UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~_________________________~~________________________

FORM 10-Q



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

For the quarterly period ended ~~September~~June 30, ~~2018~~2019



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

For the transition period from to

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

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

_________________________

HEALTHCARE TRUST OF AMERICA, INC.

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

(Exact name of registrant as specified in its charter)

~~16435 N. Scottsdale Road, Suite 320~~



16435 N. Scottsdale Road, Suite 320,	Scottsdale,	Arizona	85254		(480)	998-3478
(Address of Principal Executive Office and Zip Code)				(Registrant’s telephone number, including area code)
				(Registrant’s telephone number, including area code)

~~Scottsdale, Arizona 85254~~

~~(Address of principal executive offices)~~

~~(480) 998-3478~~

~~(Registrant’s telephone number, including area code)~~

www.htareit.com

(Internet address)

N/A

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

~~http://www.htareit.com~~Securities registered pursuant to Section 12(b) of the Act:

~~(Internet address)~~



Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	HTA	New York Stock Exchange

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



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

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



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

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



Healthcare Trust of America, Inc.	~~Large-accelerated filer~~ x☒	Large accelerated filer	☐	Accelerated filer¨	☐	Non-accelerated filer¨	~~Smaller reporting company~~ ¨	~~Emerging growth company~~ ¨
			~~(Do not check if a smaller reporting company)~~
Healthcare Trust of America Holdings, LP	☐	Large accelerated filer	☐	Accelerated filer	~~Large-accelerated filer~~ ¨☒	~~Accelerated filer~~ ¨	Non-accelerated filerx



Healthcare Trust of America, Inc.	☐	Smaller reporting company¨	☐	Emerging growth company¨
Healthcare Trust of America Holdings, LP	☐	Smaller reporting company	~~(Do not check if a smaller reporting company)~~☐		Emerging growth company

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



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

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



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

As of ~~October~~July 22, ~~2018,~~2019, there were ~~206,940,894~~205,158,581 shares of Class A common stock of Healthcare Trust of America, Inc. outstanding.

Explanatory Note

This quarterly report combines the Quarterly Reports on Form 10-Q (“Quarterly Report”) for the quarter ended ~~September~~June 30, ~~2018,~~2019, of Healthcare Trust of America, Inc. (“HTA”), a Maryland corporation, and Healthcare Trust of America Holdings, LP (“HTALP”), a Delaware limited partnership. Unless otherwise indicated or unless the context requires otherwise, all references in this Quarterly Report to “we,” “us,” “our,” “the Company” or “our Company” refer to HTA and HTALP, collectively, and all references to “common stock” shall refer to the Class A common stock of HTA.

HTA operates as a real estate investment trust (“REIT”) and is the general partner of HTALP. As of ~~September~~June 30, ~~2018,~~2019, HTA owned a 98.1% partnership interest in HTALP, and other limited partners, including some of HTA’s directors, executive officers and their affiliates, owned the remaining partnership interest (including the long-term incentive plan (“LTIP” Units)) in HTALP. As the sole general partner of HTALP, HTA has the full, exclusive and complete responsibility for HTALP’s day-to-day management and control, including its compliance with the Securities and Exchange Commission (“SEC”) filing requirements.

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

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

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

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

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

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

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

the condensed consolidated financial statements;

certain accompanying notes to the condensed consolidated financial statements, including Note 78 - Debt, Note 1112 - Stockholders’ Equity and Partners’ Capital, Note 1314 - Per Share Data of HTA, and Note 1415 - Per Unit Data of HTALP;

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

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

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

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

HEALTHCARE TRUST OF AMERICA, INC. AND

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

TABLE OF CONTENTS



		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	4
Healthcare Trust of America, Inc.
	Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018	4
	Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	5
	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	6
	Condensed Consolidated Statements of Equity for the ~~Nine~~Three and Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	7
	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	8
Healthcare Trust of America Holdings, LP
	Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017~~2018	9
	Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months ~~September~~Ended June 30, ~~2018~~2019 and ~~2017~~2018	10
	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	11
	Condensed Consolidated Statements of Changes in Partners’ Capital for the ~~Nine~~Three and Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	12
	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018	13
Notes for Healthcare Trust of America, Inc. and Healthcare Trust of America Holdings, LP
	Notes to Unaudited Condensed Consolidated Financial Statements	14
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3331
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43

PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	44
Item 4.1A.	~~Controls~~Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and ~~Procedures~~Use of Proceeds	44
Item 6.	Exhibits	44

~~PART II - OTHER INFORMATION~~Signatures
~~Item 1.~~	~~Legal Proceedings~~	45
~~Item 1A.~~	~~Risk Factors~~	45
~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	45
~~Item 6.~~	~~Exhibits~~	45

~~Signatures~~		46

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(Unaudited)


	September 30, 2018			December 31, 2017			June 30, 2019			December 31, 2018
ASSETS
Real estate investments:
Land	$	483,541		$	485,319		$	492,770		$	481,871
Building and improvements	5,743,439			5,830,824			5,886,129			5,787,152
Lease intangibles	604,215			639,199			598,022			599,864
Construction in progress	27,273			14,223			8,907			4,903
	6,858,468			6,969,565			6,985,828			6,873,790
Accumulated depreciation and amortization	(1,151,490		)	(1,021,691		)	(1,324,281		)	(1,208,169		)
Real estate investments, net	5,706,978			5,947,874			5,661,547			5,665,621
Investment in unconsolidated joint venture	67,592			68,577			66,731			67,172
Cash and cash equivalents	225,518			100,356			23,194			126,221
Restricted cash	14,639			18,204			5,950			7,309
Receivables and other assets, net	213,482			207,857			225,681			223,415
Right-of-use assets, net							245,495			—
Other intangibles, net	100,475			106,714			11,877			98,738
Total assets	$	6,328,684		$	6,449,582		$	6,240,475		$	6,188,476
LIABILITIES AND EQUITY
Liabilities:
Debt	$	2,609,659		$	2,781,031		$	2,567,008		$	2,541,232
Accounts payable and accrued liabilities	160,246			167,852			159,853			185,073
Derivative financial instruments - interest rate swaps	—			1,089
Security deposits, prepaid rent and other liabilities	55,753			61,222			41,241			59,567
Lease liabilities							200,842			—
Intangible liabilities, net	62,887			68,203			40,529			61,146
Total liabilities	2,888,545			3,079,397			3,009,473			2,847,018
Commitments and contingencies
Redeemable noncontrolling interests	6,610			6,737			—			6,544
Equity:
Preferred stock, $0.01 par value; 200,000,000 shares authorized; none issued and outstanding	—			—			—			—
Class A common stock, $0.01 par value; 1,000,000,000 shares authorized; 207,231,171 and 204,892,118 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively	2,072			2,049
Class A common stock, $0.01 par value; 1,000,000,000 shares authorized; 205,117,620 and 205,267,349 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively							2,051			2,053
Additional paid-in capital	4,574,913			4,508,528			4,521,103			4,525,969
Accumulated other comprehensive income	648			274
Accumulated other comprehensive (loss) income							(449		)	307
Cumulative dividends in excess of earnings	(1,224,006		)	(1,232,069		)	(1,369,763		)	(1,272,305		)
Total stockholders’ equity	3,353,627			3,278,782			3,152,942			3,256,024
Noncontrolling interests	79,902			84,666			78,060			78,890
Total equity	3,433,529			3,363,448			3,231,002			3,334,914
Total liabilities and equity	$	6,328,684		$	6,449,582		$	6,240,475		$	6,188,476

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

Table of Contents

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per share data)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Revenues:
Rental income	$	175,038		$	175,431		$	523,826		$	438,949		$	171,609		$	173,221		$	340,484		$	348,788
Interest and other operating income	97			563			302			1,271			148			111			239			205
Total revenues	175,135			175,994			524,128			440,220			171,757			173,332			340,723			348,993
Expenses:
Rental	55,789			56,331			165,364			138,874			52,938			53,553			104,406			109,575
General and administrative	8,770			8,283			26,281			25,178			10,079			8,725			21,369			17,511
Transaction	346			261			933			5,618			296			396			336			587
Depreciation and amortization	70,568			70,491			210,064			172,900			68,429			69,104			137,910			139,496
Interest expense													24,006			26,305			47,976			52,558
Impairment	4,281			—			8,887			5,093			—			—			—			4,606
Total expenses	139,754			135,366			411,529			347,663			155,748			158,083			311,997			324,333
Income before other income (expense)	35,381			40,628			112,599			92,557
Interest income (expense):
Interest related to derivative financial instruments	169			(264		)	297			(827		)
Gain on change in fair value of derivative financial instruments, net	—			—			—			884
Total interest related to derivative financial instruments, including net change in fair value of derivative financial instruments	169			(264		)	297			57
Interest related to debt	(25,003		)	(25,924		)	(77,689		)	(59,688		)
Gain on sale of real estate, net	166,372			—			166,372			3
Loss on extinguishment of debt, net	(1,092		)	(774		)	(1,092		)	(11,192		)
Loss on sale of real estate, net													—			—			(37		)	—
Income from unconsolidated joint venture	432			318			1,405			381			548			403			1,034			973
Other income (expense)	89			(27		)	129			(13		)
Other income													41			5			576			40
Net income	$	176,348		$	13,957		$	202,021		$	22,105		$	16,598		$	15,657		$	30,299		$	25,673
Net income attributable to noncontrolling interests ⁽¹⁾	(3,362		)	(194		)	(3,887		)	(715		)	(339		)	(311		)	(600		)	(525		)
Net income attributable to common stockholders	$	172,986		$	13,763		$	198,134		$	21,390		$	16,259		$	15,346		$	29,699		$	25,148
Earnings per common share - basic:
Net income attributable to common stockholders	$	0.83		$	0.07		$	0.96		$	0.12		$	0.08		$	0.07		$	0.14		$	0.12
Earnings per common share - diluted:
Net income attributable to common stockholders	$	0.82		$	0.07		$	0.94		$	0.12		$	0.08		$	0.07		$	0.14		$	0.12
Weighted average common shares outstanding:
Basic	207,513			200,674			205,950			173,189			205,108			205,241			205,094			205,155
Diluted	211,444			204,795			209,968			177,410			209,005			209,259			209,002			209,218
Dividends declared per common share	$	0.310		$	0.305		$	0.920		$	0.905

(1) Includes amounts attributable to redeemable noncontrolling interests.	(1) Includes amounts attributable to redeemable noncontrolling interests.												(1) Includes amounts attributable to redeemable noncontrolling interests.

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

Table of Contents

HEALTHCARE TRUST OF AMERICA, INC.

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

(In thousands)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018

Net income	$	176,348		$	13,957		$	202,021		$	22,105		$	16,598		$	15,657		$	30,299		$	25,673

Other comprehensive (loss) income
Change in unrealized (losses) gains on cash flow hedges	(732		)	205			382			(631		)	(381		)	214			(771		)	1,114
Total other comprehensive (loss) income	(732		)	205			382			(631		)	(381		)	214			(771		)	1,114

Total comprehensive income	175,616			14,162			202,403			21,474			16,217			15,871			29,528			26,787
Comprehensive income attributable to noncontrolling interests	(3,331		)	(170		)	(3,830		)	(619		)	(294		)	(301		)	(519		)	(499		)
Total comprehensive income attributable to common stockholders	$	172,285		$	13,992		$	198,573		$	20,855		$	15,923		$	15,570		$	29,009		$	26,288

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

Table of Contents

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In thousands)

(Unaudited)


	Class A Common Stock					Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Cumulative Dividends in Excess of Earnings			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity			Class A Common Stock					Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Cumulative Dividends in Excess of Earnings			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
	Shares		Amount			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Cumulative Dividends in Excess of Earnings			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity			Shares		Amount			Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)			Cumulative Dividends in Excess of Earnings			Total Stockholders’ Equity			Noncontrolling Interests			Total Equity
Balance as of December 31, 2016	141,719		$	1,417		$	2,754,818		$	—		$	(1,068,961	)	$	1,687,274		$	93,143		$	1,780,417
Issuance of common stock in HTA	58,623		586			1,623,636			—			—			1,624,222			—			1,624,222
Issuance of operating partnership units in HTALP in connection with an acquisition	—		—			—			—			—			—			610			610
Balance as of December 31, 2017																								204,892		$	2,049		$	4,508,528		$	274		$	(1,232,069	)	$	3,278,782		$	84,666		$	3,363,448
Share-based award transactions, net	234		3			5,490			—			—			5,493			—			5,493			289		3			3,504			—			—			3,507			—			3,507
Repurchase and cancellation of common stock	(116	)	(1		)	(3,412		)	—			—			(3,413		)	—			(3,413		)	(92	)	(1		)	(2,708		)	—			—			(2,709		)	—			(2,709		)
Redemption of noncontrolling interest and other	227		2			5,692			—			—			5,694			(5,694		)	—			91		1			2,412			—			—			2,413			(2,413		)	—
Dividends declared	—		—			—			—			(164,480		)	(164,480		)	(3,936		)	(168,416		)
Dividends declared ($0.305 per common share)																								—		—			—			—			(62,559		)	(62,559		)	(1,307		)	(63,866		)
Net income	—		—			—			—			21,390			21,390			635			22,025			—		—			—			—			9,802			9,802			181			9,983
Other comprehensive loss	—		—			—			(615		)	—			(615		)	(16		)	(631		)
Balance as of September 30, 2017	200,687		$	2,007		$	4,386,224		$	(615	)	$	(1,212,051	)	$	3,175,565		$	84,742		$	3,260,307

Balance as of December 31, 2017	204,892		$	2,049		$	4,508,528		$	274		$	(1,232,069	)	$	3,278,782		$	84,666		$	3,363,448
Other comprehensive income																								—		—			—			883			—			883			17			900
Balance as of March 31, 2018																								205,180		2,052			4,511,736			1,157			(1,284,826		)	3,230,119			81,144			3,311,263
Issuance of common stock in HTA	2,550		25			72,789			—			—			72,814			—			72,814			2,550		25			72,789			—			—			72,814			—			72,814
Share-based award transactions, net	323		3			7,827			—			—			7,830			411			8,241			7		—			2,196			—			—			2,196			—			2,196
Repurchase and cancellation of common stock	(729	)	(7		)	(19,424		)	—			—			(19,431		)	—			(19,431		)	(337	)	(3		)	(8,841		)	—			—			(8,844		)	—			(8,844		)
Redemption of noncontrolling interest and other	195		2			5,193			—			—			5,195			(5,195		)	—			93		1			2,493			—			—			2,494			(2,494		)	—
Dividends declared	—		—			—			—			(190,071		)	(190,071		)	(3,810		)	(193,881		)
Dividends declared ($0.305 per common share)																								—		—			—			—			(63,279		)	(63,279		)	(1,253		)	(64,532		)
Net income	—		—			—			—			198,134			198,134			3,822			201,956			—		—			—			—			15,346			15,346			297			15,643
Other comprehensive income	—		—			—			374			—			374			8			382			—		—			—			210			—			210			4			214
Balance as of September 30, 2018	207,231		$	2,072		$	4,574,913		$	648		$	(1,224,006	)	$	3,353,627		$	79,902		$	3,433,529
Balance as of June 30, 2018																								207,493		$	2,075		$	4,580,373		$	1,367		$	(1,332,759	)	$	3,251,056		$	77,698		$	3,328,754

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

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

Table of Contents

HEALTHCARE TRUST OF AMERICA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended September 30,						Six Months Ended June 30,
	2018			2017			2019			2018
Cash flows from operating activities:
Net income	$	202,021		$	22,105		$	30,299		$	25,673
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other	203,550			169,057
Depreciation and amortization							132,931			135,177
Share-based compensation expense	7,830			5,493			5,491			5,703
Impairment	8,887			5,093			—			4,606
Income from unconsolidated joint venture	(1,405		)	(381		)	(1,034		)	(973		)
Distributions from unconsolidated joint venture	1,680			—			1,335			975
Gain on sale of real estate, net	(166,372		)	(3		)
Loss on extinguishment of debt, net	1,092			11,192
Change in fair value of derivative financial instruments	—			(884		)
Loss on sale of real estate, net							37			—
Changes in operating assets and liabilities:
Receivables and other assets, net	(7,820		)	(19,854		)	457			(2,956		)
Accounts payable and accrued liabilities	(5,932		)	29,566			(23,262		)	(13,254		)
Prepaid rent and other liabilities	(2,780		)	7,158			2,483			1,157
Net cash provided by operating activities	240,751			228,542			148,737			156,108
Cash flows from investing activities:
Investments in real estate	(17,389		)	(2,357,570		)	(93,855		)	(11,887		)
Investment in unconsolidated joint venture	—			(68,839		)
Development of real estate	(29,593		)	(19,163		)	(4,627		)	(23,861		)
Proceeds from the sale of real estate	302,440			4,746			1,193			—
Capital expenditures	(61,136		)	(42,990		)	(37,763		)	(34,110		)
Collection of real estate notes receivable	524			—			365			347
Net cash provided by (used in) investing activities	194,846			(2,483,816		)
Net cash used in investing activities							(134,687		)	(69,511		)
Cash flows from financing activities:
Borrowings on unsecured revolving credit facility	145,000			515,000			135,000			85,000
Payments on unsecured revolving credit facility	(145,000		)	(528,000		)	(15,000		)	(85,000		)
Proceeds from unsecured senior notes	—			900,000
Payments on secured mortgage loans	(173,212		)	(75,444		)	(96,173		)	(99,218		)
Deferred financing costs	(782		)	(16,902		)
Debt extinguishment costs	(1,909		)	(10,391		)
Security deposits	499			1,932			—			222
Proceeds from issuance of common stock	72,814			1,624,222			—			72,814
Issuance of operating partnership units	411			—
Repurchase and cancellation of common stock	(19,431		)	(3,413		)	(12,095		)	(11,553		)
Dividends paid	(188,414		)	(145,877		)	(127,387		)	(125,128		)
Distributions paid to noncontrolling interest of limited partners	(3,976		)	(4,019		)	(2,781		)	(2,689		)
Net cash (used in) provided by financing activities	(314,000		)	2,257,108
Net cash used in financing activities							(118,436		)	(165,552		)
Net change in cash, cash equivalents and restricted cash	121,597			1,834			(104,386		)	(78,955		)
Cash, cash equivalents and restricted cash - beginning of period	118,560			25,045			133,530			118,560
Cash, cash equivalents and restricted cash - end of period	$	240,157		$	26,879		$	29,144		$	39,605

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

Table of Contents

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except unit data)

(Unaudited)


