Financial Data and Key Metrics Changes - Healthcare Realty reported pro forma FFO per share for Q3 2022 at $0.39, with a run rate FFO per share of $0.40, reflecting a significant impact from merger-related expenses [23][24] - The company realized $16.4 million in G&A synergies, which is 50% of the projected $33 million to $36 million in annual G&A savings, indicating strong operational efficiency post-merger [21][22] - Same-store NOI growth was 2.8% in Q3 2022, up from 2% a year ago, showing an acceleration in performance [27] Business Line Data and Key Metrics Changes - The company has made significant progress in asset sales, with 29 properties sold for a total of $922 million at a 4.6% cap rate, and expects to reach $1.1 billion in total dispositions by year-end [33][34] - The development pipeline has increased to $209 million, with a long-term embedded development pipeline of approximately $2 billion, indicating strong growth potential [36][37] Market Data and Key Metrics Changes - The medical office building (MOB) market is currently experiencing price discovery due to rising debt costs, with cap rates around 6% [34] - The company’s top 15 markets account for 60% of total NOI, with an average of 31 properties in these markets, enhancing its competitive position [15] Company Strategy and Development Direction - The company is focused on integration and organizational realignment, with nearly 50% of expected G&A savings already realized, and aims to boost NOI through operational efficiencies [12][21] - Healthcare Realty plans to selectively sell assets and reinvest proceeds into development projects, acquisitions, or stock repurchases, maintaining a patient approach in the current market [11][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth driven by occupancy gains, rent growth, and a robust development pipeline, expecting to generate the fastest growth in the medical office sector [18][19] - The company is actively monitoring interest rates and their impact on growth, indicating that a 1% increase in interest expense could reduce overall growth by about 1.5% [55][101] Other Important Information - The company has made strides in ESG efforts, achieving a GRESB score of 80 points, which is a notable improvement and positions it well among peers [19] - The company is implementing real-time electricity monitoring in properties, leading to an average 8% reduction in energy consumption, which is expected to further enhance operational efficiency [29] Q&A Session Summary Question: What is the rate on the new swaps? - The rate on the $250 million swaps is approximately 4.12%, bringing the fixed debt ratio to over 50% [47][48] Question: How should we think about the adjusted run rate FAD for next year? - The company views occupancy upside as a key growth driver, with expectations of 3% to 5% growth on fundamental contractual escalations and cash leasing spreads [53][54] Question: Can you elaborate on the leasing and operations teams' realignment? - The realignment focuses on leveraging top talent from both legacy companies to enhance efficiency and accelerate occupancy gains [60] Question: What are the realistic prospects for further dispositions in 2023? - The company anticipates a measured approach to dispositions, potentially in the $250 million to $300 million range, depending on market conditions [74] Question: What yields are expected from the $300 million development pipeline? - The targeted initial yield for developments is in the range of 7% to 8%, which is above the current cost of capital [84]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements, including balance sheets, income, comprehensive income, equity, and cash flow statements, reflecting significant changes due to the July 20, 2022 merger with HTA, accounted for as a reverse acquisition [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of September 30, 2022, shows significant increases in total assets, liabilities, real estate properties, notes and bonds payable, and stockholders' equity, primarily driven by the HTA merger Balance Sheet Highlights | Metric | September 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------------------- | :-------------------------------- | :--------------------------------- | | Total real estate properties, net | $12,716,543 | $3,766,199 | | Cash and cash equivalents | $57,583 | $13,175 | | Total assets | $14,195,443 | $4,258,919 | | Notes and bonds payable | $5,570,139 | $1,801,325 | | Total liabilities | $6,356,417 | $2,073,803 | | Total equity | $7,839,026 | $2,185,116 | [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The income statement reflects substantial increases in revenues and expenses for both the three and nine months ended September 30, 2022, largely due to the HTA merger, with net income turning positive for the three-month period Income Statement Highlights | Metric (in thousands) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Rental income | $298,931 | $131,746 | $578,052 | $388,620 | | Total revenues | $306,354 | $136,632 | $594,575 | $398,393 | | Property operating expenses | $112,473 | $55,518 | $226,947 | $159,241 | | Merger-related costs | $79,402 | — | $92,603 | — | | Depreciation and amortization | $158,117 | $50,999 | $267,889 | $150,904 | | Total expenses | $367,215 | $115,698 | $628,893 | $337,784 | | Gain on sales of real estate properties | $143,908 | $1,186 | $197,188 | $41,046 | | Interest expense | $(53,044) | $(13,334) | $(82,248) | $(39,857) | | Net income (loss) | $28,616 | $(2,066) | $76,973 | $45,052 | | Basic EPS | $0.08 | $(0.02) | $0.36 | $0.31 | | Diluted EPS | $0.08 | $(0.02) | $0.35 | $0.31 | [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for the three