UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~June 30, 2020


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35568 (Healthcare Trust of America, Inc.)

Commission File Number: 333-190916 (Healthcare Trust of America Holdings, LP)

_________________________

HEALTHCARE TRUST OF AMERICA, INC.

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

(Exact name of registrant as specified in its charter)

Maryland

(Healthcare Trust of America, Inc.)

20-4738467

Delaware

(Healthcare Trust of America Holdings, LP)

20-4738347

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

16435 N. Scottsdale Road, Suite 320,

Scottsdale,

Arizona

85254

(480)

998-3478

(Address of Principal Executive Office and Zip Code)

(Registrant’s telephone number, including area code)


www.htareit.com
(Internet address)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common stock, $0.01 par value

HTA

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Healthcare Trust of America, Inc.	☒	Yes	¨ No
Healthcare Trust of America Holdings, LP	☒	Yes	¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Healthcare Trust of America, Inc.	☒	Yes	¨ No
Healthcare Trust of America Holdings, LP	☒	Yes	¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Healthcare Trust of America, Inc.

☒

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

Healthcare Trust of America Holdings, LP

☐

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

Healthcare Trust of America, Inc.

☐

Smaller reporting company

☐

Emerging growth company

Healthcare Trust of America Holdings, LP

☐

Smaller reporting company

☐

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


Healthcare Trust of America, Inc.			☐
Healthcare Trust of America Holdings, LP			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Healthcare Trust of America, Inc.	☐	Yes	x No
Healthcare Trust of America Holdings, LP	☐	Yes	x No

As of ~~April~~July 30, 2020, there were ~~218,480,985~~218,544,671 shares of Class A common stock of Healthcare Trust of America, Inc. outstanding.

Explanatory Note

This quarterly report combines the Quarterly Reports on Form 10-Q (“Quarterly Report”) for the quarter ended ~~March 31,~~June 30, 2020, of Healthcare Trust of America, Inc. (“HTA”), a Maryland corporation, and Healthcare Trust of America Holdings, LP (“HTALP”), a Delaware limited partnership. Unless otherwise indicated or unless the context requires otherwise, all references in this Quarterly Report to “we,” “us,” “our,” “the Company” or “our Company” refer to HTA and HTALP, collectively, and all references to “common stock” shall refer to the Class A common stock of HTA.

HTA operates as a real estate investment trust (“REIT”) and is the general partner of HTALP. As of ~~March 31,~~June 30, 2020, HTA owned a 98.4% partnership interest in HTALP, and other limited partners, including some of HTA’s directors, executive officers and their affiliates, owned the remaining partnership interest (including the long-term incentive plan (“LTIP” Units)) in HTALP. As the sole general partner of HTALP, HTA has the full, exclusive and complete responsibility for HTALP’s day-to-day management and control, including its compliance with the Securities and Exchange Commission (“SEC”) filing requirements.

We believe it is important to understand the few differences between HTA and HTALP in the context of how we operate as an integrated consolidated company. HTA operates as an umbrella partnership REIT structure in which HTALP and its subsidiaries hold substantially all of the assets. HTA’s only material asset is its ownership of partnership interests of HTALP. As a result, HTA does not conduct business itself, other than acting as the sole general partner of HTALP, issuing public equity from time to time and guaranteeing certain debts of HTALP. HTALP conducts the operations of the business and issues publicly-traded debt, but has no publicly-traded equity. Except for net proceeds from public equity issuances by HTA, which are generally contributed to HTALP in exchange for partnership units of HTALP, HTALP generates the capital required for the business through its operations and by direct or indirect incurrence of indebtedness or through the issuance of its partnership units (“OP Units”).

Noncontrolling interests, stockholders’ equity and partners’ capital are the primary areas of difference between the condensed consolidated financial statements of HTA and HTALP. Limited partnership units in HTALP are accounted for as partners’ capital in HTALP’s condensed consolidated balance sheets and as a noncontrolling interest reflected within equity in HTA’s condensed consolidated balance sheets. The differences between HTA’s stockholders’ equity and HTALP’s partners’ capital are due to the differences in the equity issued by HTA and HTALP, respectively.

We believe combining the Quarterly Reports of HTA and HTALP, including the notes to the condensed consolidated financial statements, into this single Quarterly Report results in the following benefits:

•enhances stockholders’ understanding of HTA and HTALP by enabling stockholders to view the business as a whole in the same manner that management views and operates the business;

•eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure in this Quarterly Report applies to both HTA and HTALP; and

•creates time and cost efficiencies through the preparation of a single combined Quarterly Report instead of two separate Quarterly Reports.

In order to highlight the material differences between HTA and HTALP, this Quarterly Report includes sections that separately present and discuss areas that are materially different between HTA and HTALP, including:

•the condensed consolidated financial statements;

•certain accompanying notes to the condensed consolidated financial statements, including Note 8 - Debt, Note 11 - Stockholders’ Equity and Partners’ Capital, Note 13 - Per Share Data of HTA, and Note 14 - Per Unit Data of HTALP;

•as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), the Funds From Operations (“FFO”) and Normalized FFO in Part 1, Item 2 of this Quarterly Report;

•the Controls and Procedures in Part 1, Item 4 of this Quarterly Report; and

•the Certifications of the Chief Executive Officer and the Chief Financial Officer included as Exhibits 31 and 32 to this Quarterly Report.

In the sections of this Quarterly Report that combine disclosure for HTA and HTALP, this Quarterly Report refers to actions or holdings as being actions or holdings of the Company. Although HTALP (directly or indirectly through one of its subsidiaries) is generally the entity that enters into contracts, holds assets and issues or incurs debt, management believes this presentation is appropriate for the reasons set forth above and because the business of the Company is a single integrated enterprise operated through HTALP.

HEALTHCARE TRUST OF AMERICA, INC. AND

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

TABLE OF CONTENTS

Page

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

Healthcare Trust of America, Inc.

Condensed Consolidated Balance Sheets as of~~March 31,~~ June 30, 2020 and December 31, 2019

Condensed Consolidated Statements of Operations for the Three and Six Months Ended ~~March 31,~~June 30, 2020 and 2019

Condensed Consolidated Statements of Comprehensive ~~(Loss)~~ Income for the Three and Six Months Ended ~~March 31,~~June 30, 2020 and 2019

Condensed Consolidated Statements of Equity for the Three and Six Months Ended ~~March 31,~~June 30, 2020 and 2019

Condensed Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March 31,~~June 30, 2020 and 2019

Healthcare Trust of America Holdings, LP

Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2020 and December 31, 2019

Condensed Consolidated Statements of Operations for the Three and Six Months Ended ~~March 31,~~June 30, 2020 and 2019

Condensed Consolidated Statements of Comprehensive ~~(Loss)~~ Income for the Three and Six Months Ended ~~March 31,~~June 30, 2020 and 2019

Condensed Consolidated Statements of Changes in Partners’ Capital for the Three and Six Months Ended ~~March 31,~~June 30, 2020 and 2019

Condensed Consolidated Statements of Cash Flows for the ~~Three~~Six Months Ended ~~March 31,~~June 30, 2020 and 2019

Notes for Healthcare Trust of America, Inc. and Healthcare Trust of America Holdings, LP

Notes to Unaudited Condensed Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

2829

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

3943

Item 4.

Controls and Procedures

3943

PART II - OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(Unaudited)


		March 31, 2020		December 31, 2019			June 30, 2020		December 31, 2019
ASSETS	ASSETS					ASSETS
Real estate investments:	Real estate investments:					Real estate investments:
Land	Land	$	587,363	$	584,546	Land	$	587,362	$	584,546
Building and improvements	Building and improvements	6,313,199		6,252,854		Building and improvements	6,333,715		6,252,854
Lease intangibles	Lease intangibles	630,535		628,066		Lease intangibles	629,478		628,066
Construction in progress	Construction in progress	40,350		28,150		Construction in progress	55,854		28,150
		7,571,447		7,493,616			7,606,409		7,493,616
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(1,519,845)		(1,447,815)		Accumulated depreciation and amortization	(1,589,137)		(1,447,815)
Real estate investments, net	Real estate investments, net	6,051,602		6,045,801		Real estate investments, net	6,017,272		6,045,801
Investment in unconsolidated joint venture	Investment in unconsolidated joint venture	65,526		65,888		Investment in unconsolidated joint venture	65,120		65,888
Cash and cash equivalents	Cash and cash equivalents	216,515		32,713		Cash and cash equivalents	75,202		32,713
Restricted cash	Restricted cash	4,957		4,903		Restricted cash	4,798		4,903
Receivables and other assets, net	Receivables and other assets, net	235,022		237,024		Receivables and other assets, net	234,456		237,024
Right-of-use assets - operating leases, net	Right-of-use assets - operating leases, net	238,516		239,867		Right-of-use assets - operating leases, net	236,438		239,867
Other intangibles, net	Other intangibles, net	12,041		12,553		Other intangibles, net	11,210		12,553
Total assets	Total assets	$	6,824,179	$	6,638,749	Total assets	$	6,644,496	$	6,638,749
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Liabilities:	Liabilities:					Liabilities:
Debt	Debt	$	2,959,723	$	2,749,775	Debt	$	2,818,695	$	2,749,775
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	154,842		171,698		Accounts payable and accrued liabilities	167,999		171,698
Derivative financial instruments - interest rate swaps	Derivative financial instruments - interest rate swaps	19,480		29		Derivative financial instruments - interest rate swaps	22,796		29
Security deposits, prepaid rent and other liabilities	Security deposits, prepaid rent and other liabilities	49,895		49,174		Security deposits, prepaid rent and other liabilities	52,655		49,174
Lease liabilities - operating leases	Lease liabilities - operating leases	198,628		198,650		Lease liabilities - operating leases	198,511		198,650
Intangible liabilities, net	Intangible liabilities, net	36,659		38,779		Intangible liabilities, net	35,076		38,779
Total liabilities	Total liabilities	3,419,227		3,208,105		Total liabilities	3,295,732		3,208,105
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies

Equity:	Equity:					Equity:
Preferred stock, $0.01 par value; 200,000,000 shares authorized; NaN issued and outstanding	Preferred stock, $0.01 par value; 200,000,000 shares authorized; NaN issued and outstanding	—		—		Preferred stock, $0.01 par value; 200,000,000 shares authorized; NaN issued and outstanding	—		—
Class A common stock, $0.01 par value; 1,000,000,000 shares authorized; 218,482,526 and 216,453,312 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively		2,185		2,165
Class A common stock, $0.01 par value; 1,000,000,000 shares authorized; 218,514,870 and 216,453,312 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively						Class A common stock, $0.01 par value; 1,000,000,000 shares authorized; 218,514,870 and 216,453,312 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively	2,185		2,165
Additional paid-in capital	Additional paid-in capital	4,909,397		4,854,042		Additional paid-in capital	4,912,419		4,854,042
Accumulated other comprehensive (loss) income	Accumulated other comprehensive (loss) income	(17,592)		4,546		Accumulated other comprehensive (loss) income	(20,768)		4,546
Cumulative dividends in excess of earnings	Cumulative dividends in excess of earnings	(1,553,710)		(1,502,744)		Cumulative dividends in excess of earnings	(1,609,048)		(1,502,744)
Total stockholders’ equity	Total stockholders’ equity	3,340,280		3,358,009		Total stockholders’ equity	3,284,788		3,358,009
Noncontrolling interests	Noncontrolling interests	64,672		72,635		Noncontrolling interests	63,976		72,635
Total equity	Total equity	3,404,952		3,430,644		Total equity	3,348,764		3,430,644
Total liabilities and equity	Total liabilities and equity	$	6,824,179	$	6,638,749	Total liabilities and equity	$	6,644,496	$	6,638,749

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

Table of Contents

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per share data)

(Unaudited)


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
Revenues:	Revenues:					Revenues:
Rental income	Rental income	$	185,531	$	168,875	Rental income	$	178,670	$	171,609	$	364,201	$	340,484
Interest and other operating income	Interest and other operating income	245		91		Interest and other operating income	175		148		420		239
Total revenues	Total revenues	185,776		168,966		Total revenues	178,845		171,757		364,621		340,723
Expenses:	Expenses:					Expenses:
Rental	Rental	56,862		51,468		Rental	56,200		52,938		113,062		104,406
General and administrative	General and administrative	11,518		11,290		General and administrative	10,160		10,079		21,678		21,369
Transaction	Transaction	140		40		Transaction	32		296		172		336
Depreciation and amortization	Depreciation and amortization	77,665		69,481		Depreciation and amortization	74,927		68,429		152,592		137,910
Interest expense	Interest expense	23,872		23,970		Interest expense	24,277		24,006		48,149		47,976

Total expenses	Total expenses	170,057		156,249		Total expenses	165,596		155,748		335,653		311,997
Gain (loss) on sale of real estate, net	Gain (loss) on sale of real estate, net	1,991		(37)		Gain (loss) on sale of real estate, net	—		—		1,991		(37)

Income from unconsolidated joint venture	Income from unconsolidated joint venture	422		486		Income from unconsolidated joint venture	379		548		801		1,034
Other income	Other income	76		535		Other income	97		41		173		576
Net income	Net income	$	18,208	$	13,701	Net income	$	13,725	$	16,598	$	31,933	$	30,299
Net income attributable to noncontrolling interests ⁽¹⁾	Net income attributable to noncontrolling interests ⁽¹⁾	(307)		(261)		Net income attributable to noncontrolling interests ⁽¹⁾	(236)		(339)		(543)		(600)
Net income attributable to common stockholders	Net income attributable to common stockholders	$	17,901	$	13,440	Net income attributable to common stockholders	$	13,489	$	16,259	$	31,390	$	29,699
Earnings per common share - basic:	Earnings per common share - basic:					Earnings per common share - basic:
Net income attributable to common stockholders	Net income attributable to common stockholders	$	0.08	$	0.07	Net income attributable to common stockholders	$	0.06	$	0.08	$	0.14	$	0.14
Earnings per common share - diluted:	Earnings per common share - diluted:					Earnings per common share - diluted:
Net income attributable to common stockholders	Net income attributable to common stockholders	$	0.08	$	0.06	Net income attributable to common stockholders	$	0.06	$	0.08	$	0.14	$	0.14
Weighted average common shares outstanding:	Weighted average common shares outstanding:					Weighted average common shares outstanding:
Basic	Basic	216,692		205,080		Basic	218,483		205,108		217,588		205,094
Diluted	Diluted	220,623		208,999		Diluted	222,088		209,005		221,228		209,002

(1) Includes amounts attributable to redeemable noncontrolling interests for the three and six months ended ~~March 31,~~June 30, 2019.

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

Table of Contents

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~(LOSS)~~ INCOME

(In thousands)

(Unaudited)

Three Months Ended March 31,
2020 2019
Net income $ 18,208 $ 13,701
Other comprehensive income (loss)
Change in unrealized losses on cash flow hedges (22,498) (390)
Total other comprehensive loss (22,498) (390)
Total comprehensive (loss) income (4,290) 13,311
Comprehensive loss (income) attributable to noncontrolling interests 53 (225)
Total comprehensive (loss) income attributable to common stockholders $ (4,237) $ 13,086


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019

Net income	$	13,725	$	16,598	$	31,933	$	30,299

Other comprehensive loss
Change in unrealized losses on cash flow hedges	(3,228)		(381)		(25,726)		(771)
Total other comprehensive loss	(3,228)		(381)		(25,726)		(771)

Total comprehensive income	10,497		16,217		6,207		29,528
Comprehensive income attributable to noncontrolling interests	(184)		(294)		(131)		(519)
Total comprehensive income attributable to common stockholders	$	10,313	$	15,923	$	6,076	$	29,009

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

Table of Contents

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

(Unaudited)


		Class A Common Stock					Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Cumulative Dividends in Excess of Earnings			Total Stockholders’ Equity			Noncontrolling Interests				Total Equity	Class A Common Stock								Additional Paid-In Capital				Accumulated Other Comprehensive Income (Loss)			Cumulative Dividends in Excess of Earnings				Total Stockholders’ Equity				Noncontrolling Interests			Total Equity
		Shares	Amount																				Accumulated Other Comprehensive Income (Loss)		Cumulative Dividends in Excess of Earnings		Total Stockholders’ Equity																						Noncontrolling Interests	Total Equity
Balance as of December 31, 2018	Balance as of December 31, 2018	205,267	$	2,053	$	4,525,969							$	307		$	(1,272,305)			$	3,256,024							$	78,890			$	3,334,914		Balance as of December 31, 2018	205,267			$	2,053			$	4,525,969		$	307				$	(1,272,305)	$	3,256,024	$	78,890	$	3,334,914
Share-based award transactions, net	Share-based award transactions, net	293	3		3,386		—		—		3,389			—			3,389		Share-based award transactions, net	293		3		3,386		—				—				3,389			—				3,389
Repurchase and cancellation of common stock	Repurchase and cancellation of common stock	(478)	(5)		(11,921)		—		—		(11,926)			—			(11,926)		Repurchase and cancellation of common stock	(478)		(5)		(11,921)		—				—				(11,926)			—				(11,926)
Redemption of noncontrolling interest and other	Redemption of noncontrolling interest and other	18	—		527		—		—		527			(527)			—		Redemption of noncontrolling interest and other	18		—		527		—				—				527			(527)				—
Dividends declared ($0.310 per common share)	Dividends declared ($0.310 per common share)	—	—		—		—		(63,578)		(63,578)			(1,306)			(64,884)		Dividends declared ($0.310 per common share)	—		—		—		—				(63,578)				(63,578)			(1,306)				(64,884)
Net income	Net income	—	—		—		—		13,440		13,440			233			13,673		Net income	—		—		—		—				13,440				13,440			233				13,673
Other comprehensive loss	Other comprehensive loss	—	—		—		(382)		—		(382)			(8)			(390)		Other comprehensive loss	—		—		—		(382)				—				(382)			(8)				(390)
Balance as of March 31, 2019	Balance as of March 31, 2019	205,100	$	2,051	$	4,517,961	$	(75)	$	(1,322,443)	$	3,197,494		$	77,282		$	3,274,776	Balance as of March 31, 2019	205,100		2,051		4,517,961		(75)				(1,322,443)				3,197,494			77,282				3,274,776
Issuance of OP Units in HTALP																			Issuance of OP Units in HTALP	—		—		—		—				—				—			2,603				2,603
Share-based award transactions, net																			Share-based award transactions, net	(3)		—		2,102		—				—				2,102			—				2,102
Repurchase and cancellation of common stock																			Repurchase and cancellation of common stock	(6)		—		(169)		—				—				(169)			—				(169)
Redemption of noncontrolling interest and other																			Redemption of noncontrolling interest and other	27		—		1,209		—				—				1,209			(785)				424
Dividends declared ($0.310 per common share)																			Dividends declared ($0.310 per common share)	—		—		—		—				(63,579)				(63,579)			(1,334)				(64,913)
Net income																			Net income	—		—		—		—				16,259				16,259			301				16,560
Other comprehensive loss																			Other comprehensive loss	—		—		—		(374)				—				(374)			(7)				(381)
Balance as of June 30, 2019																			Balance as of June 30, 2019	205,118		$	2,051	$	4,521,103	$	(449)			$	(1,369,763)			$	3,152,942		$	78,060			$	3,231,002


