The table below shows how Healthcare Trust of America funded its distributions in 2009 on a quarter-by-quarter basis. The table was derived from data in a March 8-K filing by HTA. The key to me is the second half of the year where operating cash flow is much less than in the first half of the year.
|OP Cash Flow||$5,033,000||$1,718,000||$8,355,000||$5,895,000|
|Dist as % Op Cash||21.06%||7.84%||46.41%||41.38%|
|Dist as % of Offering Proceeds||78.94%||92.16%||53.59%||58.62%|
Yes, the REIT saw increased equity in the second half of the year, which would contribute to the drop in the operating cash flow-to-distribution coverage ratio discussed in the previous post, but it also saw a drop in operating cash flow over the same period. The low operating cash flow-to-distribution coverage ratio cannot be fully explained away by problem of raising too much equity. This ratio bears close attention in the coming quarters, especially since HTA made more than $400 million of acquisitions late in the fourth quarter, which ideally should be accretive to the REIT's current 7.25% distribution.