and nine months ended September 30, 2022, significantly increased compared to the prior year, primarily driven by net income and gains from interest rate swaps Comprehensive Income Highlights | Metric (in thousands) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income (loss) | $28,616 | $(2,066) | $76,973 | $45,052 | | Gains arising during the period on interest rate swaps | $6,083 | $36 | $12,905 | $2,079 | | Comprehensive income (loss) | $35,462 | $(899) | $92,550 | $50,471 | [Condensed Consolidated Statements of Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Total equity saw a substantial increase from December 31, 2021, to September 30, 2022, primarily due to the merger consideration transferred and additional paid-in capital, reflecting the reverse acquisition of HTA Equity Highlights | Metric (in thousands) | September 30, 2022 | December 31, 2021 | | :-------------------- | :----------------- | :---------------- | | Common Stock | $3,806 | $1,505 | | Additional Paid-In Capital | $9,586,556 | $3,972,917 | | Total Stockholders' Equity | $7,727,213 | $2,185,116 | | Non-controlling interest | $111,813 | — | | Total Equity | $7,839,026 | $2,185,116 | - Merger consideration transferred contributed **$5.58 billion** to total stockholders' equity and **$110.7 million** to non-controlling interest during the nine months ended September 30, 2022[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows from operating activities decreased, while investing activities generated a significant cash inflow, and financing activities resulted in a substantial outflow, largely influenced by the HTA merger and related debt and dividend payments Cash Flow Highlights | Metric (in thousands) | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $126,659 | $170,255 | | Net cash provided by (used in) investing activities | $1,425,834 | $(364,670) | | Net cash (used in) provided by financing activities | $(1,508,085) | $195,112 | | Cash and cash equivalents at end of period | $57,583 | $16,000 | - Investing activities included **$1.15 billion** cash assumed in the Merger and **$870.8 million** from sales of real estate properties in 2022[21](index=21&type=chunk) - Financing activities included a special dividend payment of **$1.12 billion** related to the Merger and net repayments on unsecured credit facility of **$154.4 million**[21](index=21&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the company's accounting policies, the significant impact of the HTA merger, real estate investment activities, lease accounting, other assets and liabilities, debt structure changes, derivative instruments, commitments, contingencies, and stockholders' equity [Note 1. Summary of Significant Accounting Policies](index=12&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's healthcare REIT business, basis of presentation, consolidation principles, use of estimates, and accounting for various revenue streams and financial instruments, including the impact of the HTA reverse acquisition - As of September 30, 2022, the Company had gross investments of approximately **$14.2 billion** in 695 real estate properties, construction in progress, redevelopments, financing receivables, financing lease right-of-use assets, land held for development and corporate property[24](index=24&type=chunk) - The Merger was treated as a 'reverse acquisition' where Legacy HR was the accounting acquirer, and its historical financial statements became the Company's historical financial statements[25](index=25&type=chunk) Other Revenue Streams | Type of Revenue (in thousands) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :----------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Parking income | $2,428 | $2,187 | $6,100 | $5,725 | | Management fee income | $1,426 | $723 | $2,864 | $1,381 | | Miscellaneous | $203 | $59 | $306 | $241 | | Total | $4,057 | $2,969 | $9,270 | $7,347 | [Note 2. Merger with HTA](index=15&type=section&id=Note%202.%20Merger%20with%20HTA) This note details the July 20, 2022 merger with HTA, accounted for as a reverse acquisition with Legacy HR as the accounting acquirer, leading to an UPREIT structure, significant asset and liability increases, and goodwill recognition - The Merger was completed on July 20, 2022, with Legacy HTA changing its name to Healthcare Realty Trust Incorporated and Legacy HR becoming HRTI, LLC, a wholly-owned subsidiary of the OP, forming an UPREIT structure[45](index=45&type=chunk)[47](index=47&type=chunk) - The Merger was treated as a 'reverse acquisition' for accounting purposes, with Legacy HR as the accounting acquirer, and its historical financial statements becoming those of the Combined Company[49](index=49&type=chunk) Merger Financial Impact | Metric (in thousands) | Amount | | :-------------------- | :----- | | Consideration transferred | $5,576,463 | | Total assets acquired | $11,177,186 | | Total liabilities assumed | $5,635,425 | | Net identifiable assets acquired | $5,541,761 | | Goodwill | $145,404 | - Merger-related costs totaled **$79.4 million** for the three months and **$92.6 million** for the nine months ended September 30, 2022, primarily for legal, consulting, and banking services[58](index=58&type=chunk) [Note 3. Real Estate Investments](index=18&type=section&id=Note%203.