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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended: December 31, 2015
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period to
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Maryland
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62-1507028
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(State or other jurisdiction of
Incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common stock, $0.01 par value per share
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New York Stock Exchange
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Large accelerated filer
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ý
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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(Do not check if a smaller reporting company)
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Page
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Number of
Investments
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Gross Investment
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Square Feet
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|||||||||
(Dollars and square feet in thousands)
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Amount
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%
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Footage
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%
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Owned properties:
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||||||
Multi-tenant leases
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||||||
Medical office/outpatient
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162
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$
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2,619,284
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77.4
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%
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11,708
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82.1
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%
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Other
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2
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50,452
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1.5
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%
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279
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2.0
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%
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164
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2,669,736
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78.9
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%
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11,987
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84.1
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%
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Single-tenant net leases
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Medical office/outpatient
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14
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243,898
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7.2
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%
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1,045
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7.3
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%
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Inpatient
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13
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400,540
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11.9
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%
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1,013
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7.1
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%
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Other
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7
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24,768
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0.7
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%
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226
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1.5
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%
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34
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669,206
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19.8
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%
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2,284
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15.9
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%
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||||||
Construction in progress
(1)
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—
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19,024
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0.6
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%
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—
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—
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Land held for development
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—
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17,452
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0.5
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%
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—
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—
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Corporate property
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—
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5,490
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0.2
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%
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—
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—
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—
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41,966
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1.3
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%
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—
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—
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Total real estate investments
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198
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$
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3,380,908
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100.0
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%
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14,271
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100.0
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%
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Investment
as of Dec. 31, 2015 (1)
(in thousands)
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Square Feet (1) (in thousands)
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Percentage of
Square Feet (1)
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Occupancy as of December 31,
(1)
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2015
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2014
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Medical office/outpatient
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$
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2,863,182
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12,753
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89.4
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%
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86.7
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%
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85.2
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%
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Inpatient
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400,540
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1,013
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7.1
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%
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100.0
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%
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100.0
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%
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Other
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75,220
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505
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3.5
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%
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85.9
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%
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85.8
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%
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Total
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$
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3,338,942
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14,271
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100.0
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%
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87.6
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%
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86.4
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%
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(1)
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The investment, square feet and percentage of square feet columns include all owned real estate properties excluding land held for development, construction in progress, and corporate property. The occupancy columns represent the percentage of total rentable square feet leased (including month-to-month and holdover leases), excluding properties classified as held for sale (
one
property as of
December 31, 2015
and
two
properties as of
December 31, 2014
). Properties under property operating or single-tenant net lease agreements are included at 100% occupancy. Upon expiration of these agreements, occupancy reflects underlying tenant leases in the building.
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Annualized Minimum
Rents (1)
(in thousands)
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Number of Leases
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Average
Percentage
of Revenues
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Total Square Feet
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Multi-Tenant
Properties
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Single-Tenant Net Lease
Properties
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Expiration Year
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2016
(2)
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$
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50,859
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549
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2
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16.4
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%
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1,903,292
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2017
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42,566
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340
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5
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13.7
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%
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1,805,939
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2018
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35,329
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314
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—
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11.4
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%
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1,502,927
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2019
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41,929
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281
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9
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13.5
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%
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1,666,759
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2020
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29,098
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204
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1
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9.4
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%
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1,174,299
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2021
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14,478
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86
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2
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4.7
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%
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624,113
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2022
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18,700
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87
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2
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6.0
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%
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745,726
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2023
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18,995
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92
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1
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6.1
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%
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778,319
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2024
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11,046
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53
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1
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3.6
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%
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447,693
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2025
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9,261
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37
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2
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3.0
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%
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462,929
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Thereafter
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38,252
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13
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9
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12.2
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%
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1,082,284
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(1)
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Represents the annualized minimum rents on leases in-place as of
December 31, 2015
, excluding the impact of potential lease renewals, future increases in rent, property lease guaranty revenue under property operating agreements and straight-line rent that may be recognized relating to the leases.
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(2)
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Includes 102 leases that expired prior to December 31, 2015 and are currently on month-to-month terms.
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•
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the Health Reform Law and proposed amendments and repeal measures and related actions at the federal and state level;
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•
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quality control, cost containment, and payment system reforms for Medicaid, Medicare and other public funding, such as expansion of pay-for-performance criteria and value-based purchasing programs, bundled provider payments, accountable care organizations, increased patient cost-sharing, geographic payment variations, comparative effectiveness research, and lower payments for hospital readmissions;
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•
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implementation of health insurance exchanges and regulations governing their operation, whether run by the state or by the federal government, whereby individuals and small businesses purchase health insurance, including government-funded plans, many assisted by federal subsidies that are under ongoing legal challenges;
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•
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equalization of Medicare payment rates across different facility-type settings; the Bipartisan Budget Act of 2015, Section 603, lowered Medicare payment rates, effective January 1, 2017, for services provided in off-campus, provider-based outpatient departments to the same level of rates for physician-office settings for those facilities not grandfathered-in under the current Medicare rates as of the law’s date of enactment, November 2, 2015;
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•
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the continued adoption by providers of federal standards for the meaningful-use of electronic health records, and the transition to ICD-10 coding;
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•
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anti-trust scrutiny of recently-announced mergers of large health insurance companies; and
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•
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tax law changes affecting non-profit providers.
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•
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The construction of properties generally requires various government and other approvals that may not be received when expected, or at all, which could delay or preclude commencement of construction;
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•
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Development opportunities that the Company pursued but later abandoned could result in the expensing of pursuit costs, which could impact the Company’s consolidated results of operations;
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•
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Construction costs could exceed original estimates, which could impact the building’s profitability to the Company;
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•
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Operating expenses could be higher than forecasted;
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•
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Time required to initiate and complete the construction of a property and to lease up a completed development property may be greater than originally anticipated, thereby adversely affecting the Company’s cash flow and liquidity;
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•
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Occupancy rates and rents of a completed development property may not be sufficient to make the property profitable to the Company; and
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•
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Favorable capital sources to fund the Company’s development activities may not be available when needed.
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•
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The Company’s purchase price for acquired facilities may be based upon a series of market or building-specific judgments which may be incorrect;
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•
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The costs of any maintenance or improvements for properties might exceed estimated costs;
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•
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The Company may incur unexpected costs in the acquisition, construction or maintenance of real estate assets that could impact its expected returns on such assets; and
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•
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Leasing of real estate properties may not occur within expected time frames or at expected rental rates.
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•
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future results could be adversely affected due to the theft, destruction, loss, misappropriation or release of confidential data or intellectual property;
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•
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operational or business delays resulting from the disruption of IT systems and subsequent clean-up and mitigation activities; and/or
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•
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negative publicity resulting in reputation or brand damage with the Company's tenants, sponsoring health systems or other operators.
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•
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limit the Company’s ability to adjust rapidly to changing market conditions in the event of a downturn in general economic conditions or in the real estate and/or healthcare industries;
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•
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impair the Company’s ability to obtain additional debt financing or require potentially dilutive equity to fund obligations and carry out its business strategy; and
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•
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result in a downgrade of the rating of the Company’s debt securities by one or more rating agencies, which would increase the costs of borrowing under the Unsecured Credit Facility and the cost of issuance of new debt securities, among other things.
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•
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trends in the method of delivery of healthcare services;
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•
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competition among healthcare providers;
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•
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consolidation of large health insurers;
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•
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lower reimbursement rates from government and commercial payors, high uncompensated care expense, investment losses and limited admissions growth pressuring operating profit margins for healthcare providers;
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•
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availability of capital;
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•
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credit downgrades;
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•
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liability insurance expense;
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•
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regulatory and government reimbursement uncertainty resulting from the Health Reform Law;
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•
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congressional efforts to repeal the Health Reform Law in whole or in part;
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•
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health reform initiatives to address healthcare costs through expanded value-based purchasing programs, bundled provider payments, health insurance exchanges, increased patient cost-sharing, geographic payment variations, comparative effectiveness research, lower payments for hospital readmissions, and shared risk-and-reward payment models such as accountable care organizations;
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•
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federal court decisions on several cases challenging the legality of certain aspects of the Health Reform Law;
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•
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federal and state government plans to reduce budget deficits and address debt ceiling limits by lowering healthcare provider Medicare and Medicaid payment rates, while requiring increased patient access to care;
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•
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equalizing Medicare payment rates across different facility-type settings;
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•
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heightened health information technology security standards and the meaningful use of electronic health records by healthcare providers; and
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•
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potential tax law changes affecting non-profit providers.
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High
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Low
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Dividends Declared
and Paid per Share
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2015
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||||||
First Quarter
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$
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31.20
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$
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26.03
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$
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0.30
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Second Quarter
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28.39
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23.10
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0.30
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Third Quarter
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25.24
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22.01
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0.30
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Fourth Quarter (Dividend payable on February 29, 2016)
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28.51
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24.64
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0.30
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||||||
2014
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||||||
First Quarter
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$
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24.66
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$
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20.85
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$
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0.30
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Second Quarter
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26.03
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|
23.88
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|
|
0.30
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|
|||
Third Quarter
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25.96
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23.41
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|
0.30
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Fourth Quarter
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28.00
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23.50
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|
0.30
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Plan Category
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Number of Securities to be
Issued upon Exercise of
Outstanding Options,
Warrants and Rights (1)
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Weighted Average
Exercise Price of
Outstanding Options,
Warrants and Rights (1)
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Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(Excluding Securities
Reflected in the First
Column)
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Equity compensation plans approved by security holders
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340,958
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|
|
—
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3,457,457
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Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
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|
|
—
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Total
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340,958
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|
|
—
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|
|
3,457,457
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(1)
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The Company’s outstanding rights relate only to its 2000 Employee Stock Purchase Plan. The Company is unable to ascertain with specificity the number of securities to be issued upon exercise of outstanding options under the 2000 Employee Stock Purchase Plan or the weighted average exercise price of outstanding rights under that plan. The 2000 Employee Stock Purchase Plan provides that shares of common stock may be purchased at a per share price equal to 85% of the fair market value of the common stock at the beginning of the offering period or a purchase date applicable to such offering period, whichever is lower.
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Period
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Total Number of Shares Purchased
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Average Price Paid per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
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|
January 1 - January 31
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6,197
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|
$
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27.32
|
|
—
|
|
—
|
|
February 1 - February 28
|
1,085
|
|
29.65
|
|
—
|
|
—
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|
|
March 1 - March 31
|
—
|
|
—
|
|
—
|
|
—
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|
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April 1 - April 30
|
—
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|
—
|
|
—
|
|
—
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|
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May 1 - May 31
|
2,837
|
|
24.56
|
|
—
|
|
—
|
|
|
June 1 - June 30
|
—
|
|
—
|
|
—
|
|
—
|
|
|
July 1 - July 31
|
—
|
|
—
|
|
—
|
|
—
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|
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August 1 - August 31
|
—
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|
—
|
|
—
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|
—
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|
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September 1 - September 30
|
—
|
|
—
|
|
—
|
|
—
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|
|
October 1 - October 31
|
—
|
|
—
|
|
—
|
|
—
|
|
|
November 1 - November 30
|
2,995
|
|
26.83
|
|
—
|
|
—
|
|
|
December 1 - December 31
|
36,111
|
|
28.13
|
|
—
|
|
—
|
|
|
Total
|
49,225
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
(Amounts in thousands except per share data)
|
2015
|
|
|
2014
(1)
|
|
|
2013
(1)
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|
|
2012
(1)
|
|
|
2011
(1)
|
|
|||||
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues
|
$
|
388,471
|
|
|
$
|
370,855
|
|
|
$
|
330,949
|
|
|
$
|
297,682
|
|
|
$
|
272,077
|
|
Total expenses
|
283,541
|
|
|
267,100
|
|
|
243,331
|
|
|
224,592
|
|
|
207,303
|
|
|||||
Other income (expense)
|
(46,094
|
)
|
|
(69,776
|
)
|
|
(100,710
|
)
|
|
(73,982
|
)
|
|
(77,125
|
)
|
|||||
Income (loss) from continuing operations
|
$
|
58,836
|
|
|
$
|
33,979
|
|
|
$
|
(13,092
|
)
|
|
$
|
(892
|
)
|
|
$
|
(12,351
|
)
|
Discontinued operations
|
10,600
|
|
|
(1,779
|
)
|
|
20,075
|
|
|
6,427
|
|
|
12,167
|
|
|||||
Net income (loss) attributable to common
|
|
|
|
|
|
|
|
|
|
||||||||||
stockholders
|
$
|
69,436
|
|
|
$
|
31,887
|
|
|
$
|
6,946
|
|
|
$
|
5,465
|
|
|
$
|
(214
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
|
$
|
0.59
|
|
|
$
|
0.35
|
|
|
$
|
(0.14
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.17
|
)
|
Discontinued operations
|
0.11
|
|
|
(0.02
|
)
|
|
0.22
|
|
|
0.08
|
|
|
0.17
|
|
|||||
Net income attributable to common
|
|
|
|
|
|
|
|
|
|
||||||||||
stockholders
|
$
|
0.70
|
|
|
$
|
0.33
|
|
|
$
|
0.08
|
|
|
$
|
0.07
|
|
|
$
|
(0.00
|
)
|
Weighted average common shares outstanding -
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted
|
99,880
|
|
|
96,759
|
|
|
90,941
|
|
|
78,845
|
|
|
72,720
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data
(as of the end of the period):
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate properties, gross
|
$
|
3,380,908
|
|
|
$
|
3,258,279
|
|
|
$
|
3,067,187
|
|
|
$
|
2,821,323
|
|
|
$
|
2,778,903
|
|
Real estate properties, net
|
$
|
2,618,982
|
|
|
$
|
2,557,608
|
|
|
$
|
2,435,078
|
|
|
$
|
2,240,706
|
|
|
$
|
2,266,777
|
|
Mortgage notes receivable
|
$
|
—
|
|
|
$
|
1,900
|
|
|
$
|
125,547
|
|
|
$
|
162,191
|
|
|
$
|
97,381
|
|
Assets held for sale and discontinued
|
|
|
|
|
|
|
|
|
|
||||||||||
operations, net
|
$
|
724
|
|
|
$
|
9,146
|
|
|
$
|
6,852
|
|
|
$
|
3,337
|
|
|
$
|
28,650
|
|
Total assets
|
$
|
2,816,726
|
|
|
$
|
2,757,510
|
|
|
$
|
2,729,662
|
|
|
$
|
2,539,972
|
|
|
$
|
2,521,022
|
|
Notes and bonds payable
|
$
|
1,431,494
|
|
|
$
|
1,403,692
|
|
|
$
|
1,348,459
|
|
|
$
|
1,293,044
|
|
|
$
|
1,393,537
|
|
Total stockholders' equity
|
$
|
1,242,747
|
|
|
$
|
1,221,054
|
|
|
$
|
1,245,286
|
|
|
$
|
1,120,944
|
|
|
$
|
1,004,806
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Funds from operations - Diluted
(2)
|
$
|
124,571
|
|
|
$
|
146,493
|
|
|
$
|
92,166
|
|
|
$
|
105,955
|
|
|
$
|
85,653
|
|
Funds from operations per common share - Diluted
(2)
|
$
|
1.25
|
|
|
$
|
1.51
|
|
|
$
|
1.00
|
|
|
$
|
1.32
|
|
|
$
|
1.16
|
|
Cash flows from operations
|
$
|
160,375
|
|
|
$
|
125,370
|
|
|
$
|
120,797
|
|
|
$
|
116,397
|
|
|
$
|
107,852
|
|
Dividends paid
|
$
|
120,266
|
|
|
$
|
116,371
|
|
|
$
|
111,571
|
|
|
$
|
96,356
|
|
|
$
|
89,270
|
|
Dividends declared and paid per common share
|
$
|
1.20
|
|
|
$
|
1.20
|
|
|
$
|
1.20
|
|
|
$
|
1.20
|
|
|
$
|
1.20
|
|
(1)
|
The Company did not have any dispositions that met the criteria for presentation as discontinued operation in 2015. However, the years ended December 31,
2013
,
2012
, and 2011 were restated to conform to the discontinued operations presentation for 2014. See Note 6 to the Consolidated Financial Statements for more information on the Company’s discontinued operations as of
December 31, 2015
.
|
(2)
|
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of funds from operations (“FFO”), including why the Company presents FFO and a reconciliation of net income attributable to common stockholders to FFO. During 2015, the Company began including an add-back for leasing commission amortization in order to provide a better basis for comparing its results of operations with those of others in the industry, consistent with the National Association of Real Estate Investment Trusts definition of FFO. For the year ended December 31, 2014, 2013, 2012, and 2011 funds from operations was previously reported as $143,493, $90,153, $104,665, and $84,682, respectively. For the year ended December 31, 2014, 2013, 2012, and 2011 funds from operations per diluted common share was previously reported as $1.48, $0.98, $1.31, and $1.15, respectively.
|
•
|
The Company's expected results may not be achieved;
|
•
|
The Company's long-term single-tenant net leases may not be extended;
|
•
|
The Company’s revenues depend on the ability of its tenants to generate sufficient income from their operations to make rent, loan and lease guaranty payments to the Company;
|
•
|
The Company may decide or may be required under purchase options to sell certain properties. The Company may not be able to reinvest the proceeds from sale at rates of return equal to the return received on the properties sold;
|
•
|
Owning real estate and indirect interests in real estate is subject to inherent risks;
|
•
|
The Company may incur impairment charges on its real estate properties or other assets;
|
•
|
If the Company is unable to promptly re-let its properties, if the rates upon such re-letting are significantly lower than the previous rates or if the Company is required to undertake significant expenditures to attract new tenants, then the Company’s business, financial condition and results of operations would be adversely affected;
|
•
|
Certain of the Company’s properties are special purpose healthcare facilities and may not be easily adaptable to other uses;
|
•
|
The Company has, and may have more in the future, exposure to fixed rent escalators, which could lag behind inflation;
|
•
|
The Company’s real estate investments are illiquid and the Company may not be able to sell properties strategically targeted for disposition;
|
•
|
The Company is subject to risks associated with the development and redevelopment of properties;
|
•
|
The Company may make material acquisitions and undertake developments that may involve the expenditure of significant funds and may not perform in accordance with management’s expectations;
|
•
|
The Company is exposed to risks associated with entering new geographic markets;
|
•
|
Many of the Company’s properties are held under ground leases. These ground leases contain provisions that may limit the Company’s ability to lease, sell, or finance these properties;
|
•
|
The Company may experience uninsured or underinsured losses related to casualty or liability;
|
•
|
The Company is subject to cyber security risks;
|
•
|
The Company has incurred significant debt obligations and may incur additional debt and increase leverage in the future;
|
•
|
Covenants in the Company’s debt instruments limit its operational flexibility, and a breach of these covenants could materially affect the Company’s financial condition and results of operations;
|
•
|
A change to the Company’s current dividend payment may have an adverse effect on the market price of the Company’s common stock;
|
•
|
If lenders under the Unsecured Credit Facility fail to meet their funding commitments, the Company’s operations and consolidated financial position would be negatively impacted;
|
•
|
The unavailability of equity and debt capital, volatility in the credit markets, increases in interest rates, or changes in the Company’s debt ratings could have an adverse effect on the Company’s ability to meet its debt payments, make dividend payments to stockholders or engage in acquisition and development activity;
|
•
|
The Company is exposed to increases in interest rates, which could adversely impact its ability to refinance existing debt, sell assets or engage in acquisition and development activity;
|
•
|
The Company may enter into swap agreements from time to time that may not effectively reduce its exposure to changes in interest rates;
|
•
|
If a healthcare tenant loses its licensure or certification, becomes unable to provide healthcare services, cannot meet its financial obligations to the Company or otherwise vacates a facility, the Company would have to obtain another tenant for the affected facility;
|
•
|
Adverse trends in the healthcare service industry may negatively affect the Company’s lease revenues and the value of its investments;
|
•
|
If the Company fails to remain qualified as a REIT, the Company will be subject to significant adverse consequences, including adversely affecting the value of its common stock;
|
•
|
The Company's Articles of Incorporation contain limits and restrictions on transferability of the Company's common stock which may have adverse effects on the value of the Company's common stock;
|
•
|
Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends;
|
•
|
Complying with the REIT requirements may cause the Company to forego otherwise attractive opportunities;
|
•
|
Qualifying as a REIT involves highly technical and complex provisions of the Internal Revenue Code; and
|
•
|
New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could make it more difficult or impossible for the Company to qualify as a REIT.
|
•
|
Overview
|
•
|
Liquidity and Capital Resources
|
•
|
Trends and Matters Impacting Operating Results
|
•
|
Results of Operations
|
•
|
Non-GAAP Measures
|
•
|
Off-balance Sheet Arrangements
|
•
|
Contractual Obligations
|
•
|
Application of Critical Accounting Policies to Accounting Estimates
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Acquisitions of real estate
|
$
|
(154,858
|
)
|
|
$
|
(71,899
|
)
|
|
$
|
(177,744
|
)
|
Development of real estate
|
(17,354
|
)
|
|
—
|
|
|
—
|
|
|||
Additional long-lived assets
|
(48,769
|
)
|
|
(70,670
|
)
|
|
(72,784
|
)
|
|||
Funding of mortgages and notes receivable
|
—
|
|
|
(1,244
|
)
|
|
(58,731
|
)
|
|||
Proceeds from acquisition of real estate upon mortgage note receivable default
|
—
|
|
|
204
|
|
|
—
|
|
|||
Proceeds from sales of real estate
|
153,281
|
|
|
32,398
|
|
|
96,132
|
|
|||
Proceeds from sale of cost method investment in real estate
|
—
|
|
|
—
|
|
|
2,717
|
|
|||
Proceeds from mortgages and notes receivable repayments
|
1,918
|
|
|
5,623
|
|
|
2,464
|
|
|||
Net cash used in investing activities
|
$
|
(65,782
|
)
|
|
$
|
(105,588
|
)
|
|
$
|
(207,946
|
)
|
•
|
The Company acquired
eight
medical office buildings and two parcels of land during
2015
for a total purchase price of
$190.1 million
, including cash consideration of
$156.4 million
and the assumption of mortgage notes payable of
$28.4 million
.
|
•
|
The Company funded $26.5 million in
2015
at its development and redevelopment properties.
|
•
|
Tenant improvement fundings during
2015
at the Company's owned properties totaled $25.2 million, including $11.8 million of first generation tenant improvements.
|
•
|
Capital addition fundings during
2015
at the Company's owned properties totaled $16.0 million.
|
•
|
The Company disposed of
nine
properties in
2015
for a total sales price of
$158.0 million
, including cash consideration of
$153.1 million
, and
$4.9 million
of closing costs and related adjustments.