																		Class A Common Stock					Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Cumulative Dividends in Excess of Earnings		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
																		Shares	Amount
Balance as of December 31, 2019	Balance as of December 31, 2019	216,453	$	2,165	$	4,854,042	$	4,546	$	(1,502,744)	$	3,358,009	$	72,635	$	3,430,644	Balance as of December 31, 2019	216,453	$	2,165	$	4,854,042											$	4,546	$	(1,502,744)	$	3,358,009	$	72,635	$	3,430,644
Issuance of common stock, net	Issuance of common stock, net	1,675	17		50,003		—		—		50,020		—		50,020		Issuance of common stock, net	1,675	17		50,003		—		—		50,020		—		50,020
Share-based award transactions, net	Share-based award transactions, net	236	2		3,201		—		—		3,203		—		3,203		Share-based award transactions, net	236	2		3,201		—		—		3,203		—		3,203
Repurchase and cancellation of common stock	Repurchase and cancellation of common stock	(154)	(2)		(4,622)		—		—		(4,624)		—		(4,624)		Repurchase and cancellation of common stock	(154)	(2)		(4,622)		—		—		(4,624)		—		(4,624)
Redemption of noncontrolling interest and other	Redemption of noncontrolling interest and other	273	3		6,773		—		—		6,776		(6,776)		—		Redemption of noncontrolling interest and other	273	3		6,773		—		—		6,776		(6,776)		—
Dividends declared ($0.315 per common share)	Dividends declared ($0.315 per common share)	—	—		—		—		(68,867)		(68,867)		(1,134)		(70,001)		Dividends declared ($0.315 per common share)	—	—		—		—		(68,867)		(68,867)		(1,134)		(70,001)
Net income	Net income	—	—		—		—		17,901		17,901		307		18,208		Net income	—	—		—		—		17,901		17,901		307		18,208
Other comprehensive loss	Other comprehensive loss	—	—		—		(22,138)		—		(22,138)		(360)		(22,498)		Other comprehensive loss	—	—		—		(22,138)		—		(22,138)		(360)		(22,498)
Balance as of March 31, 2020	Balance as of March 31, 2020	218,483	$	2,185	$	4,909,397	$	(17,592)	$	(1,553,710)	$	3,340,280	$	64,672	$	3,404,952	Balance as of March 31, 2020	218,483	2,185		4,909,397		(17,592)		(1,553,710)		3,340,280		64,672		3,404,952
Issuance of OP Units in HTALP																	Issuance of OP Units in HTALP	—	—		—		—		—		—		1,378		1,378
Share-based award transactions, net																	Share-based award transactions, net	(1)	—		2,100		—		—		2,100		—		2,100
Repurchase and cancellation of common stock																	Repurchase and cancellation of common stock	(7)	—		(174)		—		—		(174)		—		(174)
Redemption of noncontrolling interest and other																	Redemption of noncontrolling interest and other	40	—		1,096		—		—		1,096		(1,096)		—
Dividends declared ($0.315 per common share)																	Dividends declared ($0.315 per common share)	—	—		—		—		(68,827)		(68,827)		(1,162)		(69,989)
Net income																	Net income	—	—		—		—		13,489		13,489		236		13,725
Other comprehensive loss																	Other comprehensive loss	—	—		—		(3,176)		—		(3,176)		(52)		(3,228)
Balance as of June 30, 2020																	Balance as of June 30, 2020	218,515	$	2,185	$	4,912,419	$	(20,768)	$	(1,609,048)	$	3,284,788	$	63,976	$	3,348,764

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

Table of Contents

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


		Three Months Ended March 31,							Six Months Ended June 30,
		2020		2019			2020		2019
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	18,208	$	13,701	Net income	$	31,933	$	30,299
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	72,949		66,528		Depreciation and amortization	144,724		132,931
Share-based compensation expense	Share-based compensation expense	3,203		3,389		Share-based compensation expense	5,303		5,491

Income from unconsolidated joint venture	Income from unconsolidated joint venture	(422)		(486)		Income from unconsolidated joint venture	(801)		(1,034)
Distributions from unconsolidated joint venture	Distributions from unconsolidated joint venture	885		750		Distributions from unconsolidated joint venture	1,670		1,335
(Gain) loss on sale of real estate, net	(Gain) loss on sale of real estate, net	(1,991)		37		(Gain) loss on sale of real estate, net	(1,991)		37

Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Receivables and other assets, net	Receivables and other assets, net	1,196		2,546		Receivables and other assets, net	2,504		457
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	(19,662)		(40,402)		Accounts payable and accrued liabilities	(6,337)		(23,262)
Security deposits, prepaid rent and other liabilities	Security deposits, prepaid rent and other liabilities	1,055		2,492		Security deposits, prepaid rent and other liabilities	5,178		2,483
Net cash provided by operating activities	Net cash provided by operating activities	75,421		48,555		Net cash provided by operating activities	182,183		148,737
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Investments in real estate	Investments in real estate	(41,338)		(18,592)		Investments in real estate	(41,338)		(93,855)
Development of real estate	Development of real estate	(12,103)		(2,014)		Development of real estate	(30,367)		(4,627)
Proceeds from the sale of real estate	Proceeds from the sale of real estate	6,420		1,193		Proceeds from the sale of real estate	6,420		1,193
Capital expenditures	Capital expenditures	(23,793)		(16,815)		Capital expenditures	(43,917)		(37,763)
Collection of real estate notes receivable	Collection of real estate notes receivable	191		181		Collection of real estate notes receivable	514		365
Advances on real estate notes receivable	Advances on real estate notes receivable	(6,000)		—		Advances on real estate notes receivable	(6,000)		—
Net cash used in investing activities	Net cash used in investing activities	(76,623)		(36,047)		Net cash used in investing activities	(114,688)		(134,687)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Borrowings on unsecured revolving credit facility	Borrowings on unsecured revolving credit facility	720,000		—		Borrowings on unsecured revolving credit facility	1,314,000		135,000
Payments on unsecured revolving credit facility	Payments on unsecured revolving credit facility	(415,000)		—		Payments on unsecured revolving credit facility	(1,150,000)		(15,000)

Payments on secured mortgage loans	Payments on secured mortgage loans	(95,602)		(587)		Payments on secured mortgage loans	(96,206)		(96,173)

Proceeds from issuance of common stock	Proceeds from issuance of common stock	50,020		—		Proceeds from issuance of common stock	50,020		—

Issuance of OP Units						Issuance of OP Units	1,378		—
Repurchase and cancellation of common stock	Repurchase and cancellation of common stock	(4,624)		(11,926)		Repurchase and cancellation of common stock	(4,798)		(12,095)
Dividends paid	Dividends paid	(68,227)		(63,686)		Dividends paid	(137,050)		(127,387)
Distributions paid to noncontrolling interest of limited partners	Distributions paid to noncontrolling interest of limited partners	(1,509)		(1,364)		Distributions paid to noncontrolling interest of limited partners	(2,455)		(2,781)
Net cash provided by (used in) financing activities		185,058		(77,563)
Net cash used in financing activities						Net cash used in financing activities	(25,111)		(118,436)
Net change in cash, cash equivalents and restricted cash	Net change in cash, cash equivalents and restricted cash	183,856		(65,055)		Net change in cash, cash equivalents and restricted cash	42,384		(104,386)
Cash, cash equivalents and restricted cash - beginning of period	Cash, cash equivalents and restricted cash - beginning of period	37,616		133,530		Cash, cash equivalents and restricted cash - beginning of period	37,616		133,530
Cash, cash equivalents and restricted cash - end of period	Cash, cash equivalents and restricted cash - end of period	$	221,472	$	68,475	Cash, cash equivalents and restricted cash - end of period	$	80,000	$	29,144

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

Table of Contents

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)


		March 31, 2020		December 31, 2019			June 30, 2020		December 31, 2019
ASSETS	ASSETS					ASSETS
Real estate investments:	Real estate investments:					Real estate investments:
Land	Land	$	587,363	$	584,546	Land	$	587,362	$	584,546
Building and improvements	Building and improvements	6,313,199		6,252,854		Building and improvements	6,333,715		6,252,854
Lease intangibles	Lease intangibles	630,535		628,066		Lease intangibles	629,478		628,066
Construction in progress	Construction in progress	40,350		28,150		Construction in progress	55,854		28,150
		7,571,447		7,493,616			7,606,409		7,493,616
Accumulated depreciation and amortization	Accumulated depreciation and amortization	(1,519,845)		(1,447,815)		Accumulated depreciation and amortization	(1,589,137)		(1,447,815)
Real estate investments, net	Real estate investments, net	6,051,602		6,045,801		Real estate investments, net	6,017,272		6,045,801
Investment in unconsolidated joint venture	Investment in unconsolidated joint venture	65,526		65,888		Investment in unconsolidated joint venture	65,120		65,888
Cash and cash equivalents	Cash and cash equivalents	216,515		32,713		Cash and cash equivalents	75,202		32,713
Restricted cash	Restricted cash	4,957		4,903		Restricted cash	4,798		4,903
Receivables and other assets, net	Receivables and other assets, net	235,022		237,024		Receivables and other assets, net	234,456		237,024
Right-of-use assets - operating leases, net	Right-of-use assets - operating leases, net	238,516		239,867		Right-of-use assets - operating leases, net	236,438		239,867
Other intangibles, net	Other intangibles, net	12,041		12,553		Other intangibles, net	11,210		12,553
Total assets	Total assets	$	6,824,179	$	6,638,749	Total assets	$	6,644,496	$	6,638,749
LIABILITIES AND PARTNERS’ CAPITAL	LIABILITIES AND PARTNERS’ CAPITAL					LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:	Liabilities:					Liabilities:
Debt	Debt	$	2,959,723	$	2,749,775	Debt	$	2,818,695	$	2,749,775
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	154,842		171,698		Accounts payable and accrued liabilities	167,999		171,698
Derivative financial instruments - interest rate swaps	Derivative financial instruments - interest rate swaps	19,480		29		Derivative financial instruments - interest rate swaps	22,796		29
Security deposits, prepaid rent and other liabilities	Security deposits, prepaid rent and other liabilities	49,895		49,174		Security deposits, prepaid rent and other liabilities	52,655		49,174
Lease liabilities - operating leases	Lease liabilities - operating leases	198,628		198,650		Lease liabilities - operating leases	198,511		198,650
Intangible liabilities, net	Intangible liabilities, net	36,659		38,779		Intangible liabilities, net	35,076		38,779
Total liabilities	Total liabilities	3,419,227		3,208,105		Total liabilities	3,295,732		3,208,105
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies

Partners’ Capital:	Partners’ Capital:					Partners’ Capital:
Limited partners’ capital, 3,561,260 and 3,834,279 units issued and outstanding as of March 31, 2020 and December 31, 2019, respectively		64,402		72,365
General partners’ capital, 218,482,526 and 216,453,312 units issued and outstanding as of March 31, 2020 and December 31, 2019, respectively		3,340,550		3,358,279
Limited partners’ capital, 3,568,369 and 3,834,279 units issued and outstanding as of June 30, 2020 and December 31, 2019, respectively						Limited partners’ capital, 3,568,369 and 3,834,279 units issued and outstanding as of June 30, 2020 and December 31, 2019, respectively	63,706		72,365
General partners’ capital, 218,514,870 and 216,453,312 units issued and outstanding as of June 30, 2020 and December 31, 2019, respectively						General partners’ capital, 218,514,870 and 216,453,312 units issued and outstanding as of June 30, 2020 and December 31, 2019, respectively	3,285,058		3,358,279
Total partners’ capital	Total partners’ capital	3,404,952		3,430,644		Total partners’ capital	3,348,764		3,430,644
Total liabilities and partners’ capital	Total liabilities and partners’ capital	$	6,824,179	$	6,638,749	Total liabilities and partners’ capital	$	6,644,496	$	6,638,749

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

Table of Contents

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per unit data)

(Unaudited)


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
Revenues:	Revenues:					Revenues:
Rental income	Rental income	$	185,531	$	168,875	Rental income	$	178,670	$	171,609	$	364,201	$	340,484
Interest and other operating income	Interest and other operating income	245		91		Interest and other operating income	175		148		420		239
Total revenues	Total revenues	185,776		168,966		Total revenues	178,845		171,757		364,621		340,723
Expenses:	Expenses:					Expenses:
Rental	Rental	56,862		51,468		Rental	56,200		52,938		113,062		104,406
General and administrative	General and administrative	11,518		11,290		General and administrative	10,160		10,079		21,678		21,369
Transaction	Transaction	140		40		Transaction	32		296		172		336
Depreciation and amortization	Depreciation and amortization	77,665		69,481		Depreciation and amortization	74,927		68,429		152,592		137,910
Interest expense	Interest expense	23,872		23,970		Interest expense	24,277		24,006		48,149		47,976

Total expenses	Total expenses	170,057		156,249		Total expenses	165,596		155,748		335,653		311,997
Gain (loss) on sale of real estate, net	Gain (loss) on sale of real estate, net	1,991		(37)		Gain (loss) on sale of real estate, net	—		—		1,991		(37)

Income from unconsolidated joint venture	Income from unconsolidated joint venture	422		486		Income from unconsolidated joint venture	379		548		801		1,034
Other income	Other income	76		535		Other income	97		41		173		576
Net income	Net income	$	18,208	$	13,701	Net income	$	13,725	$	16,598	$	31,933	$	30,299
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	—		(28)		Net income attributable to noncontrolling interests	—		(38)		—		(66)
Net income attributable to common unitholders	Net income attributable to common unitholders	$	18,208	$	13,673	Net income attributable to common unitholders	$	13,725	$	16,560	$	31,933	$	30,233
Earnings per common OP Unit - basic:	Earnings per common OP Unit - basic:					Earnings per common OP Unit - basic:
Net income attributable to common unitholders	Net income attributable to common unitholders	$	0.08	$	0.07	Net income attributable to common unitholders	$	0.06	$	0.08	$	0.14	$	0.14
Earnings per common OP Unit - diluted:	Earnings per common OP Unit - diluted:					Earnings per common OP Unit - diluted:
Net income attributable to common unitholders	Net income attributable to common unitholders	$	0.08	$	0.07	Net income attributable to common unitholders	$	0.06	$	0.08	$	0.14	$	0.14
Weighted average common OP Units outstanding:	Weighted average common OP Units outstanding:					Weighted average common OP Units outstanding:
Basic	Basic	220,368		208,999		Basic	222,088		209,005		221,228		209,002
Diluted	Diluted	220,623		208,999		Diluted	222,088		209,005		221,228		209,002

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

Table of Contents

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~(LOSS)~~ INCOME

(In thousands)

(Unaudited)


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019

Net income	Net income	$	18,208	$	13,701	Net income	$	13,725	$	16,598	$	31,933	$	30,299

Other comprehensive income (loss)
Other comprehensive loss						Other comprehensive loss
Change in unrealized losses on cash flow hedges	Change in unrealized losses on cash flow hedges	(22,498)		(390)		Change in unrealized losses on cash flow hedges	(3,228)		(381)		(25,726)		(771)
Total other comprehensive loss	Total other comprehensive loss	(22,498)		(390)		Total other comprehensive loss	(3,228)		(381)		(25,726)		(771)

Total comprehensive (loss) income		(4,290)		13,311
Total comprehensive income						Total comprehensive income	10,497		16,217		6,207		29,528
Comprehensive income attributable to noncontrolling interests	Comprehensive income attributable to noncontrolling interests	—		(28)		Comprehensive income attributable to noncontrolling interests	—		(38)		—		(66)
Total comprehensive (loss) income attributable to common unitholders		$	(4,290)	$	13,283
Total comprehensive income attributable to common unitholders						Total comprehensive income attributable to common unitholders	$	10,497	$	16,179	$	6,207	$	29,462

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

Table of Contents

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(In thousands)

(Unaudited)


		General Partners’ Capital				Limited Partners’ Capital									Total Partners’ Capital		General Partners’ Capital							Limited Partners’ Capital	Total Partners’ Capital
		Units	Amount		Units	Amount				Total Partners’ Capital			Units			Amount		Units			Amount			Total Partners’ Capital
Balance as of December 31, 2018	Balance as of December 31, 2018	205,267	$	3,256,294	3,929	$	78,620	$	3,334,914			205,267		$	3,256,294		3,929		$	78,620		$	3,334,914
Share-based award transactions, net	Share-based award transactions, net	293	3,389		—	—		3,389		Share-based award transactions, net	293			3,389			—		—			3,389
Redemption and cancellation of general partner OP Units	Redemption and cancellation of general partner OP Units	(478)	(11,926)		—	—		(11,926)		Redemption and cancellation of general partner OP Units	(478)			(11,926)			—		—			(11,926)
Redemption of limited partner OP Units and other	Redemption of limited partner OP Units and other	18	527		(18)	(527)		—		Redemption of limited partner OP Units and other	18			527			(18)		(527)			—
Distributions declared ($0.310 per common OP Unit)	Distributions declared ($0.310 per common OP Unit)	—	(63,578)		—	(1,306)		(64,884)		Distributions declared ($0.310 per common OP Unit)	—			(63,578)			—		(1,306)			(64,884)
Net income	Net income	—	13,440		—	233		13,673		Net income	—			13,440			—		233			13,673
Other comprehensive loss	Other comprehensive loss	—	(382)		—	(8)		(390)		Other comprehensive loss	—			(382)			—		(8)			(390)
Balance as of March 31, 2019	Balance as of March 31, 2019	205,100	3,197,764		3,911	77,012		3,274,776		Balance as of March 31, 2019	205,100			3,197,764			3,911		77,012			3,274,776
Issuance of limited partner OP Units										Issuance of limited partner OP Units	—			—			91		2,603			2,603
Share-based award transactions, net										Share-based award transactions, net	(3)			2,102			—		—			2,102
Redemption and cancellation of general partner OP Units										Redemption and cancellation of general partner OP Units	(6)			(169)			—		—			(169)
Redemption of limited partner OP Units and other										Redemption of limited partner OP Units and other	27			1,209			(27)		(785)			424
Distributions declared ($0.310 per common OP Unit)										Distributions declared ($0.310 per common OP Unit)	—			(63,579)			—		(1,334)			(64,913)
Net income										Net income	—			16,259			—		301			16,560
Other comprehensive loss										Other comprehensive loss	—			(374)			—		(7)			(381)
Balance as of June 30, 2019										Balance as of June 30, 2019	205,118			$	3,153,212		3,975		$	77,790		$	3,231,002


											General Partners’ Capital				Limited Partners’ Capital					Total Partners’ Capital
											Units	Amount		Units	Amount				Total Partners’ Capital
Balance as of December 31, 2019	Balance as of December 31, 2019	216,453	$	3,358,279	3,834	$	72,365	$	3,430,644	Balance as of December 31, 2019	216,453	$	3,358,279	3,834	$	72,365	$	3,430,644
Issuance of general partner OP Units	Issuance of general partner OP Units	1,675	50,020		—	—		50,020		Issuance of general partner OP Units	1,675	50,020		—	—		50,020
Share-based award transactions, net	Share-based award transactions, net	236	3,203		—	—		3,203		Share-based award transactions, net	236	3,203		—	—		3,203
Redemption and cancellation of general partner OP Units	Redemption and cancellation of general partner OP Units	(154)	(4,624)		—	—		(4,624)		Redemption and cancellation of general partner OP Units	(154)	(4,624)		—	—		(4,624)
Redemption of limited partner OP Units and other	Redemption of limited partner OP Units and other	273	6,776		(273)	(6,776)		—		Redemption of limited partner OP Units and other	273	6,776		(273)	(6,776)		—
Distributions declared ($0.315 per common OP Unit)	Distributions declared ($0.315 per common OP Unit)	—	(68,867)		—	(1,134)		(70,001)		Distributions declared ($0.315 per common OP Unit)	—	(68,867)		—	(1,134)		(70,001)
Net income	Net income	—	17,901		—	307		18,208		Net income	—	17,901		—	307		18,208
Other comprehensive loss	Other comprehensive loss	—	(22,138)		—	(360)		(22,498)		Other comprehensive loss	—	(22,138)		—	(360)		(22,498)
Balance as of March 31, 2020	Balance as of March 31, 2020	218,483	3,340,550		3,561	64,402		3,404,952		Balance as of March 31, 2020	218,483	3,340,550		3,561	64,402		3,404,952
Issuance of limited partner OP Units										Issuance of limited partner OP Units	—	—		47	1,378		1,378

Share-based award transactions, net										Share-based award transactions, net	(1)	2,100		—	—		2,100
Redemption and cancellation of general partner OP Units										Redemption and cancellation of general partner OP Units	(7)	(174)		—	—		(174)
Redemption of limited partner OP Units and other										Redemption of limited partner OP Units and other	40	1,096		(40)	(1,096)		—
Distributions declared ($0.315 per common OP Unit)										Distributions declared ($0.315 per common OP Unit)	—	(68,827)		—	(1,162)		(69,989)
Net income										Net income	—	13,489		—	236		13,725
Other comprehensive loss										Other comprehensive loss	—	(3,176)		—	(52)		(3,228)
Balance as of June 30, 2020										Balance as of June 30, 2020	218,515	$	3,285,058	3,568	$	63,706	$	3,348,764

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

Table of Contents

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


		Three Months Ended March 31,							Six Months Ended June 30,
		2020		2019			2020		2019
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	18,208	$	13,701	Net income	$	31,933	$	30,299
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	72,949		66,528		Depreciation and amortization	144,724		132,931
Share-based compensation expense	Share-based compensation expense	3,203		3,389		Share-based compensation expense	5,303		5,491

Income from unconsolidated joint venture	Income from unconsolidated joint venture	(422)		(486)		Income from unconsolidated joint venture	(801)		(1,034)
Distributions from unconsolidated joint venture	Distributions from unconsolidated joint venture	885		750		Distributions from unconsolidated joint venture	1,670		1,335
(Gain) loss on sale of real estate, net	(Gain) loss on sale of real estate, net	(1,991)		37		(Gain) loss on sale of real estate, net	(1,991)		37

Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Receivables and other assets, net	Receivables and other assets, net	1,196		2,546		Receivables and other assets, net	2,504		457
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	(19,662)		(40,402)		Accounts payable and accrued liabilities	(6,337)		(23,262)
Security deposits, prepaid rent and other liabilities	Security deposits, prepaid rent and other liabilities	1,055		2,492		Security deposits, prepaid rent and other liabilities	5,178		2,483
Net cash provided by operating activities	Net cash provided by operating activities	75,421		48,555		Net cash provided by operating activities	182,183		148,737
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Investments in real estate	Investments in real estate	(41,338)		(18,592)		Investments in real estate	(41,338)		(93,855)
Development of real estate	Development of real estate	(12,103)		(2,014)		Development of real estate	(30,367)		(4,627)
Proceeds from the sale of real estate	Proceeds from the sale of real estate	6,420		1,193		Proceeds from the sale of real estate	6,420		1,193
Capital expenditures	Capital expenditures	(23,793)		(16,815)		Capital expenditures	(43,917)		(37,763)
Collection of real estate notes receivable	Collection of real estate notes receivable	191		181		Collection of real estate notes receivable	514		365
Advances on real estate notes receivable	Advances on real estate notes receivable	(6,000)		—		Advances on real estate notes receivable	(6,000)		—
Net cash used in investing activities	Net cash used in investing activities	(76,623)		(36,047)		Net cash used in investing activities	(114,688)		(134,687)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Borrowings on unsecured revolving credit facility	Borrowings on unsecured revolving credit facility	720,000		—		Borrowings on unsecured revolving credit facility	1,314,000		135,000
Payments on unsecured revolving credit facility	Payments on unsecured revolving credit facility	(415,000)		—		Payments on unsecured revolving credit facility	(1,150,000)		(15,000)

Payments on secured mortgage loans	Payments on secured mortgage loans	(95,602)		(587)		Payments on secured mortgage loans	(96,206)		(96,173)

Proceeds from issuance of general partner units	Proceeds from issuance of general partner units	50,020		—		Proceeds from issuance of general partner units	50,020		—

Issuance of OP Units						Issuance of OP Units	1,378		—
Repurchase and cancellation of general partner units	Repurchase and cancellation of general partner units	(4,624)		(11,926)		Repurchase and cancellation of general partner units	(4,798)		(12,095)
Distributions paid to general partner	Distributions paid to general partner	(68,227)		(63,686)		Distributions paid to general partner	(137,050)		(127,387)
Distributions paid to limited partners and redeemable noncontrolling interests	Distributions paid to limited partners and redeemable noncontrolling interests	(1,509)		(1,364)		Distributions paid to limited partners and redeemable noncontrolling interests	(2,455)		(2,781)
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	185,058		(77,563)		Net cash provided by (used in) financing activities	(25,111)		(118,436)
Net change in cash, cash equivalents and restricted cash	Net change in cash, cash equivalents and restricted cash	183,856		(65,055)		Net change in cash, cash equivalents and restricted cash	42,384		(104,386)
Cash, cash equivalents and restricted cash - beginning of period	Cash, cash equivalents and restricted cash - beginning of period	37,616		133,530		Cash, cash equivalents and restricted cash - beginning of period	37,616		133,530
Cash, cash equivalents and restricted cash - end of period	Cash, cash equivalents and restricted cash - end of period	$	221,472	$	68,475	Cash, cash equivalents and restricted cash - end of period	$	80,000	$	29,144

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

Table of C ~~ontents~~Contents

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

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

1. Organization and Description of Business

HTA, a Maryland corporation, and HTALP, a Delaware limited partnership, were incorporated or formed, as applicable, on April 20, 2006. HTA operates as a REIT and is the general partner of HTALP, which is the operating partnership, in an umbrella partnership, or “UPREIT” structure. HTA has qualified and intends to continue to be taxed as a REIT for federal income tax purposes under the applicable sections of the Internal Revenue Code.

We own real estate primarily consisting of medical office buildings (“MOBs”) located on or adjacent to hospital campuses or in off-campus, community core outpatient locations across 33 states within the United States, and we lease space to tenants primarily consisting of health systems, research and academic institutions, and various sized physician practices. Through our full-service operating platform, we provide leasing, asset management, acquisitions, development and other related services for our properties.

Our primary objective is to maximize stockholder value with growth through strategic investments that provide an attractive risk-adjusted return for our stockholders by consistently increasing our cash flow. In pursuing this objective, we: (i) seek internal growth through proactive asset management, leasing, building services and property management oversight; (ii) target accretive acquisitions and developments of MOBs in markets with attractive demographics that complement our existing portfolio; and (iii) actively manage our balance sheet to maintain flexibility with conservative leverage. Additionally, from time to time we consider, on an opportunistic basis, significant portfolio acquisitions that we believe fit our core business and we expect to enhance our existing portfolio.

2. Summary of Significant Accounting Policies

The summary of significant accounting policies presented below is designed to assist in understanding our condensed consolidated financial statements. Such condensed consolidated financial statements and the accompanying notes are the representations of our management, who are responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles in the U.S. (“GAAP”) in all material respects and have been consistently applied in preparing our accompanying condensed consolidated financial statements.

Basis of Presentation

Our accompanying condensed consolidated financial statements include our accounts and those of our subsidiaries and any consolidated variable interest entities (“VIEs”). All inter-company balances and transactions have been eliminated in the accompanying condensed consolidated financial statements.

Reclassifications

Certain prior year amounts related to the presentation of derivative financial instruments - cash flow hedges on the accompanying condensed consolidated balance sheets have been reclassified to conform to the current year presentation.

Interim Unaudited Financial Data

Our accompanying condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete financial statements. Our accompanying condensed consolidated financial statements reflect all adjustments, which are, in our opinion, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods. Interim results of operations are not necessarily indicative of the results to be expected for the full year; such results may be less favorable for the full year. Our accompanying condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our 2019 Annual Report on Form 10-K.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of our subsidiaries and consolidated joint venture arrangements. The portions of the HTALP operating partnership not owned by us are presented as noncontrolling interests on the accompanying condensed consolidated balance sheets and statements of operations, condensed consolidated statements of comprehensive income, and condensed consolidated statements of equity and changes in partners’ capital. Holders of OP Units are considered to be noncontrolling interest holders in HTALP and their ownership interests are reflected as equity on the accompanying condensed consolidated balance sheets. Further, a portion of the earnings and losses of HTALP are allocated to noncontrolling 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

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

common stock is recorded as a component of equity. As of ~~March 31,~~June 30, 2020 and December 31, 2019, there were approximately 3.6 million and 3.8 million, respectively, of OP Units issued and outstanding held by noncontrolling interest holders.

VIEs are entities where investors lack sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following: (i) the power to direct the activities that most significantly impact the entity’s economic performance; (ii) the obligation to absorb the expected losses of the entity; and (iii) the right to receive the expected returns of the entity. We consolidate our investment in VIEs when we determine that we are the primary beneficiary. A primary beneficiary is one that has both: (i) the power to direct the activities of the VIE that most significantly impacts the entity’s economic performance; and (ii) the obligation to absorb losses or the right to receive benefits of the VIE that could be significant to the entity. The HTALP operating partnership and our other joint venture arrangements are VIEs because the limited partners in those partnerships, although entitled to vote on certain matters, do not possess kick-out rights or substantive participating rights. Additionally, we determined that we are the primary beneficiary of our VIEs. Accordingly, we consolidate our interests in the HTALP operating partnership and in our other joint venture arrangements. However, because we hold what is deemed a majority voting interest in the HTALP operating partnership and our other joint venture arrangements, it qualifies for the exemption from providing certain disclosure requirements associated with investments in VIEs. We will evaluate on an ongoing basis the need to consolidate entities based on the standards set forth in GAAP as described above.

Use of Estimates

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that effect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent asset and liabilities. These estimates are made and evaluated on an ongoing basis using information that is currently available as well as various other assumptions believed to be reasonable under the circumstances. Actual results could differ from those estimates, perhaps in adverse ways, and those estimates could be different under different assumptions or conditions.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of all highly liquid investments with a maturity of three months or less when purchased. Restricted cash is comprised of: (i) reserve accounts for property taxes, insurance, capital and tenant improvements; (ii) collateral accounts for debt and interest rate swaps; and (iii) deposits for future investments.

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


		March 31,							June 30,
		2020		2019			2020		2019
Cash and cash equivalents	Cash and cash equivalents	$	216,515	$	61,073	Cash and cash equivalents	$	75,202	$	23,194
Restricted cash	Restricted cash	4,957		7,402		Restricted cash	4,798		5,950
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	221,472	$	68,475	Total cash, cash equivalents and restricted cash	$	80,000	$	29,144

Revenue Recognition

Minimum annual rental revenue is recognized on a straight-line basis over the term of the related lease (including rent holidays). Differences between rental income recognized and amounts contractually due under the lease agreements are recorded as straight-line rent receivables. Tenant reimbursements, which is comprised of additional amounts recoverable from tenants for real estate taxes, common area maintenance and other certain operating expenses are recognized as revenue on a gross basis in the period in which the related recoverable expenses are incurred. We accrue revenue corresponding to these expenses on a quarterly basis to adjust recorded amounts to our best estimate of the final annual amounts to be billed. Subsequent to year-end, on a calendar year basis, we perform reconciliations on a lease-by-lease basis and bill or credit each tenant for any differences between the estimated expenses we billed and the actual expenses that were incurred. We recognize lease termination fees when there is a signed termination letter agreement, all of the conditions of the agreement have been met, and the tenant is no longer occupying the property. Rental income is reported net of amortization of inducements.

The revenue recognition process is based on a five-step model to account for revenue arising from contracts with customers as outlined in Topic 606. We recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We have identified all of our revenue streams and we have concluded that rental income from leasing arrangements represents a substantial portion of our revenue and is governed and evaluated with the adoption of Topic 842.

~~Investments in Real Estate~~

~~Depreciation expense of buildings and improvements for the three months ended March 31, 2020 and 2019 was $58.9 million and $52.1 million, respectively.~~

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Investments in Real Estate

Depreciation expense of buildings and improvements for the three months ended June 30, 2020 and 2019 was $58.2 million and $51.9 million, respectively. Depreciation expense of buildings and improvements for the six months ended June 30, 2020 and 2019 was $117.1 million and $104.0 million, respectively.

Leases

As a lessor, we lease space in our MOBs primarily to medical enterprises for terms generally ranging from three to seven years in length. The assets underlying these leases consist of buildings and associated land which are included as real estate investments on our accompanying condensed consolidated balance sheets. All of our leases for which we are the lessor are classified as operating leases under Topic 842.

Leases, for which we are the lessee, are classified as separate components on our accompanying condensed consolidated balance sheets. Operating leases are included as right-of-use (“ROU”) assets - operating leases, net, with a corresponding lease liability. Financing lease assets are included in receivables and other assets, net, with a corresponding lease liability in security deposits, prepaid rent and other liabilities. A lease liability is recognized for our obligation related to the lease and an ROU asset represents our right to use the underlying asset over the lease term. Refer to Note 7 - Leases in the accompanying notes to the condensed consolidated financial statements for more detail relating to our leases.

Through the duration of the ~~COVID-19~~2020 coronavirus ("COVID-19") pandemic, many lessors may ~~be required~~elect to provide rent deferrals and other lease concessions to lessees. While the lease modification guidance in Accounting Standards Codification (“ASC”) Topic 842 ("Topic 842") addresses routine changes to lease terms resulting from negotiations between the lessee and the lessor, this guidance did not contemplate concessions getting rapidly executed to address the sudden liquidity constraints of some lessees arising from the COVID-19 pandemic. In April 2020, the Financial Accounting Standards Board (“FASB”) staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease guidance, we would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows us, if certain criteria have been met, to bypass the lease by lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. We have elected to apply such relief and will use the election to avoid performing a lease by lease ~~analysis.~~analysis where conditions warrant in conformity with this guidance. The Lease Modification Q&A had no material impact on our condensed consolidated financial statements as of and for the three and six months ended ~~March 31,~~June 30, 2020, however, its future impact to us is dependent upon the extent of lease concessions granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by us at the time of entering into any such concessions.

For the three and six months ended June 30, 2020, changes to our leases as a result of COVID-19 have been in two categories. Leases are categorized based upon the impact of the modification on its cash flows. One category is rent deferrals for which the guidance above was utilized, which provided relief from requiring a lease by lease analysis pursuant to Topic 842. These deferrals are generally for up to three months rent with a payback period from three to twelve months once the deferral period has ended. Deferrals do not have an impact on cash flows over the lease term, rather, payments are made in different periods while the cash flows for the entirety of the lease term are the same. However, we have continued to recognize revenue and straight line revenue for amounts subject to deferral agreements in accordance with Topic 842. Through July 31, 2020, we have approved deferral plans that total approximately $9.6 million, which includes approximately $6.6 million of rent that was deferred in the three and six months ended June 30, 2020.

The second category is early renewals, where the Company renewed lease arrangements prior to their contractual expirations, providing concession at the commencement of the lease in exchange for additional term, on average approximately three years. This category is treated as a modification under Topic 842, with the existing balance of cumulative difference between rental income and payment amounts (existing straight line rent receivable) being recast over the new term, factoring in any changes attributable to the new lease arrangement and for which we performed a lease by lease analysis. Cash flows are impacted over the long term as customary free rent, at an average of three months in conjunction with these agreements, is offset by substantively more term and/or increased rental rates. Subsequent to June 30, 2020, and through July 31, 2020 the Company has entered into minimal new deferral arrangements or early renewal leases with substantive amounts of free rent or other forms of concession at the onset of the lease.

Credit Losses

The Company adopted Topic 326 - Financial Instruments - Credit Losses as of January 1, 2020. See the "Recently Issued or Adopted Accounting Pronouncements" below for further information. Pursuant to the guidance, we adopted a policy to book current expected credit losses at the inception of loans qualifying for treatment under Topic 326. InDuring the ~~three~~six months ended ~~March 31,~~June 30, 2020, we financed a one-year, $6 million loan to which we hold a first trust deed in the underlying property as collateral. Given the one-year term, management's estimated loan-to-value at inception, and estimated probability of default, we

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

determined that any current expected credit loss would be insignificant. In addition, as of June 30, 2020, we believe that our initial assumptions have not appreciably changed and continue to not record any expected losses.

Redeemable Noncontrolling Interests

Prior to June 30, 2019, we had redeemable noncontrolling interests related to the noncontrolling interest in a joint venture in which we own the majority interest. The noncontrolling interest holders in the joint venture had the option to redeem their noncontrolling interest through the exercise of put options that were issued at the initial formation of the joint venture. The last exercisable put option lapsed on June 30, 2019, and, at that time, all holders of redeemable noncontrolling interests had either converted their interest to OP Units or received cash proceeds. For the three and six months ended ~~March 31,~~June 30, 2019, we recognized ~~$28~~$38 thousand and $66 thousand, respectively, of income related to the noncontrolling interests in the net income attributable to noncontrolling interests in our accompanying condensed consolidated statements of operations.

Unconsolidated Joint Ventures

We account for our investments in unconsolidated joint ventures using the equity method of accounting because we have the ability to exercise significant influence, but not control, over the financial and operational policy decisions of the investments. Using the equity method of accounting, the initial investment is recognized at cost and subsequently adjusted for our share of the net income and any distributions from the joint venture. As of ~~March 31,~~June 30, 2020 and December 31, 2019, we had a 50% interest in one such investment with a carrying value and maximum exposure to risk of ~~$65.5~~$65.1 million and $65.9 million, respectively, which is recorded in investment in unconsolidated joint venture on the accompanying condensed consolidated balance sheets. We record our share of net income in income from unconsolidated joint venture on the accompanying condensed consolidated statements of operations. For the three months ended ~~March 31,~~June 30, 2020 and 2019, we recognized income of $0.4 million and $0.5 million, respectively.

~~Table~~ For the six months ended June 30, 2020 and 2019, we recognized income of ~~Contents~~

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

$0.8 million and $1.0 million, respectively.

Recently Issued or Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

ASU 2016-13, Financial Instruments Credit Losses; Measurement of Credit Losses on Financial Instruments and ASU 2018-19, 2019-04 and 2019-05, Improvements to Topic 326, Financial Instruments-Credit Losses

In June 2016, the FASB issued ASU 2016-13, which is intended to improve financial reporting by requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial statement assets measured at an amortized cost be presented at the net amount expected to be collected through an allowance for credit losses that is deducted from the amortized cost basis. ASU 2018-19 also clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of these receivables should be accounted for in accordance with Topic 842, Leases. ASU 2019-04 provides clarification on the measurement, presentation and disclosure of credit losses on financial assets. ASU 2019-05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis for comparability to any new financial assets that elect the fair value option. We adopted, on a modified-retrospective basis, ASU 2016-13, ASU 2018-19, ASU 2019-04 and ASU 2019-05 collectively as of January 1, 2020. The adoption did not have a material effect on our financial statements and related footnotes. See the "Credit Losses" section above for further details.

ASU 2018-13, Fair Value Measurement; Changes to the Disclosure Requirements for Fair Value Measurement

In August 2018, the FASB issued ASU 2018-13, which modifies the disclosure requirements on fair value measurements in Topic 820 as follows: (a) disclosure removals: (i) the amount of and reasons for transfers between Level 1 and Level 2; (ii) the policy for timing of transfers between levels; and (iii) the valuation process for Level 3 fair value measurements; (b) disclosure modifications: (i) no requirement to disclose the timing of liquidation unless the investee has communicated the timing to the reporting entity or announced the timing publicly; and (ii) for Level 3 fair value measurements, a narrative description of measurement uncertainty at the reporting date, not the sensitivity to future changes; and (c) disclosure additions: (i) for recurring Level 3 measurements, disclose the changes in unrealized gains and losses for the period included in OCI and the statement of comprehensive income; and (ii) for Level 3 fair value measurements in the table of significant input, disclose the range and weighted average of the significant unobservable inputs and the way it is calculated. We adopted ASU 2018-13 as of January 1, 2020 and as of ~~March 31,~~June 30, 2020 there were no transfers between levels and no Level 3 inputs for the period. Refer to Note 12 - Fair Value of Financial Instruments in the accompanying notes to the condensed consolidated financial statements for more detail relating to our fair value disclosures.

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

Recently Issued Accounting Pronouncements

ASU 2020-04, Reference Rate Reform (Topic 848)

In March 2020, the FASB issued ASU 2020-04, which is intended to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. Reference rate reform is necessary due to the phase out of LIBOR at the end of 2021. The ASU is optional and provides relief around modification and hedge accounting as it specifically arises from changing reference rates, in addition to optional expedients for cash flow hedges, which the Company has. For information related to the Company's current cash flow hedges, refer to Note 9 - Derivative Financial Instruments and Hedging Activities. The amendment is effective from March 12, 2020 through December 31, 2022. The Company is evaluating how the transition away from LIBOR will effect the Company and if the guidance in this standard will be ~~adopted.~~adopted, however, if adopted, we do not expect that this ASU will have a material impact on our financial statements.

3. Investments in Real Estate

For the ~~three~~six months ended ~~March 31,~~June 30, 2020, our investments had an aggregate purchase price of $41.7 million. As part of these investments, we incurred approximately $0.2 million of capitalized costs. The allocations for these investments, in which we own a controlling financial interest, are set forth below in the aggregate for the ~~three~~six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in thousands):

Three Months Ended March 31,
2020 2019
Land $ 2,817 $ 3,311
Building and improvements 35,259 13,449
In place leases 3,621 1,927
Below market leases (693) (95)
Above market leases 334 160
Net real estate assets acquired 41,338 18,752
Other, net 334 74
Aggregate purchase price $ 41,672 $ 18,826

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


	Six Months Ended June 30,
	2020		2019
Land	$	2,817	$	12,233
Building and improvements	35,259		74,591
In place leases	3,621		7,784
Below market leases	(693)		(1,380)
Above market leases	334		627
Net real estate assets acquired	41,338		93,855
Other, net	334		240
Aggregate purchase price	$	41,672	$	94,095

The acquired intangible assets and liabilities referenced above had weighted average lives of the following terms for the ~~three~~six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in years):


		Three Months Ended March 31,				Six Months Ended June 30,
		2020	2019		2020	2019
Acquired intangible assets	Acquired intangible assets	5.4	9.1	Acquired intangible assets	5.4	7.0
Acquired intangible liabilities	Acquired intangible liabilities	3.8	9.1	Acquired intangible liabilities	3.6	7.1

4. Dispositions and Impairment

Dispositions

During the ~~three~~six months ended ~~March 31,~~June 30, 2020, we sold part of our interest in undeveloped land in Miami, Florida for a gross sales price of $7.6 million, resulting in a net gain of approximately $2.0 million. During the ~~three~~six months ended ~~March 31,~~June 30, 2019, we completed the disposition of 3 MOB's in Hilton Head, South Carolina for a gross sales price of $1.2 million, resulting in a net loss of $37 thousand.

Impairment

During the ~~three~~six months ended ~~March 31,~~June 30, 2020, and 2019, respectively, we recorded 0 impairment charges after the consideration of the impacts, on a qualitative and quantitative basis, of the ongoing COVID-19 pandemic in our quarterly assessment. As the COVID-19 pandemic continues to develop, we will monitor the performance of our buildings and other assets to determine whether any additional impairment indicators unique to the COVID-19 pandemic are present, including but not limited to, significant prolonged disruption in cash flows, tenant vacancies, or lease modifications, and that would indicate the recoverability of recorded values of these assets may be at risk. Accordingly, we will continue to apply the applicable accounting guidance in our consideration of our ongoing impairment analysis as conditions warrant.