%20Real%20Estate%20Investments) The company engaged in significant real estate acquisition and disposition activities during the nine months ended September 30, 2022, including properties acquired in the merger and subsequently classified as held for sale Real Estate Acquisitions | Acquisition Type | Purchase Price (in thousands) | Square Footage | | :--------------- | :---------------------------- | :------------- | | Company Acquisitions | $377,190 | 786,704 | | Joint Venture Acquisitions | $100,975 | 214,124 | Real Estate Dispositions | Disposition Type | Sale Price (in thousands) | Square Footage | | :--------------- | :------------------------ | :------------- | | Total Dispositions | $892,447 | 1,991,669 | - Six properties were classified as assets held for sale as of September 30, 2022, with a net value of **$185.1 million**, compared to none at December 31, 2021[74](index=74&type=chunk) [Note 4. Leases](index=20&type=section&id=Note%204.%20Leases) The company operates as both a lessor and lessee, with significant increases in operating lease income and substantial future lease payment obligations for both properties and ground leases Lease Income and Expense | Metric (in thousands) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :-------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Operating lease income | $298,931 | $131,746 | $578,052 | $388,620 | | Total lease expense | $6,507 | $2,557 | $12,533 | $7,453 | Future Lease Payment Obligations | Future Lease Payments (in thousands) | Operating (Lessor) | Operating (Lessee) | Financing (Lessee) | | :----------------------------------- | :----------------- | :----------------- | :----------------- | | 2022 (remaining) | $243,946 | $3,665 | $503 | | 2023 | $937,733 | $15,606 | $2,139 | | 2027 and thereafter | $2,242,792 | $894,018 | $398,092 | - As of September 30, 2022, the Company had **243 properties** totaling **17.8 million square feet** under ground leases, with initial terms of **40 to 99 years**[79](index=79&type=chunk) [Note 5. Other Assets and Liabilities](index=23&type=section&id=Note%205.%20Other%20Assets%20and%20Liabilities) This note details the composition of 'Other assets, net' and 'Accounts payable and accrued liabilities' and 'Other liabilities' on the balance sheet, showing significant increases in most categories from December 31, 2021, to September 30, 2022, largely due to the merger Other Assets, Net | Other Assets (in thousands) | September 30, 2022 | December 31, 2021 | | :-------------------------- | :----------------- | :---------------- | | Above-market intangible assets, net | $86,410 | $4,966 | | Real estate notes receivable, net | $79,036 | — | | Interest rate swap assets | $16,136 | — | | Total Other assets, net | $438,235 | $185,673 | Accounts Payable and Accrued Liabilities | Accounts Payable & Accrued Liabilities (in thousands) | September 30, 2022 | December 31, 2021 | | :------------------------------------ | :----------------- | :---------------- | | Accrued property taxes | $86,192 | $35,295 | | Accounts payable and capital expenditures | $61,461 | $17,036 | | Total Accounts payable and accrued liabilities | $231,018 | $86,108 | Other Liabilities | Other Liabilities (in thousands) | September 30, 2022 | December 31, 2021 | | :------------------------------- | :----------------- | :---------------- | | Below-market intangible liabilities, net | $113,118 | $4,931 | | Deferred revenue | $60,675 | $45,130 | | Total Other liabilities | $203,398 | $67,387 | [Note 6. Notes and Bonds Payable](index=24&type=section&id=Note%206.%20Notes%20and%20Bonds%20Payable) The company's notes and bonds payable significantly increased due to debt instruments assumed in the HTA merger and new credit facilities, alongside an exchange offer for Legacy HR notes and mortgage note repayments Notes and Bonds Payable Details | Debt Instrument (in thousands) | Maturity Dates | Balance as of Sep 30, 2022 | Balance as of Dec 31, 2021 | Effective Interest Rate (Sep 30, 2022) | | :----------------------------- | :------------- | :------------------------- | :------------------------- | :------------------------------------- | | $1.5 billion Unsecured Credit Facility | 10/27 | $190,600 | — | 3.99 % | | $1.125 billion Asset Sale Term Loan | 7/24 | $421,919 | — | 4.07 % | | Senior Notes due 2026 | 8/26 | $569,786 | — | 4.94 % | | Total Notes and bonds payable | | $5,570,139 | $1,801,325 | | - The Company assumed **$2.55 billion** in Senior Notes as part of the Merger with Legacy HTA, including notes due 2026, 2027, 2030, and 2031[93](index=93&type=chunk) - Legacy HR's **$700.0 million** revolving credit facility was replaced by a **$1.5 billion** revolving credit facility, and existing term loans were restructured and assumed by the Borrower under the new Credit Facility[94](index=94&type=chunk)[96](index=96&type=chunk) [Note 7. Derivative Financial Instruments](index=26&type=section&id=Note%207.%20Derivative%20Financial%20Instruments) The company uses interest rate swaps as cash flow hedges to manage interest rate risk, with 15 outstanding derivatives having a net asset fair value of **$16.1 million** as of September 30, 2022 - The Company uses interest rate swaps to hedge variable cash flows associated with existing variable-rate debt, with gains or losses recorded in Accumulated Other Comprehensive Income (Loss) (AOCI)[97](index=97&type=chunk)[98](index=98&type=chunk) Interest Rate Swap Details | Expiration Date | Amount (in thousands) | Weighted Average Rate | | :-------------- | :-------------------- | :-------------------- | | December 16, 2022 | $75,000 | 2.37 % | | January 31, 2023 | $300,000 | 1.42 % | | January 15, 2024 | $200,000 | 1.21 % | | May 1, 2026 | $100,000 | 2.15 % | | Total | $675,000 | 1.57 % | - As of September 30, 2022, the fair value of interest rate swaps designated as hedging instruments was **$16.1 million** (asset position)[102](index=102&type=chunk) [Note 8. Commitments and Contingencies](index=28&type=section&id=Note%208.