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Net borrowings (repayments) on unsecured credit facility
|
$
|
121,000
|
|
|
$
|
(153,000
|
)
|
|
$
|
128,000
|
|
Borrowings on term loan
|
—
|
|
|
200,000
|
|
|
—
|
|
|||
Borrowings on notes and bonds payable
|
249,793
|
|
|
—
|
|
|
247,948
|
|
|||
Repayments on notes and bonds payable
|
(72,724
|
)
|
|
(12,357
|
)
|
|
(19,984
|
)
|
|||
Redemption of notes and bonds payable
|
(333,222
|
)
|
|
—
|
|
|
(371,839
|
)
|
|||
Dividends paid
|
(120,266
|
)
|
|
(116,371
|
)
|
|
(111,571
|
)
|
|||
Net proceeds from issuance of common stock
|
66,942
|
|
|
76,856
|
|
|
220,252
|
|
|||
Common stock redemptions
|
(1,367
|
)
|
|
(10,074
|
)
|
|
(454
|
)
|
|||
Settlement of Swaps
|
(1,684
|
)
|
|
—
|
|
|
—
|
|
|||
Capital contributions received from noncontrolling interests
|
—
|
|
|
—
|
|
|
1,806
|
|
|||
Distributions to noncontrolling interest holders
|
—
|
|
|
(541
|
)
|
|
(32
|
)
|
|||
Purchase of noncontrolling interests
|
—
|
|
|
(8,189
|
)
|
|
—
|
|
|||
Debt issuance and assumption costs
|
(2,482
|
)
|
|
(1,258
|
)
|
|
(5,082
|
)
|
|||
Net cash provided by (used in) financing activities
|
$
|
(94,010
|
)
|
|
$
|
(24,934
|
)
|
|
$
|
89,044
|
|
•
|
On
April 24, 2015
, the Company issued
$250.0 million
of unsecured senior notes due 2025 (the "Senior Notes due 2025") in a registered public offering. The Senior Notes due 2025 bear interest at
3.875%
, payable semi-annually on
May 1
and
November 1
, beginning
November 1, 2015
, and are due on
May 1, 2025
, unless redeemed earlier by the Company. The notes were issued at a discount of approximately
$0.2 million
, which yielded a
3.885%
interest rate per annum upon issuance. The Company incurred approximately
$2.3 million
in debt issuance costs that are included in Other assets, which will be amortized to maturity. Concurrently with this transaction, the Company settled four forward starting interest rate swap agreements for $1.7 million. The Senior Notes due 2025 have various financial covenants that are required to be met on a quarterly and annual basis.
|
•
|
On
May 15, 2015
, the Company redeemed its unsecured senior notes due 2017 (the "Senior Notes due 2017") at a redemption price equal to an aggregate of
$333.2 million
, consisting of outstanding principal of
$300.0 million
, accrued interest of
$6.4 million
, and a "make-whole" amount of approximately
$26.8 million
for the early extinguishment of debt. The unaccreted discount and unamortized costs on these notes of
$1.2 million
was written off upon redemption. The Company recognized a loss on early extinguishment of debt of approximately
$28.0 million
related to this redemption.
|
•
|
In
September 2015
, the Company received a credit rating upgrade. This upgrade, coupled with another upgrade that the Company received earlier in the year, resulted in a decrease in the spread over LIBOR on outstanding borrowings on the
unsecured credit facility due 2017
(decreasing from
1.40%
to
1.15%
) and the
Unsecured Term Loan due 2019
(decreasing from
1.45%
to
1.20%
). In addition, the Company pays a facility fee per annum on the aggregate amount of commitments on the Unsecured Credit Facility that decreased from
0.3%
to
0.2%
. The rate decreases were effective on
September 14, 2015
.
|
•
|
The Company repaid mortgage notes payable totaling $67.5 million bearing a weighted average interest rate of 5.36% during the
twelve
months ended
December 31, 2015
. Details of each repayment are as follows:
|
•
|
On January 30, 2015, the Company repaid in full a mortgage note payable bearing an interest rate of
5.45%
with outstanding principal of
$15.0 million
and accrued interest as of the redemption date of
$0.1 million
. The mortgage note encumbered a 73,548 square foot medical office building located in Washington State.
|
•
|
On
April 1, 2015
, the Company repaid in full a mortgage note payable bearing an interest rate of
5.00%
with outstanding principal of
$10.2 million
. The mortgage note encumbered a 44,169 square foot medical office building located in Washington State.
|
•
|
On
May 4, 2015
, the Company repaid in full a mortgage note payable bearing an interest rate of
5.41%
with outstanding principal of
$16.3 million
and accrued interest as of the redemption date of
$0.1 million
. The mortgage note encumbered a 142,856 square foot medical office building located in Virginia.
|
•
|
On
June 1, 2015
, the Company repaid in full a mortgage note payable bearing an interest rate of
5.25%
with outstanding principal of
$4.0 million
. The mortgage note encumbered a 29,423 square foot medical office building located in Texas.
|
•
|
On October 1, 2015, the Company repaid in full a mortgage note payable bearing interest at a rate of
5.40%
with outstanding principal of
$10.6 million
. The mortgage note encumbered a
88,408
square foot medical office building located in Virginia.
|
•
|
On December 31, 2015, the Company repaid in full a mortgage note payable bearing interest at a rate of 5.49% with outstanding principal of $11.4 million. The mortgage note encumbered a 90,607 square foot medical office building and garage located in California. The Company subsequently refinanced the property on January 5, 2016 with a new mortgage note payable of $11.5 million bearing interest at a rate of 3.60%.
|
•
|
The Company assumed mortgage notes payable totaling $28.4 million bearing a weighted average contractual interest rate of 4.97% during the
twelve
months ended
December 31, 2015
. Details of each assumption are as follows:
|
•
|
On
June 26, 2015
, upon acquisition of a
35,558
square foot medical office property in Seattle, Washington, the Company assumed a
$9.5 million
mortgage note payable (excluding a fair value premium adjustment of
$0.2 million
). The mortgage note payable has a contractual interest rate of
5.75%
(effective rate of
5.07%
).
|
•
|
On September 1, 2015, upon acquisition of a
52,813
square foot medical office property in Seattle, Washington, the Company assumed a
$9.4 million
mortgage note payable (excluding a fair value premium adjustment of
$0.3 million
). The mortgage note payable has a contractual interest rate of
5.00%
(effective rate of
4.17%
).
|
•
|
On December 18, 2015, upon acquisition of a 64,143 square foot medical office property in Minneapolis, Minnesota, the Company assumed a $9.5 million mortgage note payable (excluding a fair value discount adjustment of $0.1 million). The mortgage note payable has a contractual interest rate of 4.15% (effective rate of 4.32%).
|
•
|
The following mortgage note payable was repaid subsequent to December 31, 2015:
|
•
|
On February 11, 2016, the Company repaid in full a mortgage note payable bearing interest at a rate of 5.86% with outstanding principal of $10.2 million. The mortgage note encumbered a 90,633 square foot medical office building located in North Carolina.
|
|
Shares Sold
|
|
|
Sales Price Per Share
|
|
Net Proceeds
(in millions)
|
|
|
2015
|
2,434,239
|
|
|
$25.00 - $29.15
|
|
$
|
65.8
|
|
2014
|
3,009,761
|
|
|
$24.35 - $27.53
|
|
$
|
75.7
|
|
2013
|
5,207,871
|
|
|
$24.19 - $30.49
|
|
$
|
140.6
|
|
Quarter
|
|
Quarterly Dividend
|
|
|
Date of Declaration
|
|
Date of Record
|
|
Date Paid/*Payable
|
|
4th Quarter 2014
|
|
$
|
0.30
|
|
|
February 3, 2015
|
|
February 17, 2015
|
|
February 27, 2015
|
1st Quarter 2015
|
|
$
|
0.30
|
|
|
May 5, 2015
|
|
May 18, 2015
|
|
May 29, 2015
|
2nd Quarter 2015
|
|
$
|
0.30
|
|
|
August 4, 2015
|
|
August 17, 2015
|
|
August 28, 2015
|
3rd Quarter 2015
|
|
$
|
0.30
|
|
|
November 3, 2015
|
|
November 16, 2015
|
|
November 30, 2015
|
4th Quarter 2015
|
|
$
|
0.30
|
|
|
February 2, 2016
|
|
February 18, 2016
|
|
* February 29, 2016
|
|
|
Gross Real Estate Investment as of December 31, 2015
|
||||||||||
Year Exercisable
|
|
Fair Market Value Method
(1)
|
|
|
Non Fair Market Value Method
(2)
|
|
|
Total
|
|
|||
Current
(3)
|
|
$
|
131,114
|
|
|
$
|
47,050
|
|
|
$
|
178,164
|
|
2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
2017
|
|
—
|
|
|
48,773
|
|
|
48,773
|
|
|||
2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
2019
|
|
41,521
|
|
|
—
|
|
|
41,521
|
|
|||
2020
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
2021
|
|
16,578
|
|
|
14,984
|
|
|
31,562
|
|
|||
2022
|
|
19,356
|
|
|
—
|
|
|
19,356
|
|
|||
2023
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
2024
|
|
16,012
|
|
|
—
|
|
|
16,012
|
|
|||
2025
|
|
20,454
|
|
|
221,929
|
|
|
242,383
|
|
|||
2026 and thereafter
|
|
48,462
|
|
|
—
|
|
|
48,462
|
|
|||
Total
|
|
$
|
293,497
|
|
|
$
|
332,736
|
|
|
$
|
626,233
|
|
|
|
|
Change
|
|||||||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
|
$
|
|
|
%
|
|
|||
Property operating
|
$
|
306,550
|
|
|
$
|
285,304
|
|
|
$
|
21,246
|
|
|
7.4
|
%
|
Single-tenant net lease
|
67,238
|
|
|
65,252
|
|
|
1,986
|
|
|
3.0
|
%
|
|||
Straight-line rent
|
9,545
|
|
|
10,969
|
|
|
(1,424
|
)
|
|
(13.0
|
)%
|
|||
Total Rental income
|
$
|
383,333
|
|
|
$
|
361,525
|
|
|
$
|
21,808
|
|
|
6.0
|
%
|
•
|
Acquisitions in
2014
and
2015
contributed $13.6 million.
|
•
|
Net leasing activity including contractual rent increases and renewals contributed $9.4 million.
|
•
|
Conversion from single-tenant net lease caused an increase of $0.9 million.
|
•
|
Conversion to single-tenant net lease caused a decrease of $1.3 million.
|
•
|
Dispositions in 2015 accounted for a decrease of $1.4 million.
|
•
|
Acquisitions in
2014
and
2015
contributed $2.8 million.
|
•
|
New leasing activity including contractual rent increases contributed $1.8 million.
|
•
|
Conversion from property operating income caused an increase of $1.8 million.
|
•
|
Conversion to property operating income caused a decrease of $1.3 million.
|
•
|
Dispositions in 2015 accounted for a decrease of $3.1 million.
|
•
|
Acquisitions in
2014
and
2015
contributed $0.7 million.
|
•
|
New leasing activity including contractual rent increases and the effects of current year rent abatements contributed $0.3 million.
|
•
|
The effects of prior year rent abatements that expired caused a decrease of $2.4 million.
|
•
|
Acquisition in 2014 of a property in Oklahoma affiliated with Mercy Health previously funded under a construction mortgage note receivable resulted in a decrease of $2.4 million.
|
•
|
The Company's 2014 receipt of a deed in lieu of foreclosure related to a mortgage note receivable on a property in Iowa resulted in a decrease of $1.0 million.
|
•
|
Acquisitions in
2014
and
2015
accounted for an increase of $4.9 million.
|
•
|
Dispositions in 2015 accounted for a decrease of $0.7 million.
|
•
|
The Company experienced an overall increase in portfolio property taxes of $2.5 million, leasing commission and legal fee expense of $0.7 million and janitorial expense of $0.2 million.
|
•
|
The Company experienced an overall decrease in maintenance and repair of approximately $0.7 million and utility expense of $0.8 million.
|
•
|
Increase in performance-based compensation expense totaling $3.4 million, including $1.7 million of non-cash stock-based award amortization.
|
•
|
Increase in pension expense of $0.4 million.
|
•
|
Increase in expenses related to potential acquisitions and developments of $0.5 million.
|
•
|
Decrease in expenses related to state income taxes of $0.2 million.
|
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
|
Change
|
|
|
Percentage Change
|
|
|||
Contractual interest
|
$
|
62,215
|
|
|
$
|
68,327
|
|
|
$
|
(6,112
|
)
|
|
(8.9
|
)%
|
Net discount/premium accretion
|
376
|
|
|
954
|
|
|
(578
|
)
|
|
(60.6
|
%)
|
|||
Deferred financing costs amortization
|
3,067
|
|
|
3,132
|
|
|
(65
|
)
|
|
(2.1
|
%)
|
|||
Amortization of interest rate swap settlement
|
115
|
|
|
—
|
|
|
115
|
|
|
—
|
%
|
|||
Interest cost capitalization
|
(239
|
)
|
|
—
|
|
|
(239
|
)
|
|
—
|
%
|
|||
Total interest expense
|
$
|
65,534
|
|
|
$
|
72,413
|
|
|
$
|
(6,879
|
)
|
|
(9.5
|
)%
|
•
|
The Unsecured Credit Facility and Unsecured Term Loan due 2019 accounted for a net increase of $0.9 million.
|
•
|
Senior Notes due 2025 were issued in the second quarter of 2015 and accounted for an increase of $6.6 million.
|
•
|
Senior Notes due 2017 were repaid in the second quarter of 2015 and accounted for a decrease of $12.2 million.
|
•
|
Mortgage notes assumed upon acquisition of real properties accounted for an increase of $1.2 million, and mortgage notes repayments accounted for a decrease of $2.4 million.
|
•
|
Scheduled monthly interest payments related to the Company's mortgage notes payable decreased $0.2 million.
|
|
|
|
Change
|
|||||||||||
(Dollars in thousands)
|
2014
|
|
|
2013
|
|
|
$
|
|
|
%
|
|
|||
Property operating
|
$
|
285,304
|
|
|
$
|
251,403
|
|
|
$
|
33,901
|
|
|
13.5
|
%
|
Single-tenant net lease
|
65,252
|
|
|
51,467
|
|
|
13,785
|
|
|
26.8
|
%
|
|||
Straight-line rent
|
10,969
|
|
|
9,452
|
|
|
1,517
|
|
|
16.0
|
%
|
|||
Total Rental income
|
$
|
361,525
|
|
|
$
|
312,322
|
|
|
$
|
49,203
|
|
|
15.8
|
%
|
•
|
Acquisitions in
2013
and
2014
contributed $20.6 million.
|
•
|
Additional leasing activity at development conversion properties contributed $9.5 million.
|
•
|
Net leasing activity including contractual rent increases and renewals contributed $3.8 million.
|
•
|
Acquisitions in 2013 and
2014
contributed $12.1 million.
|
•
|
New leasing activity including contractual rent increases contributed $1.7 million.
|
•
|
Acquisitions in
2013
and
2014
contributed $2.7 million.
|
•
|
New leasing activity including contractual rent increases and the effects of current year rent abatements contributed $1.0 million.
|
•
|
The effects of prior year rent abatements that expired caused a decrease of $2.2 million.
|
•
|
Acquisition in 2013 of a property in Missouri affiliated with Mercy Health previously funded under a construction mortgage note receivable resulted in a decrease of $4.2 million.
|
•
|
Acquisition in 2014 of a property in Oklahoma affiliated with Mercy Health previously funded under a construction mortgage note receivable resulted in a decrease of $2.6 million.
|
•
|
The Company's receipt of a deed in lieu of foreclosure related to a mortgage note receivable on a property in Iowa resulted in a decrease of $2.1 million.
|
•
|
Acquisitions in
2013
and
2014
accounted for an increase of $8.5 million.
|
•
|
The Company experienced an overall increase in maintenance and repair of approximately $1.7 million, professional fees of approximately $0.6 million and utilities of approximately $0.6 million.
|
•
|
Decrease in compensation-related expenses totaling $0.7 million.
|
•
|
Decrease in expenses related to potential acquisitions and developments of $0.6 million.
|
•
|
Increase in expenses related to state income taxes of $0.1 million and corporate office rent expense of $0.1 million.
|
(Dollars in thousands)
|
2014
|
|
|
2013
|
|
|
Change
|
|
|
Percentage Change
|
|
|||
Contractual interest
|
$
|
68,327
|
|
|
$
|
69,334
|
|
|
$
|
(1,007
|
)
|
|
(1.5
|
)%
|
Net discount accretion
|
954
|
|
|
1,132
|
|
|
(178
|
)
|
|
(15.7
|
)%
|
|||
Deferred financing costs amortization
|
3,132
|
|
|
3,228
|
|
|
(96
|
)
|
|
(3.0
|
)%
|
|||
Interest cost capitalization
|
—
|
|
|
(183
|
)
|
|
183
|
|
|
(100.0
|
)%
|
|||
Total interest expense
|
$
|
72,413
|
|
|
$
|
73,511
|
|
|
$
|
(1,098
|
)
|
|
(1.5
|
)%
|
•
|
The Unsecured Credit Facility and Unsecured Term Loan due 2019 accounted for a net increase of $1.8 million.
|
•
|
$250.0 million of unsecured senior notes due 2023 (the "Senior Notes due 2023") were issued in the first quarter of 2013 and accounted for an increase of $2.2 million.
|
•
|
The Company's outstanding unsecured senior notes due 2014 were redeemed in the second quarter of 2013 and accounted for a decrease of $4.0 million.
|
•
|
Mortgage notes assumed upon acquisition of real properties accounted for an increase of $2.2 million, and mortgage notes repayments accounted for a decrease of $2.9 million.
|
•
|
Scheduled monthly interest payments related to the Company's mortgage notes payable decreased $0.3 million.
|
|
Year Ended December 31,
|
||||||||||
(Amounts in thousands, except per share data)
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Net income attributable to common stockholders
|
$
|
69,436
|
|
|
$
|
31,887
|
|
|
$
|
6,946
|
|
Gain on sales of real estate properties
|
(67,172
|
)
|
|
(9,283
|
)
|
|
(24,718
|
)
|
|||
Impairments
|
4,325
|
|
|
12,029
|
|
|
9,889
|
|
|||
Real estate depreciation and amortization
|
114,533
|
|
|
108,860
|
|
|
98,036
|
|
|||
Leasing commission amortization
(1)
|
3,449
|
|
|
3,000
|
|
|
2,013
|
|
|||
Total adjustments
|
55,135
|
|
|
114,606
|
|
|
85,220
|
|
|||
Funds from operations attributable to common stockholders
|
$
|
124,571
|
|
|
$
|
146,493
|
|
|
$
|
92,166
|
|
Funds from operations per Common Share - Diluted
|
$
|
1.25
|
|
|
$
|
1.51
|
|
|
$
|
1.00
|
|
Weighted average common shares outstanding - Diluted
|
99,880
|
|
|
96,759
|
|
|
92,387
|
|
(1)
|
During 2015, the Company began including an add-back for leasing commission amortization in order to provide a better basis for comparing its results of operations with those of others in the industry, consistent with the NAREIT definition of FFO. For the twelve months ended December 31, 2014 and 2013, FFO per diluted common share was previously reported as $1.48 and $0.98, respectively.
