted because they are either not applicable, not required or because the information is included in the consolidated financial statements or notes thereto.
3. Exhibits
EXHIBIT NUMBER
DESCRIPTION OF EXHIBITS
2.1 — Agreement and Plan of Merger, dated as of February 28, 2022, by and among Healthcare Realty Trust Incorporated (now known as HRTI, LLC), Healthcare Trust of America, Inc. (now known as Healthcare Realty Trust Incorporated), Healthcare Trust of America Holdings, L.P. (now known as Healthcare Realty Holdings, L.P.), and HR Acquisition 2, LLC. 1
3.1 — Fifth Articles of Amendment and Restatement of Healthcare Trust of America, Inc. (now known as Healthcare Realty Trust Incorporated), effective March 22, 2014. 2
3.2
— Articles of Amendment of Healthcare Trust of America, Inc. (now known as Healthcare Realty Trust Incorporated), effective December 15, 2014. 3
3.3 — A rticles of Amendment of Healthcare Trust of America, Inc. (now known as Healthcare Realty Trust Incorporated), effective July 20, 2022. 4
3.4 — A rticles Supplementary of Healthcare Trust of America, In c. (now known as Healthcare Realty T rust Incorporated ) effective July 14, 2017 . 5
3.5 — Fourth Amended and Restated Bylaws of Healthcare Trust of America, Inc. (now known as Healthcare Realty Trust Incorporated). 6
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3.6 — C ertificate of Amendment to Certificate of Limited Partnership of Healthcare Trust of America Holdings, L.P. (now known as Healthcare Realty Holdings, L.P. ) 4
4.1 — Description of Registrant's securities registered pursuant to Section 12 of the Securities Exchange Act of 1934. 3
4.2 — Indenture, dated as of March 28, 2013, among Healthcare Trust of America Holdings, LP (now Healthcare Realty Holdings, L.P.), Healthcare Trust of America, Inc. (now Healthcare Realty Trust Incorporated) and U.S. Bank National Association, as trustee, including the form of 3.70% Senior Notes due 2023 and the guarantee thereof . 7
4.3 — 2026 Notes Indenture, dated as of July 12, 2016 among Healthcare Trust of America Holdings, LP (now Healthcare Realty Holdings, L.P.), Healthcare Trust of America, Inc. (now Healthcare Realty Trust Incorporated ) , and U.S. Bank National Association, as trustee, including the form of 3.50% Senior Notes due 2026 and the guarantee thereof. 8
4.4 — 202 7 Notes Indenture, dated as of June 8, 2017 among Healthcare Trust of America Holdings, LP (now Healthcare Realty Holdings, L.P.), Healthcare Trust of America, Inc. (now Healthcare Realty Trust Incorporated ) , and U.S. Bank National Association, as trustee, including the form of 3. 75 % Senior Notes due 202 7 and the guarantee thereof. 9
4.5 — 20 30 Notes Indenture, dated as of September 16, 2019 among Healthcare Trust of America Holdings, LP (now Healthcare Realty Holdings, L.P.), Healthcare Trust of America, Inc. (now Healthcare Realty Trust Incorporated ) , and U.S. Bank National Association, as trustee, including the form of 3. 1 0% Senior Notes due 20 30 and the guarantee thereof. 1 0
4.6 — 203 1 Notes Indenture, dated as of September 28 , 20 20 among Healthcare Trust of America Holdings, LP (now Healthcare Realty Holdings, L.P.), Healthcare Trust of America, Inc. (now Healthcare Realty Trust Incorporated ) , and U.S. Bank National Association, as trustee, including the form of 2 . 0 0% Senior Notes due 203 1 and the guarantee thereof. 1 1
4.7 — I ndenture , dated as of July 22, 2022, by and among Healthcare Realty Holdings, L.P., Healthcare Realty Trust Incorporated, and U.S. Bank Trust Company, Nationa l Association. 4
4.8 — S upplemental Indenture No. 1, dated as of July 22, 2022, by and among Healthcare Realty Holdings, L.P., Healthcare Realty Trust Incorporated, and U.S. Bank Trust Company, National Association. 4