%20Commitments%20and%20Contingencies) The company is engaged in various medical office building development and redevelopment projects with significant funded costs, and is not aware of any material adverse legal proceedings - The Company is undertaking several development and redevelopment projects, including a **217,114 sq ft** medical office building in Dallas, TX (**$11.1 million** funded), a medical office building in Tacoma, WA (**$10.3 million** funded), and a new **106,194 sq ft** medical office building in Nashville, TN (**$15.3 million** funded)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) - A joint venture partnership is developing a **120,694 sq ft** medical office building in Raleigh, NC, with approximately **$15.3 million** funded by the joint venture[113](index=113&type=chunk) - The Company is not aware of any pending or threatened litigation that would have a material adverse effect on its financial position, results of operations, or cash flows[108](index=108&type=chunk) [Note 9. Stockholders' Equity](index=29&type=section&id=Note%209.%20Stockholders%20Equity) This note details changes in common stock, the ATM equity offering program, common stock dividends, EPS computation, and an overview of incentive plans including restricted shares and RSUs Common Stock Activity | Metric | Nine Months Ended Sep 30, 2022 | Twelve Months Ended Dec 31, 2021 | | :----------------------------- | :----------------------------- | :------------------------------- | | Balance, beginning of period | 150,457,433 | 139,487,375 | | Issuance of common stock | 229,615,152 | 10,899,301 | | Balance, end of period | 380,572,290 | 150,457,433 | - The Company declared and paid common stock dividends totaling **$0.93 per share** during the nine months ended September 30, 2022[118](index=118&type=chunk) Earnings Per Share | EPS Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Basic EPS | $0.08 | $(0.02) | $0.36 | $0.31 | | Diluted EPS | $0.08 | $(0.02) | $0.35 | $0.31 | [Note 10. Fair Value of Financial Instruments](index=31&type=section&id=Note%2010.%20Fair%20Value%20of%20Financial%20Instruments) This note describes the methods and assumptions for estimating the fair value of financial instruments, including a comparison of carrying and fair values for notes, bonds payable, and real estate notes receivable - Fair value for real estate notes receivable, senior notes, and mortgage notes payable is estimated using cash flow analyses based on current interest rates for similar arrangements[133](index=133&type=chunk) Fair Value of Financial Instruments | Financial Instrument (in millions) | September 30, 2022 Carrying Value | September 30, 2022 Fair Value | December 31, 2021 Carrying Value | December 31, 2021 Fair Value | | :------------------------------- | :-------------------------------- | :---------------------------- | :------------------------------- | :--------------------------- | | Notes and bonds payable | $5,570.1 | $5,321.0 | $1,801.3 | $1,797.4 | | Real estate notes receivable | $79.0 | $79.0 | — | — | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition and operating results, emphasizing the HTA merger's impact, discussing liquidity, capital resources, investing, financing, operating activities, key trends, and non-GAAP financial measures [Merger with Healthcare Trust of America](index=33&type=section&id=Merger%20with%20Healthcare%20Trust%20of%20America) The July 20, 2022 merger with HTA established an UPREIT structure, rebranded the entity, and resulted in Legacy HR's historical financial statements becoming the Company's due to reverse acquisition accounting - The Merger was completed on July 20, 2022, resulting in Legacy HTA changing its name to Healthcare Realty Trust Incorporated and Legacy HR becoming a wholly-owned subsidiary of the OP, operating under an UPREIT structure[139](index=139&type=chunk) - Legacy HR was the accounting acquirer in the reverse acquisition, meaning its historical financial statements became the historical financial statements of the Company[140](index=140&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity, supported by rent receipts and property sales, includes **$1.3 billion** available on its Credit Facility and **$57.6 million** in cash as of September 30, 2022, deemed adequate by management - As of September 30, 2022, the Company had **$1.3 billion** available to be drawn on its Credit Facility and **$57.6 million** in cash[142](index=142&type=chunk) - Primary sources of cash include rent receipts, proceeds from property sales, joint ventures, and public/private debt or equity offerings[142](index=142&type=chunk) - The Credit Facility was restructured in connection with the Merger, adding additional borrowing capacities[144](index=144&type=chunk) [Investing Activities](index=34&type=section&id=Investing%20Activities) Investing activities generated approximately **$1.4 billion** in cash flow for the nine months ended September 30, 2022, driven by significant real estate acquisitions and dispositions, including properties acquired and sold as part of the merger - Cash flows provided by investing activities for the nine months ended September 30, 2022, were approximately **$1.4 billion**[145](index=145&type=chunk) Real Estate Acquisitions | Acquisition Type | Purchase Price (in thousands) | Square Footage | | :--------------- | :---------------------------- | :------------- | | Company Acquisitions | $377,190 | 786,704 | | Joint Venture Acquisitions | $100,975 | 214,124 | Real Estate Dispositions | Disposition Type | Sales Price (in thousands) | Square Footage | | :--------------- | :------------------------- | :------------- | | Total Dispositions | $892,447 | 1,991,669 | [Capital Funding](index=36&type=section&id=Capital%20Funding) During the nine months ended September 30, 2022, capital funding included **$48.6 million** for