|
|
|
|
|
|
Same Store NOI for the
|
|||||||||
|
|
|
|
|
Twelve Months Ended December 31,
|
|||||||||
(Dollars in thousands)
|
Number of Properties
(1)
|
|
|
Gross Investment at December 31, 2015
|
|
|
2015
|
|
|
2014
|
|
|||
Multi-tenant Properties
|
133
|
|
|
$
|
2,212,984
|
|
|
$
|
154,130
|
|
|
$
|
146,269
|
|
Single-tenant Net Lease Properties
|
33
|
|
|
578,030
|
|
|
56,866
|
|
|
54,236
|
|
|||
Total
|
166
|
|
|
$
|
2,791,014
|
|
|
$
|
210,996
|
|
|
$
|
200,505
|
|
(1)
|
Mortgage notes receivable, construction in progress, corporate property and assets classified as held for sale are excluded.
|
•
|
Properties having less than 60% occupancy;
|
•
|
Properties that experience a loss of occupancy over 30% in a single quarter;
|
•
|
Anticipated significant or material changes to a particular property or its market environment; or
|
•
|
Properties with negative net operating income.
|
Reconciliation of Same Store NOI:
|
|||||||
|
Twelve Months Ended December 31,
|
||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
||
Rental income
|
$
|
383,333
|
|
|
$
|
361,525
|
|
Property lease guaranty revenue (a)
|
3,890
|
|
|
4,430
|
|
||
Property operating expense
|
(140,195
|
)
|
|
(134,057
|
)
|
||
Exclude Straight-line rent revenue
|
(9,545
|
)
|
|
(10,969
|
)
|
||
NOI
|
237,483
|
|
|
220,929
|
|
||
NOI not included in same store
|
(26,487
|
)
|
|
(20,424
|
)
|
||
Same store NOI
|
$
|
210,996
|
|
|
$
|
200,505
|
|
___________
|
|
|
|
||||
(a) Other operating income reconciliation:
|
|
|
|
||||
Property lease guaranty revenue
|
$
|
3,890
|
|
|
$
|
4,430
|
|
Interest income
|
579
|
|
|
731
|
|
||
Other
|
578
|
|
|
504
|
|
||
Total consolidated other operating income
|
$
|
5,047
|
|
|
$
|
5,665
|
|
Reconciliation of Same Store Property Count:
|
||
|
Property Count as of December 31, 2015
|
|
Same store properties
|
166
|
|
Acquisitions
|
16
|
|
Reposition
|
16
|
|
Total owned real estate properties
|
198
|
|
|
Payments Due by Period
|
||||||||||||||||||
(Dollars in thousands)
|
Total
|
|
|
Less than
1 Year
|
|
|
1 -3
Years
|
|
|
3 - 5
Years
|
|
|
More than 5
Years
|
|
|||||
Long-term debt obligations, including interest
(1)
|
$
|
1,762,207
|
|
|
$
|
86,713
|
|
|
$
|
313,839
|
|
|
$
|
333,611
|
|
|
$
|
1,028,044
|
|
Operating lease commitments
(2)
|
316,083
|
|
|
5,160
|
|
|
10,528
|
|
|
10,709
|
|
|
289,686
|
|
|||||
Construction in progress
(3)
|
62,892
|
|
|
53,248
|
|
|
9,644
|
|
|
|
|
|
|||||||
Tenant improvements
(4)
|
28,771
|
|
|
28,771
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Pension obligations
(5)
|
19,571
|
|
|
19,571
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
2,189,524
|
|
|
$
|
193,463
|
|
|
$
|
334,011
|
|
|
$
|
344,320
|
|
|
$
|
1,317,730
|
|
(1)
|
The amounts shown include estimated interest on total debt other than the Unsecured Credit Facility, whose balance and interest rate may fluctuate from day to day. Excluded from the table above are the discounts on the Company's outstanding senior notes of approximately $3.6 million, and net premiums totaling approximately $0.9 million on 16 mortgage notes payable, which are included in notes and bonds payable on the Company’s Consolidated Balance Sheet as of
December 31, 2015
. The Company’s long-term debt principal obligations are presented in more detail in the table below.
|
(In millions)
|
Principal Balance
at Dec. 31, 2015
|
|
|
Principal Balance
at Dec. 31, 2014
|
|
|
Maturity
Date
|
|
|
Contractual Interest
Rates at
December 31, 2015
|
|
|
Principal
Payments
|
|
Interest Payments
|
||
Unsecured Credit Facility
|
$
|
206.0
|
|
|
$
|
85.0
|
|
|
4/17
|
|
|
LIBOR + 1.15%
|
|
|
At maturity
|
|
Quarterly
|
Unsecured Term Loan Facility
|
200.0
|
|
|
200.0
|
|
|
2/19
|
|
|
LIBOR + 1.20%
|
|
|
At maturity
|
|
Quarterly
|
||
Senior Notes due 2017
|
—
|
|
|
300.0
|
|
|
—
|
|
|
6.50
|
%
|
|
At maturity
|
|
Semi-Annual
|
||
Senior Notes due 2021
|
400.0
|
|
|
400.0
|
|
|
1/21
|
|
|
5.75
|
%
|
|
At maturity
|
|
Semi-Annual
|
||
Senior Notes due 2023
|
250.0
|
|
|
250.0
|
|
|
4/23
|
|
|
3.75
|
%
|
|
At maturity
|
|
Semi-Annual
|
||
Senior Notes due 2025
|
250.0
|
|
|
—
|
|
|
5/25
|
|
|
3.88
|
%
|
|
At maturity
|
|
Semi-Annual
|
||
Mortgage notes payable
|
128.2
|
|
|
172.5
|
|
|
4/16-5/40
|
|
|
4.15%-7.63%
|
|
|
Monthly
|
|
Monthly
|
||
|
$
|
1,434.2
|
|
|
$
|
1,407.5
|
|
|
|
|
|
|
|
|
|
(2)
|
Includes primarily the corporate office and ground leases, with expiration dates through 2105, related to various real estate investments for which the Company is currently making payments.
|
(3)
|
Includes cash flow projections related to the construction of three buildings, a portion of which relates to tenant improvements that will generally be funded after the core and shell of the building is completed. This amount includes $4.4 million of invoices that were accrued and included in construction in progress on the Company's Consolidated Balance Sheets as of
December 31, 2015
.
|
(4)
|
The Company has remaining tenant improvement allowances of approximately $28.8 million. The Company expects to fund these improvements in 2016.
|
(5)
|
Effective May 5, 2015, the Company terminated its Executive Retirement Plan. The Company will pay lump sum amounts to the four plan participants. In accordance with Section 409A of the Internal Revenue Code, these amounts will be paid in either cash or stock no earlier than twelve and no later than twenty-four months following the termination date.
|
•
|
Management, having the authority to approve the action, commits to a plan to sell the property or disposal group;
|
•
|
The property or disposal group is available for immediate sale (i.e., a seller currently has the intent and ability to transfer the property or disposal group to a buyer) in its present condition, subject only to conditions that are usual and customary for sales of such properties or disposal groups;
|
•
|
An active program to locate a buyer and other actions required to complete the plan to sell have been initiated;
|
•
|
The sale of the property or disposal group is probable (i.e., likely to occur) and the transfer is expected to qualify for recognition as a completed sale within one year, with certain exceptions;
|
•
|
The property or disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and
|
•
|
Actions necessary to complete the plan indicate that it is unlikely significant changes to the plan will be made or that the plan will be withdrawn.
|
•
|
type of contractual arrangement under which the receivable was recorded, e.g., a mortgage note, a triple net lease, a gross lease, a property operating agreement or some other type of agreement;
|
•
|
tenant’s or debtor’s reason for slow payment;
|
•
|
industry influences and healthcare segment under which the tenant or debtor operates;
|
•
|
evidence of willingness and ability of the tenant or debtor to pay the receivable;
|
•
|
credit-worthiness of the tenant or debtor;
|
•
|
collateral, security deposit, letters of credit or other monies held as security;
|
•
|
tenant’s or debtor’s historical payment pattern;
|
•
|
other contractual agreements between the tenant or debtor and the Company;
|
•
|
relationship between the tenant or debtor and the Company;
|
•
|
state in which the tenant or debtor operates; and
|
•
|
existence of a guarantor and the willingness and ability of the guarantor to pay the receivable.
|
|
|
|
|
|
Impact on Earnings and Cash Flows
|
||||||||||
(Dollars in thousands)
|
Outstanding
Principal Balance as of
December 31, 2015
|
|
|
Calculated Annual
Interest
|
|
|
Assuming 10% Increase in Market
Interest Rates
|
|
|
Assuming 10%
Decrease in Market Interest
Rates
|
|
||||
Variable Rate Debt:
|
|
|
|
|
|
|
|
||||||||
Unsecured Credit Facility
|
$
|
206,000
|
|
|
$
|
3,765
|
|
|
$
|
(88
|
)
|
|
$
|
88
|
|
Term Note due 2017
|
200,000
|
|
|
3,755
|
|
|
(86
|
)
|
|
86
|
|
||||
|
$
|
406,000
|
|
|
$
|
7,520
|
|
|
$
|
(174
|
)
|
|
$
|
174
|
|
|
|
|
Fair Value
|
||||||||||||||||
(Dollars in thousands)
|
Carrying Value
as of December 31, 2015
|
|
|
December 31, 2015
|
|
|
Assuming 10%
Increase in
Market Interest Rates
|
|
|
Assuming 10% Decrease in
Market Interest Rates
|
|
|
December 31, 2014 (1)
|
|
|||||
Fixed Rate Debt:
|
|
|
|
|
|
|
|
|
|
||||||||||
Senior Notes due 2017, net of discount
(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
307,771
|
|
Senior Notes due 2021, net of discount
(2)
|
398,168
|
|
|
423,637
|
|
|
419,501
|
|
|
427,744
|
|
|
430,633
|
|
|||||
Senior Notes due 2023, net of discount
(2)
|
248,435
|
|
|
240,965
|
|
|
234,587
|
|
|
247,456
|
|
|
241,947
|
|
|||||
Senior Notes due 2025, net of discount
(2)
|
249,804
|
|
|
244,026
|
|
|
236,318
|
|
|
252,138
|
|
|
—
|
|
|||||
Mortgage Notes Payable
(2)
|
129,087
|
|
|
129,124
|
|
|
127,253
|
|
|
131,052
|
|
|
173,476
|
|
|||||
|
$
|
1,025,494
|
|
|
$
|
1,037,752
|
|
|
$
|
1,017,659
|
|
|
$
|
1,058,390
|
|
|
$
|
1,153,827
|
|
Fixed Rate Receivables:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage Notes Receivable
(3)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,892
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,892
|
|
(1)
|
Fair values as of
December 31, 2014
represent fair values of obligations or receivables that were outstanding as of that date, and do not reflect the effect of any subsequent changes in principal balances and/or additions or extinguishments of instruments.
|
(2)
|
Level 3 - Fair value derived from valuation techniques in which one or more significant inputs or significant drivers are unobservable.
|
(3)
|
Level 2 - Fair value based on quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets.
|
|
December 31,
|
||||||
|
2015
|
|
|
2014
|
|
||
ASSETS
|
|
|
|
||||
Real estate properties:
|
|
|
|
||||
Land
|
$
|
198,585
|
|
|
$
|
183,060
|
|
Buildings, improvements and lease intangibles
|
3,135,893
|
|
|
3,048,251
|
|
||
Personal property
|
9,954
|
|
|
9,914
|
|
||
Construction in progress
|
19,024
|
|
|
—
|
|
||
Land held for development
|
17,452
|
|
|
17,054
|
|
||
|
3,380,908
|
|
|
3,258,279
|
|
||
Less accumulated depreciation
|
(761,926
|
)
|
|
(700,671
|
)
|
||
Total real estate properties, net
|
2,618,982
|
|
|
2,557,608
|
|
||
Cash and cash equivalents
|
4,102
|
|
|
3,519
|
|
||
Mortgage notes receivable
|
—
|
|
|
1,900
|
|
||
Assets held for sale and discontinued operations, net
|
724
|
|
|
9,146
|
|
||
Other assets, net
|
192,918
|
|
|
185,337
|
|
||
Total assets
|
$
|
2,816,726
|
|
|
$
|
2,757,510
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Notes and bonds payable
|
$
|
1,431,494
|
|
|
$
|
1,403,692
|
|
Accounts payable and accrued liabilities
|
75,489
|
|
|
70,240
|
|
||
Liabilities of discontinued operations
|
33
|
|
|
372
|
|
||
Other liabilities
|
66,963
|
|
|
62,152
|
|
||
Total liabilities
|
1,573,979
|
|
|
1,536,456
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders' Equity:
|
|
|
|
||||
Preferred stock, $.01 par value; 50,000 shares authorized; none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value; 150,000 shares authorized; 101,517 and 98,828 shares issued and outstanding at December 31, 2015 and 2014, respectively.
|
1,015
|
|
|
988
|
|
||
Additional paid-in capital
|
2,461,376
|
|
|
2,389,830
|
|
||
Accumulated other comprehensive loss
|
(1,569
|
)
|
|
(2,519
|
)
|
||
Cumulative net income attributable to common stockholders
|
909,685
|
|
|
840,249
|
|
||
Cumulative dividends
|
(2,127,760
|
)
|
|
(2,007,494
|
)
|
||
Total stockholders’ equity
|
1,242,747
|
|
|
1,221,054
|
|
||
Total liabilities and stockholders' equity
|
$
|
2,816,726
|
|
|
$
|
2,757,510
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
REVENUES
|
|
|
|
|
|
||||||
Rental income
|
$
|
383,333
|
|
|
$
|
361,525
|
|
|
$
|
312,322
|
|
Mortgage interest
|
91
|
|
|
3,665
|
|
|
12,701
|
|
|||
Other operating
|
5,047
|
|
|
5,665
|
|
|
5,926
|
|
|||
|
388,471
|
|
|
370,855
|
|
|
330,949
|
|
|||
EXPENSES
|
|
|
|
|
|
||||||
Property operating
|
140,195
|
|
|
134,057
|
|
|
122,571
|
|
|||
General and administrative
|
26,925
|
|
|
22,808
|
|
|
23,704
|
|
|||
Depreciation
|
106,530
|
|
|
99,384
|
|
|
86,239
|
|
|||
Amortization
|
10,084
|
|
|
10,820
|
|
|
10,645
|
|
|||
Bad debt, net of recoveries
|
(193
|
)
|
|
31
|
|
|
172
|
|
|||
|
283,541
|
|
|
267,100
|
|
|
243,331
|
|
|||
OTHER INCOME (EXPENSE)
|
|
|
|
|
|
||||||
Gain on sales of real estate properties
|
56,602
|
|
|
—
|
|
|
—
|
|
|||
Interest expense
|
(65,534
|
)
|
|
(72,413
|
)
|
|
(73,511
|
)
|
|||
Loss on extinguishment of debt
|
(27,998
|
)
|
|
—
|
|
|
(29,638
|
)
|
|||
Pension termination
|
(5,260
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of real estate assets
|
(3,639
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of internally-developed software
|
(654
|
)
|
|
—
|
|
|
—
|
|
|||
Gain on sale of cost method investment in real estate
|
—
|
|
|
—
|
|
|
1,492
|
|
|||
Interest and other income, net
|
389
|
|
|
2,637
|
|
|
947
|
|
|||
|
(46,094
|
)
|
|
(69,776
|
)
|
|
(100,710
|
)
|
|||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
58,836
|
|
|
33,979
|
|
|
(13,092
|
)
|
|||
DISCONTINUED OPERATIONS
|
|
|
|
|
|
||||||
Income from discontinued operations
|
715
|
|
|
967
|
|
|
5,246
|
|
|||
Impairments of real estate assets
|
(686
|
)
|
|
(12,029
|
)
|
|
(9,889
|
)
|
|||
Gain on sales of real estate properties
|
10,571
|
|
|
9,283
|
|
|
24,718
|
|
|||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS
|
10,600
|
|
|
(1,779
|
)
|
|
20,075
|
|
|||
NET INCOME
|
69,436
|
|
|
32,200
|
|
|
6,983
|
|
|||
Less: Net income attributable to noncontrolling interests
|
—
|
|
|
(313
|
)
|
|
(37
|
)
|
|||
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
69,436
|
|
|
$
|
31,887
|
|
|
$
|
6,946
|
|
BASIC EARNINGS (LOSS) PER COMMON SHARE:
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
0.59
|
|
|
$
|
0.35
|
|
|
$
|
(0.14
|
)
|
Discontinued operations
|
0.11
|
|
|
(0.02
|
)
|
|
0.22
|
|
|||
Net income attributable to common stockholders
|
$
|
0.70
|
|
|
$
|
0.33
|
|
|
$
|
0.08
|
|
DILUTED EARNINGS (LOSS) PER COMMON SHARE:
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
0.59
|
|
|
$
|
0.35
|
|
|
$
|
(0.14
|
)
|
Discontinued operations
|
0.11
|
|
|
(0.02
|
)
|
|
0.22
|
|
|||
Net income attributable to common stockholders
|
$
|
0.70
|
|
|
$
|
0.33
|
|
|
$
|
0.08
|
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - BASIC
|
99,171
|
|
|
95,279
|
|
|
90,941
|
|
|||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - DILUTED
|
99,880
|
|
|
96,759
|
|
|
90,941
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
NET INCOME
|
$
|
69,436
|
|
|
$
|
32,200
|
|
|
$
|
6,983
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Defined benefit plans:
|
|
|
|
|
|
||||||
Reclassification adjustment for losses included in net income (Pension termination)
|
2,519
|
|
|
—
|
|
|
—
|
|
|||
Net gain (loss) arising during the period
|
—
|
|
|
(2,570
|
)
|
|
2,143
|
|
|||
Forward starting interest rate swaps:
|
|
|
|
|
|
||||||
Reclassification adjustment for losses included in net income (Interest expense)
|
115
|
|
|
—
|
|
|
—
|
|
|||
Losses on settlement of swaps arising during the period
|
(1,684
|
)
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income (loss)
|
950
|
|
|
(2,570
|
)
|
|
2,143
|
|
|||
COMPREHENSIVE INCOME
|
70,386
|
|
|
29,630
|
|
|
9,126
|
|
|||
Less: Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
(313
|
)
|
|
(37
|
)
|
|||
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
$
|
70,386
|
|
|
$
|
29,317
|