~~5. Intangible Assets and Liabilities~~

~~Intangible assets and liabilities consisted of the following as of March 31, 2020 and December 31, 2019, respectively (in thousands, except weighted average remaining amortization terms):~~

March 31, 2020 December 31, 2019
Balance Weighted Average Remaining
Amortization in Years Balance Weighted Average Remaining
Amortization in Years
Assets:
In place leases $ 483,834 9.5 $ 481,173 9.5
Tenant relationships 146,701 9.7 146,893 9.7
Above market leases 37,804 6.1 37,613 6.2
668,339 665,679
Accumulated amortization (403,314) (387,827)
Total $ 265,025 9.4 $ 277,852 9.4
Liabilities:
Below market leases $ 66,599 14.2 $ 65,966 13.9
Accumulated amortization (29,940) (27,187)
Total $ 36,659 14.2 $ 38,779 13.9

~~The following is a summary of the net intangible amortization for the three months ended March 31, 2020 and 2019, respectively (in thousands):~~

Three Months Ended March 31,
2020 2019
Amortization recorded against rental income related to above and (below) market leases $ (1,968) $ (491)
Amortization expense related to in place leases and tenant relationships 15,935 14,665

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

5. Intangible Assets and Liabilities

Intangible assets and liabilities consisted of the following as of June 30, 2020 and December 31, 2019, respectively (in thousands, except weighted average remaining amortization terms):


	June 30, 2020					December 31, 2019
	Balance		Weighted Average Remaining Amortization in Years	Balance		Weighted Average Remaining Amortization in Years
Assets:
In place leases	$	483,001	9.6	$	481,173	9.5
Tenant relationships	146,477		9.8	146,893		9.7
Above market leases	37,779		6.0	37,613		6.2
	667,257			665,679
Accumulated amortization	(416,501)			(387,827)
Total	$	250,756	9.4	$	277,852	9.4

Liabilities:
Below market leases	$	66,599	14.4	$	65,966	13.9
Accumulated amortization	(31,523)			(27,187)
Total	$	35,076	14.4	$	38,779	13.9

The following is a summary of the net intangible amortization for the three and six months ended June 30, 2020 and 2019, respectively (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Amortization recorded against rental income related to above and (below) market leases	$	(751)	$	(529)	$	(2,719)	$	(1,020)
Amortization expense related to in place leases and tenant relationships	13,438		14,092		29,373		28,757

6. Receivables and Other Assets

Receivables and other assets consisted of the following as of ~~March 31,~~June 30, 2020 and December 31, 2019, respectively (in thousands):


		March 31, 2020		December 31, 2019			June 30, 2020		December 31, 2019
Tenant receivables, net	Tenant receivables, net	$	3,309	$	11,801	Tenant receivables, net	$	8,424	$	11,801
Other receivables, net	Other receivables, net	19,153		13,786		Other receivables, net	13,695		13,786
Deferred financing costs, net	Deferred financing costs, net	3,894		4,325		Deferred financing costs, net	3,463		4,325
Deferred leasing costs, net	Deferred leasing costs, net	38,224		36,586		Deferred leasing costs, net	42,367		36,586
Straight-line rent receivables, net	Straight-line rent receivables, net	112,093		107,800		Straight-line rent receivables, net	117,366		107,800
Prepaid expenses, deposits, equipment and other, net	Prepaid expenses, deposits, equipment and other, net	51,547		48,505		Prepaid expenses, deposits, equipment and other, net	44,000		48,505
Derivative financial instruments - interest rate swaps	Derivative financial instruments - interest rate swaps	—		3,011		Derivative financial instruments - interest rate swaps	124		3,011
Finance ROU asset, net	Finance ROU asset, net	3,409		3,409		Finance ROU asset, net	3,409		3,409
Insurance receivable ⁽¹⁾	Insurance receivable ⁽¹⁾	3,393		3,817		Insurance receivable ⁽¹⁾	1,608		3,817
Held for sale assets	Held for sale assets	—		3,984		Held for sale assets	—		3,984
Total	Total	$	235,022	$	237,024	Total	$	234,456	$	237,024

(1) Amount primarily related to an involuntary conversion at one of our properties in 2019 for the total amount of $3.7 million. In May 2020, this amount was adjusted to $2.1 million to reflect the revision in damages incurred and corresponding final agreement amount between HTA and the Company's insurance carrier. Pursuant to applicable accounting guidance, we deemed the receipt of funds from the Company's insurance carrier probable and expect the funds to fully cover, less our immaterial deductible, the damages we experienced. As of ~~March 31,~~June 30, 2020, we had received ~~$200 thousand~~$0.7 million in insurance ~~proceeds. Subsequent to March 31, 2020, we received an additional $500 thousand for a total of $700 thousand received pursuant to this claim.~~

~~The following is a summary of the amortization of deferred leasing costs and financing costs for the three months ended March 31, 2020 and 2019, respectively (in thousands):~~

Three Months Ended March 31,
2020 2019
Amortization expense related to deferred leasing costs $ 1,896 $ 2,154
Interest expense related to deferred financing costs 431 431

~~7. Leases~~

~~Lessee - Maturity of Lease Liabilities~~

~~The following table summarizes the future minimum lease obligations of our operating leases as of March 31, 2020 (in thousands):~~

Year Operating Leases Finance Leases
2020 $ 7,771 $ 21
2021 10,731 124
2022 10,927 124
2023 11,066 125
2024 10,412 125
2025 9,901 128
Thereafter 624,109 9,295
Total undiscounted lease payments $ 684,917 $ 9,942
Less: Interest (486,289) (6,604)
Present value of lease liabilities $ 198,628 $ 3,338

~~Lessor - Lease Revenues and Maturity of Future Minimum Rents~~

For the three months ended March 31, 2020 and 2019, we recognized $184.3 million and $168.5 million, respectively, of rental and other lease-related income related to our operating leases, of which $42.8 million and $37.9 million, respectively, were variable lease payments.

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proceeds. Subsequent to June 30, 2020, the Company received the final payment of $1.4 million in insurance proceeds to close out this claim.

The following is a summary of the amortization of deferred leasing costs and financing costs for the three and six months ended June 30, 2020 and 2019, respectively (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Amortization expense related to deferred leasing costs	$	2,113	$	1,874	$	4,009	$	4,028
Interest expense related to deferred financing costs	431		431		862		862

7. Leases

Lessee - Maturity of Lease Liabilities

The following table summarizes the future minimum lease obligations of our operating leases as of June 30, 2020 (in thousands):


Year	Operating Leases		Finance Leases
2020	$	5,323	$	21
2021	10,730		124
2022	10,926		124
2023	11,066		125
2024	10,412		125
2025	9,901		128
Thereafter	624,243		9,295
Total undiscounted lease payments	$	682,601	$	9,942
Less: Interest	(484,090)		(6,604)
Present value of lease liabilities	$	198,511	$	3,338

Lessor - Lease Revenues and Maturity of Future Minimum Rents

For the three months ended June 30, 2020 and 2019, we recognized $176.2 million and $169.9 million, respectively, of rental and other lease-related income related to our operating leases, of which $41.8 million and $38.2 million, respectively, were variable lease payments. For the six months ended June 30, 2020 and 2019, we recognized $360.5 million and $338.4 million, respectively, of rental and other lease-related income related to our operating leases, of which $84.6 million and $76.1 million, respectively, were variable lease payments.

The following table summarizes the future minimum rent contractually due under operating leases, excluding tenant reimbursements of certain costs, as of ~~March 31,~~June 30, 2020 (in thousands):


Year	Year	Amount		Year	Amount
2020	2020	$	402,544	2020	$	268,495
2021	2021	499,747		2021	521,524
2022	2022	443,919		2022	465,454
2023	2023	390,144		2023	411,921
2024	2024	342,040		2024	363,060
2025	2025	294,869		2025	314,870
Thereafter	Thereafter	1,071,163		Thereafter	1,207,218
Total	Total	$	3,444,426	Total	$	3,552,542

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8. Debt

Debt consisted of the following as of ~~March 31,~~June 30, 2020 and December 31, 2019, respectively (in thousands):


		March 31, 2020		December 31, 2019			June 30, 2020		December 31, 2019
Unsecured revolving credit facility	Unsecured revolving credit facility	$	405,000	$	100,000	Unsecured revolving credit facility	$	264,000	$	100,000
Unsecured term loans	Unsecured term loans	500,000		500,000		Unsecured term loans	500,000		500,000
Unsecured senior notes	Unsecured senior notes	2,050,000		2,050,000		Unsecured senior notes	2,050,000		2,050,000
Fixed rate mortgages	Fixed rate mortgages	18,458		114,060		Fixed rate mortgages	17,854		114,060
		$	2,973,458	$	2,764,060		$	2,831,854	$	2,764,060
Deferred financing costs, net	Deferred financing costs, net	(15,619)		(16,255)		Deferred financing costs, net	(14,974)		(16,255)
Premium, net	Premium, net	1,884		1,970		Premium, net	1,815		1,970
Total	Total	$	2,959,723	$	2,749,775	Total	$	2,818,695	$	2,749,775

Unsecured Credit Agreement

Unsecured Revolving Credit Facility due 2022

In 2017, HTALP entered into an amended and restated $1.3 billion unsecured credit agreement (the “Unsecured Credit Agreement”) which increased the amount available under the unsecured revolving credit facility to $1.0 billion and extended the maturities of the unsecured revolving credit facility to June 30, 2022 and for the $300.0 million unsecured term loan referenced below to February 1, 2023. The maximum principal amount of the Unsecured Credit Agreement may be increased by up to $750.0 million, subject to certain conditions, for a total principal amount of $2.05 billion.

Borrowings under the unsecured revolving credit facility accrue interest at a rate equal to adjusted LIBOR, plus a margin ranging from 0.83% to 1.55% per annum based on our credit rating. We also pay a facility fee ranging from 0.13% to 0.30% per annum on the aggregate commitments under the unsecured revolving credit facility. As of ~~March 31,~~June 30, 2020, HTALP had ~~$405.0~~$264.0 million under this unsecured revolving credit facility outstanding and an interest rate of ~~2.00%~~1.19% per annum. The margin associated with our borrowings was 1.00% per annum and the facility fee was 0.20% per annum.

Unsecured Term Loan due 2023

In 2017, we entered into the Unsecured Credit Agreement as noted above. As part of this agreement, we obtained a $300.0 million unsecured term loan that was guaranteed by HTA with a maturity date of February 1, 2023. Borrowings under this unsecured term loan accrue interest equal to adjusted LIBOR, plus a margin ranging from 0.90% to 1.75% per annum based on our credit rating. The margin associated with our borrowings as of ~~March 31,~~June 30, 2020 was 1.10% per annum. Including the impact of the interest rate swaps associated with our unsecured term loan, the interest rate was 2.52% per annum, based on our current credit rating. As of ~~March 31,~~June 30, 2020, HTALP had $300.0 million under this unsecured term loan outstanding.

$200.0 Million Unsecured Term Loan due 2024

In 2018, HTALP entered into a modification of our $200.0 million unsecured term loan with a maturity date of January 15, 2024. Borrowings under the unsecured term loan accrue interest at a rate equal to LIBOR, plus a margin ranging from 0.75% to 1.65% per annum based on our credit rating. The margin associated with our borrowings as of ~~March 31,~~June 30, 2020 was 1.00% per annum. HTALP had interest rate swaps on the balance, which resulted in a fixed interest rate at 2.32% per annum, based on our current credit rating. As of ~~March 31,~~June 30, 2020, HTALP had $200.0 million under this unsecured term loan outstanding.

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$300.0 Million Unsecured Senior Notes due 2023

As of ~~March 31,~~June 30, 2020, HTALP had $300.0 million of unsecured senior notes outstanding that are guaranteed by HTA. These unsecured senior notes are registered under the Securities Act of 1933, as amended (the “Securities Act”), bear interest at 3.70% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.19% of the principal amount thereof, with an effective yield to maturity of 3.80% per annum. As of ~~March 31,~~June 30, 2020, HTALP had $300.0 million of these unsecured senior notes outstanding that mature on April 15, 2023.

$600.0 Million Unsecured Senior Notes due 2026

In September 2019, in connection with the $650.0 million unsecured senior notes due 2030 referenced below, HTALP issued $250.0 million as additional unsecured senior notes to the $350.0 million aggregate principal of senior notes issued on July 12, 2016, all of which are guaranteed by HTA. These unsecured senior notes are registered under the Securities Act, bear interest at 3.50% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 103.66% and 99.72%, respectively, of the principal amount thereof, with an effective yield to maturity of 2.89% and 3.53% per annum, respectively. As of ~~March 31,~~June 30, 2020, HTALP had $600.0 million of these unsecured senior notes outstanding that mature on August 1, 2026.

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$500.0 Million Unsecured Senior Notes due 2027

In 2017, HTALP issued $500.0 million of unsecured senior notes that are guaranteed by HTA. These unsecured senior notes are registered under the Securities Act, bear interest at 3.75% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.49% of the principal amount thereof, with an effective yield to maturity of 3.81% per annum. As of ~~March 31,~~June 30, 2020, HTALP had $500.0 million of these unsecured senior notes outstanding that mature on July 1, 2027.

$650.0 million Unsecured Senior Notes due 2030

In September 2019, in connection with the $250.0 million additional unsecured senior notes due 2026 referenced above, HTALP issued $650.0 million of unsecured senior notes that are guaranteed by HTA. These unsecured senior notes are registered under the Securities Act, bear interest at 3.10% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.66% of the principal amount thereof, with an effective yield to maturity of 3.14% per annum. As of ~~March 31,~~June 30, 2020, HTALP had $650.0 million of these unsecured senior notes outstanding that mature on February 15, 2030.

Fixed Rate Mortgages

As of ~~March 31,~~June 30, 2020, HTALP and its subsidiaries had fixed rate mortgages with interest rates ranging from 2.85% to 3.95% per annum and a weighted average interest rate of ~~3.62%~~3.64% per annum. During the ~~three~~six months ended ~~March 31,~~June 30, 2020, we repaid ~~$95.6~~$96.2 million of our fixed rate mortgages. As of ~~March 31,~~June 30, 2020, we had ~~$18.5~~$17.9 million of fixed rate mortgages outstanding.

Future Debt Maturities

The following table summarizes the debt maturities and scheduled principal repayments of our indebtedness as of ~~March 31,~~June 30, 2020 (in thousands):

Year Amount
2020 $ 1,828
2021 2,504
2022 407,005
2023 612,121
2024 200,000
Thereafter 1,750,000
Total $ 2,973,458

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Year	Amount
2020	$	1,224
2021	2,504
2022	266,005
2023	612,121
2024	200,000
Thereafter	1,750,000
Total	$	2,831,854

Deferred Financing Costs

As of ~~March 31,~~June 30, 2020, the future amortization of our deferred financing costs is as follows (in thousands):


Year	Year	Amount		Year	Amount
2020	2020	$	2,293	2020	$	1,648
2021	2021	2,695		2021	2,695
2022	2022	2,697		2022	2,697
2023	2023	1,978		2023	1,978
2024	2024	1,475		2024	1,475
Thereafter	Thereafter	4,481		Thereafter	4,481
Total	Total	$	15,619	Total	$	14,974

Debt Covenants

We are required by the terms of our applicable loan agreements to meet various affirmative and negative covenants that we believe are customary for these types of facilities, such as limitations on the incurrence of debt by us and our subsidiaries that own unencumbered assets, limitations on the nature of HTALP’s business, and limitations on distributions by HTALP and its subsidiaries that own unencumbered assets. Our loan agreements also impose various financial covenants on us, such as a maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a minimum tangible net worth covenant, a maximum ratio of unsecured indebtedness to unencumbered asset value, rent coverage ratios and a minimum ratio of unencumbered Net Operating Income (“NOI”) to unsecured interest expense. As of ~~March 31,~~June 30, 2020, we believe that we were in compliance with all such financial covenants and reporting requirements. In addition, certain of our loan agreements include events of default provisions that we believe are customary for these types of facilities, including restricting us from making dividend distributions to our stockholders in the event we are in default thereunder, except to the extent necessary for us to maintain our REIT status. We have also concluded as of ~~March 31,~~June 30, 2020 we were not aware of non-compliance with any financial or non-financial covenants in light of the ongoing COVID-19 pandemic.

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9. Derivative Financial Instruments and Hedging Activities

Risk Management Objective of Using Derivative Financial Instruments

We may use derivative financial instruments, including interest rate swaps, caps, options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with our borrowings. The principal objective of such arrangements is to minimize the risks and/or costs associated with our operating and financial structure as well as to hedge specific anticipated transactions. We do not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, we only enter into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which we and our affiliates may also have other financial relationships. We do not anticipate that any of the counterparties will fail to meet their obligations. We record counterparty credit risk valuation adjustments on interest rate swap derivative assets in order to properly reflect the credit quality of the counterparty. In addition, the fair value of derivative financial instruments designated as cash flow hedges are adjusted to reflect the impact of our credit quality.

Cash Flow Hedges of Interest Rate Risk

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps and treasury locks as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for us making fixed rate payments over the life of the agreements without exchange of the underlying notional amount. A treasury lock is a synthetic forward sale of a U.S. treasury note, which is settled in cash based upon the difference between an agreed upon treasury rate and the prevailing treasury rate at settlement. Such treasury locks are entered into to effectively fix the treasury component of an upcoming debt issuance.

Amounts reported in accumulated other comprehensive income in the accompanying condensed consolidated balance sheets related to derivatives will be reclassified to interest expense as interest payments are made on our variable rate debt. During the next twelve months, we estimate that an additional ~~$5.4~~$6.5 million will be reclassified from other comprehensive income in the accompanying condensed consolidated balance sheets as an increase to interest related to derivative financial instruments in the accompanying condensed consolidated statements of operations.

During the three months ended March 31, 2020 we entered into 2 new forward starting interest rate swaps for a total notional amount of $225 million. These swaps were set up as forward starts for future debt issuances. As of ~~March 31,~~June 30, 2020,

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we had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk, 2 of which are forward starting interest rate swaps (in thousands, except number of instruments):


Interest Rate Swaps	~~March 31,~~June 30, 2020
Number of instruments	9
Notional amount	$	725,000

The table below presents the fair value of our derivative financial instruments designated as cash flow hedges as well as the classification in the accompanying condensed consolidated balance sheets as of ~~March 31,~~June 30, 2020 and December 31, 2019, respectively (in thousands):

Asset Derivatives

Liability Derivatives

Asset Derivatives

Liability Derivatives

Fair Value at:

Derivatives Designated as Hedging Instruments:

Balance Sheet
Location

March 31, 2020

December 31, 2019

Balance Sheet
Location

March 31, 2020

December 31, 2019

Derivatives Designated as Hedging Instruments:

Balance Sheet
Location

June 30, 2020

December 31, 2019

Balance Sheet
Location

June 30, 2020

December 31, 2019

Interest rate swaps

Receivables and other assets

—

3,011

Derivative financial instruments

19,480

Interest rate swaps

Receivables and other assets

124

3,011

Derivative financial instruments

22,796

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

The table below presents the gain or loss recognized on our derivative financial instruments designated as cash flow hedges as well as the classification in the accompanying condensed consolidated statements of operations for the three and six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in thousands):


		Gain (Loss) Recognized in OCI on Derivative							Gain (Loss) Reclassified from Accumulated OCI into Income							Gain (Loss) Recognized in OCI on Derivative					Gain (Loss) Reclassified from Accumulated OCI into Income
		Three Months Ended March 31,							Three Months Ended March 31,							Three Months Ended June 30,					Three Months Ended June 30,
Derivatives Cash Flow Hedging Relationships:	Derivatives Cash Flow Hedging Relationships:	2020		2019		Statement of Operations Location	2020		2019		Derivatives Cash Flow Hedging Relationships:	2020		2019		Statement of Operations Location	2020		2019
Interest rate swaps	Interest rate swaps	$	(22,153)	$	(21)	Interest expense	$	345	$	369	Interest rate swaps	$	(4,300)	$	(30)	Interest expense	$	(1,072)	$	351


	Gain (Loss) Recognized in OCI on Derivative							Gain (Loss) Reclassified from Accumulated OCI into Income
	Six Months Ended June 30,							Six Months Ended June 30,
Derivatives Cash Flow Hedging Relationships:	2020		2019		Statement of Operations Location	2020		2019
Interest rate swaps	$	(26,453)	$	(51)	Interest expense	$	(727)	$	720

Credit Risk Related Contingent Features

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

We also have agreements with each of our derivative counterparties that incorporate provisions from our indebtedness with a lender affiliate of the derivative counterparty requiring it to maintain certain minimum financial covenant ratios on our indebtedness. Failure to comply with the covenant provisions would result in us being in default on any derivative instrument obligations covered by these agreements.