development and redevelopment projects, **$26.0 million** for first-generation tenant improvements and capital expenditures for acquisitions, **$20.1 million** for second-generation tenant improvements, and **$23.2 million** for capital expenditures - Capital funding for the nine months ended September 30, 2022, included **$48.6 million** for development/redevelopment, **$26.0 million** for first-generation tenant improvements and planned capital expenditures for acquisitions, **$20.1 million** for second-generation tenant improvements, and **$23.2 million** for capital expenditures[154](index=154&type=chunk) [Financing Activities](index=36&type=section&id=Financing%20Activities) Cash flows used in financing activities totaled approximately **$1.5 billion** for the nine months ended September 30, 2022, primarily due to a special merger-related dividend and debt repayments, alongside an active ATM equity offering program - Cash flows used in financing activities for the nine months ended September 30, 2022, were approximately **$1.5 billion**[154](index=154&type=chunk) - The Company repaid mortgage notes totaling **$12.6 million** and **$6.4 million** in February 2022[156](index=156&type=chunk)[157](index=157&type=chunk) Interest Rate Swap Details | Interest Rate Swap (in thousands) | Expiration Date | Amount | Weighted Average Rate | | :-------------------------------- | :-------------- | :----- | :-------------------- | | Outstanding interest rate derivatives | January 31, 2023 | $300,000 | 1.42 % | | | December 16, 2022 | $75,000 | 2.37 % | | | January 15, 2024 | $200,000 | 1.21 % | | | May 1, 2026 | $100,000 | 2.15 % | | Total | | $675,000 | 1.57 % | [Operating Activities](index=37&type=section&id=Operating%20Activities) Cash flows provided by operating activities decreased to **$126.7 million** for the nine months ended September 30, 2022, from **$170.3 million** in the prior year, influenced by property operations, interest payments, and expense timing - Cash flows provided by operating activities decreased from **$170.3 million** for the nine months ended September 30, 2021, to **$126.7 million** for the nine months ended September 30, 2022[159](index=159&type=chunk) [Trends and Matters Impacting Operating Results](index=37&type=section&id=Trends%20and%20Matters%20Impacting%20Operating%20Results) Management identifies rising interest rates and capital market volatility as increasing capital costs, expects approximately **15%** annual lease expirations with **75-90%** retention, anticipates operating expense increases, and projects **$33 million to $36 million** in annual G&A expense synergies within a year of the merger - Rising interest rates and increased capital market volatility have increased the Company's cost and availability of debt and equity capital, potentially impacting financing and acquisition/development abilities[163](index=163&type=chunk) - Approximately **15%** of leases are expected to expire annually, with **477 leases** (**1.3 million sq ft**) expiring in Q4 2022, and the Company typically expects to retain **75% to 90%** of tenants[164](index=164&type=chunk) - The Company expects annual general and administrative expense synergies of **$33 million to $36 million** to be realized within a year from the closing of the Merger[166](index=166&type=chunk) [Non-GAAP Financial Measures and Key Performance Indicators](index=38&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Key%20Performance%20Indicators) Management utilizes non-GAAP financial measures like FFO, Normalized FFO, FAD, Cash NOI, and Same Store Cash NOI to evaluate operating performance and property-level results, acknowledging they are not GAAP substitutes Non-GAAP Performance Metrics | Metric (in thousands, except per share) | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :-------------------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | FFO attributable to common stockholders | $47,942 | $61,365 | $161,161 | $179,212 | | Normalized FFO attributable to common stockholders | $129,415 | $62,441 | $261,221 | $181,489 | | FAD | $100,450 | $48,605 | $214,526 | $150,353 | | FFO per common share - diluted | $0.14 | $0.42 | $0.76 | $1.26 | | Normalized FFO per common share - diluted | $0.39 | $0.43 | $1.23 | $1.27 | Same Store Cash NOI | Same Store Cash NOI (in thousands) | 2022 | 2021 | | :--------------------------------- | :-------- | :-------- | | Proforma same store cash NOI | $178,828 | $173,951 | - Same Store Cash NOI for the three months ended September 30, 2022, increased to **$178.8 million** from **$174.0 million** in the prior year, reflecting a **2.8%** growth[181](index=181&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) The company's results of operations for both the three and nine months ended September 30, 2022, were significantly impacted by the HTA merger, acquisitions, and capital market transactions, leading to substantial increases in revenues and expenses [Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021](index=41&type=section&id=Three%20Months%20Ended%20September%2030%2C%202022%20Compared%20to%20Three%20Months%20Ended%20September%2030%2C%202021) For the three months ended September 30, 2022, rental income surged by **126.9%**, property operating and G&A expenses more than doubled, and interest expense nearly quadrupled, all primarily due to the merger and associated **$79.4 million** in merger-related costs - Rental income increased **$167.2 million** (**126.9%**) for the three months ended September 30, 2022, with **$154.6 million** from the Merger[187](index=187&type=chunk) - Property operating expenses increased **$57.0 million** (**102.6%**), with **$51.3 million** from the