Good day, and welcome to the Healthcare Trust of America, Second Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. . Please note, this event is being recorded. I would now like to turn the conference over to David Gershenson, Chief Account Officer. Please go ahead.

Thank you. And welcome to Healthcare Trust of America second-quarter 2021 earnings call. We filed our earnings release and our financial supplement today after the close. These documents can be found in the Investor Relations section of our website or with the SEC. Please note this call is being webcast and will be available for replay for the next 90 days. We will be happy to take your questions at the conclusion of our prepared remarks. During the course of the call, we will make forward-looking statements. These forward-looking statements are based on the current beliefs of Management and information currently available to us. Our actual results will be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance. Therefore, our actual future results could materially differ from our current expectations. For detailed description on potential risks, please refer to our SEC filings, which can be found in the Investor Relations section of our website. I will now turn the call over to Brad Blair, Chairman of Healthcare Trust of America. Brad?

Thank you, David. Good afternoon and thank you for joining us today for Healthcare Trust of America, Second Quarter 2021 Investor update call. Joining me on the call today is Peter Foss, our newly announced Chief Executive Officer, Robert Milligan, our Chief Financial Officer; and Amanda Houghton, our Executive Vice President of Asset Management. Before we discuss HTA's performance for the quarter, I first wanted to comment on the voluntary resignation of our Chairman and CEO, Scott Peters. Scott founded the Company in 2006 and directed its progress as we success -- successfully grew to become the largest owner and operator of medical office buildings in the U.S.. We are extraordinarily proud of the Company HTA has become and know that we're all very well-positioned to exceed in our next phase as the leader in this evolving sector. All of us on the Board thank Scott for his 15 years of service to HTA and wish him well on his future endeavors. As a result of this resignation, as I've said, we have appointed Peter Foss as our Chief Executive Officer to lead us during this transitionary period. Peter is an established leader and executive serving over 35 years at GE, while leading multiple divisions and spearheading key growth initiatives for the Company. He has served on HTA 's Board since 2015 with the relationships and insights to partner with our strong leadership team as we execute our best existing business plans. One final thing to note. As noted in the 8-K, the Board is currently engaged in a review of several items related to the Company's Whistleblower line. These reviews are in their early stages, and at this point, we do not anticipate them having any material adverse financial impact on the Company's operation. However, we will be unable to provide any additional color on this matter at this time. I will now turn it over to Peter.

Thank you, Brad. And thanks to all of you who have joined us today on this call. I've been with HTA for over 6 years now and I know first-hand the strength of the Company and of the management team that I am joining. A Company that has balanced short-term performance with investments that will pay off in the long run. In my time here, the Company has more than doubled in size and grown earnings over 20%, a tremendous performance led by Scott Peters. As we survey the healthcare landscape, HTA is uniquely positioned to be a leader in medical office as broader healthcare continues to grow and shift to an outpatient model that is more convenient and closer to the consumer. We positioned our portfolio with scale and great markets. We have full-service capability that are focused on delivering for our tenants. We have a strong balance sheet that allows us to invest. We have demonstrated ability to grow our earnings and our dividends. And most importantly, a strong leadership team that has been critical to this execution. We may certainly look to add talent to meet the opportunity for us. The core is strong. In short, I'm stepping into a Company that Scott Peters created that's in great shape with tremendous opportunities in front of us. Our second-quarter performance certainly demonstrates that fact. With record earnings, tremendous investment pipeline, and the ability to reiterate our guidance and to raise our dividend for the 8th year in a row. Now, I am going to turn it over to Robert and Amanda for our operating performance report. Before I do that, I want to make a couple more comments. As a 77-year-old coming into this, I've been around a lot of years and seen a lot. And I was encouraged yesterday when I saw 63-year-old Australian win a gold medal and made me feel a lot younger. But I come here today -- it wasn't my plan to be doing this but I am honored to be here. I am used to driving organizations focused on growth and employee development. And I couldn't be happier to be able to do this at HTA with an outstanding team, a team that's demonstrated, on a continuing basis, their ability to drive results, as I said before, doubling the size of the business and growing earnings over 20% over the past 5 years. My role as I see it, is to assist this team in continuing that level of performance, by ensuring an environment that has clear goals and measurements and has the tools available to help focus on the execution of those goals. My job is to help this team to make this team as good as they can be. Thank you very much.