As of ~~March 31,~~June 30, 2020, the fair value of derivatives in a net liability position, including accrued interest, but excluding any adjustment for nonperformance risk related to these agreements, was ~~$19.9~~$23.1 million. As of ~~March 31,~~June 30, 2020, we have not posted any collateral related to these agreements and we were not in breach of any of the provisions of these agreements. If we had breached any of the provisions of these agreements, we could have been required to settle our obligations under these agreements.

10. Commitments and Contingencies

Litigation

We engage in litigation from time to time with various parties as a routine part of our business, including tenant defaults. However, we are not presently subject to any material litigation nor, to our knowledge, is any material litigation threatened against us, which if determined unfavorably to us, would have a material adverse effect on our condensed consolidated financial position, results of operations or cash flows.

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Environmental Matters

We follow the policy of monitoring our properties for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist at our properties, we are not currently aware of any environmental liability with respect to our properties that would have a material effect on our condensed consolidated financial position, results of operations or cash flows. Further, we are not aware of any material environmental liability or any unasserted claim or assessment with respect to an environmental liability at our properties that we believe would require additional disclosure or the recording of a loss contingency.

Other

Our other commitments and contingencies include the usual obligations of real estate owners and operators in the normal course of business. In our opinion, these matters are not expected to have a material adverse effect on our condensed consolidated financial position, results of operations or cash flows.

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11. Stockholders’ Equity and Partners’ Capital

HTALP’s operating partnership agreement provides that it will distribute cash flow from operations and net sale proceeds to its partners in accordance with their overall ownership interests at such times and in such amounts as the general partner determines. Dividend distributions are made such that a holder of 1 OP Unit in HTALP will receive distributions from HTALP in an amount equal to the dividend distributions paid to the holder of one share of our common stock. In addition, for each share of common stock issued or redeemed by HTA, HTALP issues or redeems a corresponding number of OP Units.

Common Stock Offerings

In December 2018, we entered into new equity distribution agreements with various sales agents with respect to our at-the-market (“ATM”) offering program of common stock with an aggregate sales amount of up to $500.0 million. We contemporaneously terminated our prior ATM equity distribution agreements. In November 2019, we upsized this ATM offering program with an additional $750.0 million available for issuance.

During the ~~first quarter of~~six months ended June 30, 2020, we issued approximately 1.7 million shares of our common stock under our ATM for net proceeds of approximately $50.0 million, adjusted for costs to borrow equating to a net price to us of $29.86 per share of common stock.

Additionally, we have 4 outstanding forward sale arrangements pursuant to forward equity agreements, with total anticipated net proceeds of $277.5 million, subject to adjustments as provided in the forward equity agreements. NaN of the arrangements mature in late 2020 with the last 1 maturing in early 2021. As of ~~March 31,~~June 30, 2020, $570.6 million remained available for issuance by us under our current ATM. Refer to Note 13 - Per Share Data of HTA to these condensed consolidated financial statements for a more detailed discussion related to our forward equity agreements.

Stock Repurchase Plan

In August 2018, our Board of Directors approved a stock repurchase plan authorizing us to purchase up to $300.0 million of our common stock from time to time prior to the expiration thereof on August 1, 2020. As of ~~March 31,~~June 30, 2020, the remaining amount of common stock available for repurchase under our stock repurchase plan was approximately $224.3 million.

Common Stock Dividends

See our accompanying condensed consolidated statements of equity and condensed statements of changes in partners’ capital for the dividends declared during the three and six months ended ~~March 31,~~June 30, 2020 and 2019. On May 5, 2020, our Board of Directors announced a quarterly cash dividend of $0.315 per share of common stock and per OP Unit to be paid on July 9, 2020 to stockholders of record of our common stock and holders of our OP Units on July 2, 2020.

Incentive Plan

Our Incentive Plan permits the grant of incentive awards to our employees, officers, non-employee directors and consultants as selected by our Board of Directors. This Plan authorizes us to grant awards in any of the following forms: options; stock appreciation rights; restricted stock; restricted or deferred stock units; performance awards; dividend equivalents; other stock-based awards, including units in HTALP; and cash-based awards. Subject to adjustment as provided in the Plan, the aggregate number of awards reserved and available for issuance under the Plan is 5,000,000 shares. As of ~~March 31,~~June 30, 2020, there were ~~831,341~~832,557 awards available for grant under the Plan.

Restricted Common Stock

For the three and six months ended ~~March 31,~~June 30, 2020, we recognized compensation expense of $2.1 million and $5.3 million, respectively. For the three and six months ended June 30, 2019, we recognized compensation expense of ~~$3.2~~$2.1 million and ~~$3.4~~$5.5 million, respectively. Substantially all compensation expense was recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations.

As of ~~March 31,~~June 30, 2020, we had ~~$8.7~~$7.0 million of unrecognized compensation expense, net of estimated forfeitures, which we will recognize over a remaining weighted average period of ~~1.9~~1.8 years.

The following is a summary of our restricted common stock activity as of June 30, 2020 and 2019, respectively:


	June 30, 2020				June 30, 2019
	Restricted Common Stock	Weighted Average Grant Date Fair Value		Restricted Common Stock	Weighted Average Grant Date Fair Value
Beginning balance	600,987	$	28.04	624,349	$	29.35
Granted	244,531	30.20		295,422	25.87
Vested	(361,150)	28.89		(305,647)	28.49
Forfeited	(10,197)	28.78		(6,423)	28.87
Ending balance	474,171	$	28.49	607,701	$	28.10

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

~~The following is a summary of our restricted common stock activity as of March 31, 2020 and 2019, respectively:~~

March 31, 2020 March 31, 2019
Restricted Common Stock Weighted
Average Grant
Date Fair Value Restricted Common Stock Weighted
Average Grant
Date Fair Value
Beginning balance 600,987 $ 28.04 624,349 $ 29.35
Granted 243,037 30.23 294,072 25.86
Vested (343,771) 28.81 (291,857) 28.46
Forfeited (7,407) 28.83 (1,580) 29.31
Ending balance 492,846 $ 28.57 624,984 $ 28.12

12. Fair Value of Financial Instruments

Financial Instruments Reported at Fair Value - Recurring

The table below presents the carrying amounts and fair values of our financial instruments on a recurring basis as of ~~March 31,~~June 30, 2020 and December 31, 2019 (in thousands):


		March 31, 2020						December 31, 2019							June 30, 2020				December 31, 2019
		Carrying Amount		Fair Value		Carrying Amount		Fair Value			Carrying Amount		Fair Value		Carrying Amount		Fair Value
Level 2 - Assets:	Level 2 - Assets:									Level 2 - Assets:
Derivative financial instruments	Derivative financial instruments	$	—	$	—	$	3,011	$	3,011	Derivative financial instruments	$	124	$	124	$	3,011	$	3,011
Level 2 - Liabilities:	Level 2 - Liabilities:									Level 2 - Liabilities:
Derivative financial instruments	Derivative financial instruments	$	19,480	$	19,480	$	29	$	29	Derivative financial instruments	$	22,796	$	22,796	$	29	$	29
Debt	Debt	2,959,723		2,847,483		2,749,775		2,826,983		Debt	2,818,695		2,934,746		2,749,775		2,826,983

The carrying amounts of cash and cash equivalents, tenant and other receivables, restricted cash, accounts payable, and accrued liabilities approximate fair value. Although we have determined that the majority of the inputs used to value our cash flow hedges fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our cash flow hedge positions and have determined that the credit valuation adjustments are not significant to their overall valuation. As a result, we have determined that our cash flow hedge valuations in their entirety are classified in Level 2 of the fair value hierarchy. For further discussion of the assumptions considered, refer to Note 2 - Summary of Significant Accounting Policies.

Financial Instruments Reported at Fair Value - Non-Recurring

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

13. Per Share Data of HTA

Additionally, we have 4 outstanding forward sale arrangements pursuant to forward equity agreements, with total anticipated net proceeds of $277.5 million, with an average share price of $29.46, subject to adjustments as provided in the forward equity agreements. NaN of the arrangements mature in late 2020 with the last 1 maturing in early 2021.

To account for the forward equity agreements, we considered the accounting guidance governing financial instruments and derivatives and concluded that our forward equity ~~agreement was~~agreements were not ~~a liability~~liabilities as itthey did not embody obligations to repurchase our shares of common stock nor did itthey embody obligations to issue a variable number of shares for which the monetary value was predominately fixed, varying with something other than the fair value of the shares, or varying inversely in relation to our shares. We also evaluated whether the ~~agreement~~agreements met the derivatives and hedging guidance scope exception to be accounted for as an equity ~~instrument~~instruments and concluded that the ~~agreement~~agreements can be classified as an equity contract based on the following assessment: (i) none of the agreements’ exercise contingencies were based on observable markets or indices besides those related to the market for our own stock price and operations; and (ii) none of the settlement provisions precluded the ~~agreement~~agreements from being indexed to our own common stock.

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

In addition, we considered the potential dilution resulting from the forward equity agreements mentioned above on our earnings per common share calculations. We use the treasury method to determine the dilution resulting from the forward equity agreements during the period of time prior to settlement. The impact to our weighted-average shares - diluted was anti-dilutive in nature and thus approximately ~~255,000~~1.4 million and 0.5 million shares, respectively, were excluded from the calculation for the three and six months ended ~~March 31,~~June 30, 2020.

We include unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents as “participating securities” pursuant to the two-class method. The resulting classes are our common stock and restricted stock. Our forward equity ~~agreement is~~agreements are not considered a participating security and, therefore, isare not included in the computation of earnings per share using the two-class method. For the three and six months ended ~~March 31,~~June 30, 2020 and 2019, all of our earnings were distributed and the calculated earnings per share amount would be the same for all classes.

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

The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per share of HTA for the three and six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in thousands, except per share data):


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
Numerator:	Numerator:					Numerator:
Net income	Net income	$	18,208	$	13,701	Net income	$	13,725	$	16,598	$	31,933	$	30,299
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(307)		(261)		Net income attributable to noncontrolling interests	(236)		(339)		(543)		(600)
Net income attributable to common stockholders	Net income attributable to common stockholders	$	17,901	$	13,440	Net income attributable to common stockholders	$	13,489	$	16,259	$	31,390	$	29,699
Denominator:	Denominator:					Denominator:
Weighted average shares outstanding - basic	Weighted average shares outstanding - basic	216,692		205,080		Weighted average shares outstanding - basic	218,483		205,108		217,588		205,094
Dilutive shares - OP Units convertible into common stock	Dilutive shares - OP Units convertible into common stock	3,676		3,919		Dilutive shares - OP Units convertible into common stock	3,605		3,897		3,640		3,908
Dilutive effect of forward equity sales agreement		255		—

Adjusted weighted average shares outstanding - diluted	Adjusted weighted average shares outstanding - diluted	220,623		208,999		Adjusted weighted average shares outstanding - diluted	222,088		209,005		221,228		209,002
Earnings per common share - basic	Earnings per common share - basic					Earnings per common share - basic
Net income attributable to common stockholders	Net income attributable to common stockholders	$	0.08	$	0.07	Net income attributable to common stockholders	$	0.06	$	0.08	$	0.14	$	0.14
Earnings per common share - diluted	Earnings per common share - diluted					Earnings per common share - diluted
Net income attributable to common stockholders	Net income attributable to common stockholders	$	0.08	$	0.06	Net income attributable to common stockholders	$	0.06	$	0.08	$	0.14	$	0.14

14. Per Unit Data of HTALP

Additionally, we have 4 outstanding forward sale arrangements pursuant to forward equity agreements, with total anticipated net proceeds of $277.5 million, subject to adjustments as provided in the forward equity agreements. NaN of the arrangements mature in late 2020 with the last 1 maturing in early 2021. Refer to Note 13 - Per Share Data of HTA to these condensed consolidated financial statements for a more detailed discussion related to our forward equity agreements executed in 2019 and March 2020.

The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per unit of HTALP for the three and six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in thousands, except per unit data):


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
Numerator:	Numerator:					Numerator:
Net income	Net income	$	18,208	$	13,701	Net income	$	13,725	$	16,598	$	31,933	$	30,299
Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	—		(28)		Net income attributable to noncontrolling interests	—		(38)		—		(66)
Net income attributable to common unitholders	Net income attributable to common unitholders	$	18,208	$	13,673	Net income attributable to common unitholders	$	13,725	$	16,560	$	31,933	$	30,233
Denominator:	Denominator:					Denominator:
Weighted average OP Units outstanding - basic	Weighted average OP Units outstanding - basic	220,368		208,999		Weighted average OP Units outstanding - basic	222,088		209,005		221,228		209,002
Dilutive units - OP Units convertible into common units						Dilutive units - OP Units convertible into common units	—		—		—		—

Dilutive effect of forward equity sales agreement		255		—
Adjusted weighted average units outstanding - diluted	Adjusted weighted average units outstanding - diluted	220,623		208,999		Adjusted weighted average units outstanding - diluted	222,088		209,005		221,228		209,002
Earnings per common unit - basic:	Earnings per common unit - basic:					Earnings per common unit - basic:
Net income attributable to common unitholders	Net income attributable to common unitholders	$	0.08	$	0.07	Net income attributable to common unitholders	$	0.06	$	0.08	$	0.14	$	0.14
Earnings per common unit - diluted:	Earnings per common unit - diluted:					Earnings per common unit - diluted:
Net income attributable to common unitholders	Net income attributable to common unitholders	$	0.08	$	0.07	Net income attributable to common unitholders	$	0.06	$	0.08	$	0.14	$	0.14

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

15. Supplemental Cash Flow Information

The following is the supplemental cash flow information for the ~~three~~six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in thousands):


		Three Months Ended March 31,							Six Months Ended June 30,
		2020		2019			2020		2019
Supplemental Disclosure of Cash Flow Information:	Supplemental Disclosure of Cash Flow Information:					Supplemental Disclosure of Cash Flow Information:
Interest paid, net of capitalized interest	Interest paid, net of capitalized interest	$	34,062	$	33,397	Interest paid, net of capitalized interest	$	44,230	$	46,196
Income taxes paid	Income taxes paid	39		64		Income taxes paid	1,313		1,536
Cash paid for operating leases	Cash paid for operating leases	3,352		2,911		Cash paid for operating leases	6,340		6,487

Supplemental Disclosure of Noncash Investing and Financing Activities:	Supplemental Disclosure of Noncash Investing and Financing Activities:					Supplemental Disclosure of Noncash Investing and Financing Activities:
Accrued capital expenditures	Accrued capital expenditures	$	8,923	$	5,163	Accrued capital expenditures	$	8,536	$	5,216
Dividend distributions declared, but not paid	Dividend distributions declared, but not paid	69,731		64,922		Dividend distributions declared, but not paid	69,956		68,254

Issuance of OP Units in HTALP						Issuance of OP Units in HTALP	—		2,603

Redemption of noncontrolling interest	Redemption of noncontrolling interest	6,776		527		Redemption of noncontrolling interest	7,872		1,312

Redemption of redeemable noncontrolling interest						Redemption of redeemable noncontrolling interest	—		3,441
ROU assets obtained in exchange for lease obligations	ROU assets obtained in exchange for lease obligations	—		197,099		ROU assets obtained in exchange for lease obligations	—		200,879

~~16. Subsequent Events~~

In March 2020, the World Health Organization categorized COVID-19 as a pandemic, and it continues to spread throughout the United States and other countries across the world. Federal, state and local governments have taken various actions including the issuance of "stay-at-home" orders, social distancing guidelines and ordering the temporary closure of non-essential businesses to limit the spread of COVID-19. Subsequent to March 31, 2020, our buildings remain open, however, some tenants have temporarily suspended operations as a result of precautionary measures or government imposed orders. As a result, in late March and subsequent to the end of the quarter, the Company received rent relief requests from tenants stating that COVID-19 will have an impact on their ability to meet their contractual obligations under their leases. We have received and are currently evaluating rent deferral requests that total approximately 10% of our contractual rent over the next 90 days, while we have approved deferrals that total approximately 7% of our contractual rent over the next 90 days. These deferrals and other modifications were entered into subsequent to March 31, 2020. As of March 31, 2020 and to date, we have not and do not anticipate granting any forms of rent forgiveness. In addition, subsequent to March 31, 2020 we drew an additional $595M, the remaining amount of capacity under our credit facility, to provide additional liquidity and financial flexibility. The ultimate impact of the pandemic and secondary social and economic effects on the Company's results of operations, financial position, liquidity and capital resources remains unclear and cannot be reasonably forecasted at this time.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The use of the words “we,” “us,” or “our” refers to HTA and HTALP, collectively.

The following discussion should be read in conjunction with our condensed consolidated financial statements and notes appearing elsewhere in this Quarterly Report, as well as with the audited consolidated financial statements, accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2019 Annual Report on Form 10-K.

The information set forth below is intended to provide readers with an understanding of our financial condition, changes in financial condition and results of operations.

•Forward-Looking Statements;

•Executive Summary;

•Company Highlights;

•Critical Accounting Policies;

•Recently Issued or Adopted Accounting Pronouncements;

•Factors Which May Influence Results of Operations;

•Results of Operations;

•Non-GAAP Financial Measures;

•Liquidity and Capital Resources;

•Commitments and Contingencies;

•Debt Service Requirements;

•Off-Balance Sheet Arrangements; and

•Inflation.

Forward-Looking Statements

Certain statements contained in this Quarterly Report constitute forward-looking statements within the meaning of the safe harbor from civil liability provided for such statements by the Private Securities Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”)). Such statements include, in particular, statements about our plans, strategies, prospects and estimates regarding future MOB market performance. Additionally, such statements are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially and in adverse ways from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Forward-looking statements are generally identifiable by the use of such terms as “expect,” “project,” “may,” “should,” “could,” “would,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “opinion,” “predict,” “potential,” “pro forma” or the negative of such terms and other comparable terminology. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Quarterly Report is filed with the SEC. We cannot guarantee the accuracy of any such forward-looking statements contained in this Quarterly Report, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Any such forward-looking statements reflect our current views about future events, are subject to unknown risks, uncertainties, and other factors, and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations, provide dividends to stockholders and maintain the value of our real estate properties, may be significantly hindered. Factors that might impair our ability to meet such forward-looking statements include, without limitation, those discussed in Part I, Item 1A - Risk Factors in our 2019 Annual Report on Form 10-K, which is incorporated herein and those discussed in Part II, Item 1A. Risk Factors in this Quarterly Report on Form 10-Q.

Forward-looking statements express expectations of future events. All forward-looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties that could cause actual events or results to differ materially from those projected. Due to these inherent uncertainties, our stockholders are urged not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date made. In addition, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to projections over time, except as required by law.

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These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. Additional information concerning us and our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Executive Summary

We are the largest publicly-traded REIT focused on MOBs in the U.S. as measured by the Gross Leasable Area ("GLA") of our MOBs. We conduct substantially all of our operations through HTALP. We invest in MOBs that we believe will serve the future of healthcare delivery and MOBs that are primarily located on health system campuses, near university medical centers, or in core community outpatient locations. We also focus on key markets that have certain demographic and macro-economic trends and where we can utilize our institutional full-service operating platform to generate strong tenant and health system relationships and operating cost efficiencies. Our primary objective is to maximize stockholder value with disciplined growth through strategic investments that provide an attractive risk-adjusted return for our stockholders by consistently increasing our cash flow. In pursuing this objective, we: (i) seek internal growth through proactive asset management, leasing, building services and property management oversight; (ii) target accretive acquisitions and developments of MOBs in markets with attractive demographics that complement our existing portfolio; and (iii) actively manage our balance sheet to maintain flexibility with conservative leverage. Additionally, from time to time we consider, on an opportunistic basis, significant portfolio acquisitions that we believe fit our core business and could enhance our existing portfolio.

Since 2006, we have invested $7.3 billion primarily in MOBs, development projects, land and other healthcare real estate assets consisting of approximately 24.9 million square feet of GLA throughout the U.S. Approximately 66% of our portfolio is located on the campuses of, or adjacent to, nationally and regionally recognized healthcare systems. Our portfolio is diversified geographically across 33 states, with no state having more than 20% of our total GLA as of ~~March 31,~~June 30, 2020. We are concentrated in 20 to 25 key markets that are experiencing higher economic and demographic trends than other markets, on average, that we expect will drive demand for MOBs. As of ~~March 31,~~June 30, 2020, we had approximately 1 million square feet of GLA in ten of our top 20 markets and approximately 93% of our portfolio, based on GLA, is located in the top 75 Metropolitan Statistical Area ("MSAs"), with Dallas, Houston, Boston, Tampa and Hartford/New Haven being our largest markets by investment.