Merger[189](index=189&type=chunk) - Merger-related costs totaled **$79.4 million**, and interest expense increased **$39.7 million** (**297.8%**), with **$22.8 million** from senior notes and unsecured term loans assumed in the Merger[189](index=189&type=chunk)[192](index=192&type=chunk) [Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021](index=43&type=section&id=Nine%20Months%20Ended%20September%2030%2C%202022%20Compared%20to%20Nine%20Months%20Ended%20September%2030%2C%202021) For the nine months ended September 30, 2022, rental income grew by **48.7%**, property operating and G&A expenses increased significantly, and interest expense more than doubled, all primarily driven by the merger and its **$92.6 million** in related costs - Rental income increased **$189.4 million** (**48.7%**) for the nine months ended September 30, 2022, with **$154.6 million** from the Merger[196](index=196&type=chunk)[197](index=197&type=chunk) - Property operating expenses increased **$67.7 million** (**42.5%**), with **$51.3 million** from the Merger[199](index=199&type=chunk) - Merger-related costs totaled **$92.6 million**, and interest expense increased **$42.4 million** (**106.4%**), with **$22.8 million** from senior notes and unsecured term loans assumed in the Merger[199](index=199&type=chunk)[202](index=202&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risk from changing interest rates on its debt and mortgage notes, which management actively monitors, with no material changes reported for the nine months ended September 30, 2022 - The Company is exposed to market risk from changing interest rates on its debt and mortgage notes[205](index=205&type=chunk) - No material changes in quantitative and qualitative disclosures about market risks were reported during the nine months ended September 30, 2022, compared to the Annual Report on Form 10-K for the year ended December 31, 2021[205](index=205&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2022, excluding Legacy HTA's acquired operations from the internal control assessment due to the recent merger - The Company's disclosure controls and procedures were effective as of September 30, 2022[206](index=206&type=chunk) - The acquired operations of Legacy HTA were excluded from management's assessment of internal control over financial reporting for the nine months ended September 30, 2022, due to the July 20, 2022 merger[207](index=207&type=chunk) [PART II - OTHER INFORMATION](index=46&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is occasionally involved in litigation in the ordinary course of business but is not aware of any pending or threatened litigation that would have a material adverse effect on its financial position, results of operations, or cash flows - The Company is not aware of any pending or threatened litigation that would have a material adverse effect on its consolidated financial position, results of operations, or cash flows[208](index=208&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) This section highlights various risks, including substantial merger integration expenses, business combination difficulties, key employee retention challenges, and the impact of significant indebtedness and rising interest rates on capital access and financial performance [Operational Risks](index=46&type=section&id=Operational%20Risks) Operational risks encompass substantial merger and integration expenses, potential difficulties in combining Legacy HR and Legacy HTA's businesses, and challenges in retaining key employees, all of which could disrupt operations and hinder synergy realization - The Company has incurred and expects to incur substantial expenses for completing and integrating the Merger, which may exceed anticipated savings[210](index=210&type=chunk)[211](index=211&type=chunk) - Potential difficulties in integrating Legacy HR and Legacy HTA include combining businesses, managing personnel from different locations, and integrating different histories, cultures, markets, and tenant bases[212](index=212&type=chunk) - The success of the Company after the Merger depends on its ability to retain key employees, who may depart due to integration uncertainties[214](index=214&type=chunk) [Regulatory and Legal Risks](index=48&type=section&id=Regulatory%20and%20Legal%20Risks) Regulatory and legal risks include counterparties exercising contractual rights due to the merger and inherent challenges in joint venture investments such as shared decision-making and reliance on partners' financial stability - Counterparties to certain agreements may exercise contractual rights (e.g., termination, repurchase, acceleration) in connection with the Merger, potentially impacting the Company adversely[219](index=219&type=chunk) - Joint venture investments involve risks such as lack of sole decision-making authority, reliance on partners' financial condition, potential impasses on decisions, and disputes[220](index=220&type=chunk) [Other Risks](index=48&type=section&id=Other%20Risks) Other risks include substantial indebtedness increasing borrowing costs and limiting capital access, the inability to secure additional financing or refinance debt, potential credit rating downgrades, and rising interest rates adversely impacting financial obligations and growth activities - The Company has substantial indebtedness and may incur more, which could reduce credit ratings, hinder adaptability, limit capital access, and increase vulnerability to economic downturns[222](index=222&type=chunk) - The unavailability of equity and debt capital, volatility in credit markets, and increases in interest rates could adversely affect the Company's ability to meet debt payments, pay dividends, or engage in acquisition