4.9 — Supplemental Indenture No. 2 , dated as of July 22, 2022, by and among Healthcare Realty Holdings, L.P., Healthcare Realty Trust Incorporated, and U.S. Bank Trust Company, National Association. 4
4.10 — Supplemental Indenture No. 3 , dated as of July 22, 2022, by and among Healthcare Realty Holdings, L.P., Healthcare Realty Trust Incorporated, and U.S. Bank Trust Company, National Association. 4
4.11 — Supplemental Indenture No. 4 , dated as of July 22, 2022, by and among Healthcare Realty Holdings, L.P., Healthcare Realty Trust Incorporated, and U.S. Bank Trust Company, National Association. 4
4.12 — T enth Supplemental Indenture, dated as of July 22, 2022, by and between HRTI, LLC and Truist Bank. 4
4.13 — 3 .875% Senior Notes due 20 25. 4
4.14 — 3 .625% Senior Notes due 2028 (No. 2028-1). 4
4.15 — 3 .625% Senior Notes due 2028 (No. 2028-2). 4
4.16 — 2 .400% Senior Notes due 2030 (No. 2030-1). 4
4.17 — 2 .400% Senior Notes due 2030 (No. 2030-2). 4
4.18 — 2 .050% Senior Notes due 2031. 4
4.19 — Guarantee of 2025 Note. 4
4.20 — Guarantee of 2028 Note. 4
4.21 — Guarantee of 2030 Note. 4
4.22 — Guarantee of 2031 Note. 4
10.1
— Term Loan Agreement, dated as of May 13, 2022, among Healthcare Trust of America, Inc. (now known as Healthcare Realty Trust Incorporated), Healthcare Trust of America Holdings, LP (now known as Healthcare Realty Holdings, L.P.), the lenders named therein, and J.P. Morgan Chase Bank, N.A., as administrative agent for such lenders. 1 2
10.2
— Fourth Amended and Restated Revolving Credit and Term Loan Agreement, dated as of July 20, 2022, by and among Healthcare Trust of America Holdings, LP (now known as Healthcare Realty Holdings, L.P.), Healthcare Trust of America, Inc. (now known as Healthcare Realty Trust Incorporated), the lenders named therein, and Wells Fargo Bank, National Association. 4
10.3
— Contribution and Assignment Agreement, dated as of July 20, 2022, by and between Healthcare Realty Trust Incorporated and Healthcare Realty Holdings, L.P. 4
10.4
— Third Amended and Restated Employment Agreement, dated February 16, 2016, by and between Todd J. Meredith and Healthcare Realty Trust Incorporated (now known as HRTI, LLC) . 1 3
10.5
— Amendment No. 1 to Third Amended and Restated Employment Agreement, dated February 12, 2020, between Todd J. Meredith and Healthcare Realty Trust Incorporated (now known as HRTI, LLC) . 14
105
10.6
— Amendment No. 2 to Third Amended and Restated Employment Agreement, dated February 18, 2022, between Todd J. Meredith and Healthcare Realty Trust Incorporated (now known as HRTI, LLC). 15
10.7 — Third Amended and Restated Employment Agreement, dated February 15, 2017, between John M. Bryant, Jr. and H ealthcare Realty Trust Incorporated (now known as HRTI, LLC). 16
10.8 — Amendment No. 1 to Third Amended and Restated Employment Agreement, dated February 12, 2020, between John M. Bryant, Jr. and Healthcare Realty Trust Incorporated (now known as HRT I, LLC) . 1 4
10.9 — Amended and Restated Employment Agreement, dated January 1, 2017, between Robert E. Hull and Healthcare Realty Trust Incorporated (now known as HRTI , LLC) . 1 3
10.10 — Amendment No. 1 to Amended and Restated Employment Agreement, dated February 12, 2020, between Robert E. Hull and Healthcare R ealty Trust Incorporated (now known as HRTI, LLC) . 14
10.11
— Amendment No. 2 to Amended and Restated Employment Agreement, dated February 18, 2022, between Robert E. Hull and Healthcare Realty Trust Incorporated (now known as HRTI, LLC). 15