Alright, thanks, Peter. Turning to financial performance, in the second quarter, our performance remained extremely strong. Highlighted by steady portfolio performance with same-store NOI, growth of 2.1%, and continued rent collections, including on our 2020 rent deferrals, of which less than $700,000 is remaining as of today to be paid through September. We had normalized FFO per share of $0.44, an increase of almost 5% versus 2020. Recurring capital expenditures of 16.6 million or, approximately, 13% of NOI, which included almost $2 million spend on energy efficiency projects. As a result of this performance, our normalized FAD grew almost 5% to 81 million and allowed us to announce our eighth annual dividend increase for the third quarter. We also have G&A of 10.9 million, continuing our efficient overhead at less than 10% of NOI. From an investment perspective, we remain focused on growing in our key markets through acquisitions and increasing the development while funding our growth through the use of our forward equity raised, as well as attractively priced dispositions out of non-key markets that we believe have fewer opportunities for growth over the long term. Since our last call, we have seen a significant pickup in opportunities that fit our criteria. As a result, we currently sit with $373 million in 2021 investments, that we have either closed or have under exclusive contract, with first-year yields of over 6%. This includes roughly a $100 million closed year-to-date as of the second quarter, with the majority of the rest expected to close in the third quarter. We have $110 million of development projects on track for completion in 2021. This includes 50 million related to projects that we substantially completed in the quarter. One with CommonSpirit in California and the second with Jackson South Hospital in Miami. We also…

Thanks, Robert. Our team has remained committed to working with our tenants and health systems as they navigate the COVID pandemic and its impacts on healthcare delivery. We focused on strengthening key relationships and improving building operations and tenant quality while increasing the long-term value of our buildings. During the peak of the COVID pandemic last year, many of our health system partners pushed pause on growth and expansion plans, redirecting focus on the testing and care of the increased patient population affected by the virus. This year, and specifically the second quarter, we started to see a resumption and prior plans that had been put on hold, as well as new plans for growth. To better position ourselves to provide maximum flexibility and service to our healthcare partners, we've increased our investment in tenant space, completing 185,000 square feet of speculative move-in ready space over the last 12 months, with another 100,000 square feet anticipated in the coming 12 months. We've added to our leasing staff, building internal teams in markets like Tampa, Raleigh, Orange County, and Denver. Core markets where we expect to continue to grow. From an operational performance perspective, in the second quarter, we were able to achieve same-store NOI growth of 2.1%. with over 1.5% of revenue growth despite a decline in year-over-year occupancy. We signed 647,000 square feet of leases, including 150,000 square feet of new leases. We had almost 0.5 million square feet of renewals that resulted in 80% retention and rent growth of 2.1%, solid results that are more in line with what we have historically achieved. Our annual escalators for new leases signed in the period were 2.8%, continuing our trend of increasing escalators towards 3% as we continue to roll our leases. TIs remained efficient at a $1.45 per square…

Thank you, Amanda. I will now open it up for questions.

We will now begin the question-and-answer session. . And the first question comes from Juan Sanabria with BMO Capital Markets. Please, go ahead.

Hi. Good afternoon. I know you probably are limited to what you can say, but I was hoping you could speak to the whistleblower allegations. And what gives you the confidence to say in the 8-K that you don't expect any material impact or material adverse impact to financials for the Company? The -- previously, there was allegations of smoothing on the same-store results. Is that involved in any way or form?

Yeah. Hey, Juan, and good afternoon. And thanks for getting on the call. We can answer that. That absolutely has nothing to do with it. And I think as we've reviewed everything, we -- it certainly is in the early stages. But we are able to say at this point in time, we certainly don't anticipate those to have any material financial effect on anything. But it's not related to the same store, no.

Can you delve into what it is related to in any fashion?

I don't believe we can at this time. It's too early in the process to start talking about any of the issues, the phase they're in. And we just are not at liberty to do that.

And, Peter, for you, have you looked at hiring any outside parties to look for a more permanent CEO at this point? Given your background, is it necessarily in real estate granted you have significant leadership experience? And/or have you hired any advisors in case the Company maybe has to explore other alternatives including a sale or whatnot?

We have not at this point but that would be our intention. This our first day -- half day actually. So, certainly, we'll go on a search for a more permanent management team be it internal or external search. But we certainly will bring in some new talent .

Okay. And just a question for Robert. Are you comfortable with the financials you've signed off on, or given the audit committee is involved, can you speak to your comfort with historic results?

Yeah. I think -- Juan, I think that's a perfectly fair question. And, unfortunately, we do have to be very specific about what we can say on things. But, no, you're going to see that we're signed off on our financial statements as we release our Q. I think we anticipate that coming out in the normal course of activity. I think everything that we do is obviously reviewed both internally with internal audit as well as external audit. It goes through a very thorough review process and I think we're very comfortable with the financial statements that we have out there. Which is why we're able to put in the 8-K that we anticipate that there's not going to be any material financial impact.

And one last question for me. Is Scott entitled to any severance package, given it seems like this is for cause?

No, they're not for cause. It's not for cause.

It was not for cause?

No.

Okay. So he will get severance then?

No. He resigned and he doesn't -- is not entitled to any severance.

Okay. Thank you.