	September 30, 2018			December 31, 2017			June 30, 2019			December 31, 2018
ASSETS
Real estate investments:
Land	$	483,541		$	485,319		$	492,770		$	481,871
Building and improvements	5,743,439			5,830,824			5,886,129			5,787,152
Lease intangibles	604,215			639,199			598,022			599,864
Construction in progress	27,273			14,223			8,907			4,903
	6,858,468			6,969,565			6,985,828			6,873,790
Accumulated depreciation and amortization	(1,151,490		)	(1,021,691		)	(1,324,281		)	(1,208,169		)
Real estate investments, net	5,706,978			5,947,874			5,661,547			5,665,621
Investment in unconsolidated joint venture	67,592			68,577			66,731			67,172
Cash and cash equivalents	225,518			100,356			23,194			126,221
Restricted cash	14,639			18,204			5,950			7,309
Receivables and other assets, net	213,482			207,857			225,681			223,415
Right-of-use assets, net							245,495			—
Other intangibles, net	100,475			106,714			11,877			98,738
Total assets	$	6,328,684		$	6,449,582		$	6,240,475		$	6,188,476
LIABILITIES AND PARTNERS’ CAPITAL
Liabilities:										��
Debt	$	2,609,659		$	2,781,031		$	2,567,008		$	2,541,232
Accounts payable and accrued liabilities	160,246			167,852			159,853			185,073
Derivative financial instruments - interest rate swaps	—			1,089
Security deposits, prepaid rent and other liabilities	55,753			61,222			41,241			59,567
Lease liabilities							200,842			—
Intangible liabilities, net	62,887			68,203			40,529			61,146
Total liabilities	2,888,545			3,079,397			3,009,473			2,847,018
Commitments and contingencies
Redeemable noncontrolling interests	6,610			6,737			—			6,544
Partners’ Capital:
Limited partners’ capital, 3,929,083 and 4,124,148 units issued and outstanding as of September 30, 2018 and December 31, 2017, respectively	79,632			84,396
General partners’ capital, 207,231,171 and 204,892,118 units issued and outstanding as of September 30, 2018 and December 31, 2017, respectively	3,353,897			3,279,052
Limited partners’ capital, 3,974,657 and 3,929,083 units issued and outstanding as of June 30, 2019 and December 31, 2018, respectively							77,790			78,620
General partners’ capital, 205,117,620 and 205,267,349 units issued and outstanding as of June 30, 2019 and December 31, 2018, respectively							3,153,212			3,256,294
Total partners’ capital	3,433,529			3,363,448			3,231,002			3,334,914
Total liabilities and partners’ capital	$	6,328,684		$	6,449,582		$	6,240,475		$	6,188,476

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

Table of Contents

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per unit data)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Revenues:
Rental income	$	175,038		$	175,431		$	523,826		$	438,949		$	171,609		$	173,221		$	340,484		$	348,788
Interest and other operating income	97			563			302			1,271			148			111			239			205
Total revenues	175,135			175,994			524,128			440,220			171,757			173,332			340,723			348,993
Expenses:
Rental	55,789			56,331			165,364			138,874			52,938			53,553			104,406			109,575
General and administrative	8,770			8,283			26,281			25,178			10,079			8,725			21,369			17,511
Transaction	346			261			933			5,618			296			396			336			587
Depreciation and amortization	70,568			70,491			210,064			172,900			68,429			69,104			137,910			139,496
Interest expense													24,006			26,305			47,976			52,558
Impairment	4,281			—			8,887			5,093			—			—			—			4,606
Total expenses	139,754			135,366			411,529			347,663			155,748			158,083			311,997			324,333
Income before other income (expense)	35,381			40,628			112,599			92,557
Interest income (expense):
Interest related to derivative financial instruments	169			(264		)	297			(827		)
Gain on change in fair value of derivative financial instruments, net	—			—			—			884
Total interest related to derivative financial instruments, including net change in fair value of derivative financial instruments	169			(264		)	297			57
Interest related to debt	(25,003		)	(25,924		)	(77,689		)	(59,688		)
Gain on sale of real estate, net	166,372			—			166,372			3
Loss on extinguishment of debt, net	(1,092		)	(774		)	(1,092		)	(11,192		)
Loss on sale of real estate, net													—			—			(37		)	—
Income from unconsolidated joint venture	432			318			1,405			381			548			403			1,034			973
Other income (expense)	89			(27		)	129			(13		)
Other income													41			5			576			40
Net income	$	176,348		$	13,957		$	202,021		$	22,105		$	16,598		$	15,657		$	30,299		$	25,673
Net income attributable to noncontrolling interests	(18		)	(28		)	(65		)	(80		)	(38		)	(14		)	(66		)	(47		)
Net income attributable to common unitholders	$	176,330		$	13,929		$	201,956		$	22,025		$	16,560		$	15,643		$	30,233		$	25,626
Earnings per common unit - basic:
Net income attributable to common unitholders	$	0.83		$	0.07		$	0.96		$	0.12		$	0.08		$	0.07		$	0.14		$	0.12
Earnings per common unit - diluted:
Net income attributable to common unitholders	$	0.83		$	0.07		$	0.96		$	0.12		$	0.08		$	0.07		$	0.14		$	0.12
Weighted average common units outstanding:
Basic	211,444			204,795			209,968			177,410			209,005			209,259			209,002			209,218
Diluted	211,444			204,795			209,968			177,410			209,005			209,259			209,002			209,218
Dividends declared per common unit	$	0.310		$	0.305		$	0.920		$	0.905

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

Table of Contents

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

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

(In thousands)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018

Net income	$	176,348		$	13,957		$	202,021		$	22,105		$	16,598		$	15,657		$	30,299		$	25,673

Other comprehensive (loss) income
Change in unrealized (losses) gains on cash flow hedges	(732		)	205			382			(631		)	(381		)	214			(771		)	1,114
Total other comprehensive (loss) income	(732		)	205			382			(631		)	(381		)	214			(771		)	1,114

Total comprehensive income	175,616			14,162			202,403			21,474			16,217			15,871			29,528			26,787
Comprehensive income attributable to noncontrolling interests	(18		)	(28		)	(65		)	(80		)	(38		)	(14		)	(66		)	(47		)
Total comprehensive income attributable to common unitholders	$	175,598		$	14,134		$	202,338		$	21,394		$	16,179		$	15,857		$	29,462		$	26,740

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

Table of Contents

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(In thousands)

(Unaudited)


	General Partners’ Capital					Limited Partners’ Capital					Total Partners’ Capital			General Partners’ Capital					Limited Partners’ Capital					Total Partners’ Capital
	Units		Amount			Units		Amount			Total Partners’ Capital			Units		Amount			Units		Amount			Total Partners’ Capital
Balance as of December 31, 2016	141,719		$	1,687,544		4,323		$	92,873		$	1,780,417
Issuance of general partner units	58,623		1,624,222			—		—			1,624,222
Issuance of limited partner units in connection with an acquisition	—		—			21		610			610
Balance as of December 31, 2017														204,892		$	3,279,052		4,124		$	84,396		$	3,363,448
Share-based award transactions, net	234		5,493			—		—			5,493			289		3,507			—		—			3,507
Redemption and cancellation of general partner units	(116	)	(3,413		)	—		—			(3,413		)	(92	)	(2,709		)	—		—			(2,709		)
Redemption of limited partner units and other	227		5,694			(227	)	(5,694		)	—			91		2,413			(91	)	(2,413		)	—
Distributions declared	—		(164,480		)	—		(3,936		)	(168,416		)
Distributions declared ($0.305 per common unit)														—		(62,559		)	—		(1,307		)	(63,866		)
Net income	—		21,390			—		635			22,025			—		9,802			—		181			9,983
Other comprehensive loss	—		(615		)	—		(16		)	(631		)
Balance as of September 30, 2017	200,687		$	3,175,835		4,117		$	84,472		$	3,260,307

Balance as of December 31, 2017	204,892		$	3,279,052		4,124		$	84,396		$	3,363,448
Issuance of general partner units	2,550		72,814			—		—			72,814
Other comprehensive income														—		883			—		17			900
Balance as of March 31, 2018														205,180		3,230,389			4,033		80,874			3,311,263
Issuance of general partner units, net														2,550		72,814			—		—			72,814
Share-based award transactions, net	323		7,830			—		411			8,241			7		2,196			—		—			2,196
Redemption and cancellation of general partner units	(729	)	(19,431		)	—		—			(19,431		)	(337	)	(8,844		)	—		—			(8,844		)
Redemption of limited partner units and other	195		5,195			(195	)	(5,195		)	—			93		2,494			(93	)	(2,494		)	—
Distributions declared	—		(190,071		)	—		(3,810		)	(193,881		)
Distributions declared ($0.305 per common unit)														—		(63,279		)	—		(1,253		)	(64,532		)
Net income	—		198,134			—		3,822			201,956			—		15,346			—		297			15,643
Other comprehensive income	—		374			—		8			382			—		210			—		4			214
Balance as of September 30, 2018	207,231		$	3,353,897		3,929		$	79,632		$	3,433,529
Balance as of June 30, 2018														207,493		$	3,251,326		3,940		$	77,428		$	3,328,754

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

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

Table of Contents

HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended September 30,						Six Months Ended June 30,
	2018			2017			2019			2018
Cash flows from operating activities:
Net income	$	202,021		$	22,105		$	30,299		$	25,673
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other	203,550			169,057
Depreciation and amortization							132,931			135,177
Share-based compensation expense	7,830			5,493			5,491			5,703
Impairment	8,887			5,093			—			4,606
Income from unconsolidated joint venture	(1,405		)	(381		)	(1,034		)	(973		)
Distributions from unconsolidated joint venture	1,680			—			1,335			975
Gain on sale of real estate, net	(166,372		)	(3		)
Loss on extinguishment of debt, net	1,092			11,192
Change in fair value of derivative financial instruments	—			(884		)
Loss on sale of real estate, net							37			—
Changes in operating assets and liabilities:
Receivables and other assets, net	(7,820		)	(19,854		)	457			(2,956		)
Accounts payable and accrued liabilities	(5,932		)	29,566			(23,262		)	(13,254		)
Prepaid rent and other liabilities	(2,780		)	7,158			2,483			1,157
Net cash provided by operating activities	240,751			228,542			148,737			156,108
Cash flows from investing activities:
Investments in real estate	(17,389		)	(2,357,570		)	(93,855		)	(11,887		)
Investment in unconsolidated joint venture	—			(68,839		)
Development of real estate	(29,593		)	(19,163		)	(4,627		)	(23,861		)
Proceeds from the sale of real estate	302,440			4,746			1,193			—
Capital expenditures	(61,136		)	(42,990		)	(37,763		)	(34,110		)
Collection of real estate notes receivable	524			—			365			347
Net cash provided by (used in) investing activities	194,846			(2,483,816		)
Net cash used in investing activities							(134,687		)	(69,511		)
Cash flows from financing activities:
Borrowings on unsecured revolving credit facility	145,000			515,000			135,000			85,000
Payments on unsecured revolving credit facility	(145,000		)	(528,000		)	(15,000		)	(85,000		)
Proceeds from unsecured senior notes	—			900,000
Payments on secured mortgage loans	(173,212		)	(75,444		)	(96,173		)	(99,218		)
Deferred financing costs	(782		)	(16,902		)
Debt extinguishment costs	(1,909		)	(10,391		)
Security deposits	499			1,932			—			222
Proceeds from issuance of general partner units	72,814			1,624,222			—			72,814
Issuance of limited partner units	411			—
Repurchase and cancellation of general partner units	(19,431		)	(3,413		)	(12,095		)	(11,553		)
Distributions paid to general partner	(188,414		)	(145,877		)	(127,387		)	(125,128		)
Distributions paid to limited partners and redeemable noncontrolling interests	(3,976		)	(4,019		)	(2,781		)	(2,689		)
Net cash (used in) provided by financing activities	(314,000		)	2,257,108
Net cash used in financing activities							(118,436		)	(165,552		)
Net change in cash, cash equivalents and restricted cash	121,597			1,834			(104,386		)	(78,955		)
Cash, cash equivalents and restricted cash - beginning of period	118,560			25,045			133,530			118,560
Cash, cash equivalents and restricted cash - end of period	$	240,157		$	26,879		$	29,144		$	39,605

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

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HEALTHCARE TRUST OF AMERICA, INC. AND HEALTHCARE TRUST OF AMERICA HOLDINGS, LP

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

1. Organization and Description of Business

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

We own real estate primarily consisting of medical office buildings (“MOBs”) located on or adjacent to hospital campuses or in off-campus, community core outpatient locations across 32 states within the United ~~States, and we~~States. We lease space to tenants primarily consisting of health systems, research and academic institutions, and various sized physician practices. ~~We generate substantially all of~~Through our ~~revenues from rents and rental-related activities, such as property and facilities~~full-service operating platform we provide leasing, asset management, acquisitions, development and other ~~incidental revenues~~ related ~~to the operation of real estate.~~ services for our properties.

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

2. Summary of Significant Accounting Policies

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

Basis of Presentation

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

Reclassifications

Certain prior year amounts related to the presentation of interest expense on the accompanying condensed consolidated statements of operations have been reclassified to conform to the current year presentation.

Interim Unaudited Financial Data

Our accompanying condensed consolidated financial statements have been prepared by us in accordance with GAAP in conjunction with the rules and regulations of the SEC. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, our accompanying condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete financial statements. Our accompanying condensed consolidated financial statements reflect all adjustments, which are, in our opinion, of a normal recurring nature and necessary for a fair presentation of our financial position, results of operations and cash flows for the interim periods. Interim results of operations are not necessarily indicative of the results to be expected for the full year; such results may be less favorable for the full year. Our accompanying condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto included in our ~~2017~~2018 Annual Report on Form 10-K.

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

Principles of Consolidation

The condensed consolidated financial statements include the accounts of our subsidiaries and consolidated joint venture arrangements. The portions of the HTALP operating partnership not owned by us are presented as noncontrolling interests ~~in our~~on the accompanying condensed consolidated balance sheets and statements of operations, condensed consolidated statements of comprehensive income, ~~or loss,~~and condensed consolidated statements of equity and ~~consolidated statements of~~ changes in partners’ capital. The portions of other joint venture arrangements not owned by us are presented as redeemable noncontrolling interests on the accompanying condensed consolidated balance sheets. In addition, as described in Note 1 - Organization and Description of Business, certain third parties have been issued OP Units in HTALP. Holders of OP Units are considered to be noncontrolling interest holders in HTALP and their ownership interests are reflected as equity on the accompanying condensed consolidated balance sheets. Further, a portion of the earnings and losses of HTALP are allocated to noncontrolling interest holders based on their respective ownership percentages. Upon conversion of OP Units to common stock, any difference between the fair value of the common stock issued and the carrying value of the OP Units converted to common stock is recorded as a component of equity. As of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, there were approximately ~~3.9~~4.0 million and ~~4.1~~3.9 million, respectively, of OP Units issued and outstanding.

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

~~Reclassification~~

In November 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-18 Statement of Cash Flows: Restricted Cash. ASU 2016-18 requires that a statement of cash flows explain the change during the period in cash, cash equivalents and restricted cash and restricted cash equivalents. Therefore, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of period and end of period amounts shown on the accompanying condensed consolidated statements of cash flows. We adopted ASU 2016-18 in the fourth quarter of 2017, as set forth in our 2017 Annual Report on Form 10-K as of January 1, 2017, and as a result of the adoption, the guidance requires retrospective adoption for all periods presented. The following table represents the previously reported balances and the reclassified balances for the impacted items for the nine months ended September 30, 2017 in the accompanying condensed consolidated statements of cash flows (in thousands):

Nine Months Ended September 30, 2017
As Previously Reported As Reclassified
Cash flows from investing activities:
Other assets ⁽¹⁾
$ (3,655 ) $ —
Net cash used in investing activities (2,487,471 ) (2,483,816 )

Net change in cash, cash equivalents and restricted cash ⁽²⁾
$ (1,821 ) $ 1,834
Cash, cash equivalents and restricted cash - beginning of period ⁽²⁾
11,231
25,045
Cash, cash equivalents and restricted cash - end of period ⁽²⁾
$ 9,410
$ 26,879

(1) Prior to adoption of ASU 2016-18, the line item description was “Restricted cash, escrow deposits and other assets”.
(2) With the adoption of ASU 2016-18, the line item description now includes restricted cash.

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

Cash, Cash Equivalents and Restricted Cash

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

~~With our adoption of ASU 2016-18 in the fourth quarter of 2017, as set forth in our 2017 Annual Report on Form 10-K as of January 1, 2017, the~~The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the accompanying ~~condensed~~ consolidated balance sheets to the combined amounts shown on the accompanying ~~condensed~~ consolidated statements of cash flows ~~as of September 30, 2018 and 2017, respectively~~ (in thousands):



	June 30,
	2019		2018
Cash and cash equivalents	$	23,194	$	26,191
Restricted cash	5,950		13,414
Total cash, cash equivalents and restricted cash	$	29,144	$	39,605

September 30,
2018 2017
Cash and cash equivalents $ 225,518
$ 9,410
Restricted cash 14,639
17,469
Total cash, cash equivalents and restricted cash $ 240,157
$ 26,879

Revenue Recognition

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

~~Effective January 1, 2018, with the adoption~~

Table of ~~Topic 606 and corresponding amendments, the~~Contents

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

The revenue recognition process ~~will be~~is based on a five-step model to account for revenue arising from contracts with customers ~~and supersedes most of the existing revenue recognition guidance.~~as outlined in Topic ~~606 requires an entity to~~606. We recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We have identified all of our revenue streams and we have concluded that rental income from leasing arrangements represents a substantial portion of our revenue and ~~therefore,~~ is ~~specifically excluded from Topic 606 and will be~~ governed and evaluated with the ~~anticipated~~ adoption of Topic 842. The other revenue stream identified as impacting Topic 606 is concentrated in the recognition of real estate sales and the adoption of Topic 606 did not have a material impact on our financial statements. For more detailed information on Topic 606 see “Recently Issued or Adopted Accounting Pronouncements” below.

Investments in Real Estate

Depreciation expense of buildings and improvements for the three months ended ~~September~~June 30, 2019 and 2018 ~~and 2017~~ was ~~$50.2~~$51.9 million and ~~$49.8~~$50.6 million, respectively. Depreciation expense of buildings and improvements for the ~~nine~~six months ended ~~September~~June 30, 2019 and 2018 ~~and 2017~~ was ~~$151.5~~$104.0 million and ~~$121.5~~$101.3 million, respectively.

Leases

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

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

Redeemable Noncontrolling Interests

We account for redeemable equity securities in accordance with ASU 2009-04 Liabilities (Topic 480): Accounting for Redeemable Equity Instruments, which requires that equity securities redeemable at the option of the holder, not solely within our control, be classified outside permanent stockholders’ equity. We classify redeemable equity securities as redeemable noncontrolling interests inon the accompanying condensed consolidated balances sheets. Accordingly, we record the carrying amount at the greater of the initial carrying amount (increased or decreased for the noncontrolling interest’s share of net income or loss and distributions) or the redemption value. We measure the redemption value and record an adjustment to the carrying value of the equity securities as a component of redeemable noncontrolling interest. As of ~~September~~June 30, ~~2018 and~~2019, all redeemable noncontrolling interests have either converted their interest to OP Units or received cash proceeds due to the last exercisable put option that lapsed on June 30, 2019. As of December 31, ~~2017,~~2018, we had redeemable noncontrolling interests of ~~$6.6 million and $6.7 million, respectively.~~$6.5 million. Refer to Note 1011 - Redeemable Noncontrolling Interests in the accompanying notes to the condensed consolidated financial statements for more detail relating to our redeemable noncontrolling interests.

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

Unconsolidated Joint Ventures

We account for our investments in unconsolidated joint ventures using the equity method of accounting because we have the ability to exercise significant influence, but not control, over the financial and operational policy decisions of the investments. Using the equity method of accounting, the initial investment is recognized at cost and subsequently adjusted for our share of the net income ~~or loss~~ and any distributions from the joint venture. As of ~~September~~June 30, 2019 and December 31, 2018, we had a 50% interest in one such investment with a carrying value and maximum exposure to risk of ~~$67.6~~$66.7 million and $67.2 million, respectively, which is recorded in investment in unconsolidated joint venture inon the accompanying condensed consolidated balance sheets. We record our share of net income ~~(loss)~~ in income ~~(loss)~~ from unconsolidated joint venture inon the accompanying condensed consolidated statements of operations. For the three ~~and nine~~ months ended ~~September~~June 30, 2019 and 2018, we recognized income of ~~$0.4~~$0.5 million and ~~$1.4~~$0.4 million, respectively. For the ~~three and nine~~six months ended ~~September~~June 30, ~~2017,~~2019 and 2018, we recognized income of ~~$0.3 million and $0.4 million, respectively.~~$1.0 million.