10.12 — Amended and Restated Employment Agreement, dated February 2, 2016, between J. Christopher Douglas and Healthcare Realty Trust Incorporated (now known as HRTI, LLC) . 17
10.13 — Amendment No. 1 to Amended and Restated Employment Agreement, dated February 12, 2020, between J. Christopher Douglas and Healthcare Realty Trust Incorporated (now known as HRTI, LLC) . 1 4
10.14
— Amendment No. 2 to Amended and Restated Employment Agreement, dated February 18, 2022, between J. Christopher Douglas and Healthcare Realty Trust Incorporated (now known as HRTI, LLC). 15
10.15 — Amended and Restated Employment Agreement , dated July 1, 2021, between Julie F. Wilson and Healthcare Realty Trust Incorporated (now known as HRTI, LLC) . 1 8
10.16 — Executive Incentive Program, dated August 1, 2022. 1 9
10.17 — Second Amended and Restated Agreement of Limited Partnership of Healthcare Trust of America Holdings, LP (now known as Healthcare Realty Holdings, L.P.). 4
10.18 — Form of LTIP Award Agreement (CEO Version) . 20
10.19 — Form of LTIP Award Agreement (Executive Version) . 20
10.20 — Form of LTIP Award Agreement (Director Version) . 20
10.21 — Form of Indemnification Agreement for Directors . 21
10.22 — Restricted Stock Award Certificate . 2 2
10.23 — Healthcare Trust of America, Inc. (now Healthcare Realty Trust Incorporated) Amended and Restated 2006 Incentive Plan, dated April 29, 2021. 2 3
10.24 — Form of LTIP Award Agreement. (filed herewith)
21
— Subsidiaries of the Registrant. (filed herewith)
23
— Consent of BDO USA, LLP, independent registered public accounting firm. (filed herewith)
31.1
— Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
31.2
— Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
32
— Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)
101.INS
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101.SCH
— XBRL Taxonomy Extension Schema Document. (filed herewith)
101.CAL
— XBRL Taxonomy Extension Calculation Linkbase Document. (filed herewith)
101.LAB
— XBRL Taxonomy Extension Labels Linkbase Document. (filed herewith)
101.DEF
— XBRL Taxonomy Extension Definition Linkbase Document. (filed herewith)
101.PRE
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104 — Cover Page Interactive Data File (formatted as Inline XBRL document and contained in Exhibit 101).
1 Filed as an exhibit to Legacy HTA’s (File No. 001-35568) Form 8-K filed with the SEC on March 1, 2022 and hereby incorporated by reference.
2 Filed as an exhibit to Legacy HTA's (File No. 001-35568) Form 8-K filed with the SEC on March 11, 2014 and hereby incorporated by reference.
3 Filed as an exhibit to Legacy HTA’s (File No. 001-35568) Form 8-K filed with the SEC on December 16, 2014 and hereby incorporated by reference.
4 Filed as an exhibit to the Company's (File No. 001-35568) Form 8-K filed with the SEC on July 26, 2022 and hereby incorporated by reference.
5 Filed as an exhibit to Legacy HTA’s (File No. 001-35568) Form 8-K filed with the SEC on July 14, 2017 and hereby incorporated by reference.
6 Filed as an exhibit to Legacy HTA's (File No. 001-35568) Form 8-K filed with the SEC on April 29, 2020 and hereby incorporated by reference.
7 Filed as an exhibit to Legacy HTA's (File No. 001-35568) Form 8-K filed with the SEC on March 28, 2013 and hereby incorporated by reference.
8 Filed as an exhibit to Legacy HTA's (File No. 001-35568) Form 8-K filed with the SEC on July 12, 2016 and hereby incorporated by reference.
106
9 Filed as an exhibit to Legacy HTA's (File No. 001-35568) Form 8-K filed with the SEC on June 13, 2017 and hereby incorporated by reference.
10 Filed as an exhibit to Legacy HTA's (File No. 001-35568) Form 8-K filed with the SEC on September 16, 2019 and hereby incorporated by reference.