Company Highlights

Portfolio Operating Performance

•For the three months ended ~~March 31,~~June 30, 2020, total revenue was ~~$185.8~~$178.8 million, compared to ~~$169.0~~$171.8 million for the three months ended ~~March 31,~~June 30, 2019. For the six months ended June 30, 2020, total revenue was $364.6 million, compared to $340.7 million for the six months ended June 30, 2019.

•For the three months ended ~~March 31,~~June 30, 2020, net income was ~~$18.2~~$13.7 million, compared to ~~$13.7~~$16.6 million, for the three months ended ~~March 31,~~June 30, 2019. For the six months ended June 30, 2020, net income was $31.9 million, compared to $30.3 million for the six months ended June 30, 2019.

•For the three months ended ~~March 31,~~June 30, 2020, net income attributable to common stockholders was $0.06 per diluted share, or $13.5 million, compared to $0.08 per diluted share, or ~~$17.9 million, compared to $0.06 per diluted share, or $13.4~~$16.3 million for the three months ended ~~March 31,~~June 30, 2019. For the six months ended June 30, 2020, net income attributable to common stockholders was $0.14 per diluted share, or $31.4 million, compared to $0.14 per diluted share, or $29.7 million for the six months ended June 30, 2019.

•For the three months ended ~~March 31,~~June 30, 2020, HTA’s FFO, as defined by NAREIT, was ~~$93.1~~$87.8 million, or ~~$0.42~~$0.40 per diluted share, compared to $0.40 per diluted share, or ~~$82.9~~$84.6 million, for the three months ended ~~March 31,~~June 30, 2019. For the six months ended June 30, 2020, HTA’s FFO was $180.9 million, or $0.82 per diluted share, compared to $0.80 per diluted share, or $167.4 million, for the six months ended June 30, 2019.

•For the three months ended ~~March 31,~~June 30, 2020, HTALP’s FFO was ~~$93.4~~$88.0 million, or ~~$0.42~~$0.40 per diluted OP Unit, compared to ~~$0.40~~$0.41 per diluted OP unit, or ~~$83.1~~$84.9 million, for the three months ended ~~March 31,~~June 30, 2019. For the six months ended June 30, 2020, HTALP’s FFO was $181.4 million, or $0.82 per diluted OP Unit, compared to $0.80 per diluted OP Unit, or $168.0 million, for the six months ended June 30, 2019.

•For the three months ended ~~March 31,~~June 30, 2020, HTA’s and HTALP’s Normalized FFO was $0.42 per diluted share and OP Unit, or ~~$93.6~~$93.0 million, compared to ~~$0.40~~$0.41 per diluted share and OP Unit, or ~~$83.1 million.~~$85.2 million for the three months ended June 30, 2019. For the six months ended June 30, 2020, HTA’s and HTALP’s Normalized FFO was $0.84 per diluted share and OP Unit, or $186.6 million, compared to $0.81 per diluted share and OP Unit, or $168.3 million for the six months ended June 30, 2019.

•For additional information on FFO and Normalized FFO, see “FFO and Normalized FFO” below, which includes a reconciliation to net income attributable to common stockholders/unitholders and an explanation of why we present this non-GAAP financial measure.

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•For the three months ended ~~March 31,~~June 30, 2020, NOI was ~~$128.9~~$122.6 million, compared to ~~$117.5~~$118.8 million for the three months ended ~~March 31,~~June 30, 2019. For the six months ended June 30, 2020, NOI was $251.6 million, compared to $236.3 million for the six months ended June 30, 2019.

•For the three months ended ~~March 31,~~June 30, 2020, Same-Property Cash NOI increased ~~2.7%~~0.6%, or ~~$3.0~~$0.7 million, to ~~$115.4~~$115.0 million, compared to ~~$112.4~~$114.3 million for the three months ended ~~March 31,~~June 30, 2019. For the six months ended June 30, 2020, Same-Property Cash NOI increased 1.6%, or $3.7 million, to $230.1 million, compared to $226.4 million for the six months ended June 30, 2019.

•For additional information on NOI and Same-Property Cash NOI, see “NOI, Cash NOI and Same-Property Cash NOI” below, which includes a reconciliation from net income and an explanation of why we present these non-GAAP financial measures.

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Key Market Focused Strategy and Investments

We believe we have been one of the most active investors in the medical office sector over the last decade. This has enabled us to create a high quality portfolio focused on MOBs serving the future of healthcare with scale and significance in 20 to 25 key markets.

•Our investment strategy includes alignment with key healthcare systems, hospitals, and leading academic medical universities. We are the largest owner of on-campus or adjacent MOBs in the country, with approximately 16.6 million square feet of GLA, or 66%, of our portfolio located in these locations. The remaining 34% of our portfolio is located in core community outpatient locations where healthcare is increasingly being delivered.

•Over the past decade, our investments have been focused in our 20 to 25 key markets which we believe will outperform the broader U.S. markets from an economic and demographic perspective. As of ~~March 31,~~June 30, 2020, approximately 93% of our portfolio’s GLA is located in the top 75 MSAs. Our key markets represent top MSAs with strong growth metrics in jobs, household income and population, as well as low unemployment and mature healthcare infrastructures. Many of our key markets are also supported by strong university systems.

•Our key market focus has enabled us to establish scale across 20 to 25 key markets and effectively utilize our asset management and leasing platform to deliver consistent same store growth and additional yield on investments, as well as cost effective service to tenants. As of ~~March 31,~~June 30, 2020, we had approximately 1 million square feet of GLA in ten of our top 20 markets and approximately 0.5 million square feet of GLA in 1517 of our top 20 markets.

•During the ~~three~~six months ended ~~March 31,~~June 30, 2020, we closed on $41.7 million worth of investments primarily located in our existing key markets totaling approximately 167,000 square feet of GLA.

Internal Growth through Proactive In-House Property Management and Leasing

We believe we have the largest full-service operating platform in the medical office sector that consists of our in-house asset management and leasing platform which allows us to better manage and service our existing portfolio. In each of these markets, we have established a strong in-house asset management and leasing platform that has allowed us to develop valuable relationships with health systems, physician practices, universities, and regional development firms that have led to investment and leasing opportunities. Our full-service operating platform has also enabled us to focus on generating cost efficiencies as we gain scale across individual markets and regions.

•As of ~~March 31,~~June 30, 2020, our in-house asset management and leasing platform operated approximately ~~24.5~~24.4 million square feet of GLA, or 98% of our total portfolio.

•As of ~~March 31,~~June 30, 2020, our leased rate (which includes leases which have been executed, but which have not yet commenced) was ~~90.8%~~90.4% by GLA and our occupancy rate was ~~89.9%~~89.7% by GLA.

•We entered into new and renewal leases on approximately ~~0.9~~1.3 million and 2.2 million square feet of GLA, or approximately ~~3.5%~~5.2% and 8.8%, respectively, of the GLA of our total portfolio, during the three and six months ended ~~March 31,~~June 30, 2020.

•During the three and six months ended ~~March 31,~~June 30, 2020, tenant retention for the Same-Property portfolio was ~~85%~~89% and 88%, respectively, which included approximately ~~0.7~~1.5 million and 2.2 million square feet of GLA of expiring leases, respectively, which we believe is indicative of our commitment to maintaining buildings in desirable locations and fostering strong tenant relationships. Tenant retention is defined as the sum of the total leased GLA of tenants that renewed a lease during the period over the total GLA of leases that renewed or expired during the period.

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Financial Strategy and Balance Sheet Flexibility

•As of ~~March 31,~~June 30, 2020, we had total leverage, measured by debt less cash and cash equivalents to total capitalization, of ~~33.7%~~31.8%. Total liquidity was approximately $1.1 billion, inclusive of ~~$0.6~~$0.7 billion available on our unsecured revolving credit facility, $277.5 million of forward equity agreements, and cash and cash equivalents of ~~$216.5~~$75.2 million as of ~~March 31,~~June 30, 2020.

•As of ~~March 31,~~June 30, 2020, the weighted average remaining term of our debt portfolio was 5.8 years.

•During the ~~three~~six months ended ~~March 31,~~June 30, 2020, we entered into two new forward starting interest rate swaps for a total notional amount of $225 million.

•During the ~~three~~six months ended ~~March 31,~~June 30, 2020, we settled a forward sale arrangement pursuant to a forward equity agreement that was entered into in 2019, which included the sale of approximately 1.7 million shares of our common stock for net proceeds of approximately $50.0 million, adjusted for costs to borrow equating to a net price to us of $29.86 per share of common stock.

•On May 5, 2020, our Board of Directors announced a quarterly cash dividend of $0.315 per share of common stock and per OP Unit to be paid on July 9, 2020 to stockholders of record of our common stock and holders of our OP Units on July 2, 2020.

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Critical Accounting Policies

The complete list of our critical accounting policies was disclosed in our 2019 Annual Report on Form 10-K. Additionally, in light of the COVID-19 pandemic, we believe we have included all relevant information when determining our management estimates and that these estimates are in line with our established policies. For further information on other significant accounting policies that impact us, see Note 2 - Summary of Significant Accounting Policies in the accompanying condensed consolidated financial statements.

Recently Issued or Adopted Accounting Pronouncements

On January 1, 2020 we adopted ASU 2016-13, Financial Instruments Credit Losses and ASU 2018-13, Fair Value Measurement. For more detail on the implementation and policies of these adoptions or other recently issued accounting pronouncements see Note 2 - Summary of Significant Accounting Policies in the accompanying condensed consolidated financial statements.

Factors Which May Influence Results of Operations

The current novel coronavirus, or COVID-19 pandemic, and measures taken to slow the spread and lessen its impacts, are having a significant impact on economies and markets worldwide. All our buildings remain in operation, however, some tenants, typically the more elective healthcare services, have temporarily suspended operations as a result of precautionary measures or national/local government imposed “stay-at-home” or “shelter-in-place” orders. We have taken steps to enhance our liquidity, in the form of draws against our line of credit, should cash flows become volatile throughout the remainder of the year. ~~We are working~~

As healthcare providers have seen their near-term profitability and liquidity levels decline, we have addressed requests from many of our tenants about their ability to defer payment of a portion of their rents for a limited duration. While many of these requests have been incoming, we have proactively worked with key health system tenants to seek to help them work through this ~~unprecedented time,~~period of time. Each request is evaluated on a case by case basis. To date, we have approved deferral plans that total approximately $9.6 million, which includes approximately $6.6 million of rent that was deferred in the three months ended June 30, 2020. There are no substantial outstanding requests for assistance from tenants. Payments of rent deferrals are generally expected to be repaid over the next 3 to 12 months (starting in the third quarter of 2020), depending on tenant size. As of July 31, 2020, we have not granted unilateral rent forgiveness in connection with our deferral program, however, we may do so in the future if conditions and ~~subsequent to March 31,~~the specific economics warrant the use of such measures.

For the three months ended June 30, 2020, we collected or deferred approximately 98% of our total monthly rents that are contractually due and owed, with cash collection totaling approximately 95% of monthly rent. For the month of July 2020, we collected or deferred approximately 98% of our total monthly rents that are contractually due and owed, with cash collection totaling approximately 94% of monthly rent.

In addition, we have entered into certain ~~rent deferral agreements and other~~ lease modifications ~~however~~in the form of early renewals where we provide concessions in the form of free rent, averaging three (3) months at the inception of the lease, in exchange for additional term, on average approximately three (3) years. The total amount of free rent granted during the three months ended June 30, 2020 as ~~of March 31,~~concessions to early renewals was approximately $3.6 million, with $1.2 million taken in the three months ended June 30, 2020 ~~and~~with the $2.4 million remainder expected to ~~date,~~primarily impact the third quarter 2020. Although we ~~have not and do not anticipate granting any forms of rent forgiveness.~~

We did not experience a significant deceleration of cash collections for the ~~quarter~~three and six months ended ~~March 31,~~June 30, 2020, ~~as our March rents were due and payable as of March 1, 2020, however~~ because of the evolving situation surrounding the COVID-19 pandemic, our results of operations in Q2Q3 2020 and beyond may be materially impacted as the complete effects of the pandemic, including the decrease in commerce and the slowdown and uncertainty in the broader economy, and the corresponding impacts to our buildings and tenants, come to light. ~~These~~In addition to those noted above, other impacts may take the form of an overall continued decrease in our results of operations, stemming from various factors, including, but not limited to: (a) the inability for us to collect a portion of our rents timely or at all, (b) potential slowdown of

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new lease leads and signings, (c) decreases in occupancy either from non-renewals or from tenant defaults, (d) potential increases in expenses for vendors, critical supplies or materials, or costs of maintenance activities, ~~(d)~~(e) delays in construction projects to ready spaces for tenants, ~~(e)~~(f) delays in development projects and potential for increased material costs, ~~(f)~~(g) increased labor costs should we be required to increase salaries for hazardous working conditions, ~~(g)~~(h) potential impairments should we see a more than temporary reduction in cash flows, ~~(h)~~(i) potential delays in accretive acquisitions, and ~~(i)~~(j) increased costs due to borrowings as we look to maintain balance sheet flexibility. Refer to "Results of Operations - Comparison of the Three and Six Months Ended June 30, 2020 and 2019" for additional details on certain current period impacts from the COVID-19 pandemic.

Other than the above, we are not aware of any material trends or uncertainties, other than national economic conditions affecting real estate generally, the risk factors previously discussed in Part I, Item 1A - Risk Factors, in our 2019 Annual Report on Form 10-K, and this Quarterly Report on Form 10-Q under Item 1A. Risk Factors below, that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues or income from the investment, management and operation of our properties.

Rental Income

The amount of rental income generated by our properties depends principally on our ability to maintain the occupancy rates of currently leased space and to lease currently available space and space that will become available from unscheduled lease terminations at the then applicable rental rates. Negative trends in one or more of these factors, including the ultimate collections of such rents, could adversely affect our rental income in future periods.

Investment Activity

During the ~~three~~six months ended ~~March 31,~~June 30, 2020, we had investments with an aggregate gross purchase price of $41.7 million. During the ~~three~~six months ended ~~March 31,~~June 30, 2019, we had investments with an aggregate gross purchase price of ~~$18.8~~$94.1 million. The amount of any future acquisitions or dispositions could have a significant impact on our results of operations in future periods.

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Results of Operations

Comparison of the Three and Six Months Ended ~~March 31,~~June 30, 2020 and 2019

As of ~~March 31,~~June 30, 2020 and 2019, we owned and operated approximately 24.9 million and ~~23.2~~23.3 million square feet of GLA, respectively, with a leased rate of ~~90.8%~~90.4% and ~~91.8%~~91.6%, respectively (including leases which have been executed, but which have not yet commenced), and an occupancy rate of ~~89.9%~~89.7% and 90.6%, respectively. All explanations are applicable to both HTA and HTALP unless otherwise noted.

Comparison of the three months ended ~~March 31,~~June 30, 2020 and 2019, respectively, is set forth below (in thousands):


		Three Months Ended March 31,															Three Months Ended June 30,
		2020		2019		Change		% Change			2020		2019		Change		% Change
Revenues:	Revenues:									Revenues:
Rental income	Rental income	$	185,531	$	168,875	$	16,656	9.9	%	Rental income	$	178,670	$	171,609	$	7,061	4.1	%
Interest and other operating income	Interest and other operating income	245		91		154		NM		Interest and other operating income	175		148		27		18.2
Total revenues	Total revenues	185,776		168,966		16,810		9.9		Total revenues	178,845		171,757		7,088		4.1
Expenses:	Expenses:									Expenses:
Rental	Rental	56,862		51,468		5,394		10.5		Rental	56,200		52,938		3,262		6.2
General and administrative	General and administrative	11,518		11,290		228		2.0		General and administrative	10,160		10,079		81		0.8
Transaction	Transaction	140		40		100		NM		Transaction	32		296		(264)		(89.2)
Depreciation and amortization	Depreciation and amortization	77,665		69,481		8,184		11.8		Depreciation and amortization	74,927		68,429		6,498		9.5

Interest expense	Interest expense	23,872		23,970		(98)		(0.4)		Interest expense	24,277		24,006		271		1.1
Total expenses	Total expenses	170,057		156,249		13,808		8.8		Total expenses	165,596		155,748		9,848		6.3
Gain (loss) on sale of real estate, net		1,991		(37)		2,028		NM

Income from unconsolidated joint venture	Income from unconsolidated joint venture	422		486		(64)		(13.2)		Income from unconsolidated joint venture	379		548		(169)		(30.8)
Other income	Other income	76		535		(459)		(85.8)		Other income	97		41		56		NM
Net income	Net income	$	18,208	$	13,701	$	4,507	32.9	%	Net income	$	13,725	$	16,598	$	(2,873)	(17.3)	%

NOI	NOI	$	128,914	$	117,498	$	11,416	9.7	%	NOI	$	122,645	$	118,819	$	3,826	3.2	%
Same-Property Cash NOI	Same-Property Cash NOI	$	115,394	$	112,385	$	3,009	2.7	%	Same-Property Cash NOI	$	114,970	$	114,312	$	658	0.6	%

Comparison of the six months ended June 30, 2020 and 2019, respectively, is set forth below (in thousands):


	Six Months Ended June 30,
	2020		2019		Change		% Change
Revenues:
Rental income	$	364,201	$	340,484	$	23,717	7.0	%
Interest and other operating income	420		239		181		75.7
Total revenues	364,621		340,723		23,898		7.0
Expenses:
Rental	113,062		104,406		8,656		8.3
General and administrative	21,678		21,369		309		1.4
Transaction	172		336		(164)		(48.8)
Depreciation and amortization	152,592		137,910		14,682		10.6

Interest expense	48,149		47,976		173		0.4
Total expenses	335,653		311,997		23,656		7.6
Gain (loss) on sale of real estate, net	1,991		(37)		2,028		NM

Income from unconsolidated joint venture	801		1,034		(233)		(22.5)
Other income	173		576		(403)		(70.0)
Net income	$	31,933	$	30,299	$	1,634	5.4	%

NOI	$	251,559	$	236,317	$	15,242	6.4	%
Same-Property Cash NOI	$	230,091	$	226,407	$	3,684	1.6	%

*NM- not meaningful.

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Rental Income

For the three and six months ended ~~March 31,~~June 30, 2020 and 2019, respectively, rental income was comprised of the following (in thousands):


		Three Months Ended March 31,															Three Months Ended June 30,
		2020		2019		Change		% Change			2020		2019		Change		% Change
Contractual rental income	Contractual rental income	$	175,839	$	160,757	$	15,082	9.4	%	Contractual rental income	$	168,627	$	164,037	$	4,590	2.8	%
Straight-line rent and amortization of above and (below) market leases	Straight-line rent and amortization of above and (below) market leases	6,094		4,774		1,320		27.6		Straight-line rent and amortization of above and (below) market leases	6,019		4,112		1,907		46.4
Other rental revenue	Other rental revenue	3,598		3,344		254		7.6		Other rental revenue	4,024		3,460		564		16.3
Total rental income	Total rental income	$	185,531	$	168,875	$	16,656	9.9	%	Total rental income	$	178,670	$	171,609	$	7,061	4.1	%


	Six Months Ended June 30,
	2020		2019		Change		% Change
Contractual rental income	$	344,467	$	324,794	$	19,673	6.1	%
Straight-line rent and amortization of above and (below) market leases	12,112		8,886		3,226		36.3
Other rental revenue	7,622		6,804		818		12.0
Total rental income	$	364,201	$	340,484	$	23,717	7.0	%

Contractual rental income, which includes expense reimbursements, increased ~~$15.1~~$4.6 million and $19.7 million for the three and six months ended ~~March 31,~~June 30, 2020, compared to the three and six months ended ~~March 31, 2019.~~June 30, 2019, respectively. The ~~increase was~~increases were primarily due to additional contractual rental income of ~~$11.6~~$11.5 million and $23.2 million from our 2019 and 2020 acquisitions, and contractual rent increases for the three and six months ended ~~March 31,~~June 30, 2020, respectively, partially offset by an incremental $951 thousand of bad debt recognized as a reduction of revenue in our results for the three and six months ended June 30, 2020 for tenants that are either in occupancy but are not timely in making contractual rental payments, or for tenants who have ceased occupancy due to a tenant default and have vacated, and $(0.2) million and $(0.4) million of reduced contractual rent as a result of buildings we sold during 2019 for the three and six months ended ~~March 31, 2020.~~June 30, 2020, respectively.

In addition, we recorded a non-recurring charge of $4.7 million of bad debt as a reduction in revenue related to three (3) former tenants currently in litigation and for which we evaluated collectability on an individual basis to determine whether collections continued to be deemed probable. While we fully intend to continue to pursue such collection efforts on amounts owed to us, we recorded this charge due to the recent prevailing economic conditions and resulting uncertainty of the timing and collections of such amounts previously supported by litigation affirmed in our favor and/or the defendant's former credit, which we now believe have recently eroded. Due to the non-routine nature and anticipated non-recurrence of this charge, we have normalized this amount from both Cash NOI and Normalized FFO results as presented in the section entitled "Non-GAAP Financial Measures" below and elsewhere in this document. This can be contrasted with periodic, recurring bad debt that is recorded for tenants either still in occupancy or those having vacated as a result of a tenant default, for which we also ordinarily record a reduction to revenues to account for uncollectible accounts receivable, as represented by the $951 thousand incremental bad debt charge described in the preceding paragraph which was not subject to a normalizing adjustment in our Non-GAAP Financial Measures. We believe this latter amount carries similar characteristics of those charges in our results of operations that have a propensity of recurrence as an ongoing reduction of revenue either in the form of uncollectible accounts or as reduced occupancy due to tenant defaults and corresponding vacancy.

