Healthcare Realty Trust Inc

Note 4. Notes and Bonds Payable

The table below details the Company’s notes and bonds payable as of June 30, 2025 and December 31, 2024.

1 Balance is presented net of discounts and issuance costs and inclusive of premiums, where applicable.

2 As of June 30, 2025, the Company had $1.2 billion available to be drawn on its $1.5 billion Unsecured Credit Facility.

3 In January 2025, the Company repaid $25 million of the $200 million Unsecured term Loan.

4 In January 2025, the Company repaid $10 million of the $300 million Unsecured term Loan due October 2025.

5 In May 2025, the Company repaid its Senior Notes due 2025 at maturity including $250 million of principal and $4.8 million of accrued interest.

Changes in Debt Structure

On April 8, 2025, the Company exercised its second oftwo options to extend the maturity date of the $200 million Unsecured Term Loan due May 2025 to January 2026 for a fee of approximately $0.1 million. The loan also wasamended to include afour-month extension option, which would extend the final maturity to May 2026.

On May 1, 2025, the Company repaid its Senior Notes due 2025 at maturity including $250 million of principal and $4.8 million of accrued interest.

On July 25, 2025, the Company entered into the Fifth Amended and Restated Revolving Credit and Term Loan Agreement (the “New Credit Facility”) with Wells Fargo Bank, National Association, as Administrative Agent; Wells Fargo Securities, LLC and JPMorgan Chase Bank, N.A. as Joint Book Runners; Wells Fargo Securities, LLC, JPMorgan Chase Bank, N.A., PNC Capital Markets LLC, U.S. Bank National Association, The Bank of Nova Scotia, and BofA Securities, Inc., as Joint Lead Arrangers; and the other lenders named therein. The New Credit Facility provides for (i) a $1.5 billion unsecured revolving credit facility (the “Revolver”) and (ii)five individual unsecured term loan tranches totaling $1.115 billion. The OP is the borrower under the New Credit Facility (in such capacity, the “Borrower”). A summary of the principal terms of the New Credit Facility and the New Credit Facility's effect on the Company's existing revolving credit term loan facilities is as follows:

•The New Credit Facility replaces the Unsecured Credit Facility. All outstanding obligations due under the Unsecured Credit Facility were reallocated to the lenders under the New Credit Facility.

•The Company’s $1.5 billion Revolver was continued with a maturity extension from October 31, 2025 to July 25, 2029, withtwo six-month extension options. The Revolver includes a sublimit of $120 million for letters of credit.

•The previously funded $175 million term loan was continued with a maturity date of January 31, 2026 andthree extension options totaling 16 months.

•The previously funded $150 million term loan was continued with a maturity date of June 1, 2026, withtwo extension options ofsix months each.

•The previously funded $290 million term loan was continued with a maturity date of October 31, 2025, with four extension options totaling 24 months.

•The previously funded $200 million term loan was continued with a maturity date of July 20, 2027, withtwo extension options of 12 months each.

•The previously funded $300 million term loan was continued with a maturity date of January 20, 2028, withone extension option of 12 months.

Revolving loans outstanding under the New Credit Facility bear interest at a floating rate equal to the daily simple Secured Overnight Financing Rate ("SOFR"), term SOFR or base rates, as applicable, plus an applicable margin. The applicable margin is determined based on the Borrower’s credit ratings and ranges from 0.725% per annum to 1.40% per annum (currently 0.85% per annum). Term loans outstanding under the New Credit Facility bear interest at a rate equal to Term SOFR rates plus an applicable margin. The applicable margin is determined based on the Borrower’s credit ratings and ranges from 0.80% per annum to 1.60% per annum (currently 0.95% per annum). In addition, the Borrower pays a facility fee on the Revolver commitments at a rate per annum determined based on the Borrower’s credit ratings and ranging from 0.125% per annum to 0.30% per annum (currently 0.20% per annum).

Except as set forth above, the principal terms of the New Credit Facility are substantially consistent with the terms of the Unsecured Credit Facility. Specifically, the New Credit Facility contains representations and warranties and affirmative and negative covenants that are customary for facilities of this size and type. These covenants include, among others: limitations on the incurrence of additional indebtedness; limitations on mergers, investments and acquisitions; limitations on dividends and redemptions of capital stock; limitations on transactions with affiliates; and requirements to comply with certain financial covenants, including a maximum consolidated leverage ratio, a maximum consolidated secured leverage ratio, a maximum consolidated unencumbered leverage ratio, a minimum fixed charge coverage ratio and a minimum unsecured coverage ratio.