11 Filed as an exhibit to Legacy HTA's (File No. 001-35568 Form 8-K filed with the SEC on September 28, 2020 and hereby incorporated by reference.
12 Filed as an exhibit to Legacy HTA's (File No. 001-35568) Form 8-K filed with the SEC on May 16, 2022 and hereby incorporated by reference.
13 Filed as an exhibit to Legacy HR's (File No. 001-11852) Form 10-K for the year ended December 31, 2015 filed with the SEC on February 16, 2016 and hereby incorporated by reference.
14 Filed as an exhibit to Legacy HR's (File No. 001-11852) Form 10-K for the year ended December 31, 2019 filed with the SEC on February 12, 2020 and hereby incorporated by reference.
15 Filed as an exhibit to Legacy HR's (File No. 001-11852) Form 10-K for the year ended December 31, 2021 filed with the SEC on February 22, 2022 and hereby incorporated by reference.
16 Filed as an exhibit to Legacy HR's (File No. 001-11852) Form 10-K for the year ended December 31, 2016 filed with the SEC on February 15, 2017 and hereby incorporated by reference.
17 Filed as an exhibit to Legacy HR's (File No. 001-11852) Form 8-K filed with the SEC on February 2, 2016 and hereby incorporated by reference.
18 Filed as an exhibit to Legacy HR's (File No. 001-11852) Form 10-Q for the quarter ended June 30, 2021 filed with the SEC on August 4, 2021 and hereby incorporated by reference.
19 Filed as an exhibit to the Company's (File No. 001-35568) Form 8-K filed with the SEC on August 5, 2022 and hereby incorporated by reference.
20 Filed as an exhibit to Legacy HTA's (File No. 001-35568) Form 8-K filed with the SEC on May 18, 2012 and hereby incorporated by reference.
21 Filed as an exhibit to Legacy HTA's (File No. 001-35568) Form 8-K filed with the SEC on December 22, 2010 and hereby incorporated by reference.
22 Filed as an exhibit to Legacy HTA's (File No. 001-35568) Form 10-K for the year ended December 31, 2016 filed with the SEC on February 21, 2017 and hereby incorporated by reference.
23 Included as Appendix A to Legacy HTA's (File No. 001-35568) Definitive Proxy Statement on Schedule 14A filed with the SEC on April 30, 2021 and hereby incorporated by reference.
Executive Compensation Plans and Arrangements
The following is a list of all executive compensation plans and arrangements filed as exhibits to this Annual Report on Form 10-K:
1. Third Amended and Restated Employment Agreement, dated February 16, 2016, between Todd J. Meredith and the Company (filed as Exhibit 10.4)
2. Amendment No. 1 to Third Amended and Restated Employment Agreement, dated February 12, 2020, between Todd J. Meredith and the Company (filed as Exhibit 10.5)
3. Amendment No. 2 to Third Amended and Restated Employment Agreement, dated February 22, 2022, between Todd J. Meredith and the Company (filed as Exhibit 10.6)
4. Third Amended and Restated Employment Agreement, dated February 15, 2017, between John M. Bryant, Jr. and the Company (filed as Exhibit 10.7)
5. Amendment No. 1 to Third Amended and Restated Employment Agreement, dated February 12, 2020, between John M. Bryant, Jr. and the Company (filed as Exhibit 10.8)
6. Amended and Restated Employment Agreement, dated January 1, 2017, between Robert E. Hull and the Company (filed as Exhibit 10.9)
7. Amendment No. 1 to Amended and Restated Employment Agreement, dated February 12, 2020, between Robert E. Hull and the Company (filed as Exhibit 10.10)
8. Amendment No. 2 to Amended and Restated Employment Agreement, dated February 22, 2022, between Robert E. Hull and the Company (filed as Exhibit 10.11)
9. Amended and Restated Employment Agreement, dated February 2, 2016, between J. Christopher Douglas and the Company (filed as Exhibit 10.12)
10. Amendment No. 1 to Amended and Restated Employment Agreement, dated February 12, 2020, between J. Christopher Douglas and the Company (filed as Exhibit 10.13)
11. Amendment No. 2 to Amended and Restated Employment Agreement, dated February 22, 2022, between J. Christopher Douglas and the Company (filed as Exhibit 10.14)
12. Amended and Restated Employment Agreement between the Company and Julie F. Wilson, dated July 1, 2021 (filed as Exhibit 10.15)
13. Executive Incentive Program (filed as Exhibit 10.16)
14. Healthcare Realty Trust Incorporated Form of Restricted Stock Agreement for Officers (filed as Exhibit 10.21)
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15. Healthcare Trust of America, Inc. (now Healthcare Realty Trust Incorporated) Amended and Restated 2006 Incentive Plan, dated April 29, 2021 (filed as Exhibit 10.23)
16. Form of Healthcare Realty Trust Incorporated Restricted Stock Unit Agreement (filed as Exhibit 10.22)
17. Form of LTIP Award Agreement (filed as Exhibit 10.24)
Item 16. Form 10-K Summary
None.