|
|
$
|
9,089
|
|
|
Preferred
Stock
|
|
|
Common
Stock
|
|
|
Additional
Paid-In
Capital
|
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
|
Cumulative
Net Income
|
|
|
Cumulative
Dividends
|
|
|
Total
Stockholders’
Equity
|
|
|
Non-
controlling
Interests
|
|
|
Total
Equity
|
|
|||||||||
Balance at December 31, 2012
|
$
|
—
|
|
|
$
|
875
|
|
|
$
|
2,100,297
|
|
|
$
|
(2,092
|
)
|
|
$
|
801,416
|
|
|
$
|
(1,779,552
|
)
|
|
$
|
1,120,944
|
|
|
$
|
—
|
|
|
$
|
1,120,944
|
|
Issuance of stock, net of costs
|
—
|
|
|
83
|
|
|
220,176
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
220,259
|
|
|
—
|
|
|
220,259
|
|
|||||||||
Common stock redemption
|
—
|
|
|
—
|
|
|
(454
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(454
|
)
|
|
—
|
|
|
(454
|
)
|
|||||||||
Stock-based compensation
|
—
|
|
|
1
|
|
|
5,209
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,210
|
|
|
—
|
|
|
5,210
|
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,946
|
|
|
—
|
|
|
6,946
|
|
|
37
|
|
|
6,983
|
|
|||||||||
Defined benefit pension plan net gain
|
—
|
|
|
—
|
|
|
—
|
|
|
2,143
|
|
|
—
|
|
|
—
|
|
|
2,143
|
|
|
—
|
|
|
2,143
|
|
|||||||||
Dividends to common stockholders ($1.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(111,571
|
)
|
|
(111,571
|
)
|
|
—
|
|
|
(111,571
|
)
|
|||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
(34
|
)
|
|||||||||
Proceeds from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,806
|
|
|
1,806
|
|
|||||||||
Balance at December 31, 2013
|
—
|
|
|
959
|
|
|
2,325,228
|
|
|
51
|
|
|
808,362
|
|
|
(1,891,123
|
)
|
|
1,243,477
|
|
|
1,809
|
|
|
1,245,286
|
|
|||||||||
Issuance of stock, net of costs
|
—
|
|
|
31
|
|
|
76,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
76,831
|
|
|
—
|
|
|
76,831
|
|
|||||||||
Common stock redemption
|
—
|
|
|
(4
|
)
|
|
(10,070
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,074
|
)
|
|
—
|
|
|
(10,074
|
)
|
|||||||||
Stock-based compensation
|
—
|
|
|
2
|
|
|
4,449
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,451
|
|
|
—
|
|
|
4,451
|
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,887
|
|
|
—
|
|
|
31,887
|
|
|
313
|
|
|
32,200
|
|
|||||||||
Defined benefit pension plan net gain
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,570
|
)
|
|
—
|
|
|
—
|
|
|
(2,570
|
)
|
|
—
|
|
|
(2,570
|
)
|
|||||||||
Dividends to common stockholders ($1.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(116,371
|
)
|
|
(116,371
|
)
|
|
—
|
|
|
(116,371
|
)
|
|||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(510
|
)
|
|
(510
|
)
|
|||||||||
Purchase of noncontrolling interest in consolidated joint ventures
|
—
|
|
|
—
|
|
|
(6,577
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,577
|
)
|
|
(1,612
|
)
|
|
(8,189
|
)
|
|||||||||
Balance at December 31, 2014
|
—
|
|
|
988
|
|
|
2,389,830
|
|
|
(2,519
|
)
|
|
840,249
|
|
|
(2,007,494
|
)
|
|
1,221,054
|
|
|
—
|
|
|
1,221,054
|
|
|||||||||
Issuance of stock, net of costs
|
—
|
|
|
25
|
|
|
66,886
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66,911
|
|
|
—
|
|
|
66,911
|
|
|||||||||
Common stock redemption
|
—
|
|
|
—
|
|
|
(1,367
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,367
|
)
|
|
—
|
|
|
(1,367
|
)
|
|||||||||
Stock-based compensation
|
—
|
|
|
2
|
|
|
6,027
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,029
|
|
|
—
|
|
|
6,029
|
|
|||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
69,436
|
|
|
—
|
|
|
69,436
|
|
|
—
|
|
|
69,436
|
|
|||||||||
Amounts reclassified from accumulated other comprehensive loss arising from loss on defined benefit pension plan
|
—
|
|
|
—
|
|
|
—
|
|
|
2,519
|
|
|
—
|
|
|
—
|
|
|
2,519
|
|
|
—
|
|
|
2,519
|
|
|||||||||
Loss on forward starting interest rate swaps
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,569
|
)
|
|
—
|
|
|
—
|
|
|
(1,569
|
)
|
|
—
|
|
|
(1,569
|
)
|
|||||||||
Dividends to common stockholders ($1.20 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(120,266
|
)
|
|
(120,266
|
)
|
|
—
|
|
|
(120,266
|
)
|
|||||||||
Balance at December 31, 2015
|
$
|
—
|
|
|
$
|
1,015
|
|
|
$
|
2,461,376
|
|
|
$
|
(1,569
|
)
|
|
$
|
909,685
|
|
|
$
|
(2,127,760
|
)
|
|
$
|
1,242,747
|
|
|
$
|
—
|
|
|
$
|
1,242,747
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
OPERATING ACTIVITIES
|
|
|
|
|
|
||||||
Net income
|
$
|
69,436
|
|
|
$
|
32,200
|
|
|
$
|
6,983
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
120,363
|
|
|
116,049
|
|
|
105,318
|
|
|||
Stock-based compensation
|
6,029
|
|
|
4,451
|
|
|
5,210
|
|
|||
Straight-line rent receivable
|
(9,600
|
)
|
|
(11,050
|
)
|
|
(8,608
|
)
|
|||
Straight-line rent liability
|
771
|
|
|
721
|
|
|
426
|
|
|||
Gain on sales of real estate assets
|
(67,229
|
)
|
|
(9,283
|
)
|
|
(24,718
|
)
|
|||
Gain on sale of cost method investment in real estate
|
—
|
|
|
—
|
|
|
(1,492
|
)
|
|||
Loss on extinguishment of debt
|
27,998
|
|
|
—
|
|
|
29,907
|
|
|||
Impairments of real estate properties
|
4,325
|
|
|
12,029
|
|
|
9,889
|
|
|||
Pension termination
|
5,260
|
|
|
—
|
|
|
—
|
|
|||
Impairment of internally-developed software
|
654
|
|
|
—
|
|
|
—
|
|
|||
Provision for bad debts, net
|
(194
|
)
|
|
34
|
|
|
185
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Other assets
|
(2,932
|
)
|
|
(16,842
|
)
|
|
(5,660
|
)
|
|||
Accounts payable and accrued liabilities
|
4,190
|
|
|
(1,914
|
)
|
|
740
|
|
|||
Other liabilities
|
1,304
|
|
|
(1,025
|
)
|
|
2,617
|
|
|||
Net cash provided by operating activities
|
160,375
|
|
|
125,370
|
|
|
120,797
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Acquisitions of real estate
|
(154,858
|
)
|
|
(71,899
|
)
|
|
(177,744
|
)
|
|||
Development of real estate
|
(17,354
|
)
|
|
—
|
|
|
—
|
|
|||
Additional long-lived assets
|
(48,769
|
)
|
|
(70,670
|
)
|
|
(72,784
|
)
|
|||
Funding of mortgages and notes receivable
|
—
|
|
|
(1,244
|
)
|
|
(58,731
|
)
|
|||
Proceeds from acquisition of real estate upon mortgage note receivable default
|
—
|
|
|
204
|
|
|
—
|
|
|||
Proceeds from sales of real estate
|
153,281
|
|
|
32,398
|
|
|
96,132
|
|
|||
Proceeds from sale of cost method investment in real estate
|
—
|
|
|
—
|
|
|
2,717
|
|
|||
Proceeds from mortgages and notes receivable repayments
|
1,918
|
|
|
5,623
|
|
|
2,464
|
|
|||
Net cash used in investing activities
|
(65,782
|
)
|
|
(105,588
|
)
|
|
(207,946
|
)
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Net borrowings (repayments) on unsecured credit facility
|
121,000
|
|
|
(153,000
|
)
|
|
128,000
|
|
|||
Borrowings on term loan
|
—
|
|
|
200,000
|
|
|
—
|
|
|||
Borrowings on notes and bonds payable
|
249,793
|
|
|
—
|
|
|
247,948
|
|
|||
Repayments on notes and bonds payable
|
(72,724
|
)
|
|
(12,357
|
)
|
|
(19,984
|
)
|
|||
Redemption of notes and bonds payable
|
(333,222
|
)
|
|
—
|
|
|
(371,839
|
)
|
|||
Dividends paid
|
(120,266
|
)
|
|
(116,371
|
)
|
|
(111,571
|
)
|
|||
Net proceeds from issuance of common stock
|
66,942
|
|
|
76,856
|
|
|
220,252
|
|
|||
Common stock redemptions
|
(1,367
|
)
|
|
(10,074
|
)
|
|
(454
|
)
|
|||
Settlement of swaps
|
(1,684
|
)
|
|
—
|
|
|
—
|
|
|||
Capital Contributions received from noncontrolling interest
|
—
|
|
|
—
|
|
|
1,806
|
|
|||
Distributions to noncontrolling interest holders
|
—
|
|
|
(541
|
)
|
|
(32
|
)
|
|||
Purchase of noncontrolling interest
|
—
|
|
|
(8,189
|
)
|
|
—
|
|
|||
Debt issuance and assumption costs
|
(2,482
|
)
|
|
(1,258
|
)
|
|
(5,082
|
)
|
|||
Net cash provided by (used in) financing activities
|
(94,010
|
)
|
|
(24,934
|
)
|
|
89,044
|
|
|||
Increase (decrease) in cash and cash equivalents
|
583
|
|
|
(5,152
|
)
|
|
1,895
|
|
|||
Cash and cash equivalents, beginning of period
|
3,519
|
|
|
8,671
|
|
|
6,776
|
|
|||
Cash and cash equivalents, end of period
|
$
|
4,102
|
|
|
$
|
3,519
|
|
|
$
|
8,671
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
69,773
|
|
|
$
|
68,173
|
|
|
$
|
71,025
|
|
Mortgage notes payable assumed upon acquisition (adjusted to fair value)
|
$
|
28,783
|
|
|
$
|
19,636
|
|
|
$
|
40,992
|
|
Invoices accrued for construction, tenant improvement and other capitalized costs
|
$
|
10,431
|
|
|
$
|
5,594
|
|
|
$
|
10,885
|
|
Capitalized interest
|
$
|
239
|
|
|
$
|
—
|
|
|
$
|
183
|
|
Elimination of construction mortgage note receivable upon acquisition real estate property
|
$
|
—
|
|
|
$
|
81,213
|
|
|
$
|
97,203
|
|
Mortgage note receivable eliminated upon acquisition
|
$
|
—
|
|
|
$
|
39,973
|
|
|
$
|
—
|
|
Company-financed real estate property sales
|
$
|
—
|
|
|
$
|
1,900
|
|
|
$
|
4,241
|
|
Land improvements
|
15.0 to 38.1 years
|
Buildings and improvements
|
3.3 to 39.0 years
|
Lease intangibles (including ground lease intangibles)
|
1.9 to 93.1 years
|
Personal property
|
1.5 to 17.3 years
|
•
|
Level 1
– quoted prices for identical instruments in active markets;
|
•
|
Level 2
– quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and
|
•
|
Level 3
– fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Property operating income
|
$
|
306,550
|
|
|
$
|
285,304
|
|
|
$
|
251,403
|
|
Single-tenant net lease
|
67,238
|
|
|
65,252
|
|
|
51,467
|
|
|||
Straight-line rent
|
9,545
|
|
|
10,969
|
|
|
9,452
|
|
|||
Rental income
|
$
|
383,333
|
|
|
$
|
361,525
|
|
|
$
|
312,322
|
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Property lease guaranty revenue
|
$
|
3,890
|
|
|
$
|
4,430
|
|
|
$
|
5,114
|
|
Interest income
|
579
|
|
|
731
|
|
|
457
|
|
|||
Management fee income
|
370
|
|
|
289
|
|
|
164
|
|
|||
Other
|
208
|
|
|
215
|
|
|
191
|
|
|||
|
$
|
5,047
|
|
|
$
|
5,665
|
|
|
$
|
5,926
|
|
(Dollars in thousands)
|
Number of Facilities
|
|
|
Land
|
|
|
Buildings, Improvements,and Lease Intangibles
|
|
|
Personal Property
|
|
|
Total
|
|
|
Accumulated Depreciation
|
|
|||||
Medical office/outpatient:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Alabama
|
4
|
|
|
$
|
650
|
|
|
$
|
35,169
|
|
|
$
|
20
|
|
|
$
|
35,839
|
|
|
$
|
(18,001
|
)
|
Arizona
|
7
|
|
|
1,330
|
|
|
61,902
|
|
|
444
|
|
|
63,676
|
|
|
(14,297
|
)
|
|||||
California
|
11
|
|
|
31,484
|
|
|
177,589
|
|
|
189
|
|
|
209,262
|
|
|
(60,638
|
)
|
|||||
Colorado
|
10
|
|
|
8,257
|
|
|
194,981
|
|
|
208
|
|
|
203,446
|
|
|
(24,629
|
)
|
|||||
District of Columbia
|
2
|
|
|
—
|
|
|
31,346
|
|
|
—
|
|
|
31,346
|
|
|
(10,110
|
)
|
|||||
Florida
|
7
|
|
|
6,873
|
|
|
69,113
|
|
|
106
|
|
|
76,092
|
|
|
(34,851
|
)
|
|||||
Hawaii
|
3
|
|
|
8,327
|
|
|
126,984
|
|
|
160
|
|
|
135,471
|
|
|
(21,559
|
)
|
|||||
Illinois
|
3
|
|
|
6,142
|
|
|
50,778
|
|
|
146
|
|
|
57,066
|
|
|
(12,820
|
)
|
|||||
Indiana
|
4
|
|
|
3,358
|
|
|
117,262
|
|
|
—
|
|
|
120,620
|
|
|
(19,751
|
)
|
|||||
Iowa
|
6
|
|
|
12,665
|
|
|
80,691
|
|
|
94
|
|
|
93,450
|
|
|
(15,055
|
)
|
|||||
Minnesota
|
2
|
|
|
2,090
|
|
|
34,908
|
|
|
—
|
|
|
36,998
|
|
|
(1,006
|
)
|
|||||
Missouri
|
3
|
|
|
3,797
|
|
|
28,278
|
|
|
7
|
|
|
32,082
|
|
|
(15,707
|
)
|
|||||
North Carolina
|
16
|
|
|
5,096
|
|
|
157,416
|
|
|
95
|
|
|
162,607
|
|
|
(41,974
|
)
|
|||||
Oklahoma
|
2
|
|
|
7,673
|
|
|
101,366
|
|
|
—
|
|
|
109,039
|
|
|
(4,610
|
)
|
|||||
Tennessee
|
14
|
|
|
10,353
|
|
|
189,052
|
|
|
298
|
|
|
199,703
|
|
|
(66,023
|
)
|
|||||
Texas
|
43
|
|
|
45,036
|
|
|
631,114
|
|
|
1,318
|
|
|
677,468
|
|
|
(166,700
|
)
|
|||||
Virginia
|
13
|
|
|
3,334
|
|
|
185,204
|
|
|
139
|
|
|
188,677
|
|
|
(42,894
|
)
|
|||||
Washington
|
12
|
|
|
13,217
|
|
|
279,360
|
|
|
265
|
|
|
292,842
|
|
|
(31,434
|
)
|
|||||
Other (11 states)
|
14
|
|
|
4,906
|
|
|
132,507
|
|
|
85
|
|
|
137,498
|
|
|
(46,295
|
)
|
|||||
|
176
|
|
|
174,588
|
|
|
2,685,020
|
|
|
3,574
|
|
|
2,863,182
|
|
|
(648,354
|
)
|
|||||
Inpatient:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Arizona
|
1
|
|
|
3,641
|
|
|
12,371
|
|
|
—
|
|
|
16,012
|
|
|
(2,195
|
)
|
|||||
California
|
1
|
|
|
—
|
|
|
12,688
|
|
|
—
|
|
|
12,688
|
|
|
(6,955
|
)
|
|||||
Colorado
|
1
|
|
|
623
|
|
|
10,788
|
|
|
—
|
|
|
11,411
|
|
|
(835
|
)
|
|||||
Missouri
|
1
|
|
|
1,989
|
|
|
109,304
|
|
|
—
|
|
|
111,293
|
|
|
(6,351
|
)
|
|||||
Pennsylvania
|
4
|
|
|
6,555
|
|
|
74,634
|
|
|
—
|
|
|
81,189
|
|
|
(40,527
|
)
|
|||||
Texas
|
5
|
|
|
9,507
|
|
|
158,175
|
|
|
265
|
|
|
167,947
|
|
|
(29,742
|
)
|
|||||
|
13
|
|
|
22,315
|
|
|
377,960
|
|
|
265
|
|
|
400,540
|
|
|
(86,605
|
)
|
|||||
Other:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Indiana
|
1
|
|
|
96
|
|
|
3,662
|
|
|
32
|
|
|
3,790
|
|
|
(2,593
|
)
|
|||||
Iowa
|
1
|
|
|
—
|
|
|
40,275
|
|
|
—
|
|
|
40,275
|
|
|
(3,588
|
)
|
|||||
Michigan
|
5
|
|
|
193
|
|
|
12,728
|
|
|
183
|
|
|
13,104
|
|
|
(8,776
|
)
|
|||||
Tennessee
|
1
|
|
|
253
|
|
|
7,213
|
|
|
408
|
|
|
7,874
|
|
|
(2,452
|
)
|
|||||
Virginia
|
1
|
|
|
1,140
|
|
|
9,035
|
|
|
2
|
|
|
10,177
|
|
|
(5,477
|
)
|
|||||
|
9
|
|
|
1,682
|
|
|
72,913
|
|
|
625
|
|
|
75,220
|
|
|
(22,886
|
)
|
|||||
Land Held for Development
|
—
|
|
|
17,452
|
|
|
—
|
|
|
—
|
|
|
17,452
|
|
|
(140
|
)
|
|||||
Construction in Progress
(1)
|
—
|
|
|
—
|
|
|
19,024
|
|
|
—
|
|
|
19,024
|
|
|
—
|
|
|||||
Corporate Property
|
—
|
|
|
—
|
|
|
—
|
|
|
5,490
|
|
|
5,490
|
|
|
(3,941
|
)
|
|||||
|
—
|
|
|
17,452
|
|
|
19,024
|
|
|
5,490
|
|
|
41,966
|
|
|
(4,081
|
)
|
|||||
Total real estate investments
|
198
|
|
|
$
|
216,037
|
|
|
$
|
3,154,917
|
|
|
$
|
9,954
|
|
|
$
|
3,380,908
|
|
|
$
|
(761,926
|
)
|
2016
|
$
|
302,705
|
|
2017
|
270,636
|
|
|
2018
|
235,392
|
|
|
2019
|
194,982
|
|
|
2020
|
151,440
|
|
|
2021 and thereafter
|
588,435
|
|
|
|
$
|
1,743,590
|
|
(Dollars in millions)
|
Date
Acquired |
|
Purchase Price
|
|
|
Purchase Price Adjustments/ (Credits)
|
|
|
Mortgage
Notes Payable Assumed (1) |
|
|
Cash
Consideration (2) |
|
|
Real
Estate |
|
|
Other
(3)
|
|
|
Square
Footage |
|
||||||
Real estate acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
California
|
1/15/15
|
|
$
|
39.3
|
|
|
$
|
(0.2
|
)
|
|
$
|
—
|
|
|
$
|
39.1
|
|
|
$
|
39.2
|
|
|
$
|
(0.1
|
)
|
|
110,679
|
|
Washington
|
6/26/15
|
|
14.0
|
|
|
(0.1
|
)
|
|
(9.5
|
)
|
|
4.4
|
|
|
13.8
|
|
|
0.1
|
|
|
35,558
|
|
||||||
Washington
|
9/1/15
|
|
28.0
|
|
|
(0.2
|
)
|
|
(9.4
|
)
|
|
18.4
|
|
|
27.8
|
|
|
—
|
|
|
52,813
|
|
||||||
Colorado
|
9/14/15
|
|
6.5
|
|
|
(0.3
|
)
|
|
—
|
|
|
6.2
|
|
|
6.3
|
|
|
(0.1
|
)
|
|
47,508
|
|
||||||
Washington
|
10/23/15
|
|
8.8
|
|
|
(1.3
|
)
|
|
—
|
|
|
7.5
|
|
|
8.6
|
|
|
(1.1
|
)
|
|
33,169
|
|
||||||
California
|
11/3/15
|
|
47.0
|
|
|
(3.4
|
)
|
|
—
|
|
|
43.6
|
|
|
44.2
|
|
|
(0.6
|
)
|
|
99,942
|
|
||||||
Washington
|
11/18/15
|
|
27.6
|
|
|
0.1
|
|
|
—
|
|
|
27.7
|
|
|
27.6
|
|
|
0.1
|
|
|
60,437
|
|
||||||
Minnesota
|
12/18/15
|
|
16.0
|
|
|
0.1
|
|
|
(9.5
|
)
|
|
6.6
|
|
|
16.0
|
|
|
0.1
|
|
|
64,143
|
|
||||||
Total real estate acquisitions
|
|
$
|
187.2
|
|
|
$
|
(5.3
|
)
|
|
$
|
(28.4
|
)
|
|
$
|
153.5
|
|
|
$
|
183.5
|
|
|
$
|
(1.6
|
)
|
|
504,249
|
|
|
Land acquisitions
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
||||||
|
|
|
$
|
190.1
|
|
|
$
|
(5.3
|
)
|
|
$
|
(28.4
|
)
|
|
$
|
156.4
|
|
|
$
|
186.4
|
|
|
$
|
(1.6
|
)
|
|
504,249
|
|
(1)
|
The mortgage notes payable assumed in the acquisitions do not reflect the fair value adjustments totaling
$0.4 million
recorded by the Company upon acquisition (included in Other).
|
(2)
|
Cash consideration excludes prorations of revenue and expense due to/from seller at the time of the acquisition.
|
(3)
|
Includes assets acquired, liabilities assumed, intangibles recognized at acquisition and fair value adjustments on debt assumed.