Note 5. Derivative Financial Instruments

Risk Management Objective of Using Derivatives

The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate swaps are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt.

For derivatives designated, and that qualify, as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income (Loss) ("AOCI") and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.

As of June 30, 2025, the Company had 15 outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk:

Tabular Disclosure of Fair Values of Derivative Instruments on the Balance Sheet

The table below presents the fair value of the Company's derivative financial instruments and their classification on the Condensed Consolidated Balance Sheet as of June 30, 2025 and December 31, 2024.

Tabular Disclosure of the Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income (Loss)

The table below presents the effect of cash flow hedge accounting on AOCI during the three and six months ended June 30, 2025 and 2024 related to the Company's outstanding interest rate swaps.

The Company estimates that an additional$1.2 million will be reclassified from accumulated other comprehensive loss as a net decrease to interest expense over the next 12 months.

Credit-risk-related Contingent Features

The Company has agreements with each of its derivative counterparties providing that if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

As of June 30, 2025, the fair value of derivatives in anet liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $7.3 million. As of June 30, 2025, the Company had not posted any collateral related to these agreements and was not in breach of any agreement provisions.

Note 6. Commitments and Contingencies

Legal Proceedings

From time to time, the Company is involved in litigation arising in the ordinary course of business. The Company is not aware of any pending or threatened litigation that, if resolved against the Company, would have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

Note 7. Stockholders' Equity

Common Stock

The following table provides a reconciliation of the beginning and ending shares of common stock outstanding for the six months ended June 30, 2025, and the twelve months ended December 31, 2024:

Common Stock Dividends

During the six months ended June 30, 2025, the Company declared and paid common stock dividends totaling $0.62 per share. On July 31, 2025, the Company declared a quarterly common stock dividend in the amount of $0.24 per share payable on August 28, 2025 to stockholders of record on August 14, 2025.

Common Stock Repurchases

On October 29, 2024, the Company's Board of Directors authorized the repurchase of up to $300.0 million of outstanding shares of the Company's common stock, superseding the previous stock repurchase authorization. The Company has not repurchased shares in 2025. As of June 30, 2025, the Company had $237.0 million remaining under this authorization.

Earnings Per Common Share

The Company uses the two-class method of computing net earnings per common share. The Company's non-vested share-based awards are considered participating securities pursuant to the two-class method.

The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2025 and 2024.

The effect of OP Units redeemable for 4,161,628 shares and 3,914,997 shares of common stock for the three and six months ended June 30, 2025, respectively, were excluded from the calculation of diluted loss per common share because the effect was anti-dilutive due to the loss from continuing operations incurred during those periods.

Stock Incentive Plan

The Company's stock incentive plan (the "Incentive Plan") permits the grant of incentive awards to its employees and directors in any of the following forms: options, stock appreciation rights, restricted stock, restricted or deferred stock units, performance awards, dividend equivalents, or other stock-based awards, including units in the OP.

Equity Incentive Plans

During the six months ended June 30, 2025, the Company made the following equity awards under the Incentive Plan:

Restricted Stock

During the first quarter of 2025, the Company granted non-vested stock awards to its named executive officers and other members of senior management with an aggregate grant date fair value of $7.9 million, which consisted of an aggregate of 477,226 non-vested shares of common stock with vesting periods ranging from three toeight years.

During the second quarter of 2025, the Company granted non-vested stock awards to its named executive officers and other members of senior management with an aggregate grant date fair value of $7.8 million, which consisted of an aggregate of 499,323 non-vested shares of common stock with vesting periods ranging from three tofour years. The Company also granted to independent directors an aggregate of 72,144 shares of non-vested stock with a grant date fair value of $1.1 million, and an aggregate of 34,586 LTIP Series D units in the OP with a grant date fair value of $0.5 million.

Restricted Stock Units ("RSUs")

On February 11, 2025, the Company granted an aggregate of 275,735 RSUs to members of senior management, subject to athree-year performance period, with an aggregate grant date fair value of $5.4 million.