and development activities[226](index=226&type=chunk) - Increases in interest rates, as seen with the Federal Reserve's actions in March 2022, will increase interest costs on new and existing variable debt, adversely impacting financing, acquisitions, and refinancing capabilities[228](index=228&type=chunk)[229](index=229&type=chunk) [Item 2. Unregistered Sales of Equity and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20and%20Use%20of%20Proceeds) The Board authorized a **$500.0 million** common stock repurchase program on August 2, 2022, with no shares repurchased under this new authorization as of the report date, though **2,018 shares** were purchased in September at an average price of **$24.14** - On August 2, 2022, the Board authorized the repurchase of up to **$500.0 million** of common stock, superseding previous authorizations[230](index=230&type=chunk) - As of the report date, no shares have been repurchased under the new authorization[230](index=230&type=chunk) Common Stock Repurchases | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :----------------- | :------------------------------- | :--------------------------- | | September 1 - 30 | 2,018 | $24.14 | [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the Merger Agreement, organizational documents, indentures for senior notes, credit and term loan agreements, employment agreements, and certifications - Key exhibits include the Agreement and Plan of Merger, various Articles of Amendment and Restatement, Indentures for Senior Notes, the Fourth Amended and Restated Revolving Credit and Term Loan Agreement, and employment agreements[232](index=232&type=chunk)[235](index=235&type=chunk) [SIGNATURE](index=56&type=section&id=SIGNATURE) The report is duly signed on behalf of Healthcare Realty Trust Incorporated by J. Christopher Douglas, Executive Vice President and Chief Financial Officer, on November 9, 2022 - The report was signed by J. Christopher Douglas, Executive Vice President and Chief Financial Officer, on November 9, 2022[241](index=241&type=chunk)

Financial Data and Key Metrics Changes - Healthcare Realty's normalized FFO per share increased by 4.7% from $0.21 to $0.45 in the second quarter [22] - FAD per share increased by 11% year-over-year, reducing the FAD payout ratio to 83% for the quarter [23] - Year-over-year quarterly same-store NOI growth for HR increased by 3.3%, driven by a 3.4% increase in revenue [23][24] Business Line Data and Key Metrics Changes - HTA's normalized FFO for the second quarter was $101 million or $0.43 per share, with a FAD payout ratio of 92% [23] - HR's cash leasing spreads for the second quarter were 3.4%, consistent with historical ranges [25] - There were 215,000 square feet of signed leases in the same-store portfolio in the process of build-out, representing 1.6% of total same-store square footage [25] Market Data and Key Metrics Changes - The combined portfolio now includes over 700 properties and 40 million square feet, with significant concentration in high-growth markets [8][10] - The company operates in dense, high-growth markets, with over 75% of properties located in attractive coastal and Sunbelt markets [10] Company Strategy and Development Direction - The company aims to increase scale through the combination with HTA, focusing on asset sales and joint ventures to fund a $1.1 billion special cash dividend [11][14] - Key performance indicators include asset sales, integration, leasing momentum, and relationships to drive growth [11] - The company plans to invest $500 million to $750 million in the low to mid-pods, funded largely through asset recycling [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for outpatient healthcare, driven by an aging population, which is expected to accelerate over the next decade [10] - The company anticipates solid occupancy and NOI improvement due to robust leasing activity and a focus on high-growth markets [11][12] - Management acknowledged the challenges in the current market but remains optimistic about achieving their strategic goals [33] Other Important Information - The company has a $500 million share repurchase program authorized by the board, aimed at opportunistic buybacks when valuations are attractive [28][78] - The company expects to maintain its legacy dividend policy and cadence moving forward [30] Q&A Session Summary Question: What is causing the delay in the $1.1 billion dispositions? - Management indicated that there hasn't been a material delay and that progress is on pace, with nearly half closed and the balance expected to close in August [33] Question: What is the long-term target for on-campus versus off-campus investments? - The company aims for a long-term target of about 75% on or adjacent to campus, with current levels at approximately 68% [35] Question: Can the company achieve a higher growth profile in the medical office sector? - Management believes they can sustain a 3%+ growth profile but does not expect to transform the medical office sector into a cyclical business [41] Question: How does the company plan to balance share buybacks with increased leverage? - The company plans to use disposition proceeds for share buybacks rather than increasing leverage, maintaining a target debt to EBITDA ratio of 6% to 6.5% [78] Question: What is the outlook for occupancy gains in the multi-tenant HTA portfolio? - Management is optimistic about occupancy gains due to a broker-oriented approach and increased scale in markets, with significant leases in the build-out process [81][84]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35568 (Healthcare Realty Trust Incorporated) HEALTHCARE REALTY TRUST INCORPORATED (Exact name of Registrant as ...