Average starting and expiring base rents for new and renewal leases consisted of the following for the three and six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in thousands, except in average base rents per square foot of GLA):

Three Months Ended March 31,
2020 2019
New and renewal leases:
Average starting base rents $ 25.37 $ 17.77
Average expiring base rents 24.99 16.82
Square feet of GLA 885 1,099

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	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
New and renewal leases:
Average starting base rents	$	28.54	$	26.94	$	27.36	$	21.50
Average expiring base rents	27.30		26.16		26.44		20.62

Square feet of GLA	1,301		801		2,186		1,900

Lease rates can vary across markets, and lease rates that are considered above or below current market rent may change over time. Leases that expired in 2020 had rents that we believed were at market rates. In general, leasing concessions vary depending on lease type and term.

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Tenant improvements, leasing commissions and tenant concessions for new and renewal leases consisted of the following for the three and six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in per square foot of GLA):


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
New leases:	New leases:					New leases:
Tenant improvements	Tenant improvements	$	36.09	$	35.40	Tenant improvements	$	60.95	$	30.11	$	45.64	$	32.79
Leasing commissions	Leasing commissions	2.51		1.88		Leasing commissions	4.33		1.65		3.21		2.09
Tenant concessions	Tenant concessions	5.11		4.59		Tenant concessions	2.71		3.73		4.20		4.27
Renewal leases:	Renewal leases:					Renewal leases:
Tenant improvements	Tenant improvements	$	6.26	$	15.63	Tenant improvements	$	6.19	$	8.34	$	6.21	$	12.86
Leasing commissions	Leasing commissions	3.70		0.41		Leasing commissions	3.10		1.12		3.31		2.12
Tenant concessions	Tenant concessions	0.60		0.26		Tenant concessions	3.64		0.63		1.74		0.38

The average term for new and renewal leases executed consisted of the following for the three and six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in years):


		Three Months Ended March 31,				Three Months Ended June 30,			Six Months Ended June 30,
		2020	2019		2020	2019	2020	2019
New leases	New leases	9.9	7.5	New leases	8.8	7.4	9.5	7.4
Renewal leases	Renewal leases	4.5	9.6	Renewal leases	3.9	5.5	4.1	8.1

Rental Expenses

For the three months ended ~~March 31,~~June 30, 2020 and 2019, rental expenses attributable to our properties were ~~$56.9~~$56.2 million and ~~$51.5~~$52.9 million, respectively. ~~The increase~~For the six months ended June 30, 2020 and 2019, rental expenses attributable to our properties were $113.1 million and $104.4 million, respectively. These increases in rental expenses iswere primarily due to ~~$4.3~~$4.5 million and $8.8 million of additional rental expenses associated with our 2019 and 2020 acquisitions for the three and six months ended ~~March 31,~~June 30, 2020, respectively, partially offset by $0.0 million and $(0.1) million of reduced rental expenses as a result of buildings we sold during 2019, and improved operating efficiencies for the three and six months ended ~~March 31,~~June 30, 2020, respectively. Furthermore, we recorded an incremental $0.3 million related to hazard pay and increased personal protective equipment costs directly related to COVID-19 for the three and six months ended June 30, 2020. Due to the incremental nature related to COVID-19 this amount was normalized out of both NOI and Normalized FFO results as presented below.

General and Administrative Expenses

For the three months ended ~~March 31,~~June 30, 2020 and 2019, general and administrative expenses were ~~$11.5~~$10.2 million and ~~$11.3~~$10.1 million, respectively. ~~The increase was~~For the six months ended June 30, 2020 and 2019, general and administrative expenses were $21.7 million and $21.4 million, respectively. These increases were primarily due to an increase in the overall head count due to the continued growth of the Company and stock based compensation expense.

Depreciation and Amortization Expense

For the three months ended ~~March 31,~~June 30, 2020 and 2019, depreciation and amortization expense was ~~$77.7~~$74.9 million and ~~$69.5~~$68.4 million, respectively. For the six months ended June 30, 2020 and 2019, depreciation and amortization expense was $152.6 million and $137.9 million, respectively. This increase was associated with our 2019 and 2020 acquisitions, partially offset by buildings we disposed during 2019.

Interest Expense

For the three months ended ~~March 31,~~June 30, 2020 and 2019, interest expense was ~~$23.9~~$24.3 million and $24.0 million, respectively. For the six months ended June 30, 2020 and 2019, interest expense was $48.1 million and $48.0 million, respectively. The ~~decrease~~increases in interest expense is primarily due to ~~lower average interest rates on our variable rate debt, partially offset by~~a higher overall average debt compared to the same period in ~~2019.~~2019, partially offset by lower average interest rates on our variable rate debt.

To achieve our objectives, we borrow at both fixed and variable rates. From time to time, we also enter into derivative financial instruments, such as interest rate swaps, in order to mitigate our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes.

Gain (Loss) on Sale of Real Estate, net

For the ~~three~~six months ended ~~March 31,~~June 30, 2020, we realized a net gain of approximately $2.0 million on the sale of part of our interest in undeveloped land in Miami, Florida. For the ~~three~~six months ended ~~March 31,~~June 30, 2019, we realized a net loss of $37 thousand on the disposition of three MOB's in Hilton Head, South Carolina.

Net Income

For the three months ended ~~March 31,~~June 30, 2020 and 2019, net income was ~~$18.2~~$13.7 million and ~~$13.7~~$16.6 million, respectively. For

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the six months ended June 30, 2020 and 2019, net income was $31.9 million and $30.3 million, respectively. The increase is primarily the result of continued growth in our operations due to accretive acquisitions and improved operating efficiencies.

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NOI and Same-Property Cash NOI

For the three months ended ~~March 31,~~June 30, 2020 and 2019, NOI was ~~$128.9~~$122.6 million and ~~$117.5~~$118.8 million, respectively. For the six months ended June 30, 2020 and 2019, NOI was $251.6 million and $236.3 million, respectively. The increase in NOI was primarily due to additional NOI from our 2019 and 2020 acquisitions of ~~$8.3~~$8.1 million and $16.5 million for the three and six months ended ~~March 31,~~June 30, 2020, respectively, partially offset by $(0.1) million and $(0.3) million of reduced NOI as a result of the buildings we sold during 2019 for the three and six months ended June 30, 2020, respectively, and a reduction in straight-line rent from properties we owned for more than a year.

Same-Property Cash NOI increased ~~2.7%~~0.6% to ~~$115.4~~$115.0 million for the three months ended ~~March 31,~~June 30, 2020 compared to the three months ended ~~March 31,~~June 30, 2019. Same-Property Cash NOI increased 1.6% to $230.1 million for the six months ended June 30, 2020 compared to the six months ended June 30, 2019. The ~~increase was~~increases were primarily the result of rent escalations, improved operating efficiencies, offset by a slight decrease in average ~~occupancy.~~occupancy, and the $1.2 million of incremental free rent provided related to early renewals of leases and bad debt charges of $951 thousand as described in "Results of Operations - Rental Income" above.

Non-GAAP Financial Measures

FFO and Normalized FFO

We compute FFO in accordance with the current standards established by NAREIT. NAREIT defines FFO as net income or loss attributable to common stockholders/unitholders (computed in accordance with GAAP), excluding gains or losses from sales of real estate property and impairment write-downs of depreciable assets, plus depreciation and amortization related to investments in real estate, and after adjustments for unconsolidated partnerships and joint ventures. Since FFO excludes depreciation and amortization unique to real estate, among other items, it provides a perspective not immediately apparent from net income or loss attributable to common stockholders/unitholders.

We also compute Normalized FFO, which excludes from FFO: (i) transaction expenses; (ii) gain or loss on extinguishment of debt; (iii) noncontrolling income or loss from OP Units included in diluted shares (only applicable to the Company); and (iv) other normalizing ~~items,~~adjustments, which include items that are unusual and infrequent in nature. Our methodology for calculating Normalized FFO may be different from the methods utilized by other REITs and, accordingly, may not be comparable to other REITs.

We present FFO and Normalized FFO because we consider them important supplemental measures of our operating performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. Historical cost accounting assumes that the value of real estate assets diminishes ratably over time. Since real estate values have historically risen or fallen based on market conditions, many industry investors have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. FFO and Normalized FFO should not be considered as alternatives to net income or loss attributable to common stockholders/unitholders (computed in accordance with GAAP) as indicators of our financial performance, nor are they indicative of cash available to fund cash needs. FFO and Normalized FFO should be reviewed in connection with other GAAP measurements.

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

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The following is the reconciliation of HTA’s FFO and Normalized FFO to net income attributable to common stockholders for the three and six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in thousands, except per share data):


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
Net income attributable to common stockholders	Net income attributable to common stockholders	$	17,901	$	13,440	Net income attributable to common stockholders	$	13,489	$	16,259	$	31,390	$	29,699
Depreciation and amortization expense related to investments in real estate	Depreciation and amortization expense related to investments in real estate	76,737		68,926		Depreciation and amortization expense related to investments in real estate	73,769		67,846		150,506		136,772
(Gain) loss on sale of real estate, net	(Gain) loss on sale of real estate, net	(1,991)		37		(Gain) loss on sale of real estate, net	—		—		(1,991)		37

Proportionate share of joint venture depreciation and amortization	Proportionate share of joint venture depreciation and amortization	467		472		Proportionate share of joint venture depreciation and amortization	508		450		975		922
FFO attributable to common stockholders	FFO attributable to common stockholders	$	93,114	$	82,875	FFO attributable to common stockholders	$	87,766	$	84,555	$	180,880	$	167,430
Transaction expenses	Transaction expenses	140		40		Transaction expenses	32		296		172		336

Noncontrolling income from OP Units included in diluted shares	Noncontrolling income from OP Units included in diluted shares	307		233		Noncontrolling income from OP Units included in diluted shares	236		301		543		534

Other normalizing adjustments ⁽¹⁾						Other normalizing adjustments ⁽¹⁾	4,959		—		5,031		—
Normalized FFO attributable to common stockholders	Normalized FFO attributable to common stockholders	$	93,561	$	83,148	Normalized FFO attributable to common stockholders	$	92,993	$	85,152	$	186,626	$	168,300

Net income attributable to common stockholders per diluted share	Net income attributable to common stockholders per diluted share	$	0.08	$	0.06	Net income attributable to common stockholders per diluted share	$	0.06	$	0.08	$	0.14	$	0.14
FFO adjustments per diluted share, net	FFO adjustments per diluted share, net	0.34		0.34		FFO adjustments per diluted share, net	0.34		0.32		0.68		0.66
FFO attributable to common stockholders per diluted share	FFO attributable to common stockholders per diluted share	$	0.42	$	0.40	FFO attributable to common stockholders per diluted share	$	0.40	$	0.40	$	0.82	$	0.80
Normalized FFO adjustments per diluted share, net	Normalized FFO adjustments per diluted share, net	0.00		0.00		Normalized FFO adjustments per diluted share, net	0.02		0.01		0.02		0.01
Normalized FFO attributable to common stockholders per diluted share	Normalized FFO attributable to common stockholders per diluted share	$	0.42	$	0.40	Normalized FFO attributable to common stockholders per diluted share	$	0.42	$	0.41	$	0.84	$	0.81

Weighted average diluted common shares outstanding	Weighted average diluted common shares outstanding	220,623		208,999		Weighted average diluted common shares outstanding	222,088		209,005		221,228		209,002

(1) Other normalizing adjustments includes the following:


	Three Months Ended June 30,						Six Months Ended June 30,
	2020		2019		2020		2019
Non-recurring bad debt	$	4,672	$	—	$	4,672	$	—
Incremental hazard pay to facilities employees	242		—		314		—
Incremental personal protective equipment	45		—		45		—
Total normalizing adjustments	$	4,959	$	—	$	5,031	$	—

3438

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The following is the reconciliation of HTALP’s FFO and Normalized FFO to net income attributable to common unitholders for the three and six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in thousands, except per unit data):


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
Net income attributable to common unitholders	Net income attributable to common unitholders	$	18,208	$	13,673	Net income attributable to common unitholders	$	13,725	$	16,560	$	31,933	$	30,233
Depreciation and amortization expense related to investments in real estate	Depreciation and amortization expense related to investments in real estate	76,737		68,926		Depreciation and amortization expense related to investments in real estate	73,769		67,846		150,506		136,772
(Gain) loss on sale of real estate, net	(Gain) loss on sale of real estate, net	(1,991)		37		(Gain) loss on sale of real estate, net	—		—		(1,991)		37

Proportionate share of joint venture depreciation and amortization	Proportionate share of joint venture depreciation and amortization	467		472		Proportionate share of joint venture depreciation and amortization	508		450		975		922
FFO attributable to common unitholders	FFO attributable to common unitholders	$	93,421	$	83,108	FFO attributable to common unitholders	$	88,002	$	84,856	$	181,423	$	167,964
Transaction expenses	Transaction expenses	140		40		Transaction expenses	32		296		172		336

Other normalizing adjustments ⁽¹⁾						Other normalizing adjustments ⁽¹⁾	4,959		—		5,031		—
Normalized FFO attributable to common unitholders	Normalized FFO attributable to common unitholders	$	93,561	$	83,148	Normalized FFO attributable to common unitholders	$	92,993	$	85,152	$	186,626	$	168,300

Net income attributable to common unitholders per diluted share	Net income attributable to common unitholders per diluted share	$	0.08	$	0.07	Net income attributable to common unitholders per diluted share	$	0.06	$	0.08	$	0.14	$	0.14
FFO adjustments per diluted unit, net	FFO adjustments per diluted unit, net	0.34		0.33		FFO adjustments per diluted unit, net	0.34		0.33		0.68		0.66
FFO attributable to common unitholders per diluted unit	FFO attributable to common unitholders per diluted unit	$	0.42	$	0.40	FFO attributable to common unitholders per diluted unit	$	0.40	$	0.41	$	0.82	$	0.80
Normalized FFO adjustments per diluted unit, net	Normalized FFO adjustments per diluted unit, net	0.00		0.00		Normalized FFO adjustments per diluted unit, net	0.02		0.00		0.02		0.01
Normalized FFO attributable to common unitholders per diluted unit	Normalized FFO attributable to common unitholders per diluted unit	$	0.42	$	0.40	Normalized FFO attributable to common unitholders per diluted unit	$	0.42	$	0.41	$	0.84	$	0.81

Weighted average diluted common units outstanding	Weighted average diluted common units outstanding	220,623		208,999		Weighted average diluted common units outstanding	222,088		209,005		221,228		209,002

(1) Other normalizing adjustments includes the following: non-recurring bad debt of $4,672 thousand, incremental hazard pay to facilities employees of $242 thousand, and incremental personal protective equipment of $45 thousand for the three months ended June 30, 2020 and non-recurring bad debt of $4,672 thousand, incremental hazard pay to facilities employees of $314 thousand, and incremental personal protective equipment of $45 thousand for the six months ended June 30, 2020.

NOI, Cash NOI and Same-Property Cash NOI

NOI is a non-GAAP financial measure that is defined as net income or loss (computed in accordance with GAAP) before: (i) general and administrative expenses; (ii) transaction expenses; (iii) depreciation and amortization expense; (iv) impairment; (v) interest expense; (vi) gain or loss on sales of real estate; (vii) gain or loss on extinguishment of debt; (viii) income or loss from unconsolidated joint venture; and (ix) other income or expense. We believe that NOI provides an accurate measure of the operating performance of our operating assets because NOI excludes certain items that are not associated with the management of our properties. Additionally, we believe that NOI is a widely accepted measure of comparative operating performance of REITs. However, our use of the term NOI may not be comparable to that of other REITs as they may have different methodologies for computing this amount. NOI should not be considered as an alternative to net income or loss (computed in accordance with GAAP) as an indicator of our financial performance. NOI should be reviewed in connection with other GAAP measurements.

Cash NOI is a non-GAAP financial measure which excludes from NOI: (i) straight-line rent adjustments; (ii) amortization of below and above market leases/leasehold interests and other GAAP adjustments; ~~and~~ (iii) notes receivable interest inc~~ome.~~ome; and (iv) other normalizing adjustments. Contractual base rent, contractual rent increases, contractual rent concessions and changes in occupancy or lease rates upon commencement and expiration of leases are a primary driver of our revenue performance. We believe that Cash NOI, which removes the impact of straight-line rent adjustments, provides another measurement of the operating performance of our operating assets. Additionally, we believe that Cash NOI is a widely accepted measure of comparative operating performance of REITs. However, our use of the term Cash NOI may not be comparable to that of other REITs as they may have different methodologies for computing this amount. Cash NOI should not be considered as an alternative to net income or loss (computed in accordance with GAAP) as an indicator of our financial performance. Cash NOI should be reviewed in connection with other GAAP measurements.

To facilitate the comparison of Cash NOI between periods, we calculate comparable amounts for a subset of our owned and operational properties referred to as “Same-Property”. Same-Property Cash NOI excludes (i) properties which have not been owned and operated by us during the entire span of all periods presented and disposed properties, (ii) our share of unconsolidated joint ventures, (iii) development, redevelopment and land parcels, (iv) properties intended for disposition in the near term which have (a) been approved by the Board of Directors, (b) is actively marketed for sale, and (c) an offer has been received at prices we would transact and the sales process is ongoing, and (v) certain non-routine items. Same-Property Cash NOI should not be considered as an alternative to net income or loss (computed in accordance with GAAP) as an indicator of our financial performance. Same-Property Cash NOI should be reviewed in connection with other GAAP measurements.

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The following is the reconciliation of HTA’s and HTALP’s NOI, Cash NOI and Same-Property Cash NOI to net income for the three and six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in thousands):


		Three Months Ended March 31,							Three Months Ended June 30,						Six Months Ended June 30,
		2020		2019			2020		2019		2020		2019
Net income	Net income	$	18,208	$	13,701	Net income	$	13,725	$	16,598	$	31,933	$	30,299
General and administrative expenses	General and administrative expenses	11,518		11,290		General and administrative expenses	10,160		10,079		21,678		21,369
Transaction expenses	Transaction expenses	140		40		Transaction expenses	32		296		172		336
Depreciation and amortization expense	Depreciation and amortization expense	77,665		69,481		Depreciation and amortization expense	74,927		68,429		152,592		137,910

Interest expense	Interest expense	23,872		23,970		Interest expense	24,277		24,006		48,149		47,976
(Gain) loss on sale of real estate, net	(Gain) loss on sale of real estate, net	(1,991)		37		(Gain) loss on sale of real estate, net	—		—		(1,991)		37

Income from unconsolidated joint venture	Income from unconsolidated joint venture	(422)		(486)		Income from unconsolidated joint venture	(379)		(548)		(801)		(1,034)
Other income	Other income	(76)		(535)		Other income	(97)		(41)		(173)		(576)
NOI	NOI	$	128,914	$	117,498	NOI	$	122,645	$	118,819	$	251,559	$	236,317
Straight-line rent adjustments, net	Straight-line rent adjustments, net	(3,245)		(3,258)		Straight-line rent adjustments, net	(3,717)		(2,464)		(6,962)		(5,722)
Amortization of (below) and above market leases/leasehold interests, net and other GAAP adjustments ⁽¹⁾	Amortization of (below) and above market leases/leasehold interests, net and other GAAP adjustments ⁽¹⁾	(1,699)		(222)		Amortization of (below) and above market leases/leasehold interests, net and other GAAP adjustments ⁽¹⁾	(344)		(260)		(2,043)		(482)
Notes receivable interest income	Notes receivable interest income	(138)		(27)		Notes receivable interest income	(3)		(25)		(141)		(52)
Other normalizing adjustments ⁽²⁾						Other normalizing adjustments ⁽²⁾	4,959		—		5,031		—
Cash NOI	Cash NOI	$	123,832	$	113,991	Cash NOI	$	123,540	$	116,070	$	247,444	$	230,061
Acquisitions not owned/operated for all periods presented and disposed properties Cash NOI	Acquisitions not owned/operated for all periods presented and disposed properties Cash NOI	(8,296)		(352)		Acquisitions not owned/operated for all periods presented and disposed properties Cash NOI	(8,669)		(728)		(17,310)		(1,369)
Redevelopment Cash NOI	Redevelopment Cash NOI	44		(1,077)		Redevelopment Cash NOI	286		(856)		330		(1,933)
Intended for sale Cash NOI	Intended for sale Cash NOI	(186)		(177)		Intended for sale Cash NOI	(187)		(174)		(373)		(352)
Same-Property Cash NOI ⁽²⁾		$	115,394	$	112,385
Same-Property Cash NOI ⁽³⁾						Same-Property Cash NOI ⁽³⁾	$	114,970	$	114,312	$	230,091	$	226,407

(1) The presentation includes certain adjustments to allow for the consistent treatment of items impacted by Topic 842-Leases. (2) Same-Property includes 412 buildings for the three months ended March 31, 2020 and 2019, respectively.