|
|
Estimated Fair Value
|
|
|
Estimated Useful Life
|
|
|
|
(In millions)
|
|
(In years)
|
|||
Building
|
$
|
153.1
|
|
|
25.0-35.0
|
|
Land
|
20.3
|
|
|
—
|
|
|
Intangibles:
|
|
|
|
|||
At-market lease intangibles
|
10.1
|
|
|
1.9-7.9
|
|
|
Above-market lease intangibles
|
0.1
|
|
|
0.9-4.9
|
|
|
Below-market lease intangibles
|
(0.5
|
)
|
|
1.3-8.3
|
|
|
Below-market ground lease intangibles
|
0.9
|
|
|
46.3-78.5
|
|
|
Total intangibles
|
10.6
|
|
|
|
||
Mortgage notes payable assumed, including fair value adjustments
|
(28.8
|
)
|
|
|
||
Other assets acquired
|
0.5
|
|
|
|
||
Accounts payable, accrued liabilities and other liabilities assumed
|
(2.2
|
)
|
|
|
||
Total cash paid
|
$
|
153.5
|
|
|
|
(Dollars in millions)
|
Date
Acquired |
|
Purchase Price
|
|
|
Purchase Price Adjustments/(Credits)
|
|
|
Elimination of Mortgage Notes Receivable
|
|
|
Mortgage
Notes Payable Assumed (1) |
|
|
Cash
Consideration (2) |
|
|
Real
Estate |
|
|
Other
(3)
|
|
|
Square
Footage |
|
|||||||
Real estate acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Iowa
|
3/28/14
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
(40.0
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40.2
|
|
|
$
|
(0.4
|
)
|
|
152,655
|
|
Oklahoma
|
5/22/14
|
|
85.4
|
|
|
(0.1
|
)
|
|
(81.2
|
)
|
|
—
|
|
|
4.1
|
|
|
85.4
|
|
|
(0.1
|
)
|
|
200,000
|
|
|||||||
Texas
|
6/4/14
|
|
8.7
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
8.8
|
|
|
8.8
|
|
|
—
|
|
|
48,048
|
|
|||||||
North Carolina
|
6/6/14
|
|
6.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.5
|
|
|
6.5
|
|
|
—
|
|
|
35,292
|
|
|||||||
Minnesota
|
7/28/14
|
|
19.8
|
|
|
0.8
|
|
|
—
|
|
|
(11.4
|
)
|
|
9.2
|
|
|
20.9
|
|
|
(0.3
|
)
|
|
60,476
|
|
|||||||
Florida
|
9/16/14
|
|
7.9
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
7.8
|
|
|
7.9
|
|
|
(0.1
|
)
|
|
47,962
|
|
|||||||
Oklahoma
|
10/29/14
|
|
17.5
|
|
|
0.1
|
|
|
—
|
|
|
(6.8
|
)
|
|
10.8
|
|
|
17.9
|
|
|
(0.3
|
)
|
|
68,860
|
|
|||||||
Washington
|
12/1/14
|
|
22.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.7
|
|
|
18.9
|
|
|
3.8
|
|
|
60,161
|
|
|||||||
Total real estate acquisitions
|
|
$
|
168.5
|
|
|
$
|
1.0
|
|
|
$
|
(121.2
|
)
|
|
$
|
(18.2
|
)
|
|
$
|
69.9
|
|
|
$
|
206.5
|
|
|
$
|
2.6
|
|
|
673,454
|
|
|
Estimated Fair Value
|
|
|
Estimated Useful Life
|
|
|
|
(In millions)
|
|
(In years)
|
|||
Building
|
$
|
181.7
|
|
|
11.5-39.0
|
|
Land
|
12.7
|
|
|
—
|
|
|
Intangibles:
|
|
|
|
|||
At-market lease intangibles
|
12.1
|
|
|
4.8-13.9
|
|
|
Below-market lease intangibles
|
(0.4
|
)
|
|
3.8-6.5
|
|
|
Above-market ground lease intangibles
|
(0.1
|
)
|
|
91.3
|
|
|
Below-market ground lease intangibles
|
3.8
|
|
|
63.7
|
|
|
Total intangibles
|
15.4
|
|
|
|
||
Mortgage notes payable assumed, including fair value adjustments
|
(19.6
|
)
|
|
|
||
Foreclosed mortgage note receivable
|
(40.0
|
)
|
|
|
||
Elimination of mortgage note receivable upon acquisition
|
(81.2
|
)
|
|
|
||
Other assets acquired
|
3.0
|
|
|
|
||
Accounts payable, accrued liabilities and other liabilities assumed
|
(2.3
|
)
|
|
|
||
Cash acquired
|
0.2
|
|
|
|
||
Total cash paid
|
$
|
69.9
|
|
|
|
(Dollars in millions)
|
Date
Disposed |
|
Sales Price
|
|
|
Closing Adjustments
|
|
|
Company-financed Mortgage
Notes |
|
|
Net
Proceeds |
|
|
Net Real
Estate Investment |
|
|
Other
(including receivables) |
|
|
Gain/
(Impairment) |
|
|
Square
Footage |
|
|||||||
Real estate dispositions
|
||||||||||||||||||||||||||||||||
Virginia
|
05/21/15
|
|
$
|
1.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
|
5,323
|
|
Indiana
(1)
|
06/30/15
|
|
97.0
|
|
|
(3.7
|
)
|
|
—
|
|
|
93.3
|
|
|
50.5
|
|
|
1.9
|
|
|
40.9
|
|
|
175,999
|
|
|||||||
Pennsylvania
(2)
|
07/17/15
|
|
18.4
|
|
|
—
|
|
|
—
|
|
|
18.4
|
|
|
7.4
|
|
|
0.4
|
|
|
10.6
|
|
|
63,914
|
|
|||||||
Florida
|
09/16/15
|
|
16.3
|
|
|
(0.5
|
)
|
|
—
|
|
|
15.8
|
|
|
10.5
|
|
|
0.2
|
|
|
5.1
|
|
|
119,903
|
|
|||||||
Arizona
|
09/25/15
|
|
3.0
|
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
2.0
|
|
|
0.2
|
|
|
0.8
|
|
|
40,782
|
|
|||||||
Missouri
|
09/30/15
|
|
3.0
|
|
|
(0.2
|
)
|
|
—
|
|
|
2.8
|
|
|
2.9
|
|
|
0.2
|
|
|
(0.3
|
)
|
|
13,478
|
|
|||||||
Arizona
|
11/05/15
|
|
5.3
|
|
|
(0.3
|
)
|
|
—
|
|
|
5.0
|
|
|
4.9
|
|
|
—
|
|
|
0.1
|
|
|
56,645
|
|
|||||||
Georgia
|
12/14/15
|
|
14.0
|
|
|
(0.2
|
)
|
|
—
|
|
|
13.8
|
|
|
4.4
|
|
|
0.4
|
|
|
9.0
|
|
|
58,030
|
|
|||||||
Total dispositions
|
|
158.0
|
|
|
(4.9
|
)
|
|
—
|
|
|
153.1
|
|
|
82.9
|
|
|
3.3
|
|
|
66.9
|
|
|
534,074
|
|
||||||||
Mortgage note repayments
|
—
|
|
|
—
|
|
|
1.9
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
|
|
$
|
158.0
|
|
|
$
|
(4.9
|
)
|
|
$
|
1.9
|
|
|
$
|
155.0
|
|
|
$
|
82.9
|
|
|
$
|
3.3
|
|
|
$
|
66.9
|
|
|
534,074
|
|
(Dollars in millions)
|
Date
Disposed |
|
Sales Price
|
|
|
Closing Adjustments
|
|
|
Company-financed Mortgage
Notes |
|
|
Net
Proceeds |
|
|
Net Real
Estate Investment |
|
|
Other
(including receivables) |
|
|
Gain/
(Impairment) |
|
|
Square
Footage |
|
|||||||
Real estate dispositions
|
||||||||||||||||||||||||||||||||
Florida
(1)
|
4/11/14
|
|
$
|
1.8
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
1.7
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
52,608
|
|
Texas
(1)
|
4/23/14
|
|
4.4
|
|
|
(0.2
|
)
|
|
—
|
|
|
4.2
|
|
|
4.1
|
|
|
0.1
|
|
|
—
|
|
|
58,365
|
|
|||||||
Nevada
|
9/12/14
|
|
2.3
|
|
|
(0.2
|
)
|
|
(1.9
|
)
|
|
0.2
|
|
|
4.9
|
|
|
—
|
|
|
(2.8
|
)
|
|
31,026
|
|
|||||||
Tennessee
(2)
|
11/14/14
|
|
3.1
|
|
|
(0.2
|
)
|
|
—
|
|
|
2.9
|
|
|
3.2
|
|
|
0.1
|
|
|
(0.4
|
)
|
|
32,204
|
|
|||||||
Texas
(2)
|
11/25/14
|
|
21.5
|
|
|
—
|
|
|
—
|
|
|
21.5
|
|
|
12.1
|
|
|
0.2
|
|
|
9.2
|
|
|
166,167
|
|
|||||||
Missouri
(1)
|
12/18/14
|
|
1.3
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|
1.4
|
|
|
0.1
|
|
|
(0.2
|
)
|
|
26,166
|
|
|||||||
Illinois
(1)
|
12/29/14
|
|
0.5
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
0.8
|
|
|
—
|
|
|
(0.3
|
)
|
|
110,000
|
|
|||||||
Total dispositions
|
|
34.9
|
|
|
(0.7
|
)
|
|
(1.9
|
)
|
|
32.3
|
|
|
28.2
|
|
|
0.5
|
|
|
5.5
|
|
|
476,536
|
|
||||||||
Mortgage note repayments
|
—
|
|
|
—
|
|
|
4.9
|
|
|
4.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
|
|
$
|
34.9
|
|
|
$
|
(0.7
|
)
|
|
$
|
3.0
|
|
|
$
|
37.2
|
|
|
$
|
28.2
|
|
|
$
|
0.5
|
|
|
$
|
5.5
|
|
|
476,536
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31,
|
|||||||||
State
|
|
Property Type
(1)
|
|
Face Amount
|
|
|
Interest Rate
|
|
|
Maturity Date
|
|
2015
|
|
|
2014
|
|
|||
(dollars in thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Nevada
|
|
MOB
|
|
$
|
1,900
|
|
|
6.50
|
%
|
|
09/30/17
|
|
$
|
—
|
|
|
$
|
1,900
|
|
Total mortgage notes receivable
|
|
|
|
|
|
$
|
—
|
|
|
$
|
1,900
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
||
Balance Sheet data
(as of the period ended):
|
|
|
|
||||
Land
|
$
|
422
|
|
|
$
|
422
|
|
Buildings, improvements and lease intangibles
|
1,350
|
|
|
12,822
|
|
||
Personal property
|
—
|
|
|
13
|
|
||
|
1,772
|
|
|
13,257
|
|
||
Accumulated depreciation
|
(1,070
|
)
|
|
(4,464
|
)
|
||
Assets held for sale, net
|
702
|
|
|
8,793
|
|
||
Other assets, net (including receivables)
|
22
|
|
|
353
|
|
||
Assets of discontinued operations, net
|
22
|
|
|
353
|
|
||
Assets held for sale and discontinued operations, net
|
$
|
724
|
|
|
$
|
9,146
|
|
Accounts payable and accrued liabilities
|
$
|
28
|
|
|
$
|
86
|
|
Other liabilities
|
5
|
|
|
286
|
|
||
Liabilities of discontinued operations
|
$
|
33
|
|
|
$
|
372
|
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands, except per share data)
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Statements of Income data:
|
|
|
|
|
|
||||||
Revenues
(1)
|
|
|
|
|
|
||||||
Rental income
|
$
|
752
|
|
|
$
|
5,660
|
|
|
$
|
14,202
|
|
Other operating
|
—
|
|
|
4
|
|
|
9
|
|
|||
|
752
|
|
|
5,664
|
|
|
14,211
|
|
|||
Expenses
(2)
|
|
|
|
|
|
||||||
Property operating
|
58
|
|
|
3,126
|
|
|
4,830
|
|
|||
General and administrative
|
—
|
|
|
19
|
|
|
26
|
|
|||
Depreciation
|
—
|
|
|
1,551
|
|
|
3,794
|
|
|||
Amortization
|
—
|
|
|
—
|
|
|
63
|
|
|||
Bad debt, net of recoveries
|
(1
|
)
|
|
3
|
|
|
13
|
|
|||
|
57
|
|
|
4,699
|
|
|
8,726
|
|
|||
Other Income (Expense)
(3)
|
|
|
|
|
|
||||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
(270
|
)
|
|||
Interest expense
|
—
|
|
|
—
|
|
|
(40
|
)
|
|||
Interest and other income, net
|
20
|
|
|
2
|
|
|
71
|
|
|||
|
20
|
|
|
2
|
|
|
(239
|
)
|
|||
Income from Discontinued Operations
|
715
|
|
|
967
|
|
|
5,246
|
|
|||
Impairments
(4)
|
(686
|
)
|
|
(12,029
|
)
|
|
(9,889
|
)
|
|||
Gain on sales of real estate properties
(5)
|
10,571
|
|
|
9,283
|
|
|
24,718
|
|
|||
Income (Loss) from Discontinued Operations
|
$
|
10,600
|
|
|
$
|
(1,779
|
)
|
|
$
|
20,075
|
|
Income (Loss) from Discontinued Operations per Common Share - Basic
|
$
|
0.11
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.22
|
|
Income (Loss) from Discontinued Operations per Common Share - Diluted
|
$
|
0.11
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.22
|
|
(1)
|
Total revenues for the years ended
December 31, 2015
,
2014
and
2013
included
$0.8 million
,
$5.7 million
and
$14.0 million
, respectively, related to properties sold; and
$0.2 million
related to
one
property held for sale as of December 31, 2013.
|
(2)
|
Total expenses for the years ended
December 31, 2015
,
2014
and
2013
included
$0.1 million
,
$4.7 million
and
$8.7 million
, respectively, related to properties sold.
|
(3)
|
Other income (expense) for the years ended
December 31, 2015
,
2014
, and
2013
included income (expense) related to properties sold.
|
(4)
|
Impairments for the year ended
December 31, 2015
included
$0.7 million
related to
one
property held for sale.
December 31, 2014
included
$3.7 million
related to the sale of
three
properties and
$8.3 million
on
four
properties, classified as held for sale and subsequently sold in 2015;
December 31, 2013
included the following:
$3.3 million
related to the sale of a land parcel;
$0.4 million
related to
two
properties classified as held for sale and subsequently sold for a gain in 2014; and
$6.2 million
related to
three
properties held for sale.
|
(5)
|
Gain on sales of real estate properties for the years ended
December 31, 2015
,
2014
and
2013
included gains on the sale of
one
,
three
, and
12
properties, respectively.
|
|
December 31,
|
||||||
(Dollars in millions)
|
2015
|
|
|
2014
|
|
||
Prepaid assets
|
$
|
63.6
|
|
|
$
|
61.4
|
|
Straight-line rent receivables
|
60.4
|
|
|
52.6
|
|
||
Above-market intangible assets, net
|
17.3
|
|
|
17.3
|
|
||
Additional long-lived assets, net
|
14.8
|
|
|
14.4
|
|
||
Ground lease modification, net
|
11.2
|
|
|
11.7
|
|
||
Accounts receivable
|
8.8
|
|
|
8.7
|
|
||
Allowance for uncollectible accounts
|
(0.2
|
)
|
|
(0.5
|
)
|
||
Deferred financing costs, net
|
8.7
|
|
|
9.9
|
|
||
Goodwill
|
3.5
|
|
|
3.5
|
|
||
Customer relationship intangible assets, net
|
1.9
|
|
|
1.9
|
|
||
Other
|
2.9
|
|
|
4.4
|
|
||
|
$
|
192.9
|
|
|
$
|
185.3
|
|
|
Gross Balance at December 31,
|
|
Accumulated Amortization at December 31,
|
|
Weighted
Avg. Remaining Life
(Years)
|
|
Balance Sheet
Classification
|
||||||||||||
(Dollars in millions)
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|||||||
Goodwill
|
$
|
3.5
|
|
|
$
|
3.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
N/A
|
|
Other assets
|
Deferred financing costs
|
17.1
|
|
|
17.6
|
|
|
8.4
|
|
|
7.7
|
|
|
5.4
|
|
Other assets
|
||||
Above-market lease intangibles
|
21.8
|
|
|
20.9
|
|
|
4.5
|
|
|
3.6
|
|
|
53.8
|
|
Other assets
|
||||
Customer relationship intangibles
|
2.6
|
|
|
2.6
|
|
|
0.7
|
|
|
0.7
|
|
|
27.6
|
|
Other assets
|
||||
Below-market lease intangibles
|
(7.9
|
)
|
|
(7.6
|
)
|
|
(3.7
|
)
|
|
(3.0
|
)
|
|
13.9
|
|
Other liabilities
|
||||
At-market lease intangibles
|
78.9
|
|
|
75.6
|
|
|
35.0
|
|
|
31.8
|
|
|
6.4
|
|
Real estate properties
|
||||
|
$
|
116.0
|
|
|
$
|
112.6
|
|
|
$
|
44.9
|
|
|
$
|
40.8
|
|
|
17.8
|
|
|
(Dollars in millions)
|
Future Amortization of Intangibles, net
|
|
|
2016
|
$
|
13.3
|
|
2017
|
$
|
10.4
|
|
2018
|
$
|
8.0
|
|
2019
|
$
|
6.2
|
|
2020
|
$
|
4.5
|
|
|
December 31,
|
Maturity
Dates
|
|
Contractual
Interest Rates
|
|
|
Principal
Payments
|
|
Interest
Payments
|
||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
|
|
||||||||
Unsecured Credit Facility
|
$
|
206,000
|
|
|
$
|
85,000
|
|
4/17
|
|
LIBOR + 1.15%
|
|
|
At maturity
|
|
Quarterly
|
Unsecured Term Loan Facility
|
200,000
|
|
|
200,000
|
|
2/19
|
|
LIBOR + 1.20%
|
|
|
At maturity
|
|
Quarterly
|
||
Senior Notes due 2017, net of discount
|
—
|
|
|
299,308
|
|
—
|
|
6.50
|
%
|
|
At maturity
|
|
Semi-Annual
|
||
Senior Notes due 2021, net of discount
|
398,168
|
|
|
397,864
|
|
1/21
|
|
5.75
|
%
|
|
At maturity
|
|
Semi-Annual
|
||
Senior Notes due 2023, net of discount
|
248,435
|
|
|
248,253
|
|
4/23
|
|
3.75
|
%
|
|
At maturity
|
|
Semi-Annual
|
||
Senior Notes due 2025, net of discount
|
249,804
|
|
|
—
|
|
5/25
|
|
3.88
|
%
|
|
At maturity
|
|
Semi-Annual
|
||
Mortgage notes payable, net of discounts and including premiums
|
129,087
|
|
|
173,267
|
|
4/16-5/40
|
|
4.15%-7.63%
|
|
|
Monthly
|
|
Monthly
|
||
|
$
|
1,431,494
|
|
|
$
|
1,403,692
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
||
Senior Notes due 2017 face value
|
$
|
—
|
|
|
$
|
300,000
|
|
Unaccreted discount
|
—
|
|
|
(692
|
)
|
||
Senior Notes due 2017 carrying amount
|
$
|
—
|
|
|
$
|
299,308
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
||
Senior Notes due 2021 face value
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Unaccreted discount
|
(1,832
|
)
|
|
(2,136
|
)
|
||
Senior Notes due 2021 carrying amount
|
$
|
398,168
|
|
|
$
|
397,864
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
||
Senior Notes due 2023 face value
|
$
|
250,000
|
|
|
$
|
250,000
|
|
Unaccreted discount
|
(1,565
|
)
|
|
(1,747
|
)
|
||
Senior Notes due 2023 carrying amount
|
$
|
248,435
|
|
|
$
|
248,253
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
||
Senior Notes due 2025 face value
|
$
|
250,000
|
|
|
$
|
—
|
|
Unaccreted discount
|
(196
|
)
|
|
—
|
|
||
Senior Notes due 2025 carrying amount
|
$
|
249,804
|
|
|
$
|
—
|
|
|
December 31,
|
||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
||
Mortgage notes payable principal balance
|
$
|
128,161
|
|
|
$
|
172,530
|
|
Unamortized premium
|
2,705
|
|
|
3,205
|
|
||
Unaccreted discount
|
(1,779
|
)
|
|
(2,468
|
)
|
||
Mortgage notes payable carrying amount
|
$
|
129,087
|
|
|
$
|
173,267
|
|
|
Original Balance
|
|
|
Effective
Interest
Rate
(24)
|
|
|
Maturity
Date
|
|
Collateral
(25)
|
|
Principal and Interest
Payments (23)
|
|
|
Investment in Collateral at December 31,
|
|
|
Balance at December 31,
|
||||||||
(Dollars in millions)
|
|
|
|
|
|
2015
|
|
|
2015
|
|
|
2014
|
|
||||||||||||
Commercial Bank
(1)
|
$
|
17.4
|
|
|
6.48
|
%
|
|
5/15
|
|
MOB
|
|
Monthly/10-yr amort.
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14.8
|
|
Commercial Bank
(2)
|
12.0
|
|
|
6.11
|
%
|
|
7/15
|
|
2 MOBs
|
|
Monthly/10-yr amort.
|
|
|
—
|
|
|
—
|
|
|
10.1
|
|
||||
Life Insurance Co.
(3)
|
21.5
|
|
|
4.70
|
%
|
|
8/15
|
|
MOB
|
|
Monthly/25-yr amort.
|
|
|
—
|
|
|
—
|
|
|
16.6
|
|
||||
Investment Co.
(4)
|
4.6
|
|
|
5.25
|
%
|
|
9/15
|
|
MOB
|
|
Monthly/10-yr amort.
|
|
|
—
|
|
|
—
|
|
|
4.1
|
|
||||
Life Insurance Co.
(5)
|
15.1
|
|
|
5.49
|
%
|
|
1/16
|
|
MOB
|
|
Monthly/10-yr amort.
|
|
|
—
|
|
|
—
|
|
|
11.9
|
|
||||
Life Insurance Co.
(6)
|
13.9
|
|
|
4.70
|
%
|
|
1/16
|
|
MOB
|
|
Monthly/25-yr amort
|
|
|
—
|
|
|
—
|
|
|
11.0
|
|
||||
Commercial Bank
(7)
|
13.1
|
|
|
5.00
|
%
|
|
4/16
|
|
MOB
|
|
Monthly/25-yr amort.
|
|
|
20.1
|
|
|
10.3
|
|
|
10.7
|
|
||||
Commercial Bank
(8)
|
8.1
|
|
|
4.54
|
%
|
|
8/16
|
|
MOB
|
|
Monthly/10-yr amort
|
|
|
15.7
|
|
|
7.4
|
|
|
7.5
|
|
||||
Commercial Bank
(9)
|
18.3
|
|
|
5.00
|
%
|
|
12/16
|
|
MOB
|
|
Monthly/30-yr amort.
|
|
|
34.5
|
|
|
16.0
|
|
|
16.5
|
|
||||
Life Insurance Co.
|
4.7
|
|
|
7.77
|
%
|
|
1/17
|
|
MOB
|
|
Monthly/20-yr amort
|
|
|
12.4
|
|
|
0.4
|
|
|
0.9
|
|
||||
Life Insurance Co.
|
7.0
|
|
|
5.53
|
%
|
|
1/18
|
|
MOB
|
|
Monthly/15-yr amort
|
|
|
13.7
|
|
|
1.4
|
|
|
1.9
|
|
||||
Insurance Co.