Company Overview - As of March 31, 2022, Healthcare Realty had an enterprise value of approximately $6 billion [2] - The company's portfolio included 263 properties across 23 states, totaling 179 million square feet [2, 71] - Healthcare Realty manages 148 million square feet internally [2, 71] - Medical office and outpatient properties constitute 96% of the portfolio [2] - 84% of the properties are on or adjacent to hospital campuses [2] Market Focus - The company has significant presence in top MSAs, including Seattle (134% of NOI), Dallas (118% of NOI), and Los Angeles (81% of NOI) [2] - 69% of the company's MOB/Outpatient square footage is located in the Top 25 MSAs [2] - 91% of the company's MOB/Outpatient square footage is located in the Top 50 MSAs [2] Portfolio Composition - 93% of Healthcare Realty's outpatient properties are associated with an investment-grade rated healthcare provider [3] - 584% of HR's total square footage is on-campus [15] - 254% of HR's total square footage is adjacent to campus [15] Investment and Development - The company's historical investment activity shows a cumulative new investment of $29 billion between 2014 and 2021 [40] - Acquisitions accounted for 92% ($2639 million) of these investments, while development projects made up 8% ($235 million) [40] - Healthcare Realty has an embedded re/development pipeline of $12 billion and expects annual starts of $75 million to $125 million [42]

________________________ FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35568 (Healthcare Trust of America, Inc.) Commission File Number: 333-190916 (Healthcare Trust of America Holdings, LP) _________________________ HEALTHCARE TRUST OF AMERICA, INC. HEALTHCARE TRUST OF AMERICA HOLDINGS, LP (Exact name of registrant as sp ...

Financial Data and Key Metrics Changes - The company reported a normalized FFO per share growth of 3.6% year-over-year to $0.43, with sequential quarterly FFO growth primarily driven by a $2.4 million contribution from net investment activity [33][34] - Same-store NOI growth was 2.9%, consistent with long-term historical norms, and same-store average occupancy increased 40 basis points to 89.2% [35][36] Business Line Data and Key Metrics Changes - Year-to-date acquisitions totaled $341 million at a blended cap rate of 5.1%, with a significant portion aligned with leading health systems [19][20] - Dispositions contributed $110 million at a blended cap rate of 4.2%, resulting in a positive rotation of 90 basis points between average sale cap rate and average acquisition cap rate [20] Market Data and Key Metrics Changes - The company is experiencing strong leasing interest from independent physician groups, with a record number of property tours in the first quarter [36] - The development pipeline is expanding, with $1.6 billion in projects slated to start later this year, driven by strong demand for space [9][22] Company Strategy and Development Direction - The strategic combination with HTA is expected to enhance growth, shifting from an average annual FAD per share growth of 4.5% to a range of 5% to 7% [12][13] - The focus is on forming more hospital-centric clusters, which will drive value for shareholders and increase market share [25][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategic combination with HTA, highlighting the potential for accelerated growth and increased stability [17][41] - The company anticipates steady absorption gains in the coming quarters based on constructive provider sentiment [8] Other Important Information - The company has secured commitments for a new $1.5 billion revolving credit facility and $1.5 billion of term loans to enhance liquidity [39][40] - A $500 million stock repurchase program has been authorized to reinvest proceeds accretively [15] Q&A Session Summary Question: Details on asset sales and joint ventures - Management confirmed that asset sales will primarily involve HTA assets, focusing on off-campus properties with longer lease terms [48][50] Question: Path to achieving Party F's offer - Management indicated confidence in exceeding Party F's unsolicited proposal through accelerated growth from the combination with HTA [51][54] Question: Impact of joint ventures on FAD accretion - Management stated that additional joint ventures and asset sales could add approximately 30 basis points to FAD accretion [58] Question: Tenant relationships regarding the strategic combination - Management noted excitement among tenants about the increased size and concentration of the portfolio, with no significant concerns raised [81] Question: Future Board composition post-merger - Management acknowledged the expanded Board size but emphasized the value of HTA board members and the intention to reduce the size over time [102][104]

Strategic Business Combination Healthcare Realty and Healthcare Trust of America February 28, 2022 Colorado Springs, Colorado San Francisco, California Miami, Florida Milwaukee, Wisconsin Chicago, Illinois Transaction Overview Healthcare Realty and Healthcare Trust of America enter into an $18 billion strategic combination, creating the preeminent medical office building REIT TRANSACT ION DETAIL MANAGEMENT AND GOVERNANCE RESULTS AND DIVIDEND APPROVALS AND EXPECTED TIMING • Total implied value of $35.08 per ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-35568 (Healthcare Trust of America, Inc.) Commission File Number: 333-190916 (Healthcare Trust of America Holdings, LP) HEALTHCARE TRUST OF AMERICA, I ...

Investor Presentation February 2022 HEALTHCARE REALTY This presentation contains disclosures that are "forward-looking statements" as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words and phrases such as "can," "may," "payable," "indicative," "predictive," "annualized," "expect, ...