SIGNATURES AND SCHEDULES
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
HEALTHCARE REALTY TRUST INCORPORATED
By: /s/ TODD J. MEREDITH
Todd J. Meredith
President, Chief Executive Officer, and Director
March 1, 2023
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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SIGNATURE TITLE DATE
/s/ Todd J. Meredith President, Chief Executive Officer and Director March 1, 2023
Todd J. Meredith (Principal Executive Officer)
/s/ J. Christopher Douglas Executive Vice President and Chief Financial March 1, 2023
J. Christopher Douglas Officer (Principal Financial Officer)
/s/ Amanda L. Callaway Senior Vice President and Chief Accounting March 1, 2023
Amanda L. Callaway Officer (Principal Accounting Officer)
/s/ John V. Abbott Director March 1, 2023
John V. Abbott
/s/ Nancy H. Agee Director March 1, 2023
Nancy H. Agee
/s/ W. Bradley Blair, II Director March 1, 2023
W. Bradley Blair, II
/s/ Vicki U. Booth Director March 1, 2023
Vicki U. Booth
/s/ Edward H. Braman Director March 1, 2023
Edward H. Braman
/s/ Ajay Gupta Director March 1, 2023
Ajay Gupta
/s/ James J. Kilroy Director March 1, 2023
James J. Kilroy
/s/ Jay P. Leupp Director March 1, 2023
Jay P. Leupp
/s/ Peter F. Lyle Director March 1, 2023
Peter F. Lyle
/s/ Constance B. Moore Director March 1, 2023
Constance B. Moore
/s/ John Knox Singleton Director March 1, 2023
John Knox Singleton
/s/ Christann M. Vasquez Director March 1, 2023
Christann M. Vasquez
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Schedule II – Valuation and Qualifying Accounts for the years ended December 31, 2022, 2021 and 2020
Dollars in thousands ADDITIONS AND DEDUCTIONS
DESCRIPTION BALANCE
AT BEGINNING OF PERIOD CHARGED/(CREDITED) TO COSTS AND EXPENSES CHARGED
TO OTHER ACCOUNTS UNCOLLECTIBLE ACCOUNTS WRITTEN-OFF BALANCE
AT END OF PERIOD
2022 Accounts receivable allowance $ 654 $ 3,306 $ — $ 6 $ 3,954
2021 Accounts receivable allowance
$ 604 $ 72 $ — $ 22 $ 654
2020 Accounts receivable allowance
$ 418 $ 207 $ — $ 21 $ 604
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Schedule III – Real Estate and Accumulated Depreciation as of December 31, 2022
Dollars in thousands LAND 1
BUILDINGS, IMPROVEMENTS,
LEASE INTANGIBLES AND CIP 1
MARKET NUMBER OF PROP. INITIAL INVESTMENT COST CAPITALIZED subsequent to acquisition TOTAL INITIAL INVESTMENT COST CAPITALIZED subsequent to acquisition TOTAL PERSONAL PROPERTY 2, 3, 5
TOTAL PROPERTY 1, 3 ACCUMULATED DEPRECIATION 4 ENCUMBRANCES 5
DATE ACQUIRED DATE CONST.