~~Recently Issued or Adopted Accounting Pronouncements~~

~~The following table provides a brief description of recently adopted accounting pronouncements:~~



~~Accounting Pronouncement~~	~~Description~~	~~Effective Date~~	~~Effect on financial statements~~
~~Topic 606; collectively, ASU 2014-09, 2015-14, ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12, ASU 2016-20, ASU 2017-05, ASU 2017-10, ASU 2017-13 and ASU 2017-14~~ ~~Revenue from Contracts with Customers~~ ~~(Issued May 2014, August 2015, March 2016, April 2016, May 2016, December 2016, February 2017, May 2017, September 2017 and November 2017)~~	In May 2014, the FASB issued Topic 606. The objective of Topic 606 is to establish a comprehensive new five-step model requiring a company to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (i.e., payment) to which the company expects to be entitled in exchange for those goods or services. Expanded quantitative and qualitative disclosures regarding revenue recognition will be required for contracts that are subject to Topic 606. Topic 606 does not apply to revenue from lease contracts until the adoption of the new leases standard in ASU 2016-02, in January 2019. ASU 2017-05 applies to all nonfinancial assets (including real estate) for which the counterparty is not a customer and requires an entity to derecognize a nonfinancial asset in a partial sale transaction when it ceases to have a controlling financial interest in the asset and has transferred control of the asset. Once an entity transfers control of the nonfinancial asset, the entity is required to measure any noncontrolling interest it receives or retains at fair value. Under the current guidance, a partial sale is recognized and carryover basis is used for the retained interest resulting in only partial gain recognition by the entity, however, the new guidance eliminates the use of carryover basis and generally requires the full gain to be recognized. ~~In adopting Topic 606, companies may use either a full retrospective or a modified retrospective approach.~~	~~Topic 606 is effective for fiscal years beginning after December 15, 2017 along with the right of early adoption as of the original effective date.~~	~~We adopted Topic 606 effective January 1, 2018 to all open contracts using the modified retrospective approach.~~ As part of the adoption, we identified all revenue streams and concluded that revenues from leasing arrangements represented substantially all of our revenue and is generally excluded from the scope of Topic 606. Rather, rental revenue, including any executory type costs, will be governed and evaluated with the adoption of Topic 842 as described below. In addition, under Topic 606, revenue recognition for real estate sales will be substantially based on a principles-based approach to determine whether there has been transfer of control versus continuing involvement under the current guidance. There have not been, nor do we anticipate, any reclassifications or material impacts on our consolidated financial statements as a result of this adoption.
~~ASU 2017-09~~ ~~Compensation - Stock Compensation (Topic 718): Clarifying the Scope of Modification~~ ~~(Issued May 2017)~~	ASU 2017-09 amends the scope of modification accounting for share-based payment arrangements and provides guidance on the types of changes to the terms and conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718.	~~ASU 2017-09 is effective for fiscal years beginning after December 15, 2017 with early adoption permitted.~~	We adopted ASU 2017-09 as of January 1, 2018. There have not been, nor do we anticipate, any reclassifications or material impacts on our consolidated financial statements as a result of this adoption.
~~ASU 2017-12~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~ ~~(Issued August 2017)~~	ASU 2017-12 expands and refines hedge accounting for both financial (e.g., interest rate) and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness.	~~ASU 2017-12 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted.~~	~~We adopted ASU 2017-12 as of January 1, 2018. Using the modified retrospective approach, the cumulative effect of the ineffectiveness for the year ended December 31, 2017 was immaterial; therefore, no adjustment was made to beginning retained earnings.~~ Additionally, as a result of the adoption, we no longer disclose the ineffective portion of the change in fair value of our derivative financial instruments. The entire change in the fair value of the hedging instruments included in the assessment of hedge effectiveness will now be recorded in other comprehensive income and subsequently reclassified to interest expense in the period the hedging instrument affects earnings.

1716

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

~~The~~Recently Issued or Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Topic 842, Leases

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-02, codified as ASC 842 - Leases (Topic 842). This new standard superseded ASC Topic 840 and states that companies will be required to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. Topic 842 requires qualitative and quantitative disclosures to supplement the amounts recorded in the financial statements so that users can understand the nature of the entity’s leasing activities, including significant judgments and changes in judgments.

We adopted Topic 842 as of January 1, 2019 and elected to use the optional transition method, which allows us to recognize a cumulative-effect adjustment to the opening balance of retained earnings at January 1, 2019. Using the optional transition method, the cumulative effect adjustment was immaterial and as such no adjustment was made to beginning retained earnings. In addition, it was determined in our analysis that finance leases which we are the lessee were immaterial and as such were excluded from our disclosures.

In addition to electing the optional transition method above, we also elected the following ~~table provides~~practical expedients offered by the FASB which will allow us:

to not reassess: (i) whether an expired or existing contract contains a ~~brief description~~lease arrangement, (ii) lease classification related to expired or existing lease arrangements, or (iii) whether costs incurred on expired or existing leases qualify as initial direct costs;

to not separate, as the lessor, certain non-lease components, such as common area maintenance from lease revenue if the (i) timing and pattern of ~~recently issued accounting pronouncements:~~revenue recognition are the same for the non-lease component, and (ii) related lease component and the combined single lease component would be classified as an operating lease;

to exclude land easements from assessment in determining whether they meet the definition of a lease up to the time of adoption; and

to not record on our accompanying condensed consolidated balance sheets, lease liabilities and right of use (“ROU”) assets with lease terms of 12 months or less.

Lessee Impact

Leases for which we are the lessee, including ground leases and corporate leases, which are primarily for office space, have been recorded on our accompanying condensed consolidated balance sheets as either finance or operating leases with lease liability obligations and corresponding ROU assets based on the present value of the minimum rental payments remaining as of the initial adoption date of January 1, 2019.

Lessor Impact

Topic 842 modifies the treatment of initial direct costs, which historically under Topic 840 have been capitalized upon meeting criteria provided for in that applicable guidance. These initial direct costs now under ASC 842 are eligible for capitalization only if they are incremental in nature, (i.e., would only be incurred if we enter into a new lease arrangement). Under this guidance, only commissions paid and other incurred costs incremental to our leasing activity qualify as initial direct costs. These costs, which were previously capitalized, have been classified as general and administrative expenses on our accompanying condensed consolidated statements of operations. For the three and six months ended June 30, 2018, we capitalized approximately $0.9 million and $2.2 million, respectively, of initial direct costs.

Additionally, as part of Topic 842, ASU 2018-20 states that (i) a lessor must analyze sales (and other similar) tax laws on a jurisdiction-by-jurisdiction basis to determine whether those taxes are lessor costs or lessee costs and (ii) a lessor shall exclude from variable payments, lessor costs (i.e., property taxes, insurance) paid by a lessee directly to a third party. However, costs that are paid by a lessor directly to a third party and are reimbursed by a lessee are considered lessor costs that shall be accounted for by the lessor as variable payments. As a result of the adoption of Topic 842, we no longer record income or expense when the lessee pays the property taxes directly to a third party. For the three and six months ended June 30, 2018, we recognized approximately $3.4 million and $7.0 million, respectively, of tenant paid property taxes.

Except where stated above, the adoption of Topic 842 did not have a substantive impact on our results of operations and cash flows and no significant impact on any of our debt covenants.

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

ASU 2018-07, Compensation - Stock Compensation; Improvements to Nonemployee Share-Based Payment Accounting

In June 2018, the FASB issued ASU 2018-07, which expands the scope of Topic 718. The amendments specify that ASU 2018-07 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. ASU 2018-07 also clarifies that it does not apply to share-based payments used to effectively provide (i) financing to the issuer or (ii) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606. We adopted ASU 2018-07 on January 1, 2019 (the effective date) and did not have any reclassifications or material impacts on our consolidated financial statements as a result of this adoption.



~~Accounting Pronouncement~~	~~Description~~	~~Effective Date~~	~~Effect on financial statements~~
~~ASU 2016-13~~ ~~Financial Instruments Credit Losses: Measurement of Credit Losses on Financial Instruments~~ ~~(Issued June 2016)~~	ASU 2016-13 is intended to improve financial reporting by requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial statement assets measured at an amortized cost be presented at the net amount expected to be collected through an allowance for credit losses that is deducted from the amortized cost basis.	~~ASU 2016-13 is effective for fiscal years beginning after December 15, 2019 with early adoption permitted.~~	~~We do not anticipate early adoption or there to be a material impact to our consolidated financial statements based on our ongoing evaluation.~~
~~ASU 2018-07~~ ~~Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting~~ ~~(Issued June 2018)~~	ASU 2018-07 expands the scope of Topic 718 and the amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (i) financing to the issuer or (ii) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic 606.	~~ASU 2018-07 is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, but not earlier than an entity’s adoption date of Topic 606.~~	~~We will adopt ASU 2018-07 as of January 1, 2019. We do not expect there to be a material impact to our consolidated financial statements and related notes.~~
~~ASU 2018-13~~ ~~Fair Value Measurement (Topic 820): Changes to the Disclosure Requirements for Fair Value Measurement~~ ~~(Issued August 2018)~~	ASU 2018-13 modifies the disclosure requirements on fair value measurements in Topic 820 as follows: (A) Disclosure removals: (i) the amount of and reasons for transfers between Level 1 and Level 2; (ii) the policy for timing of transfers between levels; and (iii) the valuation process for Level 3 fair value measurements. (B) Disclosure modifications: (i) no requirement to disclose the timing of liquidation unless the investee has communicated the timing to the reporting entity or announced the timing publicly; and (ii) for Level 3 fair value measurements, a narrative description of measurement uncertainty at the reporting date, not the sensitivity to future changes. (C) Disclosure additions: (i) for recurring Level 3 measurements, disclose the changes in unrealized gains and losses for the period included in OCI and the statement of comprehensive income; and (ii) for Level 3 fair value measurements in the table of significant input, disclose the range and weighted average of the significant unobservable inputs and the way it is calculated.	~~ASU 2018-13 is effective for fiscal years beginning after December 15, 2019 with early adoption permitted.~~	We will adopt ASU 2018-07 as of January 1, 2020. We will consider all level inputs in our ongoing evaluation but do not anticipate there to be a material impact to our consolidated financial statements.

Recently Issued Accounting Pronouncements

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

19In June 2016, the FASB issued ASU 2016-13, which is intended to improve financial reporting by requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial statement assets measured at an amortized cost be presented at the net amount expected to be collected through an allowance for credit losses that is deducted from the amortized cost basis. ASU 2018-19 also clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20. Instead, impairment of these receivables should be accounted for in accordance with Topic 842, Leases. ASU 2019-04 provides clarification on the measurement, presentation and disclosure of credit losses on financial assets. ASU 2019-05 provides an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis for comparability to any new financial assets that elect the fair value option. We will adopt ASU 2016-13, ASU 2018-19, ASU 2019-04 and ASU 2019-05 collectively as of January 1, 2020 (the effective date) and do not anticipate there to be a material impact to our consolidated financial statements and related notes based on our ongoing evaluation.

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

In August 2018, the FASB issued ASU 2018-13, which modifies the disclosure requirements on fair value measurements in Topic 820 as follows: (a) disclosure removals: (i) the amount of and reasons for transfers between Level 1 and Level 2; (ii) the policy for timing of transfers between levels; and (iii) the valuation process for Level 3 fair value measurements; (b) disclosure modifications: (i) no requirement to disclose the timing of liquidation unless the investee has communicated the timing to the reporting entity or announced the timing publicly; and (ii) for Level 3 fair value measurements, a narrative description of measurement uncertainty at the reporting date, not the sensitivity to future changes; and (c) disclosure additions: (i) for recurring Level 3 measurements, disclose the changes in unrealized gains and losses for the period included in OCI and the statement of comprehensive income; and (ii) for Level 3 fair value measurements in the table of significant input, disclose the range and weighted average of the significant unobservable inputs and the way it is calculated. We will adopt ASU 2018-13 as of January 1, 2020 (the effective date) and will consider all level inputs but do not we do not anticipate there to be a material impact to our consolidated financial statements and related notes based on our ongoing evaluation.

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

3. Investments in Real Estate

For the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, our investments had an aggregate purchase price of ~~$17.8~~$94.1 million. As part of these investments, we incurred approximately ~~$0.1~~$1.2 million of capitalized costs. The allocations for these investments, in which we own a controlling financial interest, are set forth below in the aggregate for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively (in thousands):



	Six Months Ended June 30,
	2019			2018
Land	$	12,233		$	1,084
Building and improvements	74,591			10,280
In place leases	7,784			662
Below market leases	(1,380		)	(139		)
Above market leases	627			—
Net real estate assets acquired	93,855			11,887
Other, net	240			447
Aggregate purchase price	$	94,095		$	12,334

Nine Months Ended September 30,
2018 2017
Land $ 1,895
$ 93,064
Building and improvements 14,458
2,336,544
In place leases 1,237
187,890
Below market leases (201 ) (27,817 )
Above market leases —
11,718
Below market leasehold interests —
54,252
Above market leasehold interests —
(8,978 )
Net assets acquired 17,389
2,646,673
Other, net ⁽¹⁾
447
60,781
Aggregate purchase price $ 17,836
$ 2,707,454

(1) For the nine months ended September 30, 2017, other, net, consisted primarily of capital expenditures and tenant improvements received as credits at the time of acquisition.

~~The acquired intangible assets and liabilities referenced above had weighted average lives of the following terms for the nine months ended September 30, 2018 and 2017, respectively (in years):~~

Nine Months Ended September 30,
2018 2017
Acquired intangible assets 5.8 20.6
Acquired intangible liabilities 6.5 19.9

~~4. Dispositions and Impairment~~

~~Dispositions~~

During the nine months ended September 30, 2018, we completed the disposition of 17 MOBs totaling approximately 965,000 square feet of gross leasable area (“GLA”) located in Greenville, South Carolina (the “Greenville Disposition”) for an aggregate gross sales price of $294.3 million in two transactions, including the sale of a single MOB which we classified as held for sale as of June 30, 2018. Additionally, we completed the disposition of two MOBs located in Derry, New Hampshire and North Adams, Massachusetts for an aggregate gross sales price of $11.6 million, totaling approximately 120,000 square feet of GLA. During the nine months ended September 30, 2017, we completed the disposition of an MOB located in Texas for a gross sales price of $5.0 million totaling approximately 48,000 square feet of GLA.

~~Impairment~~

During the three and nine months ended September 30, 2018, we recorded impairment charges of $4.3 million and $8.9 million, respectively, on six MOBs located in Tennessee, Texas and South Carolina. During the nine months ended September 30, 2017, we recorded impairment charges of $5.1 million related to one MOB located in Massachusetts.

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

The acquired intangible assets and liabilities referenced above had weighted average lives of the following terms for the six months ended June 30, 2019 and 2018, respectively (in years):



	Six Months Ended June 30,
	2019	2018
Acquired intangible assets	7.0	8.1
Acquired intangible liabilities	7.1	8.1

4. Impairment

During the six months ended June 30, 2019, we recorded no impairment charges. During the six months ended June 30, 2018, we recorded an impairment charge of $4.6 million on two MOBs located in Texas and South Carolina.

5. Intangible Assets and Liabilities

Intangible assets and liabilities consisted of the following as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively (in thousands, except weighted average remaining amortization terms):



	June 30, 2019				December 31, 2018
	Balance			Weighted Average Remaining Amortization in Years	Balance			Weighted Average Remaining Amortization in Years
Assets:
In place leases	$	449,926		9.7	$	449,424		9.8
Tenant relationships	148,096			9.5	150,440			9.4
Above market leases	36,833			6.2	36,862			6.1
Below market leasehold interests ⁽¹⁾	—				91,759			64.3
	634,855				728,485
Accumulated amortization	(369,835		)		(355,576		)
Total	$	265,020		9.5	$	372,909		22.1

Liabilities:
Below market leases	$	62,403		14.5	$	61,395		14.6
Above market leasehold interests ⁽¹⁾	—				20,610			49.2
	62,403				82,005
Accumulated amortization	(21,874		)		(20,859		)
Total	$	40,529		14.5	$	61,146		25.3

(1) As a result of the adoption of Topic 842 on January 1, 2019, the presentation of below and above market leasehold interests as of June 30, 2019 does not conform to the prior year presentation.

September 30, 2018 December 31, 2017
Balance
Weighted Average Remaining
Amortization in Years
Balance
Weighted Average Remaining
Amortization in Years
Assets:
In place leases $ 451,990
9.8 $ 474,252
9.8
Tenant relationships 152,225
9.4 164,947
10.2
Above market leases 37,537
6.1 40,082
6.3
Below market leasehold interests 91,759
64.5 92,362
63.4
733,511
771,643

Accumulated amortization (343,251 ) (312,655 )
Total $ 390,260
21.6 $ 458,988
19.5

Liabilities:
Below market leases $ 61,525
14.6 $ 61,820
14.7
Above market leasehold interests 20,610
49.5 20,610
50.1
82,135
82,430

Accumulated amortization (19,248 ) (14,227 )
Total $ 62,887
25.1 $ 68,203
25.0

The following is a summary of the net intangible amortization for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Amortization recorded against rental income related to above and (below) market leases	$	(529	)	$	(246	)	$	(1,020	)	$	(308	)
Rental expense related to above and (below) market leasehold interests ⁽¹⁾	—			286			—			563
Amortization expense related to in place leases and tenant relationships	(14,092		)	16,677			28,757			34,325

(1) As a result of the adoption of Topic 842 on January 1, 2019, the presentation of rental expense related to above and (below) market leasehold interests for the three and six months ended June 30, 2019 does not conform to the prior year presentation.

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Amortization recorded against rental income related to above and (below) market leases $ (352 ) $ (108 ) $ (660 ) $ (371 )
Rental expense related to above and (below) market leasehold interests 287
322
850
617
Amortization expense related to in place leases and tenant relationships 18,475
18,757
52,800
45,944

~~6. Receivables and Other Assets~~

~~Receivables and other assets consisted of the following as of~~ ~~September 30, 2018~~ ~~and December 31, 2017, respectively (in thousands):~~

September 30, 2018 December 31, 2017
Tenant receivables, net $ 13,062
$ 20,269
Other receivables, net 15,067
9,305
Deferred financing costs, net 6,480
7,759
Deferred leasing costs, net 28,783
25,494
Straight-line rent receivables, net 89,531
85,143
Prepaid expenses, deposits, equipment and other, net 58,971
58,358
Derivative financial instruments - interest rate swaps 1,588
1,529
Total $ 213,482
$ 207,857

2119

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

6. Receivables and Other Assets

Receivables and other assets consisted of the following as of June 30, 2019 and December 31, 2018, respectively (in thousands):



	June 30, 2019		December 31, 2018
Tenant receivables, net	$	23,921	$	14,588
Other receivables, net	16,467		16,078
Deferred financing costs, net	5,187		6,049
Deferred leasing costs, net	33,816		30,731
Straight-line rent receivables, net	101,025		92,973
Prepaid expenses, deposits, equipment and other, net	45,181		61,885
Derivative financial instruments - interest rate swaps	84		1,111
Total	$	225,681	$	223,415

The following is a summary of the amortization of deferred leasing costs and financing costs for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019 and ~~2017,~~2018, respectively (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Amortization expense related to deferred leasing costs	$	1,874	$	1,303	$	4,028	$	2,809
Interest expense related to deferred financing costs	431		431		862		862

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Amortization expense related to deferred leasing costs $ 1,357
$ 1,445
$ 4,166
$ 4,179
Interest expense related to deferred financing costs 431
398
1,293
1,061

7. Leases

The majority of our lease expenses are derived from our ground leases and a few corporate leases, which are primarily for office space. We recognize lease expense for these leases on a straight-line basis over the lease term. Many of our leases contain renewal options that can extend the lease term from one to ten years, or in certain cases, longer durations. The exercise of lease renewal options is at our sole discretion. Certain of our ground leases have the option to purchase the land at the end of the initial term. Our leases have one of the following payment options: (i) fixed payment throughout the term; (ii) fixed payments with periodic escalations; (iii) variable lease payments based on the Consumer Price Index (“CPI”) or another similar index; and (iv) a combination of the aforementioned. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants other than certain prohibitions as to the nature of business that can be conducted within the buildings which we own in order to limit activities that may be deemed competitive in nature to the ground lessor’s activities. As of June 30, 2019, we have no new ground leases or corporate leases that have not yet commenced.