(10)
|
7.3
|
|
|
5.10
|
%
|
|
12/18
|
|
MOB
|
|
Monthly/25-yr amort.
|
|
|
14.1
|
|
|
6.5
|
|
|
6.8
|
|
||||
Commercial Bank
(11)
|
9.5
|
|
|
5.07
|
%
|
|
3/19
|
|
MOB
|
|
Monthly/5-yr amort.
|
|
|
13.8
|
|
|
9.7
|
|
|
—
|
|
||||
Commercial Bank
(12)
|
9.4
|
|
|
4.17
|
%
|
|
7/19
|
|
MOB
|
|
Monthly/8-yr amort
|
|
|
27.8
|
|
|
9.6
|
|
|
—
|
|
||||
Commercial Bank
(13)
|
15.2
|
|
|
7.65
|
%
|
|
7/20
|
|
MOB
|
|
(22
|
)
|
|
20.1
|
|
|
12.7
|
|
|
12.7
|
|
||||
Life Insurance Co.
(14)
|
7.9
|
|
|
4.00
|
%
|
|
8/20
|
|
MOB
|
|
Monthly/15-yr amort.
|
|
|
20.7
|
|
|
3.3
|
|
|
4.0
|
|
||||
Life Insurance Co.
(15)
|
7.3
|
|
|
4.86
|
%
|
|
8/20
|
|
MOB
|
|
Monthly/27-yr amort.
|
|
|
17.9
|
|
|
6.9
|
|
|
7.1
|
|
||||
Commercial Bank
(16)
|
12.9
|
|
|
6.43
|
%
|
|
2/21
|
|
MOB
|
|
Monthly/12-yr amort.
|
|
|
20.8
|
|
|
10.9
|
|
|
11.0
|
|
||||
Financial Services
(17)
|
9.7
|
|
|
4.32
|
%
|
|
9/24
|
|
MOB
|
|
Monthly/10-yr amort
|
|
|
16.1
|
|
|
9.4
|
|
|
—
|
|
||||
Commercial Bank
(18)
|
15.0
|
|
|
5.25
|
%
|
|
4/27
|
|
MOB
|
|
Monthly/20-yr amort.
|
|
|
33.4
|
|
|
11.2
|
|
|
11.9
|
|
||||
Commercial Bank
|
1.8
|
|
|
5.55
|
%
|
|
10/30
|
|
OTH
|
|
Monthly/27-yr amort
|
|
|
7.9
|
|
|
1.4
|
|
|
1.5
|
|
||||
Municipal Government
(19) (20)
|
11.9
|
|
|
4.79
|
%
|
|
(21)
|
|
MOB
|
|
Semi-Annual
(21)
|
|
|
20.9
|
|
|
12.0
|
|
|
12.3
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
$
|
309.9
|
|
|
$
|
129.1
|
|
|
$
|
173.3
|
|
(1)
|
The Company repaid this mortgage note in January 2015.
|
(2)
|
The Company repaid this mortgage note in April 2015.
|
(3)
|
The Company repaid this mortgage note in May 2015.
|
(4)
|
The Company repaid this mortgage note in June 2015.
|
(5)
|
The Company repaid this mortgage note in December 2015.
|
(6)
|
The Company repaid this mortgage note in October 2015.
|
(7)
|
The unamortized portion of the
$0.2 million
premium recorded on this note upon acquisition is included in the balance above.
|
(8)
|
The unamortized portion of the
$0.5 million
premium recorded on this note upon acquisition is included in the balance above.
|
(9)
|
The unamortized portion of the
$0.5 million
premium recorded on this note upon acquisition is included in the balance above.
|
(10)
|
The unamortized portion of the
$0.6 million
premium recorded on this note upon acquisition is included in the balance above.
|
(11)
|
The unamortized portion of the
$0.2 million
premium recorded on this note upon acquisition is included in the balance above.
|
(12)
|
The unamortized portion of the
$0.3 million
premium recorded on this note upon acquisition is included in the balance above.
|
(13)
|
The unaccreted portion of a
$2.4 million
discount recorded on this note upon acquisition is included in the balance above.
|
(14)
|
The unamortized portion of the
$0.3 million
premium recorded on this note upon acquisition is included in the balance above.
|
(15)
|
The unamortized portion of the
$0.4 million
premium recorded on this note upon acquisition is included in the balance above.
|
(16)
|
The unaccreted portion of a
$1.0 million
discount recorded on this note upon acquisition is included in the balance above.
|
(17)
|
The unaccreted portion of the
$0.1 million
discount recorded on the note upon acquisition is included in the balance above.
|
(18)
|
The unamortized portion of the
$0.7 million
premium recorded on this note upon acquisition is included in the balance above.
|
(19)
|
Balance consists of
four
notes secured by the same building.
|
(20)
|
The unamortized portion of the
$1.0 million
premium recorded on the four notes upon acquisition is included in the balance above.
|
(21)
|
These
four
mortgage notes payable are series municipal bonds that have maturity dates ranging from from May 2017 to May 2040. The note payable with the earliest maturity date will require principal and interest payments while the remaining notes payable will require interest only payments. One of the notes payable matures in May 2017 and the remaining three have future maturity dates but allow repayment in May 2020 without penalty. The Company intends on repaying all three notes payable at that time.
|
(22)
|
Payable in monthly installments of interest only for
24
months and then installments of principal and interest based on an
11
-year amortization with the final payment due at maturity.
|
(23)
|
Payable in monthly installments of principal and interest with the final payment due at maturity (unless otherwise noted).
|
(24)
|
The contractual interest rates for the
19
outstanding mortgage notes ranged from
4.2%
to
7.6%
as of
December 31, 2015
.
|
(25)
|
MOB-Medical office building; OTH-Other.
|
(Dollars in thousands)
|
Principal
Maturities
|
|
|
Net Accretion/
Amortization
(1)
|
|
|
Notes and Bonds Payable
|
|
|
%
|
|
|||
2016
|
$
|
37,369
|
|
|
$
|
(24
|
)
|
|
$
|
37,345
|
|
|
2.6
|
%
|
2017
|
209,701
|
|
|
(338
|
)
|
|
209,363
|
|
|
14.6
|
%
|
|||
2018
|
8,966
|
|
|
(399
|
)
|
|
8,567
|
|
|
0.6
|
%
|
|||
2019
|
220,950
|
|
|
(616
|
)
|
|
220,334
|
|
|
15.4
|
%
|
|||
2020
|
20,987
|
|
|
(783
|
)
|
|
20,204
|
|
|
1.4
|
%
|
|||
2021 and thereafter
|
936,188
|
|
|
(507
|
)
|
|
935,681
|
|
|
65.4
|
%
|
|||
|
$
|
1,434,161
|
|
|
$
|
(2,667
|
)
|
|
$
|
1,431,494
|
|
|
100.0
|
%
|
(1)
|
Includes discount accretion and premium amortization related to the Company’s Senior Notes due 2021, Senior Notes due 2023, Senior Notes due 2025, and
16
mortgage notes payable.
|
(Dollars in thousands)
|
|
Location
|
|
December 31, 2015
|
|
|
Loss on forward starting interest rate swap agreements recognized in OCI
|
|
OCI
|
|
$
|
(1,684
|
)
|
Amount of loss reclassified from accumulated OCI into Income (effective portion)
|
|
Interest Expense
|
|
$
|
(115
|
)
|
Amount of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
|
|
Interest Expense
|
|
$
|
0
|
|
|
Year Ended December 31,
|
|||||||
|
2015
|
|
|
2014
|
|
|
2013
|
|
Balance, beginning of year
|
98,828,098
|
|
|
95,924,339
|
|
|
87,514,336
|
|
Issuance of common stock
|
2,493,171
|
|
|
3,073,445
|
|
|
8,293,369
|
|
Non-vested stock-based awards, net of withheld shares and forfeitures
|
195,740
|
|
|
(169,686
|
)
|
|
116,634
|
|
Balance, end of year
|
101,517,009
|
|
|
98,828,098
|
|
|
95,924,339
|
|
|
|
Shares Sold
|
|
|
Sales Price Per Share
|
|
Net Proceeds
(in millions)
|
|
|
2015
|
|
2,434,239
|
|
|
$25.00 - $29.15
|
|
$
|
65.8
|
|
2014
|
|
3,009,761
|
|
|
$24.35 - $27.53
|
|
$
|
75.7
|
|
2013
|
|
5,207,871
|
|
|
$24.19 - $30.49
|
|
$
|
140.6
|
|
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Net income attributable to common stockholders
|
|
$
|
69,436
|
|
|
$
|
31,887
|
|
|
$
|
6,946
|
|
Transfers to noncontrolling interest:
|
|
|
|
|
|
|
||||||
Net decrease in the Company's additional paid-in capital for purchase of subsidiary partnership interest
|
|
—
|
|
|
(6,577
|
)
|
|
—
|
|
|||
Net transfers to the noncontrolling interest
|
|
—
|
|
|
(6,577
|
)
|
|
—
|
|
|||
Change to the Company's total stockholders' equity from net income attributable to common stockholders and transfers to noncontrolling interest
|
|
$
|
69,436
|
|
|
$
|
25,310
|
|
|
$
|
6,946
|
|
(Dollars in thousands)
|
|
Forward Starting Swaps
|
|
|
Defined Benefit Pension Plan
|
|
|
Total
|
|
|||
Beginning balance
|
|
$
|
—
|
|
|
$
|
(2,519
|
)
|
|
$
|
(2,519
|
)
|
Other comprehensive loss before reclassifications
|
|
(1,684
|
)
|
|
—
|
|
|
(1,684
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income (loss)
|
|
115
|
|
|
2,519
|
|
|
2,634
|
|
|||
Net current-period other comprehensive income (loss)
|
|
(1,569
|
)
|
|
2,519
|
|
|
950
|
|
|||
Ending balance
|
|
$
|
(1,569
|
)
|
|
$
|
—
|
|
|
$
|
(1,569
|
)
|
Details about accumulated other comprehensive income (loss) components
|
|
Amount reclassified from accumulated other comprehensive income (loss)
|
|
|
Affected line item in the statement where net income is presented
|
|
(Dollars in thousands)
|
|
|
|
|
||
Amounts reclassified from accumulated other comprehensive income (loss) related to forward starting swaps
|
|
$
|
115
|
|
|
Interest Expense
|
Amounts reclassified from accumulated other comprehensive loss arising from settlement of defined benefit pension plan
|
|
2,519
|
|
|
Pension Termination
|
|
|
|
$
|
2,634
|
|
|
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Service cost
|
$
|
29
|
|
|
$
|
88
|
|
|
$
|
86
|
|
Interest cost
|
225
|
|
|
687
|
|
|
597
|
|
|||
Amortization of prior service cost (benefit)
|
(198
|
)
|
|
(1,189
|
)
|
|
(1,189
|
)
|
|||
Amortization of net gain (loss)
|
343
|
|
|
469
|
|
|
1,380
|
|
|||
|
399
|
|
|
55
|
|
|
874
|
|
|||
Net (gain) loss recognized in Accumulated other comprehensive income (loss)
|
—
|
|
|
2,570
|
|
|
(2,143
|
)
|
|||
Total recognized in net periodic benefit gain and Accumulated other comprehensive income (loss)
(1)
|
$
|
399
|
|
|
$
|
2,625
|
|
|
$
|
(1,269
|
)
|
(1)
|
2015 is a partial year due to the termination of the Executive Retirement Plan.
|
|
Year Ended December 31,
|
||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
||
Benefit obligation at beginning of year
|
$
|
16,473
|
|
|
$
|
13,890
|
|
Service cost
|
29
|
|
|
88
|
|
||
Interest cost
|
225
|
|
|
687
|
|
||
Benefits paid
|
(42
|
)
|
|
(42
|
)
|
||
Amortization of net gain/loss and prior service cost
|
145
|
|
|
—
|
|
||
Actuarial loss, net
|
—
|
|
|
1,850
|
|
||
Settlement loss
|
5,260
|
|
|
—
|
|
||
Amounts reclassified from accumulated other comprehensive loss arising from settlement on defined benefit pension plan
|
(2,519
|
)
|
|
—
|
|
||
Benefit obligation at end of year
|
$
|
19,571
|
|
|
$
|
16,473
|
|
|
Year Ended December 31,
|
||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
||
Net liabilities included in other liabilities
|
$
|
(19,571
|
)
|
|
$
|
(13,954
|
)
|
Amounts recognized in accumulated other comprehensive income (loss)
|
—
|
|
|
(2,519
|
)
|
|
2015
|
|
2014
|
|
2013
|
|
Discount rates
|
—
|
%
|
4.08
|
%
|
4.92
|
%
|
Compensation increases
|
—
|
%
|
2.7
|
%
|
2.7
|
%
|
•
|
On February 16, 2016, the Company granted cash incentive and non-vested performance-based awards totaling
$5.8 million
to its
five
named executive officers and
five
senior vice presidents. The officers could elect cash based awards or non-vested stock awards. Cash awards totaled
$1.1 million
. The non-vested awards, which the officers elected to receive in lieu of cash, had a grant date fair value totaling
$4.7 million
, which were granted in the form of
163,788
non-vested shares, with either a
three
- or
five
-year vesting period, resulting in annual compensation expense of
$1.1 million
for the years ended 2016, 2017, 2018 and
$0.7 million
for the years ended 2019 and 2020.
|
•
|
On December 18, 2015, the Company granted non-vested stock awards for TSR performance to its
five
named executive officers and
five
senior vice presidents with a grant date fair value totaling
$3.9 million
. The awards were granted in the form of
139,000
non-vested shares, with a
three
-year vesting period, which will result in annual compensation expense of
$1.3 million
for the years ended 2016, 2017 and 2018, respectively.
|
•
|
On
December 31, 2014
, the Company granted non-vested stock awards for TSR performance to its
five
named executive officers and
five
senior vice presidents with a grant date fair value totaling
$3.9 million
, which were granted in the form of
140,930
non-vested shares, with a
three
-year vesting period, which will result in annual compensation expense of
$1.3 million
for the years ended 2015, 2016 and 2017, respectively.
|
•
|
On
December 31, 2013
, the Company granted non-vested stock awards for TSR performances to its
five
named executive officers and
six
senior vice presidents with a grant date fair value totaling
$1.0 million
, which were granted in the form of
47,709
non-vested shares, with a
three
-year vesting period, which will result in annual compensation expense of
$0.3 million
for the years ended 2014, 2015 and 2016, respectively.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Stock-based awards, beginning of year
|
1,057,732
|
|
|
1,788,168
|
|
|
1,770,061
|
|
|||
Granted
|
251,789
|
|
|
269,129
|
|
|
134,752
|
|
|||
Vested
|
(210,955
|
)
|
|
(931,767
|
)
|
|
(116,645
|
)
|
|||
Forfeited
|
(6,304
|
)
|
|
(67,798
|
)
|
|
—
|
|
|||
Stock-based awards, end of year
|
1,092,262
|
|
|
1,057,732
|
|
|
1,788,168
|
|
|||
Weighted-average grant date fair value of:
|
|
|
|
|
|
||||||
Stock-based awards, beginning of year
|
$
|
24.01
|
|
|
$
|
23.81
|
|
|
$
|
23.97
|
|
Stock-based awards granted during the year
|
$
|
27.70
|
|
|
$
|
25.27
|
|
|
$
|
23.90
|
|
Stock-based awards vested during the year
|
$
|
25.05
|
|
|
$
|
24.13
|
|
|
$
|
26.35
|
|
Stock-based awards forfeited during the year
|
$
|
24.80
|
|
|
$
|
22.01
|
|
|
$
|
—
|
|
Stock-based awards, end of year
|
$
|
24.72
|
|
|
$
|
24.01
|
|
|
$
|
23.81
|
|
Grant date fair value of shares granted during the year
|
$
|
6,975,024
|
|
|
$
|
6,800,122
|
|
|
$
|
3,220,623
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Options outstanding, beginning of year
|
393,902
|
|
|
391,108
|
|
|
433,452
|
|
|||
Granted
|
197,640
|
|
|
275,655
|
|
|
246,717
|
|
|||
Exercised
|
(44,462
|
)
|
|
(51,078
|
)
|
|
(69,076
|
)
|
|||
Forfeited
|
(47,176
|
)
|
|
(63,908
|
)
|
|
(49,434
|
)
|
|||
Expired
|
(158,946
|
)
|
|
(157,875
|
)
|
|
(170,551
|
)
|
|||
Options outstanding and exercisable, end of year
|
340,958
|
|
|
393,902
|
|
|
391,108
|
|
|||
Weighted-average exercise price of:
|
|
|
|
|
|
||||||
Options outstanding, beginning of year
|
$
|
19.17
|
|
|
$
|
17.05
|
|
|
$
|
16.78
|
|
Options granted during the year
|
$
|
23.22
|
|
|
$
|
18.11
|
|
|
$
|
20.41
|
|
Options exercised during the year
|
$
|
19.41
|
|
|
$
|
17.76
|
|
|
$
|
17.09
|
|
Options forfeited during the year
|
$
|
19.90
|
|
|
$
|
18.58
|
|
|
$
|
17.98
|
|
Options expired during the year
|
$
|
20.41
|
|
|
$
|
15.80
|
|
|
$
|
17.99
|
|
Options outstanding, end of year
|
$
|
20.70
|
|
|
$
|
19.17
|
|
|
$
|
17.05
|
|
Weighted-average fair value of options granted during the year (calculated as of the grant date)
|
$
|
5.39
|
|
|
$
|
4.35
|
|
|
$
|
5.08
|
|
Intrinsic value of options exercised during the year
|
$
|
380,615
|
|
|
$
|
436,547
|
|
|
$
|
375,335
|
|
Intrinsic value of options outstanding and exercisable (calculated as of December 31)
|
$
|
2,597,238
|
|
|
$
|
3,209,456
|
|
|
$
|
1,665,331
|
|
Exercise prices of options outstanding (calculated as of December 31)
|
$
|
20.70
|
|
|
$
|
19.17
|
|
|
$
|
17.05
|
|
Weighted-average contractual life of outstanding options (calculated as of December 31, in years)
|
0.8
|
|
|
0.8
|
|
|
0.8
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
Risk-free interest rates
|
0.67
|
%
|
|
0.38
|
%
|
|
0.25
|
%
|
Expected dividend yields
|
4.79
|
%
|
|
4.94
|
%
|
|
5.17
|
%
|
Expected life (in years)
|
1.38
|
|
|
1.39
|
|
|
1.35
|
|
Expected volatility
|
21.0
|
%
|
|
23.0
|
%
|
|
25.6
|
%
|
Expected forfeiture rates
|
85
|
%
|
|
75
|
%
|
|
85
|
%
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands, except per share data)
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Weighted Average Common Shares
|
|
|
|
|
|
||||||
Weighted average Common Shares outstanding
|
100,280,059
|
|
|
97,093,960
|
|
|
92,725,112
|
|
|||
Non-vested shares
|
(1,108,707
|
)
|
|
(1,814,734
|
)
|
|
(1,784,485
|
)
|
|||
Weighted average Common Shares - Basic
|
99,171,352
|
|
|
95,279,226
|
|
|
90,940,627
|
|
|||
Weighted average Common Shares - Basic
|
99,171,352
|
|
|
95,279,226
|
|
|
90,940,627
|
|
|||
Dilutive effect of non-vested shares
|
623,212
|
|
|
1,364,236
|
|
|
—
|
|
|||
Dilutive effect of employee stock purchase plan
|
85,738
|
|
|
115,948
|
|
|
—
|
|
|||
Weighted average Common Shares - Diluted
|
99,880,302
|
|
|
96,759,410
|
|
|
90,940,627
|
|
|||
Net Income (loss)
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
58,836
|
|
|
$
|
33,979
|
|
|
$
|
(13,092
|
)
|
Noncontrolling interests’ share in earnings
|
—
|
|
|
(313
|
)
|
|
(37
|
)
|
|||
Income (loss) from continuing operations attributable to common stockholders
|
58,836
|
|
|
33,666
|
|
|
(13,129
|
)
|
|||
Discontinued operations
|
10,600
|
|
|
(1,779
|
)
|
|
20,075
|
|
|||
Net income attributable to common stockholders
|
$
|
69,436
|
|
|
$
|
31,887
|
|
|
$
|
6,946
|
|
Basic Earnings (loss) Per Common Share
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
0.59
|
|
|
$
|
0.35
|
|
|
$
|
(0.14
|
)
|
Discontinued operations
|
0.11
|
|
|
(0.02
|
)
|
|
0.22
|
|
|||
Net income attributable to common stockholders
|
$
|
0.70
|
|
|
0.33
|
|
|
0.08
|
|
||
Diluted Earnings (loss) Per Common Share
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
0.59
|
|
|
$
|
0.35
|
|
|
$
|
(0.14
|
)
|
Discontinued operations
|
0.11
|
|
|
(0.02
|
)
|
|
0.22
|
|
|||
Net income attributable to common stockholders
|
$
|
0.70
|
|
|
$
|
0.33
|
|
|
$
|
0.08
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
|
|
|||||||||||||||
(Dollars in thousands)
|
|
Number of Properties
|
|
Estimated Completion Date
|
|
Construction in Progress Fundings During the Twelve Months Ended
|
|
|
Total Funded During the Twelve Months Ended
|
|
|
Total Amount Funded
|
|
|
Estimated Remaining Fundings (unaudited)
|
|
|
Estimated Total Investment (unaudited)
|
|
|
Approximate Square Feet
|
|
|||||
Construction Activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Birmingham, AL
|
|
1
|
|
Q4 2015
(1)
|
|
$
|
—
|
|
|
$
|
6,880
|
|
|
$
|
6,880
|
|
|
$
|
8,520
|
|
|
$
|
15,400
|
|
|
138,000
|
|
Austin, TX
|
|
1
|
|
Q2 2016
|
|
3,316
|
|
|
3,316
|
|
|
3,316
|
|
|
2,259
|
|
|
5,575
|
|
|
12,900
|
|
|||||
Nashville, TN
|
|
2
|
|
Q1 2017
|
|
15,479
|
|
|
17,434
|
|
|
21,818
|
|
|
29,982
|
|
|
51,800
|
|
|
294,000
|
|
|||||
Denver, CO
|
|
1
|
|
Q2 2017
|
|
229
|
|
|
229
|
|
|
229
|
|
|
26,271
|
|
|
26,500
|
|
|
98,000
|
|
|||||
Total
|
|
|
|
|
|
$
|
19,024
|
|
|
$
|
27,859
|
|
|
$
|
32,243
|
|
|
$
|
67,032
|
|
|
$
|
99,275
|
|
|
542,900
|
|
2016
|
$
|
5,160
|
|
2017
|
5,225
|
|
|
2018
|
5,303
|
|
|
2019
|
5,399
|
|
|
2020
|
5,310
|
|
|
2021 and thereafter
|
289,686
|
|
|
|
$
|
316,083
|
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Net income attributable to common stockholders
|
$
|
69,436
|
|
|
$
|
31,887
|
|
|
$
|
6,946
|
|
Reconciling items to taxable income:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
30,457
|
|
|
28,332
|
|
|
26,240
|
|
|||
Gain or loss on disposition of depreciable assets
|
1,659
|
|
|
(4,940
|
)
|
|
(3,656
|
)
|
|||
Impairments
|
687
|
|
|
—
|
|
|
6,222
|
|
|||
Straight-line rent
|
(8,833
|
)
|
|
(12,203
|
)
|
|
(6,493
|
)
|
|||
Receivable allowances
|
571
|
|
|
2,074
|
|
|
(716
|
)
|
|||
Stock-based compensation
|
7,518
|
|
|
2,020
|
|
|
5,817
|
|
|||
Other
|
4,304
|
|
|
1,213
|
|
|
(1,866
|
)
|
|||
|
36,363
|
|
|
16,496
|
|
|
25,548
|
|
|||
Taxable income
(1)
|
$
|
105,799
|
|
|
$
|
48,383
|
|
|
$
|
32,494
|
|
Dividends paid
|
$
|
120,266
|
|
|
$
|
116,371
|
|
|
$
|
111,571
|
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
|
Per Share
|
|
|
%
|
|
|
Per Share
|
|
|
%
|
|
|
Per Share
|
|
|
%
|
|
|||
Common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Ordinary income
|
$
|
0.61
|
|
|
51.0
|
%
|
|
$
|
0.50
|
|
|
42.0
|
%
|
|
$
|
0.27
|
|
|
22.2
|
%
|
Return of capital
|
0.08
|
|
|
6.7
|
%
|
|
0.70
|
|
|
58.0
|
%
|
|
0.80
|
|
|
66.3
|
%
|
|||
Unrecaptured section 1250 gain
|
0.51
|
|
|
42.3
|
%
|
|
—
|
|
|
—
|
%
|
|
0.13
|
|
|
11.5
|
%
|
|||
Common stock distributions
|
$
|
1.20
|
|
|
100.0
|
%
|
|
$
|
1.20
|
|
|
100.0
|
%
|
|
$
|
1.20
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
State income tax expense:
|
|
|
|
|
|
||||||
Texas gross margins tax
(1)
|
$
|
528
|
|
|
$
|
694
|
|
|
$
|
649
|
|
Other
|
37
|
|
|
58
|
|
|
23
|
|
|||
Total state income tax expense
|
$
|
565
|
|
|
$
|
752
|
|
|
$
|
672
|
|
State income tax payments, net of refunds and collections
|
$
|
758
|
|
|
$
|
593
|
|
|
$
|
768
|
|
(1)
|
In the table above, income tax expense for 2015 and 2014 includes approximately
$50 thousand
that was recorded to the gain on sale of real estate properties sold, which is included in discontinued operations rather than general and administrative expenses on the Company’s Consolidated Statements of Income.