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

(2) Other normalizing adjustments includes the following: non-recurring bad debt of $4,672 thousand, incremental hazard pay to facilities employees of $242 thousand, and incremental personal protective equipment of $45 thousand for the three months ended June 30, 2020 and non-recurring bad debt of $4,672 thousand, incremental hazard pay to facilities employees of $314 thousand, and incremental personal protective equipment of $45 thousand for the six months ended June 30, 2020.

(3) Same-Property includes 413 and 412 buildings for the three and six months ended June 30, 2020 and 2019, respectively.

Liquidity and Capital Resources

Our primary sources of cash include: (i) cash flow from operations; (ii) borrowings under our unsecured revolving credit facility; (iii) net proceeds from the issuances of debt and equity securities; and (iv) proceeds from our dispositions. During the next 12 months our primary uses of cash are expected to include: (a) the funding of acquisitions of MOBs, development properties and other facilities that serve the healthcare industry; (b) capital expenditures; (c) the payment of operating expenses; (d) debt service payments, including principal payments; and (e) the payment of dividends to our stockholders. We anticipate cash flow from operations, restricted cash and reserve accounts and our unsecured revolving credit facility, if needed, will be sufficient to fund our operating expenses, capital expenditures and dividends to stockholders. Investments and maturing indebtedness may require funds from borrowings under our unsecured revolving credit facility, the issuance of debt and/or equity securities or proceeds from sales of real estate.

During the COVID-19 pandemic, we continue to take a measured approach to our operations and cash flows, with an expectation that despite efforts by the US Government to provide liquidity and relief to certain of our tenants who qualify for aid under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, payments from tenants who do not qualify for such aid, or those medical practices focused on procedures that are of an elective nature, may decline appreciably until such time that there is a sustained reversal of government mandated "stay-at-home" or "shelter-in-place" orders and a corresponding normalized level of economic activity and commerce resumes. In addition, due to the recent volatility in capital markets, our access to such capital may be temporarily delayed, and/or we may not be able to raise debt or equity financing on terms that are favorable to us.

As of ~~March 31,~~June 30, 2020, we had total liquidity of $1.1 billion, inclusive of ~~$0.6~~$0.7 billion available on our unsecured revolving credit facility, $277.5 million of forward equity agreements, and cash and cash equivalents of ~~$216.5~~$75.2 million.

We believe that we have sufficient liquidity and options at our disposal to sustain operations for the foreseeable future. As the COVID-19 pandemic continues to unfold, we will assess cash flow requirements and deploy various strategies to preserve liquidity, including, but not limited to, continued utilization of our credit facility, settlement of equity raised on a forward basis, or if circumstances warrant, changes to the manner in which our dividends are paid and/or corresponding amounts distributed.

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As of ~~March 31,~~June 30, 2020, we had unencumbered assets with a gross book value of $7.6 billion. The unencumbered properties may be used as collateral to secure additional financings in future periods or refinance our current debt as it becomes due. Our ability to raise funds from future debt and equity issuances is dependent on our investment grade credit ratings, general economic and market conditions, and our operating performance.

~~Table of Contents~~

When we acquire a property, we prepare a capital plan that contemplates the estimated capital needs of that investment. In addition to operating expenses, capital needs may also include costs of refurbishment, tenant improvements or other major capital expenditures. The capital plan for each investment will be adjusted through ongoing, regular reviews of our portfolio or as necessary to respond to unanticipated additional capital needs. Capital expenditures for the remainder of the year will be primarily targeted towards planned maintenance activities and other capital improvements that are either of an immediate need to preserve liquidity, or strategically necessary for revenue generation purposes. Currently these expenditures are estimated at approximately $5$10 million to ~~$15~~$20 million per quarter, but may fluctuate materially depending on the ongoing impacts from COVID-19. Although we cannot provide assurance that we will not exceed these estimated expenditure levels, we believe our liquidity of $1.1 billion allows us the flexibility to fund such capital expenditures.

If we experience lower occupancy levels, reduced rental rates, reduced revenues as a result of asset sales, or increased capital expenditures and leasing costs compared to historical levels due to competitive market conditions for new and renewal leases, the effect would be a reduction of net cash provided by operating activities. If such a reduction of net cash provided by operating activities is realized, we may have a cash flow deficit in subsequent periods. Our estimate of net cash available is based on various assumptions which are difficult to predict, including the levels of our leasing activity and related leasing costs. Any changes in these assumptions could impact our financial results and our ability to fund working capital and unanticipated cash needs.

Cash Flows

The following is a summary of our cash flows for the ~~three~~six months ended ~~March 31,~~June 30, 2020 and 2019, respectively (in thousands):


		Three Months Ended March 31,											Six Months Ended June 30,
		2020		2019		Change			2020		2019		Change
Cash, cash equivalents and restricted cash - beginning of period	Cash, cash equivalents and restricted cash - beginning of period	$	37,616	$	133,530	$	(95,914)	Cash, cash equivalents and restricted cash - beginning of period	$	37,616	$	133,530	$	(95,914)
Net cash provided by operating activities	Net cash provided by operating activities	75,421		48,555		26,866		Net cash provided by operating activities	182,183		148,737		33,446
Net cash used in investing activities	Net cash used in investing activities	(76,623)		(36,047)		(40,576)		Net cash used in investing activities	(114,688)		(134,687)		19,999
Net cash provided by (used in) financing activities		185,058		(77,563)		262,621
Net cash used in financing activities								Net cash used in financing activities	(25,111)		(118,436)		93,325
Cash, cash equivalents and restricted cash - end of period	Cash, cash equivalents and restricted cash - end of period	$	221,472	$	68,475	$	152,997	Cash, cash equivalents and restricted cash - end of period	$	80,000	$	29,144	$	50,856

Net cash provided by operating activities increased in 2020 primarily due to the impact of our 2019 and 2020 acquisitions and contractual rent increases, ~~and improved operational efficiencies,~~ partially offset by our 2019 and 2020 ~~dispositions.~~dispositions and rents that have been deferred under our deferral program in light of COVID-19. We anticipate cash flows from operating activities to increase as a result of the growth in our portfolio through new acquisitions and continued leasing activity in our existing portfolio.

For the ~~three~~six months ended ~~March 31,~~June 30, 2020, net cash used in investing activities primarily related to capital expenditures of $43.9 million, investments in real estate of $41.3 million, ~~capital expenditures of $23.8 million,~~ development of real estate of ~~$12.1~~$30.4 million, funding of a real estate loan of $6.0 million, partially offset by proceeds from the sale of real estate of $6.4 million. For the ~~three~~six months ended ~~March 31,~~June 30, 2019, net cash used in investing activities primarily related to investments in real estate of ~~$18.6~~$93.9 million and capital expenditures of ~~$16.8 million, and development of real estate of $2.0~~$37.8 million.

For the ~~three~~six months ended ~~March 31,~~June 30, 2020, net cash ~~provided by~~used in financing activities primarily related to dividends paid to holders of our common stock of $137.1 million, and payments on our secured mortgage loans of $96.2 million, partially offset by net borrowings on our unsecured revolving credit facility of ~~$305.0~~$164.0 million, and proceeds from issuance of common stock of $50.0 ~~million, offset by payments on our secured mortgage loans of $95.6 million, dividends paid to holders of our common stock of $68.2 million, and the repurchase and cancellation of common stock of $4.6~~ million. For the ~~three~~six months ended ~~March 31,~~June 30, 2019, net cash used in financing activities primarily related to dividends paid to holders of our common stock of ~~$63.7~~$127.4 million, payments on our secured mortgage loans of $96.2 million, and the repurchase and cancellation of common stock of ~~$11.9~~$12.1 million, which was partially offset by net borrowings on our unsecured revolving credit facility of $120.0 million.

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Dividends

The amount of dividends we pay to our stockholders is determined by our Board of Directors, in their sole discretion, and is dependent on a number of factors, including funds available, our financial condition, capital expenditure requirements and annual dividend distribution requirements needed to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended. We have paid monthly or quarterly dividends since February 2007, and if our investments produce sufficient cash flow, we expect to continue to pay dividends to our stockholders. Because our cash available for dividend distributions in any year may be less than 90% of our taxable income for the year, we may obtain the necessary funds through borrowings, issuing new securities or selling assets to pay out enough of our taxable income to satisfy our dividend distribution requirement. Our organizational documents do not establish a limit on dividends that may constitute a return of capital for federal income tax purposes. The dividend we pay to our stockholders is equal to the distributions received from HTALP in accordance with the terms of the HTALP partnership agreement. It is our intention to continue to pay dividends. However, our Board of Directors may reduce our dividend rate and we cannot guarantee the timing and amount of dividends that we may pay in the future, if any.

For the ~~three~~six months ended ~~March 31,~~June 30, 2020, we paid cash dividends of ~~$68.2~~$137.1 million on our common stock. In ~~April~~July 2020 for the quarter ended ~~March 31,~~June 30, 2020, we paid cash dividends on our common stock of $68.8 million.

Financing

We have historically maintained a low leveraged balance sheet and intend to continue to maintain this structure in the long term. However, our total leverage may fluctuate on a short-term basis as we execute our business strategy. As of ~~March 31,~~June 30, 2020, our leverage ratio, measured by debt less cash and cash equivalents to total capitalization, was ~~33.7%~~31.8%.

As of ~~March 31,~~June 30, 2020, we had debt outstanding of ~~$3.0~~$2.8 billion and the weighted average interest rate therein was ~~3.09%~~3.07% per annum, inclusive of the impact of our cash flow hedges. The following is a summary of our unsecured and secured debt. See Note 8 - Debt in the accompanying condensed consolidated financial statements for a further discussion of our debt.

Unsecured Revolving Credit Facility

As of ~~March 31,~~June 30, 2020, ~~$0.6 billion~~$736.0 million was available on our $1.0 billion unsecured revolving credit facility. Our unsecured revolving credit facility matures in June 2022.

Unsecured Term Loans

As of ~~March 31,~~June 30, 2020, we had $500.0 million of unsecured term loans outstanding, comprised of $300.0 million under our Unsecured Credit Agreement maturing in 2023, and $200.0 million under our unsecured term loan maturing in 2024.

Unsecured Senior Notes

As of ~~March 31,~~June 30, 2020, we had $2.05 billion of unsecured senior notes outstanding, comprised of $300.0 million of senior notes maturing in 2023, $600.0 million of senior notes maturing in 2026, $500.0 million of senior notes maturing in 2027, and $650.0 million of senior notes maturing in 2030.

Fixed Rate Mortgages

During the ~~three~~six months ended ~~March 31,~~June 30, 2020, we made payments on our fixed rate mortgages of ~~$95.6~~$96.2 million and have ~~$1.8~~$1.2 million of principal payments due during the remainder of 2020.

Commitments and Contingencies

There have been no material changes from the commitments and contingencies previously disclosed in our 2019 Annual Report on Form 10-K.

Debt Service Requirements

We are required by the terms of our applicable loan agreements to meet certain financial covenants, such as minimum net worth and liquidity, and reporting requirements, among others. As of ~~March 31,~~June 30, 2020, we believe that we were in compliance with all such covenants and we are not aware of any covenants that it is reasonably likely that we would not be able to meet in accordance with our loan agreements.

Off-Balance Sheet Arrangements

As of and during the ~~three~~six months ended ~~March 31,~~June 30, 2020, we had no material off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Inflation

We are exposed to inflation risk as income from future long-term leases is the primary source of our cash flows from operations. There are provisions in the majority of our tenant leases that protect us from the impact of normal inflation. These provisions include rent escalations, reimbursement billings for operating expense pass-through charges and real estate tax and insurance reimbursements on a per square foot allowance. However, due to the long-term nature of our leases, among other factors, the leases may not reset frequently enough to cover inflation.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes from the quantitative and qualitative disclosures about market risk previously disclosed in our 2019 Annual Report on Form 10-K.

Item 4. Controls and Procedures

Healthcare Trust of America, Inc.

HTA’s management is responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including HTA’s Chief Executive Officer (as the principal executive officer) and Chief Financial Officer (as the principal financial officer and principal accounting officer), to allow timely decisions regarding required disclosures.

As of ~~March 31,~~June 30, 2020, an evaluation was conducted by HTA under the supervision and with the participation of its management, including HTA’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, HTA’s Chief Executive Officer and Chief Financial Officer each concluded that HTA’s disclosure controls and procedures were effective as of ~~March 31,~~June 30, 2020.

There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~March 31,~~June 30, 2020 that have materially affected, or are reasonably believed to be likely to materially affect, our internal control over financial reporting. This determination was reached after careful evaluation of the effects COVID-19 has had on our operations.

~~May 6,~~August 7, 2020

Healthcare Trust of America Holdings, LP

HTALP’s management is responsible for establishing and maintaining disclosure controls and procedures that are designed to ensure that information required to be disclosed in its reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to management, including HTA’s Chief Executive Officer (as the principal executive officer) and Chief Financial Officer (as the principal financial officer and principal accounting officer), to allow timely decisions regarding required disclosures.

As of ~~March 31,~~June 30, 2020, an evaluation was conducted by HTALP under the supervision and with the participation of its management, including HTA’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, HTA’s Chief Executive Officer and Chief Financial Officer, on behalf of HTA in its capacity as general partner of HTALP, each concluded that HTALP’s disclosure controls and procedures were effective as of ~~March 31,~~June 30, 2020.

There were no changes in HTALP’s internal control over financial reporting that occurred during the quarter ended ~~March 31,~~June 30, 2020 that have materially affected, or are reasonably believed to be likely to materially affect, HTALP’s internal control over financial reporting. This determination was reached after careful evaluation of the effects COVID-19 has had on our operations.

~~May 6,~~August 7, 2020

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to claims and litigation arising in the ordinary course of business. We do not believe any liability from any reasonably foreseeable disposition of such claims and litigation, individually or in the aggregate, would have a material adverse effect on our accompanying condensed consolidated financial statements.

Item 1A. Risk Factors

The following risk factor supplements the risk factor disclosure contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the SEC on February 18, 2020.

Pandemics and other health concerns, and the measures intended to prevent its spread, including the currently ongoing COVID-19 pandemic, could have a material adverse effect on our business, results of operations, cash flows and financial condition.

Pandemics, including both widespread and localized outbreaks of infectious diseases and other health concerns, and the measures taken to prevent the spread or lessen the impact, could cause a material disruption to our industry or the economy as a whole. The impacts of such an event could be severe and far-reaching, and may impact our operations in several ways. Such operational impacts include, but are not limited to, the following: (i) tenants could experience deteriorating financial conditions and be unable or unwilling to pay rent on time and in full; (ii) we may have to restructure tenants' obligations and may not be able to do so on terms that are favorable to us; (iii) inquiries and tours at our properties could decrease; (iv) move-ins and new tenanting efforts, and re-letting efforts could slow or stop altogether; (v) move-outs and potential early termination of leases thereunder could increase; (vi) operating expenses, including the costs of certain essential services or supplies, including payments to third-party contractors, service providers, and employees essential to ensure continuity in our building operations may increase; and (vii) costs of development, including expenditures for materials utilized in construction and labor essential to complete existing developments in progress may increase substantively.

Further, disruption in the real estate markets may restrict our ability to deploy capital for new investments, or limit our ability to make new investments on terms that are favorable to us.

Additionally, these types of events could cause severe economic, market and other disruptions worldwide which could stretch to bank lending, capital and other financial markets. If these markets are affected, future access to capital and other sources of funding could be constrained which could adversely affect the availability and terms of our future borrowings, our ability to refinance existing debt, our ability to draw on our revolving credit facility, and our ability to raise equity financing on terms that are favorable to us.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

During the three months ended ~~March 31,~~June 30, 2020, we repurchased shares of our common stock as follows:


Period	Period	Total Number of Shares Purchased ^{(1) (2)}	Average Price Paid per Share ^{(1) (2)}		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program	Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs	Period	Total Number of Shares Purchased ^{(1) (2)}	Average Price Paid per Share ^{(1) (2)}		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program	Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
January 1, 2020 to January 31, 2020		130,481	$	30.15	—	—
February 1, 2020 to February 29, 2020		1,159	32.58		—	—
March 1, 2020 to March 31, 2020		22,713	30.06		—	—
April 1, 2020 to April 30, 2020							April 1, 2020 to April 30, 2020	1,541	$	24.59	—	—
May 1, 2020 to May 31, 2020							May 1, 2020 to May 31, 2020	—	—		—	—
June 1, 2020 to June 30, 2020							June 1, 2020 to June 30, 2020	5,151	26.50		—	—

(1) Purchases represent shares withheld to satisfy withholding obligations on the vesting of restricted shares and shares repurchased under our stock repurchase plan. The price paid per share was the then closing price of our common stock on the NYSE.	(1) Purchases represent shares withheld to satisfy withholding obligations on the vesting of restricted shares and shares repurchased under our stock repurchase plan. The price paid per share was the then closing price of our common stock on the NYSE.												(1) Purchases represent shares withheld to satisfy withholding obligations on the vesting of restricted shares and shares repurchased under our stock repurchase plan. The price paid per share was the then closing price of our common stock on the NYSE.
(2) For each share of common stock redeemed by HTA, HTALP redeems a corresponding number of OP Units in the HTALP operating partnership. Therefore, the OP Units in the HTALP operating partnership repurchased by HTALP are the same as the shares of common stock repurchased by HTA as shown above.	(2) For each share of common stock redeemed by HTA, HTALP redeems a corresponding number of OP Units in the HTALP operating partnership. Therefore, the OP Units in the HTALP operating partnership repurchased by HTALP are the same as the shares of common stock repurchased by HTA as shown above.												(2) For each share of common stock redeemed by HTA, HTALP redeems a corresponding number of OP Units in the HTALP operating partnership. Therefore, the OP Units in the HTALP operating partnership repurchased by HTALP are the same as the shares of common stock repurchased by HTA as shown above.

Item 6. Exhibits

The exhibits listed on the Exhibit Index are included, and incorporated by reference, in this Quarterly Report.

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EXHIBIT INDEX

Pursuant to Item 601(a)(2) of Regulation S-K, this Exhibit Index immediately precedes the exhibits.

The following exhibits are included, or incorporated by reference, in this Quarterly Report for the quarter ended ~~March 31,~~June 30, 2020 (and are numbered in accordance with Item 601 of Regulation S-K).


3.1			Fourth Amended and Restated Bylaws of Healthcare Trust of America, Inc., dated April 27, 2020 (included as Exhibit 3.1 to our Current Report on Form 8-K filed on April 29, 2020 and incorporated herein by reference.
31.1*			Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America, Inc.
31.2*			Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America, Inc.
31.3*			Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
31.4*			Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
32.1**			Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Inc.
32.2**			Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America, Inc.
32.3**			Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
32.4**			Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
101.INS*			Inline XBRL Instance Document.
101.SCH*			Inline XBRL Taxonomy Extension Schema Document.
101.CAL*			Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*			Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*			Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*			Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*			Filed herewith.
**			Furnished herewith.

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SIGNATURES

Pursuant to the requirements 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 Trust of America, Inc.

By:

/s/ Scott D. Peters

Chief Executive Officer, President and Chairman

Scott D. Peters

(Principal Executive Officer)

Date:

~~May 6,~~August 7, 2020

By:

/s/ Robert A. Milligan

Chief Financial Officer

Robert A. Milligan

(Principal Financial Officer and Principal Accounting Officer)

Date:

~~May 6,~~August 7, 2020

Healthcare Trust of America Holdings, LP

By:

Healthcare Trust of America, Inc.,

its General Partner

By:

/s/ Scott D. Peters

Chief Executive Officer, President and Chairman

Scott D. Peters

(Principal Executive Officer)

Date:

~~May 6,~~August 7, 2020

By:

/s/ Robert A. Milligan

Chief Financial Officer

Robert A. Milligan

(Principal Financial Officer and Principal Accounting Officer)

Date:

~~May 6,~~August 7, 2020

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	March 31, 2020				March 31, 2019
	Restricted Common Stock	Weighted Average Grant Date Fair Value		Restricted Common Stock	Weighted Average Grant Date Fair Value
Beginning balance	600,987	$	28.04	624,349	$	29.35
Granted	243,037	30.23		294,072	25.86
Vested	(343,771)	28.81		(291,857)	28.46
Forfeited	(7,407)	28.83		(1,580)	29.31
Ending balance	492,846	$	28.57	624,984	$	28.12