Dallas, TX 45 $ 95,647 $ 1,063 $ 96,710 $ 1,081,969 $ 129,495 $ 1,211,464 $ 551 $ 1,308,725 $ 202,031 $ — 2003-2022 1974-2021
Seattle, WA 29 59,412 4,883 64,295 558,280 78,330 636,610 726 701,631 164,423 — 2008-2022 1974-2018
Los Angeles, CA 23 95,360 3,164 98,524 436,629 55,941 492,570 453 591,547 129,663 38,373 1993-2022 1959-2018
Boston, MA 18 128,904 — 128,904 456,963 2,173 459,136 — 588,040 13,513 — 2022 1860-2019
Charlotte, NC 32 35,366 36 35,402 454,299 25,616 479,915 105 515,422 95,363 — 2008-2022 1961-2018
Houston, TX 34 82,539 2,850 85,389 669,553 27,966 697,519 57 782,965 63,486 — 1993-2022 1974-2018
Miami, FL 23 72,304 60 72,364 429,781 17,413 447,194 105 519,663 52,920 — 1994-2022 1954-2021
Atlanta, GA 28 45,220 4,159 49,379 463,963 9,519 473,482 95 522,956 63,773 15,778 2017-2022 1960-2014
Tampa, FL 20 30,790 743 31,533 419,354 ( 5,061 ) 414,293 33 445,859 18,991 — 1994-2022 1954-2015
Denver, CO 33 70,478 6,220 76,698 491,881 51,208 543,089 609 620,396 65,123 6,818 2010-2022 1942-2020
Raleigh, NC 27 52,954 3,666 56,620 394,574 6,231 400,805 9 457,434 15,566 — 2019-2022 1977-2020
Phoenix, AZ 35 20,257 5 20,262 448,657 18,836 467,493 425 488,180 30,281 — 2007-2022 1971-2006
Chicago, IL 7 32,374 — 32,374 271,285 15,995 287,280 81 319,735 28,243 — 2004-2022 1970-2017
Indianapolis, IN 36 52,180 — 52,180 292,372 5,437 297,809 13 350,002 19,705 — 2019-2022 1988-2013
Hartford, CT 30 43,326 — 43,326 234,702 1,150 235,852 — 279,178 8,015 — 2022 1955-2017
Nashville, TN 12 41,291 2,057 43,348 272,122 84,395 356,517 1,424 401,289 92,720 — 2004-2022 1976-2021
New York, NY 14 64,402 — 64,402 192,029 2,220 194,249 — 258,651 4,771 — 2022 1920-2014
Austin, TX 13 25,718 1,346 27,064 261,585 28,675 290,260 142 317,466 40,363 — 2007-2022 1972-2015
Orlando, FL 8 20,698 10 20,708 198,719 3,556 202,275 1 222,984 11,654 — 1998-2022 1988-2009
Memphis, TN 11 12,811 1,090 13,901 118,426 70,325 188,751 317 202,969 60,624 — 1999-2022 1982-2021
Other (51 markets) 210 315,986 10,276 326,262 3,324,552 205,043 3,529,595 1,223 3,857,080 457,572 23,728 1993-2022
Total real estate 688 1,398,017 41,628 1,439,645 11,471,695 834,463 12,306,158 6,369 13,752,172 1,638,800 84,697
Land held for develop. — 74,265 — 74,265 — — — — 74,265 1,183 —
Construction in Progress — — — — 35,560 — 35,560 — 35,560 — —
Corporate property — 1,853 — 1,853 1,787 1,240 3,027 5,538 10,418 5,288 —
Financing lease right-of-use assets — — — — — — — — 83,824 — —
Investment in financing receivables, net — — — — — — — — 120,236 — —
Total properties 688 1,474,135 $ 41,628 $ 1,515,763 $ 11,509,042 $ 835,703 $ 12,344,745 $ 11,907 $ 14,076,475 $ 1,645,271 $ 84,697
1 Includes one asset held for sale at 12/31/22 of approximately $ 18.9 million.
2 Total properties as of December 31, 2022 have an estimated aggregate total cost of $ 13.0 billion for federal income tax purposes.