As part of the adoption of Topic 842, a lease liability and a corresponding ROU asset was recorded on our accompanying condensed consolidated balance sheets effective January 1, 2019. The lease liability was calculated as the present value of the remaining lease payments using the lease term at lease commencement and an incremental borrowing rate. In determining this calculation, we made the following assumptions and judgments:

only material ground leases and corporate leases exceeding one year in duration, were included in our lease population. Office equipment and other non-essential leases were excluded from the population due to immateriality; and

a series of incremental borrowing rates were determined based on observed prices and credit spreads of our unsecured senior debt as of December 31, 2018 after applying treasury or other similar index rates as of January 1, 2019 to leases that correspond to the remaining lease terms, adjusted for the effects of collateral.

At adoption, the ROU asset was calculated as the sum of the lease liability, deferred rent of approximately ($19.0) million, and the above and below market leasehold interest balances as of December 31, 2018 of approximately $66.5 million, which were previously recorded as other intangibles and intangible liabilities on our accompanying condensed consolidated balance sheets.

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

Lessee - Lease Costs

Lease costs consisted of the following for the three and six months ended June 30, 2019 (in thousands):



	Three Months Ended		Six Months Ended
	June 30, 2019		June 30, 2019
Operating lease cost	$	3,066	$	6,121
Variable lease cost	333		714
Total lease cost	$	3,399	$	6,835

Lessee - Lease Term and Discount Rates

The following is the weighted average remaining lease term and the weighted average discount rate for our operating leases as of June 30, 2019 (weighted average remaining lease term in years):



	June 30, 2019
Weighted-average remaining lease term	47.9
Weighted-average discount rate	5.3	%

Lessee - Maturity of Lease Liabilities

The following table summarizes the future minimum lease obligations of our operating leases as of June 30, 2019 under Topic 842 (in thousands):



Year	Amount
2019	$	4,963
2020	10,549
2021	10,670
2022	10,842
2023	10,967
2024	10,361
Thereafter	632,016
Total undiscounted lease payments	$	690,368
Less: Interest	(489,526		)
Present value of lease liabilities	$	200,842

As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting standard, Topic 840, the following table summarizes the future minimum lease obligations of our operating leases as of December 31, 2018 (in thousands):



Year	Amount
2019	$	10,309
2020	10,408
2021	9,877
2022	10,031
2023	10,132
Thereafter	639,234
Total	$	689,991

Lessor - Lease Revenues and Maturity of Future Minimum Rents

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

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

The following table summarizes the future minimum rent contractually due under operating leases, excluding tenant reimbursements of certain costs, as of June 30, 2019 under Topic 842 (in thousands):



Year	Amount
2019	$	247,608
2020	476,320
2021	428,342
2022	375,494
2023	327,302
2024	282,124
Thereafter	1,110,928
Total	$	3,248,118

As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting standard, Topic 840, the following table summarizes the future minimum rent contractually due under operating leases, excluding tenant reimbursements of certain costs, as of December 31, 2018 (in thousands):



Year	Amount
2019	$	497,083
2020	448,956
2021	401,871
2022	341,889
2023	294,451
Thereafter	1,244,246
Total	$	3,228,496

8. Debt

Debt consisted of the following as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively (in thousands):



	June 30, 2019			December 31, 2018
Unsecured revolving credit facility	$	120,000		$	—
Unsecured term loans	500,000			500,000
Unsecured senior notes	1,850,000			1,850,000
Fixed rate mortgages	115,248			211,421
	2,585,248			2,561,421
Deferred financing costs, net	(12,355		)	(13,741		)
Discount, net	(5,885		)	(6,448		)
Total	$	2,567,008		$	2,541,232

September 30, 2018 December 31, 2017
Unsecured revolving credit facility $ —
$ —
Unsecured term loans 500,000
500,000
Unsecured senior notes 1,850,000
1,850,000
Fixed rate mortgages 279,230
414,524
Variable rate mortgages —
37,918
2,629,230
2,802,442
Deferred financing costs, net (14,448 ) (15,850 )
Discount, net (5,123 ) (5,561 )
Total $ 2,609,659
$ 2,781,031

Unsecured Credit Agreement

Unsecured Revolving Credit Facility due 2022

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

Borrowings under the unsecured revolving credit facility accrue interest at a rate equal to adjusted LIBOR,, plus a margin ranging from 0.83% to 1.55% per annum based on our credit rating. We also pay a facility fee ranging from 0.13% to 0.30% per annum on the aggregate commitments under the unsecured revolving credit facility. As of ~~September~~June 30, ~~2018, the~~2019, HTALP had $120.0 million under this unsecured revolving credit facility outstanding and an interest rate of 3.49% per annum. The margin associated with our borrowings was 1.00% per annum and the facility fee was 0.20% per annum.

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

Unsecured Term Loan due 2023

In 2017, we entered into ~~an amended and restated~~the Unsecured Credit Agreement as noted above. As part of this agreement, we obtained a $300.0 million unsecured term loan that was guaranteed by usHTA with a maturity date of February 1, 2023. Borrowings under this unsecured term loan accrue interest equal to adjusted LIBOR, plus a margin ranging from 0.90% to 1.75% per annum based on our credit rating. The margin associated with our borrowings as of ~~September~~June 30, ~~2018~~2019 was 1.10% per annum. Including the impact of the interest rate swaps associated with our unsecured term loan, the interest rate was ~~3.46%~~3.59% per annum, based on our current credit rating. As of ~~September~~June 30, ~~2018,~~2019, HTALP had $300.0 million under this unsecured term loan outstanding.

$200.0 Million Unsecured Term Loan due 2024

~~On August 1,~~In 2018, HTALP entered into a modification of our $200.0 million unsecured term loan ~~previously due in 2023. The modification decreased pricing at our current credit rating by 65 basis points.~~with a maturity date of January 15, 2024. Borrowings under the unsecured term loan accrue interest at a rate equal to LIBOR, plus a margin ranging from 0.75% to 1.65% per annum based on our credit rating. The margin associated with our borrowings as of ~~September~~June 30, ~~2018~~2019 was 1.00% per annum. HTALP had interest rate swaps on a portion of the balance, which resulted in a fixed interest rate at ~~2.70%~~2.75% per ~~annum. The maturity date was also extended by five months to January 2024. The other material terms of the unsecured term loan prior to the modification remained substantially unchanged.~~annum, based on our current credit rating. As of ~~September~~June 30, ~~2018,~~2019, HTALP had $200.0 million under this unsecured term loan outstanding.

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

$300.0 Million Unsecured Senior Notes due 2021

As of ~~September~~June 30, ~~2018,~~2019, HTALP had $300.0 million of unsecured senior notes outstanding that are guaranteed by ~~us.~~HTA. These unsecured senior notes are registered under the Securities Act of 1933, as amended (the “Securities Act”), bear interest at 3.38% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.21% of the principal amount thereof, with an effective yield to maturity of 3.50% per annum. As of ~~September~~June 30, ~~2018,~~2019, HTALP had $300.0 million of these unsecured senior notes outstanding that mature on July 15, 2021.

$400.0 Million Unsecured Senior Notes due 2022

In 2017, in connection with the $500.0 million unsecured senior notes due 2027 referenced below, HTALP issued $400.0 million of unsecured senior notes that are guaranteed by ~~us.~~HTA. These unsecured senior notes are registered under the Securities Act, bear interest at 2.95% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.94% of the principal amount thereof, with an effective yield to maturity of 2.96% per annum. As of ~~September~~June 30, ~~2018,~~2019, HTALP had $400.0 million of these unsecured senior notes outstanding that mature on July 1, 2022.

$300.0 Million Unsecured Senior Notes due 2023

As of ~~September~~June 30, ~~2018~~,2019, HTALP had $300.0 million of unsecured senior notes outstanding that are guaranteed by ~~us.~~HTA. These unsecured senior notes are registered under the Securities Act, bear interest at 3.70% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.19% of the principal amount thereof, with an effective yield to maturity of 3.80% per annum. As of ~~September~~June 30, ~~2018,~~2019, HTALP had $300.0 million of these unsecured senior notes outstanding that mature on April 15, 2023.

$350.0 Million Unsecured Senior Notes due 2026

As of ~~September~~June 30, ~~2018,~~2019, HTALP had $350.0 million of unsecured senior notes outstanding that are guaranteed by ~~us.~~HTA. These unsecured senior notes are registered under the Securities Act, bear interest at 3.50% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.72% of the principal amount thereof, with an effective yield to maturity of 3.53% per annum. As of ~~September~~June 30, ~~2018,~~2019, HTALP had $350.0 million of these unsecured senior notes outstanding that mature on August 1, 2026.

$500.0 Million Unsecured Senior Notes due 2027

In 2017, in connection with the $400.0 million unsecured senior notes due 2022 referenced above, HTALP issued $500.0 million of unsecured senior notes that are guaranteed by ~~us.~~HTA. These unsecured senior notes are registered under the Securities Act, bear interest at 3.75% per annum and are payable semi-annually. Additionally, these unsecured senior notes were offered at 99.49% of the principal amount thereof, with an effective yield to maturity of 3.81% per annum. As of ~~September~~June 30, ~~2018,~~2019, HTALP had $500.0 million of these unsecured senior notes outstanding that mature on July 1, 2027.

Fixed ~~and Variable~~ Rate Mortgages

In 2017, we were required by the seller under the Duke acquisition to execute a promissory note (the “Promissory Note”), as the borrower, for a part of the purchase price, a senior secured first lien loan, subject to customary non-recourse carve-outs, in the amount of $286.0 million. The Promissory Note bears interest at 4.0% per annum and is payable in three equal payments maturing on January 10, 2020 and is guaranteed by us. In June 2018, the first principal installment of $96.0 million was paid and as of September 30, 2018, the outstanding balance was $190.0 million.

In August 2018, we prepaid approximately $72.6 million of our fixed and variable rate mortgages, including the settlement of three cash flow hedges, utilizing net proceeds from the Greenville Disposition to do so, resulting in a loss on extinguishment of debt of $1.1 million, primarily due to prepayment fees we incurred. See Note 4 - Impairment and Dispositions for more detail on the Greenville Disposition. As of ~~September~~June 30, ~~2018,~~2019, HTALP and its subsidiaries had ~~only~~ fixed rate mortgages with interest rates ranging from 2.85% to ~~5.50%~~4.00% per annum and a weighted average interest rate of ~~4.32%~~3.92% per annum.

~~Subsequent to September~~ During the six months ended June 30, ~~2018,~~2019, we ~~prepaid approximately $67.2~~repaid $96.2 million of our fixed rate mortgages. ~~We did not incur any prepayment fees related to this transaction.~~As of June 30, 2019, we had $115.2 million of fixed rate mortgages outstanding.

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

Future Debt Maturities

The following table summarizes the debt maturities and scheduled principal repayments of our indebtedness as of ~~September~~June 30, ~~2018~~2019 (in thousands):



Year	Amount
2019	$	1,189
2020	97,429
2021	302,504
2022	522,005
2023	612,121
Thereafter	1,050,000
Total	$	2,585,248

Year Amount
2018 $ 1,086
2019 99,453
2020 99,641
2021 304,840
2022 462,089
Thereafter 1,662,121
Total $ 2,629,230

Deferred Financing Costs

As of ~~September~~June 30, ~~2018,~~2019, the future amortization of our deferred financing costs is as follows (in thousands):



Year	Amount
2019	$	1,636
2020	2,890
2021	2,717
2022	2,096
2023	1,110
Thereafter	1,906
Total	$	12,355

Year Amount
2018 $ 764
2019 2,956
2020 2,894
2021 2,721
2022 2,098
Thereafter 3,015
Total $ 14,448

Debt Covenants

We are required by the terms of our applicable loan agreements to meet various affirmative and negative covenants that we believe are customary for these types of facilities, such as limitations on the incurrence of debt by us and our subsidiaries that own unencumbered assets, limitations on the nature of HTALP’s business, and limitations on distributions by HTALP and its subsidiaries that own unencumbered assets. Our loan agreements also impose various financial covenants on us, such as a maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a minimum tangible net worth covenant, a maximum ratio of unsecured indebtedness to unencumbered asset value, rent coverage ratios and a minimum ratio of unencumbered Net Operating Income (“NOI”) to unsecured interest expense. As of ~~September~~June 30, ~~2018~~,2019, we believe that we were in compliance with all such financial covenants and reporting requirements. In addition, certain of our loan agreements include events of default provisions that we believe are customary for these types of facilities, including restricting us from making dividend distributions to our stockholders in the event we are in default thereunder, except to the extent necessary for us to maintain our REIT status.

8.9. Derivative Financial Instruments and Hedging Activities

Risk Management Objective of Using Derivative Financial Instruments

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

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

Cash Flow Hedges of Interest Rate Risk

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

As ~~a result~~ of ~~our adoption of ASU 2017-12 as of January 1, 2018,~~July 17, 2019, the ~~entire change in the fair value of derivatives designated and qualify as~~two remaining cash flow hedges, are recorded in accumulated other comprehensive income (loss) in the accompanying condensed consolidated balance sheets and are subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings. During the nine months ended September 30, 2018, such derivatives were used to hedge the variable cash flows associated with variable rate debt. Additionally, as a result of the foregoing adoption of ASU 2017-12, we no longer disclose the ineffective portion of the change in fair value of our derivatives financial instruments designated as hedges.noted below, have matured.

Amounts reported in accumulated other comprehensive income (loss) in the accompanying condensed consolidated balance sheets related to derivatives will be reclassified to interest expense as interest payments are made on our variable rate debt. During the next twelve months, we estimate that an additional $1.2 million will be reclassified from other comprehensive income (loss) in the accompanying condensed consolidated balance sheets as an increase to interest related to derivative financial instruments in the accompanying condensed consolidated statements of operations.

In August 2018, we settled three of our five cash flow hedges utilizing net proceeds from the Greenville Disposition to do so. See Note 4 - Impairment and Dispositions in the accompanying notes to the condensed consolidated financial statements for more detail on the Greenville Disposition. As of ~~September~~June 30, ~~2018~~,2019, we had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (in thousands, except number of instruments):


Cash Flow Hedges	September 30, 2018		June 30, 2019
Number of instruments	2		2
Notional amount	$	155,000	$	155,000

The table below presents the fair value of our derivative financial instruments designated as ~~a hedge~~cash flow hedges as well as ~~our~~the classification in the accompanying condensed consolidated balance sheets as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively (in thousands).



	Asset Derivatives
		Fair Value at:
Derivatives Designated as Hedging Instruments:	Balance Sheet Location	June 30, 2019		December 31, 2018
Interest rate swaps	Receivables and other assets	$	84	$	1,111

Asset Derivatives Liability Derivatives
Fair Value at: Fair Value at:
Derivatives Designated as Hedging Instruments:
Balance Sheet
Location
September 30, 2018 December 31, 2017
Balance Sheet
Location
September 30, 2018 December 31, 2017
Interest rate swaps Receivables and other assets $ 1,588
$ 1,529
Derivative financial instruments $ —
$ 1,089

~~Table of Contents~~

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

The table below presents the gain or loss recognized on our derivative financial instruments designated as cash flow hedges as well as ~~our~~the classification in the accompanying condensed consolidated statements of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively (in thousands). ~~As a result of the foregoing adoption of ASU 2017-12, we no longer disclose the ineffective portion of the change in fair value of our derivative financial instruments designated as hedges.~~



	Gain (Loss) Recognized in OCI on Derivative						Gain (Loss) Reclassified from Accumulated OCI into Income
	Three Months Ended June 30,						Three Months Ended June 30,
Derivatives Cash Flow Hedging Relationships:	2019			2018		Statement of Operations Location	2019		2018
Interest rate swaps	$	(30	)	$	371	Interest expense	$	351	$	157

Gain (Loss) Recognized in OCI on Derivative
Gain (Loss) Reclassified from Accumulated OCI into Income ⁽¹⁾
Three Months Ended September 30, Three Months Ended September 30,
Derivatives Cash Flow Hedging Relationships: 2018 2017 Statement of Operations Location 2018 2017
Interest rate swaps $ 96
$ 9
Interest related to derivative financial instruments $ 223
$ (196 )



	Gain (Loss) Recognized in OCI on Derivative						Gain (Loss) Reclassified from Accumulated OCI into Income
	Six Months Ended June 30,						Six Months Ended June 30,
Derivatives Cash Flow Hedging Relationships:	2019			2018		Statement of Operations Location	2019		2018
Interest rate swaps	$	(51	)	$	1,341	Interest expense	$	720	$	227

Gain (Loss) Recognized in OCI on Derivative
Gain (Loss) Reclassified from Accumulated OCI into Income ⁽¹⁾
Nine Months Ended September 30, Nine Months Ended September 30,
Derivatives Cash Flow Hedging Relationships: 2018 2017 Statement of Operations Location 2018 2017
Interest rate swaps $ 1,437
$ (1,196 ) Interest related to derivative financial instruments $ 450
$ (565 )

(1) For the three and nine months ended September 30, 2018, due to the settlement of three cash flow hedges that was a result of the prepayment of its associated debt, a forecasted amount of gain reclassified from accumulated OCI to income in the amount of approximately $0.6 million will not occur. This reclassification was reported in loss on extinguishment of debt on the accompanying condensed consolidated statements of operations.

~~Non-Designated Hedges~~

Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks, but do not meet the strict hedge accounting requirements of ASC 815 - Derivatives and Hedging. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly to gain or loss on change in fair value of derivative financial instruments in the accompanying condensed consolidated statements of operations. For the nine months ended September 30, 2017, we recorded a gain on change in fair value of derivative financial instruments of ~~$0.9 million. There were no non-designated hedges during the three months ended September 30, 2017 and the three and nine months ended September 30, 2018.~~

Tabular Disclosure of Offsetting Derivatives

The table below sets forth the net effects of offsetting and net presentation of our derivatives as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively (in thousands). The net amounts of derivative assets ~~or liabilities~~ can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets ~~or liabilities~~ are presented in the accompanying condensed consolidated balance sheets.