In the interest of time, we ask that all people that are asking a question limit themselves to one question and one follow-up. The next question comes from Nick Joseph with Citi. Please go ahead.

It's Michael Bilerman. I'm here with Nick. I guess Brad, or Peter, or both of you. It's not every day we see a founder of 15 years who's got, I think he has over 3 million units, so let's call it over $100 million invested in the Company voluntarily resign and rush you guys to put -- Peter, I admire your dedication to step up at 77 and take this job. But it's not every day you see someone just walk away from the Company they found and the team they found, is there -- can you elaborate on his decision to resign? And does it have any result of any of the whistleblower complaints that were made?

It's Peter. It is not a result of any whistleblower. It was a personal decision on Scott's part to resign, that we can't put any more information out at this point in time. I don't know what else to say. We can't comment.

Well, I guess, it's just not -- how does someone just step away? Was it the result of any disagreement on the business, the operations, the strategy, the financial conditions, the internal controls, the processes, strategic direction of the Company? You have to give us -- he's a founder with a significant stake in the Company. It's not every day that you see that with zero explanation. It could be for personal reasons and then just say that, but that's not even said.

Well, we did say it's for personal reasons. It was Scott's decision. And I can tell you it isn't any of the things you just listed.

Into why no transition, right? A guy can step away and continue to help to that -- Peter, you have an easier job to do. Just doesn't -- something doesn't feel right for someone just to step away. You had to accelerate your conference call. There is no transition period. What comfort can you provide shareholders that something's not larger of an issue here?

First of all, it's not a $100 million he has in the Company, but it's a substantial amount. His decision was a personal decision where I have nothing we can add to that equation. It's unusual that it would occur on such short notice, we weren't prepared for it. We have a succession, sort of plan, that we've been working on, but it was no way we could jump into that plan at this early stage with this short notice. I can't -- we're not at liberty talk anymore about it. We don't know.

Okay. Well, I guess --

We don't have a very good answer for you other than to say that we stepped up to the continuation of this great Company. And we run it, we love it, but we don't have a good answer for you because we don't know.

Well, can you give some confidence that you will involve some strategic financial advisors as you evaluate what the best course is because perhaps investing in a new CEO, which could cost a lot of money, and a lot of people are chasing MOB talent. Maybe that's not the right direction to go. Perhaps the right direction could be to explore a sale of the Company. I think your shareholders, especially given how quickly this has transpired, should get from the Board of Directors some clarity about the process from a CEO search as well as an exploration of potential alternatives, if that is something that -- would -- you'd even come to mind?

Yes, we will be expanding our communications on that as we pursued in -- proceed down that road. We are going to look internally and externally. I don't think we're going to rush to any conclusions. We've got some business at hand we want to continue to take care of. We need to focus on that most importantly. And we will replace Peter in due course with the appropriate talent and we'll keep you informed as we move along. At this stage --

Does that mean you're just -- right -- so you are just going to stay the course and be a standalone Company hiring a CEO. It doesn't sound like you. And there's a ton of money in MOBs, why wouldn't you take the opportunity today to at least explore when the Company doesn't have a CEO in place to see if a combination with another public Company or a complete sale to private capital may makes more sense at this juncture versus continuing to stay the course standalone public Company basis?

Well, should in the course of our continuation of the business opportunities we have that circumstance would be presented to us, we would, as a Board, have to consider all those situations but we don't consider ourselves in any rush to have to deal with that situation at this time.

Okay. Thank you for the time.

The next question comes from Vikram Malhotra with Morgan Stanley. Please go ahead.

Thanks for taking the question. Maybe just to start, if you can clarify, when did Scott actually resign?

Yeah. The effective date was yesterday, and the notice was about 4 days before that.

Yup. 29th was the notice.

Could you clarify, the notice was when?

29.

29th.

Vikram, we have the exact dates, I believe in the 8-K.

Okay. Got it.

When resignation was tendered in -- on the effective date.

And then I just want to make sure I heard, you said there is no link between the whistleblower complaint and his resignation, correct?

That's correct.

Okay. I guess just you've obviously had a lot of questions on this topic. My sense is that -- maybe just first if you can clarify this, the whistleblower complaint. Is that something that the board has been focused on? Is that just something you got to know very recently? Has it been a week or so you've been focused on this? Can you just give us a bit more color on the timeline or on the whistleblower complaint?

About 2 to 3 weeks now.

Okay. And in those two -- given, you have 2 to 3 weeks, you are not -- you can't even give us a broad sense of what aspect it could be related to high level? Is it something to do with accounting, is it something with some calculations, is it something you would -- any broad topic, could you give us a sense of what aspect it could be related to? Just -- I ask this only because this is again, going back to the prior question, This is still unprecedented and so abrupt that it would help to just give us a bit of -- and give investors a bit of color.