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
(Dollars in millions)
|
Carrying
Value
|
|
|
Fair
Value
|
|
|
Carrying
Value
|
|
|
Fair
Value
|
|
||||
Notes and bonds payable
(1)
|
$
|
1,431.5
|
|
|
$
|
1,443.8
|
|
|
$
|
1,403.7
|
|
|
$
|
1,438.8
|
|
Mortgage notes receivable
(2)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
1.9
|
|
|
Quarter Ended
|
||||||||||||||
(Dollars in thousands, except per share data)
|
March 31
(1)
|
|
|
June 30
(2)
|
|
|
September 30
(3)
|
|
|
December 31
(4)
|
|
||||
2015
|
|
|
|
|
|
|
|
||||||||
Revenues from continuing operations
|
$
|
96,456
|
|
|
$
|
96,708
|
|
|
$
|
96,725
|
|
|
$
|
98,582
|
|
Income from continuing operations
|
5,049
|
|
|
17,586
|
|
|
16,848
|
|
|
19,354
|
|
||||
Discontinued operations
|
333
|
|
|
330
|
|
|
10,632
|
|
|
(696
|
)
|
||||
Net income
|
5,382
|
|
|
17,916
|
|
|
27,480
|
|
|
18,658
|
|
||||
Less: (Income) from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income attributable to common stockholders
|
$
|
5,382
|
|
|
$
|
17,916
|
|
|
$
|
27,480
|
|
|
$
|
18,658
|
|
Net income attributable to common stockholders per share:
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
0.05
|
|
|
$
|
0.18
|
|
|
$
|
0.28
|
|
|
$
|
0.19
|
|
Diluted earnings per common share
|
$
|
0.05
|
|
|
$
|
0.18
|
|
|
$
|
0.27
|
|
|
$
|
0.19
|
|
|
Quarter Ended
|
||||||||||||||
(Dollars in thousands, except per share data)
|
March 31
(1)
|
|
|
June 30
(2)
|
|
|
September 30
(3)
|
|
|
December 31
(4)
|
|
||||
2014
|
|
|
|
|
|
|
|
||||||||
Revenues from continuing operations
|
$
|
90,571
|
|
|
$
|
91,671
|
|
|
$
|
93,612
|
|
|
$
|
95,001
|
|
Income from continuing operations
|
7,477
|
|
|
9,005
|
|
|
8,437
|
|
|
9,060
|
|
||||
Discontinued operations
|
(3,514
|
)
|
|
(2,994
|
)
|
|
(4,284
|
)
|
|
9,013
|
|
||||
Net income
|
3,963
|
|
|
6,011
|
|
|
4,153
|
|
|
18,073
|
|
||||
Less: Income from noncontrolling interests
|
(111
|
)
|
|
(40
|
)
|
|
(162
|
)
|
|
—
|
|
||||
Net income attributable to common stockholders
|
$
|
3,852
|
|
|
$
|
5,971
|
|
|
$
|
3,991
|
|
|
$
|
18,073
|
|
Net income attributable to common stockholders per share:
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
0.04
|
|
|
$
|
0.06
|
|
|
$
|
0.04
|
|
|
$
|
0.19
|
|
Diluted earnings per common share
|
$
|
0.04
|
|
|
$
|
0.06
|
|
|
$
|
0.04
|
|
|
$
|
0.18
|
|
Name
|
|
Age
|
|
|
Position
|
David R. Emery
|
|
71
|
|
|
Chairman of the Board & Chief Executive Officer
|
Scott W. Holmes
|
|
61
|
|
|
Executive Vice President & Chief Financial Officer (through February 29, 2016)
|
John M. Bryant, Jr.
|
|
49
|
|
|
Executive Vice President & General Counsel
|
B. Douglas Whitman, II
|
|
47
|
|
|
Executive Vice President - Corporate Finance
|
Todd J. Meredith
|
|
41
|
|
|
Executive Vice President - Investments
|
J. Christopher Douglas
|
|
40
|
|
|
Executive Vice President & Chief Financial Officer (effective March 1, 2016)
|
(a)
|
Index to Historical Financial Statements, Financial Statement Schedules and Exhibits
|
(1)
|
Financial Statements:
|
(3)
|
Exhibits:
|
Exhibit
Number
|
|
|
|
Description of Exhibits
|
|
1.1
|
|
—
|
|
|
Controlled Equity Offering Sales Agreement, dated as of March 29, 2013, between the Company and Cantor Fitzgerald & Co. (1)
|
1.2
|
|
—
|
|
|
Amendment to Controlled Equity Offering Sales Agreement, dated as of December 23, 2015, between the Company and Cantor Fitzgerald & Co. (2)
|
3.1
|
|
—
|
|
|
Second Articles of Amendment and Restatement of the Company, as amended. (3)
|
3.2
|
|
—
|
|
|
Amended and Restated Bylaws of the Company, as amended. (3)
|
4.1
|
|
—
|
|
|
Specimen stock certificate. (4)
|
4.2
|
|
—
|
|
|
Indenture, dated as of May 15, 2001 by and between the Company and Regions Bank, or trustee (as successor to the trustee named therein). (5)
|
4.3
|
|
—
|
|
|
Third Supplemental Indenture, dated December 4, 2009, by and between the Company and Regions Bank as Trustee. (6)
|
4.4
|
|
—
|
|
|
Form of 6.50% Senior Note due 2017 (set forth in Exhibit B to the Third Supplemental Indenture filed as Exhibit 4.2 thereto). (6)
|
4.5
|
|
—
|
|
|
Fourth Supplemental Indenture, dated December 13, 2010, by and between the Company and Regions Bank as Trustee. (7)
|
4.6
|
|
—
|
|
|
Form of 5.750% Senior Note due 2021 (set forth in Exhibit B to the Fourth Supplemental Indenture filed as Exhibit 4.2 thereto). (7)
|
4.7
|
|
—
|
|
|
Fifth Supplemental Indenture, dated March 26, 2013, by and between the Company and Regions Bank, as Trustee. (8)
|
4.8
|
|
—
|
|
|
Form of 3.75% Senior Note due 2023 (set forth in Exhibit B to the Fifth Supplemental Indenture filed as Exhibit (4.8) hereto). (8)
|
4.9
|
|
__
|
|
|
Sixth Supplemental Indenture, dated April 24, 2015, by and between the Company and Regions Bank, as Trustee. (9)
|
4.10
|
|
__
|
|
|
Form of 3.875% Senior Notes due 2025 (set forth in Exhibit B to the Sixth Supplemental Indenture filed as Exhibit 4.9 thereto). (9)
|
10.1
|
|
—
|
|
|
Second Amended and Restated Executive Retirement Plan. (10)
|
10.2
|
|
—
|
|
|
Amendment to Second Amended and Restated Executive Retirement Plan, dated as of October 30, 2012. (11)
|
10.3
|
|
__
|
|
|
Second Amendment to Second Amended and Restated Executive Retirement Plan, dated as of May 5, 2015. (12)
|
10.4
|
|
—
|
|
|
2000 Employee Stock Purchase Plan. (13)
|
10.5
|
|
—
|
|
|
Dividend Reinvestment Plan, as Amended. (14)
|
10.6
|
|
—
|
|
|
Second Amended and Restated Employment Agreement, dated July 31, 2012, between David R. Emery and the Company. (15)
|
10.7
|
|
—
|
|
|
Third Amended and Restated Employment Agreement, dated February 16, 2016, between David R. Emery and the Company. (filed herewith)
|
10.8
|
|
—
|
|
|
Second Amended and Restated Employment Agreement, dated July 31, 2012, between Scott W. Holmes and the Company. (15)
|
10.9
|
|
—
|
|
|
Second Amended and Restated Employment Agreement, dated July 31, 2012, between John M. Bryant and the Company. (15)
|
10.10
|
|
—
|
|
|
Third Amended and Restated Employment Agreement, dated February 16, 2016, between Todd J. Meredith and the Company. (filed herewith)
|
10.11
|
|
—
|
|
|
Second Amended and Restated Employment Agreement, dated July 31, 2012, between B. Douglas Whitman, II and the Company. (15)
|
10.12
|
|
—
|
|
|
Amended and Restated Employment Agreement, dated February 2, 2016, between J. Christopher Douglas and the Company. (16)
|
10.13
|
|
—
|
|
|
Healthcare Realty Trust Incorporated Amended and Restated Executive Incentive Plan. (filed herewith)
|
10.14
|
|
—
|
|
|
2010 Restricted Stock Implementation for Non-Employee Directors, dated May 4, 2010. (17)
|
10.15
|
|
—
|
|
|
Amendment No. 1 to 2010 Restricted Stock Implementation for Non-Employee Directors, dated December 11, 2013. (18)
|
10.16
|
|
—
|
|
|
Amendment No. 2 to 2010 Restricted Stock Implementation for Non-Employee Directors, dated August 4, 2015. (19)
|
10.17
|
|
—
|
|
|
Healthcare Realty Trust Incorporated Form of Restricted Stock Agreement for Non-Employee Directors. (15)
|
10.18
|
|
—
|
|
|
Healthcare Realty Trust Incorporated Form of Restricted Stock Agreement for Officers. (15)
|
10.19
|
|
—
|
|
|
Healthcare Realty Trust Incorporated 2015 Stock Incentive Plan. (20)
|
10.20
|
|
—
|
|
|
Amendment No. 1 to Healthcare Realty Trust Incorporated 2015 Stock Incentive Plan. (19)
|
10.21
|
|
—
|
|
|
Credit Agreement, dated as of October 14, 2011, by and among the Company, as Borrower, Wells Fargo Bank National Association, as Administrative Agent, JP Morgan Chase Bank, N.A., as Syndication Agent, Barclays Bank PLC, Credit Agricole Corporate and Investment Bank and Bank of America, N.A., as Co-Documentation Agents, and the other Lenders named therein. (21)
|
10.22
|
|
—
|
|
|
Amendment to Credit Agreement, dated as of February 15, 2013, by and among the Company, as Borrower, Wells Fargo Bank National Association, as Administrative Agent, JP Morgan Chase Bank, N.A., as Syndication Agent, Barclays Bank PLC, Credit Agricole Corporate and Investment Bank and Bank of American, N.A., as Co-Documentation Agents, and the other Lenders named therein. (22)
|
10.23
|
|
—
|
|
|
Amendment No. 2 to Credit Agreement, dated as of February 27, 2014, among the Company, Wells Fargo Bank, National Association, as Administrative Agent, and the other lenders that are party thereto. (23)
|
10.24
|
|
—
|
|
|
Term Loan Agreement, dated as of February 27, 2014, among the Company, Wells Fargo Bank, National Association, as Administrative Agent, and the other lenders that are party thereto. (23)
|
11
|
|
—
|
|
|
Statement re: computation of per share earnings (contained in Note 14 to the Notes to the Consolidated Financial Statements for the year ended December 31, 2013 in Item 8 to this Annual Report on Form 10-K).
|
21
|
|
—
|
|
|
Subsidiaries of the Registrant. (filed herewith)
|
23
|
|
—
|
|
|
Consent of BDO USA, LLP, independent registered public accounting firm. (filed herewith)
|
31.1
|
|
—
|
|
|
Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
|
31.2
|
|
—
|
|
|
Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
|
32
|
|
—
|
|
|
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)
|
99.1
|
|
—
|
|
|
Press release dated February 16, 2016. (filed herewith)
|
101.INS
|
|
—
|
|
|
XBRL Instance Document. (filed herewith)
|
101.SCH
|
|
—
|
|
|
XBRL Taxonomy Extension Schema Document. (filed herewith)
|
101.CAL
|
|
—
|
|
|
XBRL Taxonomy Extension Calculation Linkbase Document. (filed herewith)
|
101.LAB
|
|
—
|
|
|
XBRL Taxonomy Extension Labels Linkbase Document. (filed herewith)
|
101.DEF
|
|
—
|
|
|
XBRL Taxonomy Extension Definition Linkbase Document. (filed herewith)
|
101.PRE
|
|
—
|
|
|
XBRL Taxonomy Extension Presentation Linkbase Document. (filed herewith)
|
(1)
|
Filed as an exhibit to the Company’s Form 8-K filed March 29, 2013 and hereby incorporated by reference.
|
(2)
|
Filed as an exhibit to the Company's Form 8-K filed December 23, 2015 and hereby incorporated by reference.
|
(3)
|
Filed as an exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2015 and hereby incorporated by reference.
|
(4)
|
Filed as an exhibit to the Company's Registration Statement on Form S-11 (Registration No. 33-60506) previously filed pursuant to the Securities Act of 1933 and hereby incorporated by reference.
|
(5)
|
Filed as an exhibit to the Company's Form 8-K filed May 17, 2001 and hereby incorporated by reference.
|
(6)
|
Filed as an exhibit to the Company’s Form 8-K filed December 4, 2009 and hereby incorporated by reference.
|
(7)
|
Filed as an exhibit to the Company’s Form 8-K filed December 13, 2010 and hereby incorporated by reference.
|
(8)
|
Filed as an exhibit to the Company's Form 8-K filed March 26, 2013 and hereby incorporated by reference.
|
(9)
|
Filed as an exhibit to the Company’s Form 8-K filed April 24, 2015 and hereby incorporated by reference.
|
(10)
|
Filed as an exhibit to the Company’s Form 8-K filed December 31, 2008 and hereby incorporated by reference.
|
(11)
|
Filed as an exhibit to the Company's Form 10-Q for the quarter ended September 30, 2012 and hereby incorporated by reference.
|
(12)
|
Filed as an exhibit to the Company's Form 10-Q for the quarter ended March 31, 2015 and hereby incorporated by reference.
|
(13)
|
Filed as an exhibit to the Company’s Form 10-K for the year ended December 31, 1999 and hereby incorporated by reference.
|
(14)
|
Filed as an exhibit to the Company’s Registration Statement on Form S-3 (Registration No. 33-79452) previously filed on September 26, 2003 pursuant to the Securities Act of 1933 and hereby incorporated by reference.
|
(15)
|
Filed as an exhibit to the Company's Form 10-Q for the quarter ended June 30, 2012 and hereby incorporated by reference.
|
(16)
|
Filed as an exhibit to the Company's Form 8-K filed February 3, 2016 and hereby incorporated by reference.
|
(17)
|
Filed as an exhibit to the Company's Form 10-Q for the quarter ended March 31, 2010 and hereby incorporated by reference.
|
(18)
|
Filed as an exhibit to the Company’s Form 10-K for the year ended December 31, 2013 and hereby incorporated by reference.
|
(19)
|
Filed as an exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2015 and hereby incorporated by reference.
|
(20)
|
Filed as an exhibit to the Company's proxy statement filed March 30, 2015 and hereby incorporated by reference.
|
(21)
|
Filed as an exhibit to the Company's Form 8-K filed October 19, 2011 and hereby incorporated by reference.
|
(22)
|
Filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2012 and hereby incorporated by reference.
|
(23)
|
Filed as an exhibit to the Company's Form 8-K filed February 28, 2014 and hereby incorporated by reference.
|
1.
|
Second Amended and Restated Executive Retirement Plan (filed as Exhibit 10.1)
|
2.
|
Amendment to Second Amended and Restated Executive Retirement Plan, dated as of October 30, 2012 (filed as Exhibit 10.2)
|
3.
|
Second Amendment to Second Amended and Restated Executive Retirement Plan, dated as of May 5, 2015 (filed as Exhibit 10.3)
|
4.
|
2000 Employee Stock Purchase Plan (filed as Exhibit 10.4)
|
5.
|
Second Amended and Restated Employment Agreement, dated July 31, 2012, between David R. Emery and the Company (filed as Exhibit 10.6)
|
6.
|
Third Amended and Restated Employment Agreement, dated February 16, 2016, between David R. Emery and the Company (filed as Exhibit 10.7)
|
7.
|
Second Amended and Restated Employment Agreement, dated July 31, 2012, between Scott W. Holmes and the Company (filed as Exhibit 10.8)
|
8.
|
Second Amended and Restated Employment Agreement, dated July 31, 2012, between John M. Bryant and the Company (filed as Exhibit 10.9)
|
9.
|
Third Amended and Restated Employment Agreement, dated February 16, 2016, between Todd J. Meredith and the Company (filed as Exhibit 10.10)
|
10.