Offsetting of Derivative Assets
Gross Amounts of Recognized Assets Gross Amounts in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount
September 30, 2018 $ 1,588
$ —
$ 1,588
$ —
$ —
$ 1,588
December 31, 2017 1,529
—
1,529
—
—
1,529



	Offsetting of Derivative Assets
	Gross Amounts of Recognized Assets		Gross Amounts in the Balance Sheets		Net Amounts of Assets Presented in the Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
June 30, 2019	$	84	$	—	$	84	$	—	$	—	$	84
December 31, 2018	1,111		—		1,111		—		—		1,111

Offsetting of Derivative Liabilities
Gross Amounts of Recognized Liabilities Gross Amounts in the Consolidated Balance Sheets Net Amounts of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount
September 30, 2018 $ —
$ —
$ —
$ —
$ —
$ —
December 31, 2017 1,089
—
1,089
—
—
1,089

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

Credit Risk Related Contingent Features

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

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

As of ~~September~~June 30, ~~2018, due to the settlement of three of our cash flow hedges,~~2019, there is no fair value of derivatives in a net liability position. As of ~~September~~June 30, ~~2018,~~2019, we have not posted any collateral related to these agreements and we were not in breach of any of the provisions of these agreements. As such, there is no termination value as of ~~September~~June 30, ~~2018.~~2019. If we had breached any of the provisions of these agreements, we could have been required to settle our obligations under these agreements.

9.10. Commitments and Contingencies

Litigation

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

Environmental Matters

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

Other

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

~~10.~~11. Redeemable Noncontrolling Interests

~~Redeemable~~As discussed in Note 2 - Summary of Significant Accounting Policies, redeemable noncontrolling interests inon the accompanying condensed consolidated balance sheets represent the noncontrolling interest in ~~one~~a joint venture in which we own the majority interest. AsThe noncontrolling interest holders in the joint venture have the option to redeem their noncontrolling interest through the exercise of ~~September 30, 2018, approximately 14.3% of~~put options that were issued at the ~~earnings~~initial formation of the joint ~~venture are allocated to~~venture. The last exercisable put option lapsed on June 30, 2019. The redemption price was based on the fair value of their interest at the time of option exercise. During the three months ended June 30, 2019, all redeemable noncontrolling ~~interests.~~ interests have either converted their interest to OP Units or received cash proceeds.

The following is summary of the activity of our redeemable noncontrolling interests as of ~~September~~June 30, ~~2018~~2019 and December 31, ~~2017,~~2018, respectively (in thousands):



	June 30, 2019			December 31, 2018
Beginning balance	$	6,544		$	6,737
Net income attributable to noncontrolling interests	66			89
Distributions	(141		)	(282		)
Fair value adjustment	(425		)	—
Redemptions	(3,441		)	—
Issuance of OP Units	(2,603		)	—
Ending balance	$	—		$	6,544

September 30, 2018 December 31, 2017
Beginning balance $ 6,737
$ 4,653
Net income attributable to noncontrolling interests 65
123
Distributions (192 ) (53 )
Fair value adjustment —
2,014
Ending balance $ 6,610
$ 6,737

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

~~11.~~12. Stockholders’ Equity and Partners’ Capital

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

Common Stock Offerings

In ~~June~~December 2018, we ~~settled~~entered into new equity distribution agreements with various sales agents with respect to our at-the-market (“ATM”) offering program of common stock with an aggregate sales amount of up to $500.0 million. In June 2019, we entered into a forward sale arrangement pursuant to a forward equity agreement, ~~that we entered into in October 2017, which included the sale of approximately 2.6 million shares of our common stock for~~with anticipated net proceeds of ~~approximately $73.8~~$52.1 million ~~adjusted~~with a maturity date of June 2020, subject to adjustments as provided in the forward equity agreement. As of June 30, 2019, $500.0 million remained available for ~~costs to borrow equating to a net price to~~issuance (excluding the forward sale arrangement) by us ~~of $28.94 per share of common stock.~~under the new ATM. Refer to Note 1314 - Per Share Data of HTA ~~in the accompanying notes~~ to ~~the~~these condensed consolidated financial statements for a more detailed discussion related to our forward equity ~~agreement.~~agreement executed in June 2019.

Stock Repurchase Plan

In August 2018, our Board of Directors approved a stock repurchase plan authorizing us to purchase up to $300.0 million of our common stock from time to time prior to the expiration thereof on June 7, 2020. During the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, we repurchased ~~628,002~~345,786 shares of our common stock, at an average price of ~~$26.25~~$24.65 per share, for an aggregate amount of approximately ~~$16.5~~$8.5 million, pursuant to ~~this~~our stock repurchase plan. As of ~~September~~June 30, ~~2018,~~2019, the remaining amount of common stock available for repurchase under ~~the~~our stock repurchase plan was approximately ~~$283.5~~$224.3 million. Subsequent to September 30, 2018, we repurchased 289,519 shares of our common stock at an average price of $25.69 per share, for an aggregate amount of approximately $7.4 million under this stock repurchase plan.

Common Stock Dividends

See our accompanying condensed consolidated statements of ~~operations~~equity and condensed statements of changes in partners’ capital for the dividends declared during the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017.~~2018. On ~~October 25, 2018,~~July 23, 2019, our Board of Directors announced aan increased quarterly cash dividend of ~~$0.310~~$0.315 per share of common stock and per OP ~~unit~~Unit to be paid on ~~January 9,~~October 10, 2019 to stockholders of record of our common stock and holders of our OP Units on ~~January 2,~~October 3, 2019.

Incentive Plan

Our Incentive Plan permits the grant of incentive awards to our employees, officers, non-employee directors and consultants as selected by our Board of Directors. ~~The~~This Plan authorizes us to grant awards in any of the following forms: options; stock appreciation rights; restricted stock; restricted or deferred stock units; performance awards; dividend equivalents; other stock-based awards, including units in HTALP; and cash-based awards. Subject to adjustment as provided in the Plan, the aggregate number of awards reserved and available for issuance under the Plan is 5,000,000 shares. As of ~~September~~June 30, ~~2018~~,2019, there were ~~1,370,792~~1,096,002 awards available for grant under the Plan.

Restricted Common Stock

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, we recognized compensation expense of $2.1 million and ~~$7.8~~$5.5 million, respectively. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2018, we recognized compensation expense of ~~$1.7~~$2.2 million and ~~$5.5~~$5.7 million, respectively. Substantially all compensation expense was recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations.

As of ~~September~~June 30, ~~2018,~~2019, we had ~~$8.8~~$8.6 million of unrecognized compensation expense, net of estimated forfeitures, which we will recognize over a remaining weighted average period of 1.5 years.

The following is a summary of our restricted common stock activity as of ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively:



	June 30, 2019				June 30, 2018
	Restricted Common Stock		Weighted Average Grant Date Fair Value		Restricted Common Stock		Weighted Average Grant Date Fair Value
Beginning balance	624,349		$	29.35	589,606		$	29.38
Granted	295,422		25.87		323,354		28.86
Vested	(305,647	)	28.49		(219,418	)	28.97
Forfeited	(6,423	)	28.87		(28,611	)	29.59
Ending balance	607,701		$	28.10	664,931		$	29.25

September 30, 2018 September 30, 2017
Restricted Common Stock
Weighted
Average Grant
Date Fair Value
Restricted Common Stock
Weighted
Average Grant
Date Fair Value
Beginning balance 589,606
$ 29.38
640,870
$ 27.36
Granted 360,700
28.70
292,109
29.75
Vested (255,946 ) 28.68
(278,821 ) 25.31
Forfeited (38,882 ) 28.97
(58,384 ) 28.86
Ending balance 655,478
$ 29.30
595,774
$ 29.39

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

~~12.~~13. Fair Value of Financial Instruments

Financial Instruments Reported at Fair Value - Recurring

The table below presents the carrying amounts and fair values of our ~~assets and liabilities measured at fair value~~financial instruments on a recurring basis as of ~~September~~June 30, ~~2018, aggregated by the applicable level in the fair value hierarchy (in thousands):~~

Level 1 Level 2 Level 3 Total
Assets:
Derivative financial instruments $ —
$ 1,588
$ —
$ 1,588
Liabilities:
Derivative financial instruments $ —
$ —
$ —
$ —

~~The table below presents our assets~~2019 and ~~liabilities measured at fair value on a recurring basis as of~~ December 31, ~~2017, aggregated by the applicable level in the fair value hierarchy (in thousands):~~

Level 1 Level 2 Level 3 Total
Assets:
Derivative financial instruments $ —

$ 1,529

$ —
$ 1,529
Liabilities:
Derivative financial instruments $ —
$ 1,089
$ —
$ 1,089

~~Financial Instruments Reported at Fair Value - Non-Recurring~~

~~The table below presents our assets measured at fair value on a non-recurring basis as of September 30,~~ 2018 ~~aggregated by the applicable level in the fair value hierarchy~~ (in thousands):



	June 30, 2019				December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Level 2 - Assets:
Derivative financial instruments	$	84	$	84	$	1,111	$	1,111
Level 2 - Liabilities:
Debt	$	2,567,008	$	2,623,553	$	2,541,232	$	2,508,599

Level 1 Level 2 Level 3 Total
Assets:
MOB⁽¹⁾
$ —
$ 10,110
$ —
$ 10,110

(1) During the nine months ended September 30, 2018, we recognized $8.9 million of impairment charges to the carrying value of six MOBs, one of which had been sold as of September 30, 2018 and one subsequent to September 30, 2018. The estimated fair value as of September 30, 2018 for the remaining four MOBs was based on the purchase price set forth in executed letters of intent for the purchase thereof and a pending, executed sales agreement.

The ~~table below presents our assets measured at~~carrying amounts of cash and cash equivalents, tenant and other receivables, restricted cash, accounts payable, and accrued liabilities approximate fair ~~value on a non-recurring basis as of December 31, 2017, aggregated by the applicable level in the fair value hierarchy (in thousands):~~

Level 1 Level 2 Level 3 Total
Assets:
MOB⁽¹⁾
$ —
$ 10,271
$ —
$ 10,271

(1) During the year ended December 31, 2017, we recognized $13.9 million of impairment charges to the carrying value of two MOBs and a portfolio of MOBs. The estimated fair value as of December 31, 2017 for these MOBs was based upon a pending, executed sales agreement and real estate market comparables.

value. There have been no transfers of assets or liabilities between levels. We will record any such transfers at the end of the reporting period in which a change of event occurs that results in a transfer. Although we have determined that the majority of the inputs used to value our ~~interest rate swap derivatives~~cash flow hedges fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with these instruments utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. However, we have assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our ~~interest rate swap derivative~~cash flow hedge positions and have determined that the credit valuation adjustments are not significant to their overall valuation. As a result, we have determined that our ~~interest rate swap derivative~~cash flow hedge valuations in their entirety are classified in Level 2 of the fair value hierarchy.

~~Table~~For further discussion of ~~Contents~~

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

the assumptions considered, refer to Note 2 - Summary of Significant Accounting Policies.

Financial Instruments ~~Disclosed~~Reported at Fair Value - Non-Recurring

We ~~consider the carrying values of cash and cash equivalents, tenant and other receivables, restricted cash and accounts payable, and accrued liabilities,~~also have assets that under certain conditions are subject to ~~approximate~~measurement at fair value for these financial instruments because of the short period of time between origination of the instruments and their expected realization. All of these financial instruments are measured using Level 2.

~~The fair value of debt is estimated using borrowing rates available~~on a non-recurring basis. This generally includes assets subject to us with similar terms and maturities, which is considered a Level 2 input. As of September 30, 2018, the fair value of the debt was $2,550.0 million compared to the carrying value of $2,609.7 million. As of December 31, 2017, the fair value of the debt was $2,826.3 million compared to the carrying value of $2,781.0 million.impairment.

~~13.~~14. Per Share Data of HTA

In ~~October 2017,~~June 2019, we entered into a forward sale arrangement pursuant to a forward equity agreement to sell approximately ~~2.6~~1.8 million shares of ~~our~~ common stock through our ~~at-the-market program (the “ATM”). In June 2018, we settled our forward sale arrangement~~ATM at a price of $28.31 per share, for anticipated net proceeds of approximately ~~$73.8~~$52.1 million ~~adjusted for costs~~with a maturity date of June 2020, subject to ~~borrow equating to a net price to us of $28.94 per share of common stock.~~adjustments as provided in the forward equity agreement. To account for the forward equity agreement, we considered the accounting guidance governing financial instruments and derivatives and concluded that our forward equity agreement was not a liability as it did not embody obligations to repurchase our shares of common stock nor did it embody obligations to issue a variable number of shares for which the monetary value was predominately fixed, varying with something other than the fair value of the shares, or varying inversely in relation to our shares. We also evaluated whether the agreement met the derivatives and hedging guidance scope exception to be accounted for as an equity instrument and concluded that the agreement can be classified as an equity contract based on the following assessment: (i) none of the ~~agreement did not~~agreements’ exercise contingencies were based on observable markets or indices besides those related to the market for our own stock price and operations; and (ii) none of the settlement provisions precluded the agreement from being indexed to our own common stock.

In addition, we considered the potential dilution resulting from the forward equity agreement on our earnings per common share calculations. We ~~used~~use the treasury method to determine the dilution resulting from the forward equity agreement during the period of time prior to settlement. The number of weighted-average shares outstanding - diluted used in the computation of earnings per common share for the ~~nine~~three and six months ended ~~September~~June 30, ~~2018, included~~2019, includes the effect from the assumed issuance of ~~2.6~~1.8 million shares of ~~our~~ common stock pursuant to the settlement of the forward equity agreement at the contractual price, less the assumed repurchase of ~~our~~ common ~~stock~~shares at the average market price using the anticipated proceeds of approximately ~~$73.8~~$52.1 million, adjusted as provided for ~~costs~~in the forward equity agreement. The impact to ~~borrow. For the nine months ended September 30, 2018, approximately 330,000~~our weighted-average shares - diluted was not material as these were computed as less than a thousand weighted-average incremental shares ~~of our common stock were excluded from~~for the ~~computation of our weighted-average shares-diluted, as their impact was anti-dilutive.~~three and six months ended June 30, 2019.

We include unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents as “participating securities” pursuant to the two-class method. The resulting classes are our common stock and restricted stock. Our forward equity agreement is not considered a participating security and, therefore, is not included in the computation of earnings per share using the two-class method. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, all of our earnings were distributed and the calculated earnings per share amount would be the same for all classes.

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

The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per share of HTA for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively (in thousands, except per share data):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Numerator:
Net income	$	16,598		$	15,657		$	30,299		$	25,673
Net income attributable to noncontrolling interests	(339		)	(311		)	(600		)	(525		)
Net income attributable to common stockholders	$	16,259		$	15,346		$	29,699		$	25,148
Denominator:
Weighted average shares outstanding - basic	205,108			205,241			205,094			205,155
Dilutive shares - partnership units convertible into common stock	3,897			4,018			3,908			4,063
Adjusted weighted average shares outstanding - diluted	209,005			209,259			209,002			209,218
Earnings per common share - basic
Net income attributable to common stockholders	$	0.08		$	0.07		$	0.14		$	0.12
Earnings per common share - diluted
Net income attributable to common stockholders	$	0.08		$	0.07		$	0.14		$	0.12

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Numerator:
Net income $ 176,348
$ 13,957
$ 202,021
$ 22,105
Net income attributable to noncontrolling interests (3,362 ) (194 ) (3,887 ) (715 )
Net income attributable to common stockholders $ 172,986
$ 13,763
$ 198,134
$ 21,390
Denominator:
Weighted average shares outstanding - basic 207,513
200,674
205,950
173,189
Dilutive shares - partnership units convertible into common stock 3,931
4,121
4,018
4,221
Adjusted weighted average shares outstanding - diluted 211,444
204,795
209,968
177,410
Earnings per common share - basic
Net income attributable to common stockholders $ 0.83
$ 0.07
$ 0.96
$ 0.12
Earnings per common share - diluted
Net income attributable to common stockholders $ 0.82
$ 0.07
$ 0.94
$ 0.12

~~14.~~15. Per Unit Data of HTALP

In ~~October 2017,~~June 2019, we entered into a forward sale arrangement pursuant to a forward equity agreement to sell ~~approximately 2.6~~1.8 million shares of ~~our~~ common stock through our ATM. Refer to Note 1314 - Per Share Data of HTA ~~in the accompanying notes~~ to ~~the~~these condensed consolidated financial statements for a more detailed discussion related to our forward equity agreement ~~settled~~executed in June ~~2018.~~2019.

The following is the reconciliation of the numerator and denominator used in basic and diluted earnings per unit of HTALP for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, and ~~2017,~~2018, respectively (in thousands, except per unit data):



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Numerator:
Net income	$	16,598		$	15,657		$	30,299		$	25,673
Net income attributable to noncontrolling interests	(38		)	(14		)	(66		)	(47		)
Net income attributable to common unitholders	$	16,560		$	15,643		$	30,233		$	25,626
Denominator:
Weighted average units outstanding - basic	209,005			209,259			209,002			209,218
Dilutive units - partnership units convertible into common units	—			—			—			—
Adjusted weighted average units outstanding - diluted	209,005			209,259			209,002			209,218
Earnings per common unit - basic:
Net income attributable to common unitholders	$	0.08		$	0.07		$	0.14		$	0.12
Earnings per common unit - diluted:
Net income attributable to common unitholders	$	0.08		$	0.07		$	0.14		$	0.12

Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
Numerator:
Net income $ 176,348
$ 13,957
$ 202,021
$ 22,105
Net income attributable to noncontrolling interests (18 ) (28 ) (65 ) (80 )
Net income attributable to common unitholders $ 176,330
$ 13,929
$ 201,956
$ 22,025
Denominator:

Weighted average units outstanding - basic 211,444
204,795
209,968
177,410
Dilutive units - partnership units convertible into common units —
—
—
—
Adjusted weighted average units outstanding - diluted 211,444
204,795
209,968
177,410
Earnings per common unit - basic:
Net income attributable to common unitholders $ 0.83
$ 0.07
$ 0.96
$ 0.12
Earnings per common unit - diluted:
Net income attributable to common unitholders $ 0.83
$ 0.07
$ 0.96
$ 0.12

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

~~15.~~16. Supplemental Cash Flow Information

The following is the supplemental cash flow information for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively (in thousands):

Nine Months Ended September 30,
2018 2017
Supplemental Disclosure of Cash Flow Information:
Interest paid $ 87,303
$ 51,066
Income taxes paid 1,656
997

Supplemental Disclosure of Noncash Investing and Financing Activities:
Accrued capital expenditures $ 243
$ 4,185
Debt assumed and entered into in connection with an acquisition —
286,000
Dividend distributions declared, but not paid 65,544
62,494
Issuance of operating partnership units in HTALP in connection with an acquisition —
610
Note receivable retired in connection with an acquisition —
2,494
Redemption of noncontrolling interest 5,195
5,694



	Six Months Ended June 30,
	2019		2018
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	46,196	$	52,260
Income taxes paid	1,536		1,534
Cash paid for operating leases	6,487		—

Supplemental Disclosure of Noncash Investing and Financing Activities:
Accrued capital expenditures	$	5,216	$	454
Dividend distributions declared, but not paid	68,254		64,571
Issuance of OP Units in HTALP	2,603		—
Redemption of noncontrolling interest	1,312		4,907
Redemption of redeemable noncontrolling interest	3,441		—
ROU assets obtained in exchange for lease obligations	200,879		—

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

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

The following discussion should be read in conjunction with our condensed consolidated financial statements and notes appearing elsewhere in this Quarterly Report, as well as with the audited consolidated financial statements, accompanying notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our ~~2017~~2018 Annual Report on Form 10-K. Such condensed consolidated financial statements and information have been prepared to reflect HTA’s and HTALP’s financial position as of September 30, 2018 and December 31, 2017, together with results of operations and cash flows for three and nine months ended September 30, 2018 and 2017.