3 Depreciation is provided for on a straight-line basis on buildings and improvements over 3.0 to 49.0 years, lease intangibles over 1.2 to 99.0 years, personal property over 3.0 to 20.0 years, and land improvements over 2.0 to 39.0 years.
4 Includes unamortized premium of $ 0.5 million and unaccreted discount of $ 38 thousand and debt issuance costs of $ 0.3 million as of December 31, 2022.
5 Includes merger of Healthcare Trust of America, Inc. buildings, acquired in 2022.
6 Rollforward of Total Property and Accumulated Depreciation, including assets held for sale, for the year ended December 31, 2022, 2021 and 2020 follows:
YEAR ENDED DEC. 31, 2022 YEAR ENDED DEC. 31, 2021 YEAR ENDED DEC. 31, 2020
Dollars in thousands TOTAL PROPERTY ACCUMULATED DEPRECIATION TOTAL PROPERTY ACCUMULATED DEPRECIATION TOTAL PROPERTY ACCUMULATED DEPRECIATION
Beginning balance $ 5,104,942 $ 1,338,743 $ 4,670,226 $ 1,249,679 $ 4,359,993 $ 1,121,102
Additions during the period
Real estate acquired 9,780,070 241,285 374,912 7,668 430,205 8,313
Other improvements 219,783 205,703 103,035 191,875 80,462 178,636
Land held for development 49,416 — 2,021 — 2,579 282
Construction in progress 31,586 — 3,974 — — —
Investment in financing receivable, net ( 66,509 ) — 186,745 — — —
Financing lease right-of-use assets, net 52,249 — 11,909 — 19,667 —
Corporate Properties 3,640 236 — — — —
Retirement/dispositions
Real estate ( 1,098,702 ) ( 140,696 ) ( 247,880 ) ( 110,479 ) ( 222,680 ) ( 58,654 )
Ending balance $ 14,076,475 $ 1,645,271 $ 5,104,942 $ 1,338,743 $ 4,670,226 $ 1,249,679
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Schedule IV – Mortgage Loans on Real Estate Assets as of December 31, 2022
Dollars in thousands Final Maturity Date Payment Terms Prior Liens Face Amount Carrying Amount Principal Amount of Loans Subject to Delinquent Principal or Interest
Mortgage loan on real estate located in:
Texas 7.00 % 12/31/2023 (1) $ — $ 31,150 $ 30,552 $ —
Florida 6.00 % 2/27/2026 (2) $ — 13,062 12,988 —
Mezzanine loans on real estate located in:
Texas 8.00 % 6/24/2024 (3) — 54,119 51,052 —
North Carolina 8.00 % 12/22/2024 (4) — 6,000 5,493 —
Total real estate notes receivable $ — $ 104,331 $ 100,085 $ —
Accrued interest receivable — — 758 —
Deferred fee — — ( 1,200 ) —
Total real estate notes receivable, net $ — $ 104,331 $ 99,643 $ —
1 Twelve-month prefunded interest reserve, with principal sum and interest on unpaid principal due on the maturity date.
2 Construction loan up to $ 65 million with periodic disbursements. Interest only payments due with principal and any unpaid interest due on the maturity date.
3 Interest is accrued and funded utilizing interest reserves, funded through payment-in-kind interest, until such time the interest reserve is fully funded. Thereafter, interest only payments due with principal and any unpaid interest due on the maturity date.
4 Capitalized interest through maturity, with outstanding principal and accrued interest due on the maturity date.
The following shows changes in the carrying amounts of mortgage loans on real estate assets during the years ended December 31, 2022, 2021 and 2020:
Year Ended December 31,
2022 2021 2020
Balance as of the beginning of the year $ — $ — $ —
Additions:
Fair value real estate notes assumed 74,819 — —
New real estate notes 23,325 — —
Capitalized interest 1,499 — —
Accretion of fees and other items — — —
Deductions:
Collection of real estate loans — — —
Deferred fees and other items — — —
Balance as of the end of the year $ 99,643 $ — $ —
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are omitted because they are not required under the related instructions or are not applicable, or because the required information is shown in the consolidated financial statements or notes thereto.
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