|
Second Amended and Restated Employment Agreement, dated July 31, 2012, between B. Douglas Whitman, II and the Company (filed as Exhibit 10.11)
|
11.
|
Amended and Restated Employment Agreement, dated February 2, 2016, between J. Christopher Douglas and the Company (filed as Exhibit 10.12)
|
12.
|
Healthcare Realty Trust Incorporated Amended and Restated Executive Incentive Plan (filed as Exhibit 10.13)
|
13.
|
2010 Restricted Stock Implementation for Non-Employee Directors, dated May 4, 2010 (filed as Exhibit 10.14)
|
14.
|
Amendment No. 1 to Restricted Stock Implementation for Non-Employee Directors (filed as Exhibit 10.15)
|
15.
|
Amendment No. 2 to Restricted Stock Implementation for Non-Employee Directors (filed as Exhibit 10.16)
|
16.
|
Healthcare Realty Trust Incorporated Form of Restricted Stock Agreement for Non-Employee Directors (filed as Exhibit 10.17)
|
17.
|
Healthcare Realty Trust Incorporated Form of Restricted Stock Agreement for Officers (filed as Exhibit 10.18)
|
18.
|
Healthcare Realty Trust Incorporated 2015 Stock Incentive Plan (filed as Exhibit 10.19)
|
19.
|
Amendment No. 1 to Healthcare Realty Trust Incorporated 2015 Stock Incentive Plan (filed as Exhibit 10.20)
|
|
HEALTHCARE REALTY TRUST INCORPORATED
|
||||
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ David R. Emery
|
|
|
|
|
|
David R. Emery
|
|
|
|
|
|
Chairman of the Board and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ David R. Emery
|
|
Chairman of the Board and Chief Executive
|
|
February 16, 2016
|
David R. Emery
|
|
Officer (Principal Executive Officer)
|
|
|
|
|
|
||
/s/ Scott W. Holmes
|
|
Executive Vice President and Chief Financial
|
|
February 16, 2016
|
Scott W. Holmes
|
|
Officer (Principal Financial Officer)
|
|
|
|
|
|
||
/s/ Amanda L. Callaway
|
|
Senior Vice President and Chief Accounting
|
|
February 16, 2016
|
Amanda L. Callaway
|
|
Officer (Principal Accounting Officer)
|
|
|
|
|
|
||
/s/ Errol L. Biggs, Ph.D.
|
|
Director
|
|
February 16, 2016
|
Errol L. Biggs, Ph.D.
|
|
|
|
|
|
|
|
||
/s/ Charles Raymond Fernandez, M.D.
|
|
Director
|
|
February 16, 2016
|
Charles Raymond Fernandez, M.D.
|
|
|
|
|
|
|
|
||
/s/ Edwin B. Morris, III
|
|
Director
|
|
February 16, 2016
|
Edwin B. Morris, III
|
|
|
|
|
|
|
|
||
/s/ John Knox Singleton
|
|
Director
|
|
February 16, 2016
|
John Knox Singleton
|
|
|
|
|
|
|
|
||
/s/ Bruce D. Sullivan
|
|
Director
|
|
February 16, 2016
|
Bruce D. Sullivan
|
|
|
|
|
|
|
|
||
/s/ Roger O. West
|
|
Director
|
|
February 16, 2016
|
Roger O. West
|
|
|
|
|
|
|
|
||
/s/ Dan S. Wilford
|
|
Director
|
|
February 16, 2016
|
Dan S. Wilford
|
|
|
|
|
|
|
Balance at Beginning of Period
|
|
|
Additions and Deductions
|
|
Uncollectible Accounts Written-off
|
|
|
Balance at End of Period
|
|
|||||||||||
Description
|
|
|
Charged /(Credited) to Costs and Expenses
|
|
|
Charged to Other Accounts
|
|
|
|
|||||||||||||
2015
|
|
Accounts and notes receivable allowance
|
|
$
|
465
|
|
|
$
|
(194
|
)
|
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
179
|
|
2014
|
|
Accounts and notes receivable allowance
|
|
$
|
541
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
110
|
|
|
$
|
465
|
|
2013
|
|
Accounts and notes receivable allowance
|
|
$
|
740
|
|
|
$
|
185
|
|
|
$
|
—
|
|
|
$
|
384
|
|
|
$
|
541
|
|
|
|
|
Land
|
|
Buildings, Improvements, Lease Intangibles and CIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Property Type
|
Number of Properties
|
|
State
|
Initial Investment
|
|
|
Cost Capitalized Subsequent to Acquisition
|
|
|
Total
|
|
|
Initial Investment
|
|
|
Cost Capitalized Subsequent to Acquisition
|
|
|
Total
|
|
|
Personal Property
|
|
|
(2) (3) (5) (6) Total Property
|
|
|
(1) (3) Accumulated Depreciation
|
|
|
(4) Encumbrances
|
|
|
Date Acquired
|
|
Date Constructed
|
||||||||||
Medical office/outpatient
|
177
|
|
AL, AZ, CA, CO, DC, FL, GA, HI, IA, IL, IN, KS, LA, MD, MI, MN, MO, MS, NC, NV, OH, OK, OR, SC, SD, TN, TX, VA, WA
|
$
|
172,354
|
|
|
$
|
2,656
|
|
|
$
|
175,010
|
|
|
$
|
2,297,367
|
|
|
$
|
389,003
|
|
|
$
|
2,686,370
|
|
|
$
|
3,574
|
|
|
$
|
2,864,954
|
|
|
$
|
649,424
|
|
|
$
|
127,676
|
|
|
1993-2015
|
|
1905 -2015
|
Inpatient
|
13
|
|
AZ, CA, CO, MO, PA, TX
|
22,165
|
|
|
150
|
|
|
22,315
|
|
|
363,773
|
|
|
14,187
|
|
|
377,960
|
|
|
265
|
|
|
400,540
|
|
|
86,605
|
|
|
—
|
|
|
1994-2013
|
|
1983 -2013
|
||||||||||
Other
|
9
|
|
IA, IN, MI, TN, VA
|
1,609
|
|
|
73
|
|
|
1,682
|
|
|
66,574
|
|
|
6,339
|
|
|
72,913
|
|
|
625
|
|
|
75,220
|
|
|
22,886
|
|
|
1,411
|
|
|
1993-2014
|
|
1906 - 2008
|
||||||||||
Total Real Estate
|
199
|
|
|
196,128
|
|
|
2,879
|
|
|
199,007
|
|
|
2,727,714
|
|
|
409,529
|
|
|
3,137,243
|
|
|
4,464
|
|
|
3,340,714
|
|
|
758,915
|
|
|
129,087
|
|
|
|
|
|
||||||||||
Land Held for Develop.
|
—
|
|
|
17,452
|
|
|
—
|
|
|
17,452
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,452
|
|
|
140
|
|
|
—
|
|
|
|
|
|
||||||||||
Construction in Progress (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
19,024
|
|
|
|
|
19,024
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Corporate Property
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,490
|
|
|
5,490
|
|
|
3,941
|
|
|
—
|
|
|
|
|
|
||||||||||
Total Properties
|
199
|
|
|
$
|
213,580
|
|
|
$
|
2,879
|
|
|
$
|
216,459
|
|
|
$
|
2,727,714
|
|
|
$
|
409,529
|
|
|
$
|
3,156,267
|
|
|
$
|
9,954
|
|
|
$
|
3,382,680
|
|
|
$
|
762,996
|
|
|
$
|
129,087
|
|
|
|
|
|
(1)
|
Includes
one
asset held for sale as of
December 31, 2015
of approximately
$1.8 million
(gross) and accumulated depreciation of
$1.1 million
,
two
asset held for sale as of
December 31, 2014
of approximately
$13.3 million
(gross) and accumulated depreciation of
$4.5 million
; and
three
assets held for sale as of
December 31, 2013
of
$17.0 million
(gross) and accumulated depreciation of
$10.2 million
.
|
(2)
|
Total assets as of
December 31, 2015
have an estimated aggregate total cost of
$3.4 billion
for federal income tax purposes.
|
(3)
|
Depreciation is provided for on a straight-line basis on buildings and improvements over
3.3
to
39.0 years
, lease intangibles over to
1.9
to
93.1 years
, personal property over to
1.5
to
17.3
, and land improvements over
15.0
to
38.1
years.
|
(4)
|
Includes unamortized premium of
$2.7 million
and unaccreted discount of
$1.8 million
as of
December 31, 2015
.
|
(5)
|
Construction in progress includes
$5.8 million
of land.
|
(6)
|
A reconciliation of Total Property and Accumulated Depreciation for the twelve months ended
December 31, 2015
, 2014 and 2013 follows:
|
|
Year Ended
December 31, 2015
|
|
Year Ended
December 31, 2014
|
|
Year Ended
December 31, 2013
|
||||||||||||||||||
(Dollars in thousands)
|
Total Property
|
|
|
Accumulated Depreciation
|
|
|
Total Property
|
|
|
Accumulated Depreciation
|
|
|
Total Property
|
|
|
Accumulated Depreciation
|
|
||||||
Beginning Balance
|
$
|
3,271,536
|
|
|
$
|
705,135
|
|
|
$
|
3,084,166
|
|
|
$
|
642,320
|
|
|
$
|
2,830,931
|
|
|
$
|
586,920
|
|
Additions during the period:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real Estate acquired
|
231,463
|
|
|
114,673
|
|
|
166,290
|
|
|
2,272
|
|
|
314,159
|
|
|
1,046
|
|
||||||
Other improvements
|
—
|
|
|
—
|
|
|
55,340
|
|
|
105,257
|
|
|
58,849
|
|
|
97,255
|
|
||||||
Acquisition through Foreclosure
|
—
|
|
|
—
|
|
|
40,247
|
|
|
1,536
|
|
|
—
|
|
|
—
|
|
||||||
Land held for development
|
500
|
|
|
26
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
||||||
Construction in Progress
|
19,024
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Retirement/dispositions:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Real Estate
|
(139,741
|
)
|
|
(56,838
|
)
|
|
(74,507
|
)
|
|
(46,276
|
)
|
|
(111,656
|
)
|
|
(42,927
|
)
|
||||||
Disposal of previously consolidated VIE
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Land held for development
|
(102
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,117
|
)
|
|
—
|
|
||||||
Ending Balance
|
$
|
3,382,680
|
|
|
$
|
762,996
|
|
|
$
|
3,271,536
|
|
|
$
|
705,135
|
|
|
$
|
3,084,166
|
|
|
$
|
642,320
|
|
|
Year Ended December 31,
|
||||||||||
(Dollars in thousands)
|
2015
|
|
|
2014
|
|
|
2013
|
|
|||
Balance at beginning of period
|
$
|
1,900
|
|
|
$
|
125,547
|
|
|
$
|
162,191
|
|
Additions during period:
|
|
|
|
|
|
||||||
New or acquired mortgages
|
—
|
|
|
1,900
|
|
|
4,241
|
|
|||
Increased funding on existing mortgages
|
—
|
|
|
1,244
|
|
|
58,731
|
|
|||
|
—
|
|
|
3,144
|
|
|
62,972
|
|
|||
Deductions during period:
|
|
|
|
|
|
||||||
Principal repayments and reductions
(1)
|
(1,900
|
)
|
|
(5,605
|
)
|
|
(2,413
|
)
|
|||
Principal reductions due to acquisitions
(2) (3)
|
—
|
|
|
(81,213
|
)
|
|
(97,203
|
)
|
|||
Foreclosed mortgage note receivable
(4)
|
—
|
|
|
(39,973
|
)
|
|
—
|
|
|||
|
(1,900
|
)
|
|
(126,791
|
)
|
|
(99,616
|
)
|
|||
Balance at end of period
|
$
|
—
|
|
|
$
|
1,900
|
|
|
$
|
125,547
|
|
(1)
|
Principal repayments for the years ended December 31, 2015, 2014 and 2013 include unscheduled principal reductions on mortgage notes of
$1.9 million
,
$5.6 million
and
$2.4 million
, respectively.
|
(2)
|
In September 2013, the Company acquired an orthopedic facility in Missouri for
$102.6 million
, including the elimination of the construction mortgage note receivable totaling
$97.2 million
.
|
(3)
|
I
n May 2014, the Company acquired a medical office building in Oklahoma for
$85.4 million
, including the elimination of the construction mortgage note receivable totaling
$81.2 million
and cash consideration of approximately
$4.1 million
.
|
(4)
|
In March 2014, the Company acquired a medical office building in Iowa in satisfaction of a
$40.0 million
mortgage note receivable that matured on January 10, 2014. The cash flows from the operations of the property were sufficient to pay the Company interest from the maturity date through the date of the transfer of ownership to the Company at the
7.7%
fixed interest rate plus an additional
3%
of interest for the default interest rate. The Company did not recognize any of the
$1.5 million
exit fee receivable that was due upon maturity of the mortgage note receivable.
|
Corporation:
|
|
|
|
Healthcare Realty Trust Incorporated
|
|
|
|
By:
|
/s/ John M. Bryant, Jr.
|
Name:
|
John M. Bryant, Jr.
|
Title:
|
Executive Vice President and General Counsel
|
Officer:
|
|
|
|
By:
|
/s/ David R. Emery
|
Name:
|
David R. Emery
|
Dated: ____________________, 20__
|
|
|
|
|
|
|
David R. Emery
|
Corporation:
|
|
|
|
Healthcare Realty Trust Incorporated
|
|
|
|
By:
|
/s/ David R. Emery
|
Name:
|
David R. Emery
|
Title:
|
Chairman and Chief Executive Officer
|
Officer:
|
|
|
|
By:
|
/s/ Todd J. Meredith
|
Name:
|
Todd J. Meredith
|
Dated: ____________________, 20__
|
|
|
|
|
|
|
Todd J. Meredith
|
|
TSR Percent Rank
|
Payout
|
1-Yr
|
3-Yr
|
Maximum
|
100
|
100%
|
1.50x
|
2.50x
|
|
95
|
95%
|
1.43x
|
2.38x
|
|
90
|
90%
|
1.35x
|
2.25x
|
|
85
|
85%
|
1.28x
|
2.13x
|
|
80
|
80%
|
1.20x
|
2.00x
|
|
75
|
75%
|
1.13x
|
1.88x
|
|
70
|
70%
|
1.05x
|
1.75x
|
|
65
|
65%
|
0.98x
|
1.63x
|
|
60
|
60%
|
0.90x
|
1.50x
|
Target
|
55
|
55%
|
0.83x
|
1.38x
|
|
50
|
45%
|
0.68x
|
1.13x
|
|
45
|
|||
|
40
|
35%
|
0.53x
|
0.88x
|
|
35
|
|||
Threshold
|
30
|
25%
|
0.38x
|
0.63x
|
|
25
|
|||
|
20
|
0.00%
|
0.00x
|
0.00x
|
|
15
|
|||
|
10
|
|||
|
5
|
|||
|
0
|
|
TSR Percent Rank
|
Payout
|
1-Yr
|
3-Yr
|
Maximum
|
100
|
100%
|
1.00x
|
1.75x
|
|
95
|
95%
|
0.95x
|
1.66x
|
|
90
|
90%
|
0.90x
|
1.58x
|
|
85
|
85%
|
0.85x
|
1.49x
|
|
80
|
80%
|
0.80x
|
1.40x
|
|
75
|
75%
|
0.75x
|
1.31x
|
|
70
|
70%
|
0.70x
|
1.23x
|
|
65
|
65%
|
0.65x
|
1.14x
|
|
60
|
60%
|
0.60x
|
1.05x
|
Target
|
55
|
55%
|
0.55x
|
0.96x
|
|
50
|
45%
|
0.45x
|
0.79x
|
|
45
|
|||
|
40
|
35%
|
0.35x
|
0.61x
|
|
35
|
|||
Threshold
|
30
|
25%
|
0.25x
|
0.44x
|
|
25
|
|||
|
20
|
0.00%
|
0.00x
|
0.00x
|
|
15
|
|||
|
10
|
|||
|
5
|
|||
|
0
|
Subsidiary
|
State of Incorporation
|
5901 Westown Parkway MOB, LLC
|
DE
|
593HR, LLC
|
TN
|
Allenmore C, LLC
|
DE
|
Ankeny North MOB, LLC
|
DE
|
Atrevis, LLC
|
TN
|
Clive Wellness Campus Building Two, LLC
|
DE
|
Clive Wellness Campus Building One, LLC
|
DE
|
Clive Wellness Campus Building Five, LLC
|
DE
|
Dallas County MOB, LLC
|
DE
|
Healthcare Acquisition of Texas, Inc.
|
AL
|
Healthcare Realty Services Incorporated
|
TN
|
HR 3705 Medical Parkway, LLC
|
DE
|
HR 601 Broadway Unit A, LLC
|
TN
|
HR 9191 Pinecroft Manager, LLC
|
DE
|
HR 9191 Pinecroft SPE, LLC
|
DE
|
HR-Pima, LLC
|
DE
|
HR Acquisition I Corporation
|
MD
|
HR Acquisition of Alabama, Inc.
|
AL
|
HR Acquisition of Pennsylvania, Inc.
|
PA
|
HR Acquisition of San Antonio, Ltd.
|
AL
|
HR Assets, LLC
|
DE
|
HR Briargate, LLC
|
DE
|
HR Carolinas Holdings, LLC
|
DE
|
HR Dakota, LLC
|
DE
|
HR First Hill Holdings, LLC
|
DE
|
HR First Hill Medical Building SPE, LLC
|
DE
|
HR Fridley, LLC
|
MN
|
HR HMP Unit 1 Manager, LLC
|
DE
|
HR HMP Unit 1 SPE, LLC
|
|
HR Interests, Inc.
|
TX
|
HR Ladco Holdings, LLC
|
DE
|
HR Lowry Medical Center SPE, LLC
|
DE
|
HR MAC II, LLC
|
DE
|
HR McNaughten SPE, LLC
|
DE
|
HR MRMC MOB II SPE, LLC
|
DE
|
HR MRMC MOB III SPE, LLC
|
DE
|
HR North Carolina, LLC
|
DE
|
HR of Carolinas, LLC
|
DE
|
HR of California, Inc.
|
AL
|
HR of Indiana, LLC
|
DE
|
HR of Iowa, LLC
|
DE
|
HR of Kingsport, LLC
|
AL
|
HR of Los Angeles, Inc.
|
AL
|
HR of Los Angeles, Ltd.
|
AL
|
HR of Sarasota, Ltd.
|
AL
|
HR Oregon MOB Venture, LLC
|
DE
|
HR Richmond Community SPE, LLC
|
DE
|
HR Richmond Manager, LLC
|
DE
|
HR Summit Crossing SPE, LLC
|
DE
|
HR Springfield MO, LLC
|
DE
|
HR St. Francis MOB I SPE, LLC
|
DE
|
HR St. Mary’s MOB NW SPE, LLC
|
DE
|
HR St. Mary’s MOB South SPE, LLC
|
DE
|
HR St. Mary’s MOB West SPE, LLC
|
DE
|
HR Three Tree, LLC
|
DE
|
HR Unity, LLC
|
TN
|
HR Washington MOB Venture, LLC
|
DE
|
HR West Hills Manager SPE, LLC
|
TN
|
HR West Hills MOB SPE, LLC
|
TN
|
HR West Des Moines SPE, LLC
|
DE
|
HRP MAC III, LLC
|
DE
|
HRT Holdings, Inc.
|
DE
|
HRT of Alabama, Inc.
|
AL
|
HRT of Delaware, Inc.
|
DE
|
HRT of Illinois, Inc.
|
DE
|
HRT of Louisiana, Inc.
|
LA
|
HRT of Mississippi, Inc.
|
DE
|
HRT of Roanoke, Inc.
|
VA
|
HRT of Tennessee, LLC
|
TN
|
HRT of Virginia, Inc.
|
VA
|
HRT Properties of Texas, Ltd.
|
TX
|
Lakewood MOB, LLC
|
DE
|
Oat Properties, LLC
|
TN
|
Pasadena Medical Plaza SSJ Ltd.
|
FL
|
Pennsylvania HRT, Inc.
|
PA
|
Roseburg Surgery Center, LLC
|
DE
|
Southwest General Medical Building (TX) SPE, LLC
|
DE
|
Stevens Pavilion LLC
|
DE
|
Stevens Pavilion Parent LLC
|
DE
|
West Norman SPE, LLC
|
TN
|
Yakima Valley Parent LLC
|
DE
|
Yakima Valley Subsidiary LLC
|
DE
|
1.
|
I have reviewed this annual report on Form 10-K of Healthcare Realty Trust Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 16, 2016
|
|
|
|
/s/ DAVID R. EMERY
|
|
|
David R. Emery
|
|
|
Chairman of the Board and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Healthcare Realty Trust Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
February 16, 2016
|
|
|
|
/s/ SCOTT W. HOLMES
|
|
|
Scott W. Holmes
|
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
February 16, 2016
|
|
|
|
/s/ DAVID R. EMERY
|
|
|
David R. Emery
|
|
|
Chairman of the Board and Chief Executive Officer
|
|
|
|
|
|
/s/ SCOTT W. HOLMES
|
|
|
Scott W. Holmes
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
HEALTHCAREREALTY.COM
|