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

Forward-Looking Statements;

Executive Summary;

Company Highlights;

Critical Accounting Policies;

Recently Issued or Adopted Accounting Pronouncements;

Factors Which May Influence Results of Operations;

Results of Operations;

Non-GAAP Financial Measures;

Liquidity and Capital Resources;

Commitments and Contingencies;

Debt Service Requirements;

Off-Balance Sheet Arrangements; and

Inflation.

Forward-Looking Statements

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

Any such forward-looking statements reflect our current views about future events, are subject to unknown risks, uncertainties, and other factors, and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual results, our ability to meet such forward-looking statements, including our ability to generate positive cash flow from operations, provide dividends to stockholders and maintain the value of our real estate properties, may be significantly hindered. Factors that might impair our ability to meet such forward-looking statements include, without limitation, those discussed in Part I, Item 1A - Risk Factors in our ~~2017~~2018 Annual Report on Form 10-K, which is incorporated herein.

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

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

Executive Summary

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

Since 2006, we have invested ~~$6.8~~$6.9 billion ~~to create a portfolio of~~primarily in MOBs, development projects, land and other healthcare real estate assets consisting of approximately ~~23.2~~23.3 million square feet of GLA throughout the U.S. Approximately 68% of our portfolio was located on the campuses of, or adjacent to, nationally and regionally recognized healthcare systems. Our portfolio is diversified geographically across 32 states, with no state having more than 20% of our total GLA as of ~~September~~June 30, ~~2018.~~2019. We are concentrated in 20 to 25 key markets that are experiencing higher economic and demographic trends than other markets, on average, that we expect will drive demand for MOBs. As of ~~September~~June 30, ~~2018,~~2019, we had approximately 1 million square feet of GLA in nine of our top ~~ten~~20 markets and approximately 93% of our portfolio, based on GLA, is located in the top 75 MSAs, with Dallas, Houston, Boston, Tampa and Atlanta being our largest markets by investment.

Company Highlights

Portfolio Operating Performance

For the three months ended ~~September~~June 30, ~~2018,~~2019, total revenue ~~decreased (0.5)%, or $(0.9) million, to $175.1~~was $171.8 million, compared to $173.3 million for the three months ended ~~September~~June 30, ~~2017.~~2018. For the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, total revenue ~~increased 19.1%, or $83.9 million, to $524.1~~was $340.7 million, compared to $349.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2018.

For the three months ended ~~September~~June 30, ~~2018,~~2019, net income was ~~$176.3~~$16.6 million, compared to ~~$14.0~~$15.7 million, for the three months ended ~~September~~June 30, ~~2017.~~2018. For the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, net income was ~~$202.0~~$30.3 million, compared to ~~$22.1~~$25.7 million, for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2018.

For the three months ended ~~September~~June 30, ~~2018,~~2019, net income attributable to common stockholders was ~~$0.82~~$0.08 per diluted share, or ~~$173.0~~$16.3 million, compared to $0.07 per diluted share, or ~~$13.8~~$15.3 million for the three months ended ~~September~~June 30, ~~2017.~~2018. For the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, net income attributable to common stockholders was ~~$0.94~~$0.14 per diluted share, or ~~$198.1~~$29.7 million, compared to $0.12 per diluted share, or ~~$21.4~~$25.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2018.

For the three months ended ~~September~~June 30, ~~2018,~~2019, HTA’s FFO, as defined by NAREIT, was ~~$81.4~~$84.6 million, or ~~$0.38~~$0.40 per diluted share, compared to ~~$0.41~~$0.40 per diluted share, or $84.2 million, for the three months ended September 30, 2017. For the nine months ended September 30, 2018, HTA’s FFO was $250.4 million, or $1.19 per diluted share, compared to $1.12 per diluted share, or $198.7 million, for the nine months ended September 30, 2017.

~~Table of Contents~~

~~For the three months ended September 30, 2018, HTALP’s FFO was $84.7 million, or $0.40 per diluted OP Unit, compared to $0.41 per diluted OP Unit,~~ or $84.4 million, for the three months ended ~~September~~June 30, ~~2017.~~2018. For the ~~nine~~six months ended ~~September~~June 30, 2019 HTA’s FFO, was $167.4 million, or $0.80 per diluted share, compared to $0.81 per diluted share, or $169.0 million, for the six months ended June 30, 2018. Due to the adoption of Topic 842, initial direct costs are now reported in general and administrative expenses on the accompanying condensed consolidated statements of operations. For the three and six months ended June 30, 2018, we capitalized approximately $0.9 million and $2.2 million, respectively, of initial direct costs.

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For the three months ended June 30, 2019, HTALP’s FFO was ~~$254.2~~$84.9 million, or ~~$1.21~~$0.41 per diluted OP Unit, compared to ~~$1.12~~$0.40 per diluted OP unit, or $84.7 million, for the three months ended June 30, 2018. For the six months ended June 30, 2019, HTALP’s FFO was $168.0 million, or $0.80 per diluted OP Unit, compared to $0.81 per diluted OP Unit, or ~~$199.3~~$169.5 million, for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2018.

For the three months ended ~~September~~June 30, ~~2018,~~2019, HTA’s and HTALP’s Normalized FFO was $0.41 per diluted share and OP Unit, or ~~$86.1 million, compared to~~$85.2 million. For the ~~three~~six months ended ~~September~~June 30, ~~2017. For the nine months ended September 30, 2018,~~2019, HTA’s and HTALP’s Normalized FFO was ~~$1.22~~$0.81 per diluted share and OP Unit, or ~~$256.2 million, compared to the nine months ended September 30, 2017.~~$168.3 million.

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

For the three months ended ~~September~~June 30, ~~2018,~~2019, NOI ~~decreased (0.3)%, or $(0.3) million, to $119.3~~was $118.8 million, compared to $119.8 million for the three months ended ~~September~~June 30, ~~2017.~~2018. For the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, NOI ~~increased 19.1%, or $57.4 million, to $358.8~~was $236.3 million, compared to $239.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2018.

For the three months ended ~~September~~June 30, ~~2018, Same-property~~2019, Same-Property Cash NOI increased ~~2.5%~~2.9%, or ~~$2.7~~$3.2 million, to ~~$108.8~~$112.5 million, compared to $109.3 million for the three months ended ~~September~~June 30, ~~2017.~~2018. For the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, Same-Property Cash NOI increased ~~2.4%~~2.9%, or ~~$5.6~~$6.3 million, to ~~$233.2~~$223.8 million, compared to $217.6 million for the ~~nine~~six months ended ~~September 30, 2017. Excluding the MOBs located on our Forest Park Dallas campus, Same-Property Cash NOI growth was 2.7% for the nine months ended September~~June 30, 2018.

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

Key Market Focused Strategy and Investments

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

Our investment strategy includes alignment with key healthcare systems, hospitals, and leading academic medical universities. We are the largest owner of on-campus or adjacent MOBs in the country, with approximately 1615.7 million square feet of GLA, or 68%, of our portfolio located in these locations. The remaining 32% of our portfolio is located in core community outpatient locations where healthcare is increasingly being delivered.

Over the ~~last several years,~~past decade, our investments have been focused in our 20 to 25 key markets which we believe will outperform the broader U.S. from an economic and demographic perspective. As of ~~September~~June 30, ~~2018,~~2019, approximately 93% of our portfolio’s GLA is located in the top 75 MSAs. Our key markets represent top MSAs with strong growth metrics in jobs, household income and population, as well as low unemployment and mature healthcare infrastructures. Many of our key markets are also supported by strong university systems.

Our key market focus has enabled us to establish scale across 20 to 25 key markets and effectively utilize our ~~internal property~~asset management and leasing platform to deliver consistent same store growth and additional yield on investments, and also cost effective service to tenants. As of ~~September~~June 30, ~~2018,~~2019, we had approximately 1 million square feet of GLA in nine of our top ~~ten~~20 markets and approximately ~~500,000 square feet in each of our top 15 markets. We expect to establish this scale across 20 to 25 key markets as our portfolio expands.~~

During the three months ended September 30, 2018, HTA completed the disposition of 19 MOBs, primarily located in Greenville, South Carolina for an aggregate gross sales price of $305.9 million totaling approximately 1.10.5 million square feet of GLA ~~generating gains~~in 15 of ~~approximately $166.4 million.~~our top 20 markets.

During the ~~nine~~six months ended ~~September~~June 30, 2018, we announced a new development in our key gateway market of Miami, Florida and commenced two redevelopments, including an agreement to build a new on-campus MOB in Raleigh, North Carolina. These projects will have total expected construction costs of approximately $70.6 million and are approximately 78% pre-leased to major health systems.

~~During the nine months ended September 30, 2018,~~2019, we invested ~~$13.9~~$89.5 million to acquire ~~three~~five MOBs ofall located in our existing key markets totaling approximately ~~60,000~~229,000 square feet of ~~GLA in the key market of Raleigh, North Carolina.~~GLA. In addition, we invested ~~$3.9~~approximately $3.4 million to consolidate our ownership interests in several other ~~MOBs.~~

~~Table~~MOBs totaling approximately 34,000 square feet of ~~Contents~~

GLA.

Internal Growth through Proactive In-House Property Management and Leasing

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

As of ~~September~~June 30, ~~2018,~~2019, our in-house ~~property~~asset management and leasing platform operated approximately ~~21.7~~21.8 million square feet of GLA, or 93%, of our total portfolio.

As of ~~September~~June 30, ~~2018,~~2019, our leased rate (which includes leases which have been executed, but which have not yet commenced) was ~~92.1%~~91.6% by GLA and our occupancy rate was ~~90.9%~~90.6% by GLA.

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We entered into new and renewal leases on approximately ~~532,000~~0.8 million and ~~2.2~~1.9 million square feet of GLA, or ~~2.3%~~approximately 3.4% and ~~9.5%~~8.1%, respectively, of the GLA of our total portfolio, during the three and ~~nine~~six months ended ~~September~~June 30, ~~2018.~~2019.

~~Tenant~~During the three and six months ended June 30, 2019, tenant retention for the Same-Property portfolio was ~~82%~~83% and ~~83%~~85%, respectively, which included approximately ~~381,000~~0.6 million and 1.7 million square feet of GLA of expiring leases, ~~for the quarter and year-to-date,~~ respectively, which we believe is indicative of our commitment to maintaining buildings in desirable locations and fostering strong tenant relationships. Tenant retention is defined as the sum of the total leased GLA of tenants that renewed a lease during the period over the total GLA of leases that renewed or expired during the period.

Financial Strategy and Balance Sheet Flexibility

As of ~~September~~June 30, ~~2018,~~2019, we had total leverage, measured by debt less cash and cash equivalents to total capitalization, of ~~29.7%~~30.7%. Total liquidity was ~~$1.2~~$1.0 billion, including cash and cash equivalents of ~~$225.5~~$23.2 million, a $52.1 million forward commitment, and ~~$994.5 million~~approximately $0.9 billion available on our unsecured revolving credit facility ~~(which includes the impact of $5.5 million of outstanding letters of credit)~~ as of ~~September~~June 30, ~~2018.~~2019.

As of ~~September~~June 30, ~~2018,~~2019, the weighted average remaining term of our debt portfolio was ~~5.2~~4.6 years.


•	During the three months ended June 30, 2019, we entered into a forward sale arrangement in which it would issue approximately 1.8 million shares of common stock to receive anticipated net proceeds of approximately $52.1 million prior to June 2020, subject to adjustments as provided in the forward equity agreement.

In August 2018, we prepaid approximately $72.6 million of our fixed and variable rate mortgages, including the settlement of three cash flow hedges, utilizing net proceeds from the Greenville Disposition to do so. Additionally, in August 2018, HTALP entered into a modification of our $200.0 million unsecured term loan previously due in 2023. The modification decreased pricing at our current credit rating by 65 basis points. The maturity date was also extended by five months to January 2024. The other material terms of the unsecured term loan prior to the modification remained substantially unchanged.

In August 2018, our Board of Directors approved a stock repurchase plan authorizing us to purchase up to $300 million of our common stock from time to time prior to the expiration thereof on June 7, 2020. During the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, we repurchased ~~628,002~~345,786 shares of our common stock totaling approximately $8.5 million, at an average price of ~~$26.25~~$24.65 per share, ~~for an aggregate amount of approximately $16.5 million,~~ pursuant to ~~this~~our stock repurchase plan.

In June 2018, we settled a forward sale arrangement pursuant to a forward equity agreement that was entered into in October 2017, which included approximately 2.6 million shares of our common stock for net proceeds of approximately $73.8 million, adjusted for costs to borrow equating to a net price to us of $28.94 per share of common stock.

On ~~October 25, 2018,~~July 23, 2019, our Board of Directors announced aan increased quarterly cash dividend of ~~$0.310~~$0.315 per share of common stock and per OP ~~Unit.~~Unit to be paid on October 10, 2019 to stockholders of record of our common stock and holders of our OP Units on October 3, 2019.

Critical Accounting Policies

The complete list of our critical accounting policies was disclosed in our ~~2017~~2018 Annual Report on Form 10-K. ~~There have been no material changes to our critical accounting~~On January 1, 2019 we adopted Topic 842. For more detail on the implementation and policies ~~as disclosed herein.~~of this adoption see Note 2 - Summary of Significant Accounting Policies and Note 7 - Leases in the accompanying condensed consolidated financial statements. For further information on other significant accounting policies that impact us, see Note 2 - Summary of Significant Accounting Policies in the accompanying condensed consolidated financial statements.

Recently Issued or Adopted Accounting Pronouncements

See Note 2 - Summary of Significant Accounting Policies in the accompanying condensed consolidated financial statements for a discussion of recently issued or adopted accounting pronouncements.

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Factors Which May Influence Results of Operations

We are not aware of any material trends or uncertainties, other than national economic conditions affecting real estate generally and the risk factors previously listed in Part I, Item 1A - Risk Factors, in our ~~2017~~2018 Annual Report on Form 10-K that may reasonably be expected to have a material impact, favorable or unfavorable, on revenues or income from the investment, management and operation of our properties.

Rental Income

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

Investment Activity

During the ~~nine~~six months ended ~~September~~June 30, 2018, we had investments with an aggregate purchase price of $17.8 million and dispositions with an aggregate gross sales price of $305.9 million. Including the Duke acquisition, during the nine months ended September 30, 2017,2019, we had investments with an aggregate gross purchase price of ~~$2.7 billion, which included a 50% ownership in~~$94.1 million. During the six months ended June 30, 2018, we had investments with an ~~unconsolidated joint venture and a disposition with a~~aggregate gross ~~sales~~purchase price of ~~$5.0~~$12.3 million. The amount of any future acquisitions or dispositions could have a significant impact on our results of operations in future periods.

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Results of Operations

Comparison of the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2018~~2019 and ~~2017~~2018

As of ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, we owned and operated approximately ~~23.2~~23.3 million and 24.2 million square feet of GLA, respectively, with a leased rate of ~~92.1%~~91.6% and ~~91.7%~~91.9%, respectively ~~(which includes~~(including leases which have been executed, but which have not yet commenced), and an occupancy rate of ~~90.9%,~~90.6% and ~~90.6%~~90.9%, respectively. All explanations are applicable to both HTA and HTALP unless otherwise noted.

Comparison of the three months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively, is set forth below:

Three Months Ended September 30,
2018 2017 Change % Change
Revenues:
Rental income $ 175,038
$ 175,431
$ (393 ) (0.2 )%
Interest and other operating income 97
563
(466 ) (82.8 )
Total revenues 175,135
175,994
(859 ) (0.5 )
Expenses:
Rental 55,789
56,331
(542 ) (1.0 )
General and administrative 8,770
8,283
487
5.9
Transaction 346
261
85
32.6
Depreciation and amortization 70,568
70,491
77
0.1
Impairment 4,281
—
4,281
NM
Total expenses 139,754
135,366
4,388
3.2
Income before other income (expense) 35,381
40,628
(5,247 ) (12.9 )
Interest income (expense):
Interest related to derivative financial instruments 169
(264 ) 433
NM
Interest related to debt (25,003 ) (25,924 ) 921
3.6
Gain on sale of real estate, net 166,372
—
166,372
NM
Loss on extinguishment of debt, net (1,092 ) (774 ) (318 ) (41.1 )
Income from unconsolidated joint venture 432
318
114
35.8
Other income (expense) 89
(27 ) 116
NM
Net income $ 176,348
$ 13,957
$ 162,391
NM

NOI $ 119,346
$ 119,663
$ (317 ) (0.3 )%
Same-Property Cash NOI $ 108,823
$ 106,160
$ 2,663
2.5 %

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	Three Months Ended June 30,
	2019		2018		Change			% Change
Revenues:
Rental income	$	171,609	$	173,221	$	(1,612	)	(0.9	)%
Interest and other operating income	148		111		37			33.3
Total revenues	171,757		173,332		(1,575		)	(0.9	)
Expenses:
Rental	52,938		53,553		(615		)	(1.1	)
General and administrative	10,079		8,725		1,354			15.5
Transaction	296		396		(100		)	(25.3	)
Depreciation and amortization	68,429		69,104		(675		)	(1.0	)
Interest expense	24,006		26,305		(2,299		)	(8.7	)
Total expenses	155,748		158,083		(2,335		)	(1.5	)
Income from unconsolidated joint venture	548		403		145			36.0
Other income	41		5		36			NM
Net income	$	16,598	$	15,657	$	941		6.0	%

NOI	$	118,819	$	119,779	$	(960	)	(0.8	)%
Same-Property Cash NOI	$	112,477	$	109,320	$	3,157		2.9	%

Comparison of the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively, is set forth below:


	Nine Months Ended September 30,											Six Months Ended June 30,
	2018			2017			Change			% Change		2019			2018		Change			% Change
Revenues:
Rental income	$	523,826		$	438,949		$	84,877		19.3	%	$	340,484		$	348,788	$	(8,304	)	(2.4	)%
Interest and other operating income	302			1,271			(969		)	(76.2	)	239			205		34			16.6
Total revenues	524,128			440,220			83,908			19.1		340,723			348,993		(8,270		)	(2.4	)
Expenses:
Rental	165,364			138,874			26,490			19.1		104,406			109,575		(5,169		)	(4.7	)
General and administrative	26,281			25,178			1,103			4.4		21,369			17,511		3,858			22.0
Transaction	933			5,618			(4,685		)	(83.4	)	336			587		(251		)	(42.8	)
Depreciation and amortization	210,064			172,900			37,164			21.5		137,910			139,496		(1,586		)	(1.1	)
Interest expense												47,976			52,558		(4,582		)	(8.7	)
Impairment	8,887			5,093			3,794			74.5		—			4,606		(4,606		)	NM
Total expenses	411,529			347,663			63,866			18.4		311,997			324,333		(12,336		)	(3.8	)
Income before other income (expense)	112,599			92,557			20,042			21.7
Interest income (expense):
Interest related to derivative financial instruments	297			(827		)	1,124			NM
Gain on change in fair value of derivative financial instruments, net	—			884			(884		)	NM
Total interest related to derivative financial instruments, including net change in fair value of derivative financial instruments	297			57			240			NM
Interest related to debt	(77,689		)	(59,688		)	(18,001		)	(30.2	)
Gain on sale of real estate, net	166,372			3			166,369			NM
Loss on extinguishment of debt, net	(1,092		)	(11,192		)	10,100			90.2
Loss on sale of real estate, net												(37		)	—		(37		)	NM
Income from unconsolidated joint venture	1,405			381			1,024			NM		1,034			973		61			6.3
Other income (expense)	129			(13		)	142			NM
Other income												576			40		536			NM
Net income	$	202,021		$	22,105		$	179,916		NM		$	30,299		$	25,673	$	4,626		18.0	%

NOI	$	358,764		$	301,346		$	57,418		19.1	%	$	236,317		$	239,418	$	(3,101	)	(1.3	)%
Same-Property Cash NOI	$	233,152		$	227,595		$	5,557		2.4	%	$	223,806		$	217,554	$	6,252		2.9	%

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Rental Income

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively, rental income was comprised of the following (in thousands):


	Three Months Ended September 30,									Three Months Ended June 30,
	2018		2017		Change			% Change		2019		2018		Change			% Change
Contractual rental income	$	168,169	$	169,099	$	(930	)	(0.5	)%	$	164,037	$	166,281	$	(2,244	)	(1.3	)%
Straight-line rent and amortization of above and (below) market leases	4,252		4,269		(17		)	(0.4	)	4,112		3,885		227			5.8
Other rental revenue	2,617		2,063		554			26.9		3,460		3,055		405			13.3
Total rental income	$	175,038	$	175,431	$	(393	)	(0.2	)%	$	171,609	$	173,221	$	(1,612	)	(0.9	)%


	Nine Months Ended September 30,								Six Months Ended June 30,
	2018		2017		Change		% Change		2019		2018		Change			% Change
Contractual rental income	$	502,984	$	423,696	$	79,288	18.7	%	$	324,794	$	334,814	$	(10,020	)	(3.0	)%
Straight-line rent and amortization of above and (below) market leases	12,727		9,475		3,252		34.3		8,886		8,475		411			4.8
Other rental revenue	8,115		5,778		2,337		40.4		6,804		5,499		1,305			23.7
Total rental income	$	523,826	$	438,949	$	84,877	19.3	%	$	340,484	$	348,788	$	(8,304	)	(2.4	)%

Contractual rental income, which includes expense reimbursements, decreased ~~$(0.9)~~$(2.2) million and ~~increased $79.3~~$(10.0) million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, respectively, compared to the three and ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2018. The ~~decrease and increase~~decreases were primarily due to ~~$3.5~~$6.6 million and ~~$88.1~~$13.3 million of additional contractual rental income from our 2017 and 2018 acquisitions, and contractual rent increases for the three and nine months ended September 30, 2018, respectively, partially offset by a decrease inreduced contractual rent as a result of buildings we sold during ~~2017~~2018 and ~~2018.~~

~~Table~~2019 and $3.4 million and $7.0 million of ~~Contents~~

tenant paid property tax that we no longer record due to the adoption of Topic 842, for the three and six months ended June 30, 2019, respectively, partially offset by additional contractual rental income of $1.8 million and $2.5 million from our 2018 and 2019 acquisitions, and contractual rent increases for the three and six months ended June 30, 2019, respectively.