During the second quarter of 2025, the Company granted an aggregate of 16,038 RSUs to members of senior management, subject to athree-year performance period, with an aggregate grant date fair value of $0.3 million.

The RSUs vest based on relative total shareholder return ("TSR") performance and were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $19.47 for the RSU grants using the following assumptions:

LTIP Series C Units ("LTIP-C units")

On February 11, 2025, the Company granted an aggregate of 166,976 LTIP-C units in the OP to its named executive officers with three-year forward-looking performance targets, athree-year vesting period and an aggregate grant date fair value of $1.6 million.

The LTIP-C units in the OP vest based on relative TSR performance and were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $9.88 for the February 2025 grant using the following assumptions:

The Company records amortization expense based on the Monte Carlo simulation throughout the performance period.

On April 15, 2025, the Company granted 347,770 LTIP-C units in the OP to its newly appointed Chief Executive Officer with three-year forward-looking performance targets, athree-year vesting period and an aggregate grant date fair value of $3.4 million.

The LTIP-C units in the OP vest based on relative TSR performance and were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $9.83 for the April 2025 grant using the following assumptions:

The Company records amortization expense based on the Monte Carlo simulation throughout the performance period.

The following table represents the summary of non-vested share-based awards under the Incentive Plan for the three and six months ended June 30, 2025, and 2024:

1 LTIP-C units in the OP are issued at the maximum number of units of the award and are reflected as such in this table until the performance conditions have been satisfied, and the exact number of awards are determinable.

During the three months ended June 30, 2025, and 2024, the Company withheld 72,853 and 8,228 shares of common stock, respectively, from participants to pay estimated withholding taxes related to shares that vested.

The following table represents expected amortization of the Company's non-vested awards issued as of June 30, 2025:

Note 8. Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair value of each class of financial instrument for which it is practical to estimate that value.

•Cash and cash equivalents - The carrying amount approximates fair value (level 1 inputs) due to the short-term maturity of these investments.

•Real estate notes receivable - Real estate notes receivable are recorded in other assets on the Company's Condensed Consolidated Balance Sheets. Fair value is estimated using cash flow analyses, based on current interest rates for similar types of arrangements using level 2 inputs in the hierarchy. However, the fair value of one note receivable was determined utilizing the fair value of the receivable's collateral, which was determined based on an executed purchase and sale agreement of the underlying collateral and therefore was classified as level 1 inputs in the hierarchy.

•Borrowings under the Unsecured Credit Facility and the Term Loans Due 2024 and 2026 - The carrying amount approximates fair value because the borrowings are based on variable market interest rates.

•Senior Notes and Mortgage Notes payable - The fair value of notes and bonds payable is estimated using cash flow analyses, based on the Company’s current interest rates for similar types of borrowing arrangements.

•Interest rate swap agreements - Interest rate swap agreements are recorded in other assets/liabilities on the Company's Condensed Consolidated Balance Sheets at fair value. Fair value is estimated by utilizing pricing models, level 2 inputs, which consider forward yield curves and discount rates. See Note 5 for additional information.

The table below details the fair values and carrying values for notes and bonds payable and real estate notes receivable as of June 30, 2025, and December 31, 2024:

1 Level 2 – model-derived valuations in which significant inputs and significant value drivers are observable in active markets.

2 Fair value for senior notes includes accrued interest as of June 30, 2025.

Note 9. Segment Reporting

The Company is a REIT that owns, leases, acquires, invests in joint ventures, manages, finances, develops and redevelops its medical outpatient properties and reports the operating results in the accompanying Condensed Consolidated Financial Statements asone reportable segment. The CODM assesses performance and allocates resources based on consolidated net income (loss) as reported on the Company's Condensed Consolidated Statements of Operations. The Company uses net income (loss) to monitor expected versus actual results to assess the segment's performance. The measure of the Company's reportable segment assets is reported on the Company's Condensed Consolidated Balance Sheets as total assets.

Pursuant to ASU 2023-07, Segment Reporting (Topic 280), public entities are required to disclose more detailed information about significant reportable segment expenses that are regularly provided to the CODM.

The table below details the significant expenses for the three and six months ended June 30, 2025, and 2024.

The following schedule reconciles net loss to segment expenses for the three and six months ended June 30, 2025, and 2024.

1 Other segment expenses are primarily related to administrative costs, travel, legal, technology, and insurance.