Average starting and expiring base rents for new and renewal leases consisted of the following for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively (in thousands, except in average base rents per square foot of GLA):


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017		2019		2018		2019		2018
New and renewal leases:
Average starting base rents	$	22.10	$	22.34	$	23.07	$	22.46	$	26.94	$	23.23	$	21.50	$	23.26
Average expiring base rents	21.32		21.94		22.59		22.47		26.16		22.87		20.62		22.85

Square feet of GLA	532		745		2,204		2,040		801		1,009		1,900		1,672

Lease rates can vary across markets, and lease rates that are considered above or below current market rent may change over time. Leases that expired in ~~2018~~2019 had rents that we believed were at market rates. In general, leasing concessions vary depending on lease type and term.

Tenant improvements, leasing commissions and tenant concessions for new and renewal leases consisted of the following for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively (in per square foot of GLA):


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017		2019		2018		2019		2018
New leases:
Tenant improvements	$	17.93	$	17.18	$	22.91	$	18.18	$	30.11	$	26.75	$	32.79	$	25.76
Leasing commissions	2.26		1.92		1.95		2.01		1.65		2.03		2.09		1.77
Tenant concessions	0.02		1.93		1.85		2.68		3.73		4.13		4.27		2.93
Renewal leases:
Tenant improvements	$	6.51	$	8.58	$	7.73	$	7.50	$	8.34	$	9.81	$	12.86	$	8.01
Leasing commissions	0.68		1.02		1.30		1.09		1.12		1.67		2.12		1.44
Tenant concessions	0.02		0.80		0.76		1.45		0.63		0.44		0.38		0.94

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The average term for new and renewal leases executed consisted of the following for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively (in years):


	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended June 30,		Six Months Ended June 30,
	2018	2017	2018	2017	2019	2018	2019	2018
New leases	7.6	6.2	7.3	5.8	7.4	7.8	7.4	7.1
Renewal leases	4.2	5.5	5.2	5.0	5.5	5.9	8.1	5.4

Rental Expenses

For the three months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, rental expenses attributable to our properties were ~~$55.8~~$52.9 million and ~~$56.3~~$53.6 million, respectively. For the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, rental expenses attributable to our properties were ~~$165.4~~$104.4 million and ~~$138.9~~$109.6 million, respectively. The ~~decrease and increase~~decreases in rental expenses were primarily due to ~~$0.5~~$2.3 million and ~~$34.0~~$4.5 million of reduced rental expenses as a result of buildings we sold during 2018 and 2019, $3.4 million and $7.0 million of tenant paid property tax that we no longer record due to the adoption of Topic 842, and improved operating efficiencies for the three and six months ended June 30, 2019, respectively, partially offset by additional rental expenses associated with our ~~2017~~2018 and ~~2018~~2019 acquisitions for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018, respectively, partially offset by improved operating efficiencies and a decrease in rental expense as a result of the buildings we sold during 2017 and 2018.~~2019.

General and Administrative Expenses

For the three months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, general and administrative expenses were ~~$8.8~~$10.1 million and ~~$8.3~~$8.7 million, respectively. For the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, general and administrative expenses were ~~$26.3~~$21.4 million and ~~$25.2~~$17.5 million, respectively. ~~These~~The increases were primarily due to an increase in ~~non-cash compensation expense and an~~the overall ~~increase in~~ head count due to the continued growth of the ~~company. General~~Company and stock based compensation expense. In addition, due to the adoption of Topic 842, initial direct costs are now reported in general and administrative expenses ~~include such costs as salaries, corporate overhead and professional fees, among other items.~~

~~Transaction Expenses~~

on the accompanying condensed consolidated statements of operations. For the three and six months ended ~~September~~June 30, 2018, ~~and 2017, transaction expenses were $0.3 million. For the nine months ended September 30, 2018 and 2017, transaction expenses were~~ we capitalized approximately $0.9 million and ~~$5.6~~$2.2 million, ~~respectively. Transaction expenses increased in 2017 due to $4.6 million~~respectively, of ~~non-incremental costs related to the Duke acquisition.~~

~~Table of Contents~~

initial direct costs.

Depreciation and Amortization Expense

For the three months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, depreciation and amortization expense was ~~$70.6~~$68.4 million and ~~$70.5~~$69.1 million, respectively. For the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, depreciation and amortization expense was ~~$210.1~~$137.9 million and ~~$172.9~~$139.5 million, respectively. These ~~increases~~decreases were associated with our ~~2017~~2018 and ~~2018 acquisitions,~~2019 dispositions, partially offset by buildings we ~~sold~~acquired during ~~2017~~2018 and ~~2018.~~2019.

Impairment

During the ~~three and nine~~six months ended ~~September~~June 30, 2019, we recorded no impairment charges. During the six months ended June 30, 2018, we recorded impairment charges of ~~$4.3~~$4.6 million ~~and $8.9 million, respectively, which~~ related to ~~six~~two MOBs located in ~~Tennessee,~~ Texas and South Carolina. ~~During~~

Interest Expense

For the ~~nine~~three months ended ~~September~~June 30, ~~2017, we recorded impairment charges of $5.1 million that related to an MOB in our portfolio located in Massachusetts.~~

~~Interest Expense~~2019 and ~~Net Change in Fair Value of Derivative Financial Instruments~~

~~Interest~~2018, interest expense ~~excluding the impact of the net change in fair value of derivative financial instruments, decreased by $1.4~~was $24.0 million and ~~increased $16.9~~$26.3 million, ~~during~~respectively. For the ~~three and nine~~six months ended ~~September~~June 30, 2019 and 2018, ~~respectively, compared to the three~~interest expense was $48.0 million and ~~nine months ended September 30, 2017.~~$52.6 million, respectively. The ~~decrease~~decreases in interest expense ~~during the quarter was~~were primarily due to early payoffs of our fixed ~~and variable~~ rate mortgages, including the settlement of three cash flow hedges in connection with the Greenville Disposition. For the nine months ended September 30, 2018, the increase was primarily the result of higher average debt outstanding, as a result of the use of debt to partially fund our investments over the last 12 months with debt and a change in the composition of our debt, driven by an increase in long-term senior unsecured notes, including the $400.0 million and $500.0 million 5-year and 10-year senior unsecured notes issued in June 2017 at a coupon rate of 2.95% per annum and 3.75% per annum, respectively.mortgages.

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

~~Gain on Sale of Real Estate~~Net Income

For the three ~~and nine~~ months ended ~~September~~June 30, 2019 and 2018, ~~we realized a~~ net ~~gain on sale of real estate of $166.4 million.~~income was $16.6 million and $15.7 million, respectively. For the ~~nine~~six months ended ~~September~~June 30, ~~2017, we realized a~~2019 and 2018, net ~~gain on sale of real estate of $3,000. These increases were primarily the result of the Greenville Disposition. See Note 4 - Impairment and Dispositions for more detail on the Greenville Disposition.~~

~~Gain or Loss on Extinguishment of Debt~~

For the three and nine months ended September 30, 2018, we realized a net loss on extinguishment of debt of $1.1 million primarily due to prepayment fees we incurred in connection with the early payoffs of fixed and variable rate mortgages, including the settlement of three cash flow hedges in connection with the Greenville Disposition. For the three and nine months ended September 30, 2017, we realized a net loss on extinguishment of debt of $0.8income was $30.3 million and ~~$11.2~~$25.7 million, ~~respectively, due to fees we incurred in connection with the execution and our termination of a bridge loan facility we entered into as part of the Duke acquisition.~~

~~Net Income or Loss~~

Net income increased $162.4 million to $176.3 million for the three months ended September 30, 2018, compared to the three months ended September 30, 2017. Net income increased $179.9 million to $202.0 million for the nine months ended September 30, 2018, compared to the nine months ended September 30, 2017. Theserespectively. The increases were primarily the result of continued growth in our operations and improved operating efficiencies.

NOI and Same-Property Cash NOI

~~NOI decreased $(0.3) million to $119.3 million for~~For the three months ended ~~September~~June 30, 2019 and 2018, ~~compared to~~NOI was $118.8 million and $119.8 million, respectively. For the ~~three~~six months ended ~~September~~June 30, ~~2017.~~2019 and 2018, NOI ~~increased $57.4~~was $236.3 million ~~to $358.8~~and $239.4 million, ~~for the nine months ended September 30, 2018, compared to the nine months ended September 30, 2017.~~respectively. The ~~decrease and increase~~decreases in NOI were primarily due to ~~$2.8~~$4.3 million and ~~$58.7~~$8.8 million of ~~additional NOI from our 2017 and 2018 acquisitions for the three and nine months ended September 30, 2018, respectively, partially offset by a decrease in~~reduced NOI as a result of the buildings we sold during ~~2017~~2018 and ~~2018~~2019 for the three and six months ended June 30, 2019, respectively, and a reduction in straight-line rent from properties we owned more than a ~~year.~~year, partially offset by additional NOI from our 2018 and 2019 acquisitions for the three and six months ended June 30, 2019.

Same-Property Cash NOI increased ~~$2.7 million~~2.9% to ~~$108.8~~$112.5 million for the three months ended ~~September~~June 30, ~~2018~~2019 compared to the three months ended ~~September~~June 30, ~~2017.~~2018. Same-Property Cash NOI increased ~~$5.6 million~~2.9% to ~~$233.2~~$223.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019 compared to the ~~nine~~six months ended ~~September~~June 30, ~~2017. These~~2018. The increases were primarily the result of rent escalations, an increase in average occupancy, and improved operating efficiencies.

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Non-GAAP Financial Measures

FFO and Normalized FFO

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

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

We present ~~this non-GAAP financial measure~~FFO and Normalized FFO because we consider ~~it an~~them important supplemental ~~measure~~measures of our operating performance and believe ~~it is~~they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. Historical cost accounting assumes that the value of real estate assets diminishes ratably over time. Since real estate values have historically risen or fallen based on market conditions, many industry investors have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. ~~Because~~ FFO ~~excludes depreciation~~ and ~~amortization unique to real estate, among other items, it provides a perspective not immediately apparent from net income or loss attributable to common stockholders/unitholders.~~

We also compute Normalized FFO, which excludes from FFO: (i) transaction expenses; (ii) gain or loss on change in fair value of derivative financial instruments; (iii) gain or loss on extinguishment of debt; (iv) noncontrolling income or loss from OP Units included in diluted shares (only applicable to the Company); and (v) other normalizing items, which include items that are unusual and infrequent in nature. We present this non-GAAP financial measure because it allows for the comparison of our operating performance to other REITs and between periods on a consistent basis. Our methodology for calculating Normalized FFO may be different from the methods utilized by other REITs and, accordingly, may not be comparable to other REITs. Normalized FFO should not be considered as ~~an alternative~~alternatives to net income or loss attributable to common stockholders/unitholders (computed in accordance with GAAP) as ~~an indicator~~indicators of our financial performance, nor ~~is it~~are they indicative of cash available to fund cash needs. FFO and Normalized FFO should be reviewed in connection with other GAAP measurements.

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

~~Table of Contents~~

The following is the reconciliation of HTA’s FFO and Normalized FFO to net income attributable to common stockholders for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively (in thousands, except per share data):


	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended June 30,				Six Months Ended June 30,
	2018			2017		2018			2017			2019		2018		2019		2018
Net income attributable to common stockholders	$	172,986		$	13,763	$	198,134		$	21,390		$	16,259	$	15,346	$	29,699	$	25,148
Depreciation and amortization expense related to investments in real estate	70,004			70,021		208,445			171,678			67,846		68,585		136,772		138,441
Gain on sale of real estate, net	(166,372		)	—		(166,372		)	(3		)
Loss on sale of real estate, net												—		—		37		—
Impairment	4,281			—		8,887			5,093			—		—		—		4,606
Proportionate share of joint venture depreciation and amortization	463			464		1,277			506			450		463		922		814
FFO attributable to common stockholders	$	81,362		$	84,248	$	250,371		$	198,664		$	84,555	$	84,394	$	167,430	$	169,009
Transaction expenses	346			261		789			975			296		252		336		443
Gain on change in fair value of derivative financial instruments, net	—			—		—			(884		)
Loss on extinguishment of debt, net	1,092			774		1,092			11,192
Noncontrolling income from partnership units included in diluted shares	3,344			166		3,822			635
Other normalizing items, net ⁽¹⁾	—			—		144			4,643
Noncontrolling income from OP units included in diluted shares												301		297		534		478
Other normalizing items, net												—		144		—		144
Normalized FFO attributable to common stockholders	$	86,144		$	85,449	$	256,218		$	215,225		$	85,152	$	85,087	$	168,300	$	170,074

Net income attributable to common stockholders per diluted share	$	0.82		$	0.07	$	0.94		$	0.12		$	0.08	$	0.07	$	0.14	$	0.12
FFO adjustments per diluted share, net	(0.44		)	0.34		0.25			1.00			0.32		0.33		0.66		0.69
FFO attributable to common stockholders per diluted share	$	0.38		$	0.41	$	1.19		$	1.12		$	0.40	$	0.40	$	0.80	$	0.81
Normalized FFO adjustments per diluted share, net	0.03			0.01		0.03			0.09			0.01		0.01		0.01		0.00
Normalized FFO attributable to common stockholders per diluted share	$	0.41		$	0.42	$	1.22		$	1.21		$	0.41	$	0.41	$	0.81	$	0.81

Weighted average diluted common shares outstanding	211,444			204,795		209,968			177,410			209,005		209,259		209,002		209,218

(1) For the nine months ended September 30, 2017, other normalizing items included $4.6 million of non-incremental costs related to the Duke acquisition that were included in transaction expenses on our condensed consolidated statements of operations.

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The following is the reconciliation of HTALP’s FFO and Normalized FFO to net income attributable to common unitholders for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively (in thousands, except per unit data):


	Three Months Ended September 30,					Nine Months Ended September 30,						Three Months Ended June 30,				Six Months Ended June 30,
	2018			2017		2018			2017			2019		2018		2019		2018
Net income attributable to common unitholders	$	176,330		$	13,929	$	201,956		$	22,025		$	16,560	$	15,643	$	30,233	$	25,626
Depreciation and amortization expense related to investments in real estate	70,004			70,021		208,445			171,678			67,846		68,585		136,772		138,441
Gain on sale of real estate, net	(166,372		)	—		(166,372		)	(3		)
Loss on sale of real estate, net												—		—		37		—
Impairment	4,281			—		8,887			5,093			—		—		—		4,606
Proportionate share of joint venture depreciation and amortization	463			464		1,277			506			450		463		922		814
FFO attributable to common unitholders	$	84,706		$	84,414	$	254,193		$	199,299		$	84,856	$	84,691	$	167,964	$	169,487
Transaction expenses	346			261		789			975			296		252		336		443
Gain on change in fair value of derivative financial instruments, net	—			—		—			(884		)
Loss on extinguishment of debt, net	1,092			774		1,092			11,192
Other normalizing items, net ⁽¹⁾	—			—		144			4,643
Other normalizing items, net												—		144		—		144
Normalized FFO attributable to common unitholders	$	86,144		$	85,449	$	256,218		$	215,225		$	85,152	$	85,087	$	168,300	$	170,074

Net income attributable to common unitholders per diluted unit	$	0.83		$	0.07	$	0.96		$	0.12
Net income attributable to common unitholders per diluted share												$	0.08	$	0.07	$	0.14	$	0.12
FFO adjustments per diluted unit, net	(0.43		)	0.34		0.25			1.00			0.33		0.33		0.66		0.69
FFO attributable to common unitholders per diluted unit	$	0.40		$	0.41	$	1.21		$	1.12		$	0.41	$	0.40	$	0.80	$	0.81
Normalized FFO adjustments per diluted unit, net	0.01			0.01		0.01			0.09			0.00		0.01		0.01		0.00
Normalized FFO attributable to common unitholders per diluted unit	$	0.41		$	0.42	$	1.22		$	1.21		$	0.41	$	0.41	$	0.81	$	0.81

Weighted average diluted common units outstanding	211,444			204,795		209,968			177,410			209,005		209,259		209,002		209,218

(1) For the nine months ended September 30, 2017, other normalizing items included $4.6 million of non-incremental costs related to the Duke acquisition that were included in transaction expenses on our condensed consolidated statements of operations.

NOI, Cash NOI and Same-Property Cash NOI

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

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

~~Table of Contents~~

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

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The following is the reconciliation of HTA’s and HTALP’s NOI, Cash NOI and Same-Property Cash NOI to net income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017			2019			2018			2019			2018
Net income	$	176,348		$	13,957		$	202,021		$	22,105		$	16,598		$	15,657		$	30,299		$	25,673
General and administrative expenses	8,770			8,283			26,281			25,178			10,079			8,725			21,369			17,511
Transaction expenses ⁽¹⁾	346			261			933			5,618			296			396			336			587
Depreciation and amortization expense	70,568			70,491			210,064			172,900			68,429			69,104			137,910			139,496
Impairment	4,281			—			8,887			5,093			—			—			—			4,606
Interest expense and net change in fair value of derivative financial instruments	24,834			26,188			77,392			59,631
Gain on sale of real estate, net	(166,372		)	—			(166,372		)	(3		)
Loss on extinguishment of debt, net	1,092			774			1,092			11,192
Interest expense													24,006			26,305			47,976			52,558
Loss on sale of real estate, net													—			—			37			—
Income from unconsolidated joint venture	(432		)	(318		)	(1,405		)	(381		)	(548		)	(403		)	(1,034		)	(973		)
Other (income) expense	(89		)	27			(129		)	13
Other income													(41		)	(5		)	(576		)	(40		)
NOI	$	119,346		$	119,663		$	358,764		$	301,346		$	118,819		$	119,779		$	236,317		$	239,418
Straight-line rent adjustments, net	(2,746		)	(3,009		)	(8,289		)	(5,834		)	(2,464		)	(2,377		)	(5,722		)	(5,543		)
Amortization of (below) and above market leases/leasehold interests, net	(65		)	214			190			246
Notes receivable interest income and other GAAP adjustments	(33		)	(588		)	(218		)	(1,163		)
Amortization of (below) and above market leases/leasehold interests, net and other GAAP adjustments													(357		)	55			(123		)	176
Notes receivable interest income													(25		)	(34		)	(52		)	(70		)
Cash NOI	$	116,502		$	116,280		$	350,447		$	294,595		$	115,973		$	117,423		$	230,420		$	233,981
Acquisitions not owned/operated for all periods presented and disposed properties Cash NOI	(6,065		)	(7,337		)	(112,557		)	(59,865		)	(1,457		)	(5,002		)	(2,413		)	(10,216		)
Redevelopment Cash NOI	(607		)	(1,540		)	(1,923		)	(4,072		)	(845		)	(1,784		)	(1,951		)	(3,505		)
Intended for sale Cash NOI	(1,007		)	(1,243		)	(2,815		)	(3,063		)	(1,194		)	(1,317		)	(2,250		)	(2,706		)
Same-Property Cash NOI ⁽²⁾	$	108,823		$	106,160		$	233,152		$	227,595
Same-Property Cash NOI ⁽¹⁾													$	112,477		$	109,320		$	223,806		$	217,554

(1) For the nine months ended September 30, 2017, transaction costs included $4.6 million of non-incremental costs related to the Duke acquisition.
(2) Same-Property includes 403 and 317 buildings for the three and nine months ended September 30, 2018 and 2017, respectively.
(1) Same-Property includes 408 and 407 buildings for the three and six months ended June 30, 2019 and 2018, respectively.													(1) Same-Property includes 408 and 407 buildings for the three and six months ended June 30, 2019 and 2018, respectively.

Liquidity and Capital Resources

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

As of ~~September~~June 30, ~~2018~~2019, we had liquidity of ~~$1.2~~$1.0 billion, including ~~$994.5 million~~$0.9 billion available under our unsecured revolving credit facility, ~~(which includes the impact of $5.5 million of outstanding letters of credit) and $225.5~~$23.2 million of cash and cash ~~equivalents.~~equivalents, and a $52.1 million forward commitment.

In addition, we had unencumbered assets with a gross book value of ~~$6.4~~$6.9 billion. The unencumbered properties may be used as collateral to secure additional financings in future periods or refinance our current debt as it becomes due. Our ability to raise funds from future debt and equity issuances is dependent on our investment grade credit ratings, general economic and market conditions and our operating performance.

When we acquire a property, we prepare a capital plan that contemplates the estimated capital needs of that investment. In addition to operating expenses, capital needs may also include costs of refurbishment, tenant improvements or other major capital expenditures. The capital plan for each investment will be adjusted through ongoing, regular reviews of our portfolio or as necessary to respond to unanticipated additional capital needs. As of ~~September~~June 30, ~~2018,~~2019, we estimate that our expenditures for capital improvements for the remainder of ~~2018~~2019 will range from ~~$20.0~~$35 million to ~~$25.0~~$45 million depending on leasing activity. ~~As of September 30, 2018,~~Although we had $4.1 million of restricted cash and reserve accounts for such capital expenditures, in addition to the availability under our unsecured revolving credit facility and on hand cash and cash equivalents. We cannot provide assurance ~~however,~~ that we will not exceed these estimated expenditure ~~levels.~~levels, our liquidity of $1.0 billion allows us the flexibility to fund such capital expenditures.

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

Cash Flows

The following is a summary of our cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2018~~2019 and ~~2017,~~2018, respectively (in thousands):


	Nine Months Ended September 30,									Six Months Ended June 30,
	2018			2017			Change			2019			2018			Change
Cash, cash equivalents and restricted cash - beginning of period ⁽¹⁾	$	118,560		$	25,045		$	93,515		$	133,530		$	118,560		$	14,970
Net cash provided by operating activities	240,751			228,542			12,209			148,737			156,108			(7,371		)
Net cash provided by (used in) investing activities ⁽¹⁾	194,846			(2,483,816		)	2,678,662
Net cash (used in) provided by financing activities	(314,000		)	2,257,108			(2,571,108		)
Net cash used in investing activities										(134,687		)	(69,511		)	(65,176		)
Net cash used in financing activities										(118,436		)	(165,552		)	47,116
Cash, cash equivalents and restricted cash - end of period ⁽¹⁾	$	240,157		$	26,879		$	213,278		$	29,144		$	39,605		$	(10,461	)

(1) The amounts for 2017 differ from amounts previously reported in our Quarterly Report for the nine months ended September 30, 2017, as a result of the retrospective presentation of the early adoption of ASU 2016-18 in our 2017 Annual Report on Form 10-K as of January 1, 2017. Additionally, the presentation of beginning of period and end of period cash now includes restricted cash as a result of the adoption of ASU 2016-18.

Net cash provided by operating activities ~~increased~~decreased in ~~2018~~2019 primarily due to the timing of payments on certain liabilities and the impact of our ~~2017~~2018 and 2019 dispositions, partially offset by our 2018 and 2019 acquisitions, contractual rent increases and improved operating ~~efficiencies, partially offset by our 2017 and 2018 dispositions.~~efficiencies. We anticipate cash flows from operating activities to increase as a result of the ~~above items~~growth in our portfolio through new acquisitions and continued leasing activity in our existing portfolio.

For the ~~nine~~six months ended ~~September~~June 30, 2018, net cash provided by investing activities primarily related to proceeds from the sale of real estate of $302.4 million, which was partially offset by capital expenditures of $61.1 million, development of real estate of $29.6 million, and investments in real estate of $17.4 million. For the nine months ended September 30, 2017,2019, net cash used in investing activities primarily related to ~~the investment~~investments in real estate of ~~$2.4 billion, investment in unconsolidated joint venture of $68.8~~$93.9 million and capital expenditures of ~~$43.0~~$37.8 million. For the six months ended June 30, 2018, net cash used in investing activities primarily related to capital expenditures of $34.1 million, development of real estate of $23.9 million, and investments in real estate of $11.9 million.

For the six months ended June 30, 2019, net cash used in financing activities primarily related to dividends paid to holders of our common stock of $127.4 million, payments on our secured mortgage loans of $96.2 million, and the repurchase and cancellation of common stock of $12.1 million, which was partially offset by ~~proceeds from the sale~~net borrowings on our unsecured revolving credit facility of ~~real estate of $4.7~~$120.0 million.

For the ~~nine~~six months ended ~~September~~June 30, 2018, net cash used in financing activities primarily related to dividends paid to holders of our common stock of ~~$188.4~~$125.1 million and payments on our secured mortgage loans of ~~$173.2~~$99.2 million, which was partially offset by net proceeds of shares of common stock issued of $72.8 million. For the nine months ended September 30, 2017, net cash provided by financing activities primarily related to the net proceeds of shares of common stock issued of $1.6 billion and net proceeds on the issuance of senior notes of $900.0 million, partially offset by dividends paid to holders of our common stock of $145.9 million, and payments on our secured mortgage loans of $75.4 million.

Dividends

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

For the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, we paid cash dividends of ~~$188.4~~$127.4 million on our common stock. In ~~October 2018,~~July 2019, we paid cash dividends on our common stock of ~~$64.2~~$63.6 million for the quarter ended ~~September~~June 30, 2018. On October 25, 2018, our Board of Directors announced a quarterly dividend of $0.310 per share of common stock and per OP Unit to be paid on January 9, 2019 to stockholders of record of our common stock and holders of our OP Units on January 2, 2019.

Financing

We have historically maintained a low leveraged balance sheet and intend to continue to maintain this structure in the long term. However, our total leverage may fluctuate on a short-term basis as we execute our business strategy. As of ~~September~~June 30, ~~2018,~~2019, our leverage ratio, measured by debt less cash and cash equivalents to total capitalization, was ~~29.7%~~30.7%.

Table of Contents

As of ~~September~~June 30, ~~2018,~~2019, we had debt outstanding of $2.6 billion and the weighted average interest rate therein was ~~3.49%~~3.44% per annum, inclusive of the impact of our ~~interest rate swaps.~~cash flow hedges. The following is a summary of our unsecured and secured debt. See Note 78 - Debt in the accompanying condensed consolidated financial statements for a further discussion of our debt.

Unsecured Revolving Credit Facility

~~In 2017, HTALP entered into an amended and restated $1.3 billion Unsecured Credit Agreement which increased the amount available under the unsecured revolving credit facility to $1.0 billion.~~ As of ~~September~~June 30, ~~2018, $994.5 million~~2019, $0.9 billion was available on our $1.0 billion unsecured revolving credit facility. Our unsecured revolving credit facility matures in June 2022.

Unsecured Term Loans

As of ~~September~~June 30, ~~2018~~,2019, we had $500.0 million of unsecured term loans outstanding, comprised of $300.0 million under our Unsecured Credit Agreement maturing in 2023, and $200.0 million under our unsecured term loan maturing in 2024.

Unsecured Senior Notes

As of ~~September~~June 30, ~~2018,~~2019, we had $1.85 billion of unsecured senior notes outstanding, comprised of $300.0 million of senior notes maturing in 2021, $400.0 million of senior notes maturing in 2022, $300.0 million of senior notes maturing in 2023, $350.0 million of senior notes maturing in 2026, and $500.0 million of senior notes maturing in 2027.

Fixed ~~and Variable~~ Rate Mortgages

During the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, we made payments on our fixed ~~and variable~~ rate mortgages of ~~$173.2~~$96.2 million and have ~~$1.1~~$1.2 million of principal payments due during the remainder of ~~2018.~~2019.

Commitments and Contingencies

There have been no material changes from the commitments and contingencies previously disclosed in our ~~2017~~2018 Annual Report on Form 10-K.

Debt Service Requirements

We are required by the terms of our applicable loan agreements to meet certain financial covenants, such as minimum net worth and liquidity, and reporting requirements, among others. As of ~~September~~June 30, ~~2018~~,2019, we believe that we were in compliance with all such covenants and we are not aware of any covenants that it is reasonably likely that we would not be able to meet in accordance with our loan agreements.

Off-Balance Sheet Arrangements

As of and during the ~~nine~~six months ended ~~September~~June 30, ~~2018,~~2019, we had no material off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Inflation

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

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes from the quantitative and qualitative disclosures about market risk previously disclosed in our ~~2017~~2018 Annual Report on Form 10-K.

Item 4. Controls and Procedures

Healthcare Trust of America, Inc.

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

As of ~~September~~June 30, ~~2018,~~2019, an evaluation was conducted by HTA under the supervision and with the participation of its management, including HTA’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, HTA’s Chief Executive Officer and Chief Financial Officer each concluded that HTA’s disclosure controls and procedures were effective as of ~~September~~June 30, ~~2018.~~2019.

There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~September~~June 30, ~~2018~~2019 that have materially affected, or are reasonably believed to be likely to materially affect, our internal control over financial reporting.

~~October 26, 2018~~July 24, 2019

Healthcare Trust of America Holdings, LP

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

As of ~~September~~June 30, ~~2018,~~2019, an evaluation was conducted by HTALP under the supervision and with the participation of its management, including HTA’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, HTA’s Chief Executive Officer and Chief Financial Officer, on behalf of HTA in its capacity as general partner of HTALP, each concluded that HTALP’s disclosure controls and procedures were effective as of ~~September~~June 30, ~~2018.~~2019.

There were no changes in HTALP’s internal control over financial reporting that occurred during the quarter ended ~~September~~June 30, ~~2018~~2019 that have materially affected, or are reasonably believed to be likely to materially affect, HTALP’s internal control over financial reporting.

~~October 26, 2018~~July 24, 2019

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in our ~~2017~~2018 Annual Report on Form 10-K.

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

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

During the three months ended ~~September~~June 30, ~~2018,~~2019, we repurchased shares of our common stock as follows:

Period
Total Number of
Shares Purchased ^{(1) (2)}

Average Price
Paid per Share ^{(1) (2)}

Total Number of
Shares Purchased
as Part of
Publicly Announced
Plan or Program
Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
July 1, 2018 to July 31, 2018 4,983
$ 26.75
—
—
August 1, 2018 to August 31, 2018 9
28.60
—
—
September 1, 2018 to September 30, 2018 295,000
26.24
—
(3 )

(1) Purchases mainly represent shares withheld to satisfy withholding obligations on the vesting of restricted shares. The price paid per share was the then closing price of our common stock on the NYSE.
(2) For each share of common stock redeemed by HTA, HTALP redeems a corresponding number of OP Units in the HTALP operating partnership. Therefore, the OP Units in the HTALP operating partnership repurchased by HTALP are the same as the shares of common stock repurchased by HTA as shown above.
(3) In August 2018, our Board of Directors approved a stock repurchase plan with a share repurchase authorization of up to $300.0 million of our common stock. During the three months ended September 2018, we repurchased 295,000 shares of our common stock, at an average price of $26.24 per share, for an aggregate amount of approximately $7.7 million.



Period	Total Number of Shares Purchased ^{(1) (2)}	Average Price Paid per Share ^{(1) (2)}		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program	Maximum Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
April 1, 2019 to April 30, 2019	285	$	27.68	—	—
May 1, 2019 to May 31, 2019	5,135	27.70		—	—
June 1, 2019 to June 30, 2019	678	27.44		—	—

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

Item 6. Exhibits

The exhibits listed on the Exhibit Index ~~(following the signatures section of this Quarterly Report)~~ are included, and incorporated by reference, in this Quarterly Report.

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EXHIBIT INDEX

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

The following exhibits are included, or incorporated by reference, in this Quarterly Report for the quarter ended June 30, 2019 (and are numbered in accordance with Item 601 of Regulation S-K).



10.1*	Healthcare Trust of America, Inc. Amended and Restated 2006 Independent Directors Compensation Plan, effective as of July 9, 2019.
31.1*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America, Inc.
31.2*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America, Inc.
31.3*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
31.4*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
32.1**	Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Inc.
32.2**	Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America, Inc.
32.3**	Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
32.4**	Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.
101.INS*	This instance document does not appear in the interactive data file because of XBRL tags are embedded within the inline XBRL document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

*	Filed herewith.
**	Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	Healthcare Trust of America, Inc.

By:	/s/ Scott D. Peters	Chief Executive Officer, President and Chairman
	Scott D. Peters	(Principal Executive Officer)
Date:	~~October 26, 2018~~July 24, 2019

By:	/s/ Robert A. Milligan	Chief Financial Officer
	Robert A. Milligan	(Principal Financial Officer and Principal Accounting Officer)
Date:	~~October 26, 2018~~July 24, 2019



	Healthcare Trust of America Holdings, LP

By:	Healthcare Trust of America, Inc.,
	its General Partner

By:	/s/ Scott D. Peters	Chief Executive Officer, President and Chairman
	Scott D. Peters	(Principal Executive Officer)
Date:	~~October 26, 2018~~July 24, 2019

By:	/s/ Robert A. Milligan	Chief Financial Officer
	Robert A. Milligan	(Principal Financial Officer and Principal Accounting Officer)
Date:	~~October 26, 2018~~July 24, 2019

~~Table of Contents~~

~~EXHIBIT INDEX~~

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

~~The following exhibits are included, or incorporated by reference, in this Quarterly Report for the quarter ended September 30, 2018 (and are numbered in accordance with Item 601 of Regulation S-K).~~



31.1*	~~Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America, Inc.~~
31.2*	~~Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America, Inc.~~
31.3*	~~Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.~~
31.4*	~~Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.~~
32.1**	~~Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Inc.~~
32.2**	~~Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America, Inc.~~
32.3**	~~Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.~~
32.4**	~~Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 for Healthcare Trust of America Holdings, LP.~~
101.INS*	~~XBRL Instance Document.~~
101.SCH*	~~XBRL Taxonomy Extension Schema Document.~~
101.CAL*	~~XBRL Taxonomy Extension Calculation Linkbase Document.~~
101.DEF*	~~XBRL Taxonomy Extension Definition Linkbase Document.~~
101.LAB*	~~XBRL Taxonomy Extension Label Linkbase Document.~~
101.PRE*	~~XBRL Taxonomy Extension Presentation Linkbase Document.~~

*	~~Filed herewith.~~
**	~~Furnished herewith.~~



	Nine Months Ended September 30, 2017
	As Previously Reported			As Reclassified
Cash flows from investing activities:
Other assets ⁽¹⁾	$	(3,655	)	$	—
Net cash used in investing activities	(2,487,471		)	(2,483,816		)

Net change in cash, cash equivalents and restricted cash ⁽²⁾	$	(1,821	)	$	1,834
Cash, cash equivalents and restricted cash - beginning of period ⁽²⁾	11,231			25,045
Cash, cash equivalents and restricted cash - end of period ⁽²⁾	$	9,410		$	26,879

(1) Prior to adoption of ASU 2016-18, the line item description was “Restricted cash, escrow deposits and other assets”.
(2) With the adoption of ASU 2016-18, the line item description now includes restricted cash.



	September 30,
	2018		2017
Cash and cash equivalents	$	225,518	$	9,410
Restricted cash	14,639		17,469
Total cash, cash equivalents and restricted cash	$	240,157	$	26,879



	Offsetting of Derivative Assets
	Gross Amounts of Recognized Assets		Gross Amounts in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
September 30, 2018	$	1,588	$	—	$	1,588	$	—	$	—	$	1,588
December 31, 2017	1,529		—		1,529		—		—		1,529



	Offsetting of Derivative Liabilities
	Gross Amounts of Recognized Liabilities		Gross Amounts in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
September 30, 2018	$	—	$	—	$	—	$	—	$	—	$	—
December 31, 2017	1,089		—		1,089		—		—		1,089



	September 30, 2018				September 30, 2017
	Restricted Common Stock		Weighted Average Grant Date Fair Value		Restricted Common Stock		Weighted Average Grant Date Fair Value
Beginning balance	589,606		$	29.38	640,870		$	27.36
Granted	360,700		28.70		292,109		29.75
Vested	(255,946	)	28.68		(278,821	)	25.31
Forfeited	(38,882	)	28.97		(58,384	)	28.86
Ending balance	655,478		$	29.30	595,774		$	29.39



	Level 1		Level 2		Level 3		Total
Assets:
Derivative financial instruments	$	—	$	1,588	$	—	$	1,588
Liabilities:
Derivative financial instruments	$	—	$	—	$	—	$	—

Maryland ~~(Healthcare~~

(Healthcare Trust of America, Inc.)

Delaware ~~(Healthcare~~

(Healthcare Trust of America Holdings, LP)

(State or other jurisdiction of
incorporation or organization)

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