The investigation started by independent attorneys two weeks ago. Last week, really, was the first week. And the whistleblower complaints are not financial. The Company is in great shape. That's not a concern.

And, I think -- Vikram, this is Robert. I think when you look at that, obviously, Peter and Brad can comment around it as it goes to the Board. From a financial numbers perspective, there's a number of things that it could be related to. We have the comfort to be able to sign off on our financials. I think we have complete sign-off within the organization about the certainty of what we're putting forth and be able to make the statement as something that has been reviewed by all parties that we don't anticipate there's going to be any material financial impact to this. I think that gives you at least some color as to what it might -- that we have that comfort of being able to say that.

Okay. And then just last question. I may have missed this, but is there a double -- I think you said there's outside counsel looking into this. Is there a dollar amount that you expect would be spent? And can you give us a rough timeline as to how long you think this will take?

I don't know if we can put a dollar amount on it, but our expectation is it should be 4 to 6 weeks.

Okay. Great. Thanks so much.

Vikram, from a financial perspective, and cost is at least as what we've been able to see here. Obviously, we reiterated our financial guidance for the year. I think we have the confidence to continue down that path. I think we have the confidence to put out a range today. I think we have the confidence knowing what you know to continue with the investments that we've seen, to continue to run the business operations. Obviously, we understand you have to ask all of these questions related to it and, unfortunately, there's not a lot of additional color we can provide, but we did, obviously reiterate our guidance. We do continue to see the operations moving forward. I think we do continue to see investments that are out there and I think what Michael said was right; MOBs are a great place to be in, the asset value is very high right now. I think it's a very attractive place and we've got a very attractive platform that we've been able to put together.

Okay. That's helpful. Robert, while I have you, I'll just ask you a quick numbers question. The same-store NOI guide, I think, is modestly lower now at the midpoint. Can you just highlight what drove that?

Yeah. I think as we've been looking at our same-store growth for the year, we've come into it with slightly lower occupancy coming into the year. I think we've seen extremely strong leasing activity as the health systems come out of COVID and focus more on growth, as Amanda talked about. I think some of the timing of actually getting leases signed and move in and thus resulting in occupancy has been a bit delayed. I think everybody has talked about some shortage of materials. I think as we look at contractors, it's been a very tough market in order to get them an order. So, there has been some construction delay on things but I think it's a modest change down to the 2.5%. We came in at 1.6% in the first quarter, driven by higher snow removal, higher utility costs. So there's expense -- some expenses in there and I think now that we're 6 months in the year, it's just prudent to take it to that area that we think we're going to be in. Which I think is still very good, good number. I think when you look at our performance over the last two years, we've been able to continue to grow. I think we're able to continue to move the portfolio performance up. And so against the backdrop of every other read, I think we've -- get our performance has been quite strong.

Okay. Great. Thanks so much.

Thank you.

The next question comes from Rich Anderson with SMBC Nikko. Please, go ahead.

Yeah. I've got 2 questions, I promise. You said whistleblower is not financial, but then you say in the 8-K that there's no financial -- I'm confu -- is it or is it not financial impact because you -- or a financial matter because you throw out the disclaimer that you don't expect material financial impact but not zero financial impact. I'm just trying to frame what this whistleblower topicality is. If you could say it in general terms; personal, financial, anything like that?

Rich, this is Robert. I think I'll say just a little bit about it, and I do think you're -- as appropriate, you're looking at the specific text. In everything that we do within the business, obviously, it could have a financial impact to it. I think as we look at things, everybody has been able to sign off that we don't anticipate this having a material -- the topic at hand, we don't anticipate it having any sort of material financial impact to the Company.

Okay. Second question. I'm curious why the acceleration of the release in the call. You're supposed to report on Thursday night, call on Friday. He gave notice on the 29th and resigned officially on the 2nd. What -- why -- it rings frantic to me. Why not just -- if you're going to wait from the 29th to the 3rd, why not wait from the 29th to the 5th? What was the reason for accelerating the call?

Yeah, Rich, it really comes down to disclosure date. It comes from the date of notice upon receipt and we have a specific SEC requirement, obviously, to put out information at this timely of manner as possible, but I believe this is a 3 to 4 days. And so I think when we received the noticed on Thursday that started the clock ticking. And I think, obviously, given the questions that are out there, we wanted to make sure that we could, again, put it in the context of a business that's continued to perform, a business that continue to have opportunities, a business that continues to have various investment opportunities, including development that is better than we've seen and continues to put out earnings. So I think we -- the clock was ticking based on the date of the notice period.

That's -- I get that. I'm just wondering why Scott wouldn't time it a little bit differently. I understand disclosure issues, but it doesn't seem like there's a whole lot of cooperation here. Just an observation. That's all I got. Thanks.

Thanks, Rich.

The next question comes from Lukas Hartwich with Green Street. Please go ahead.

Thanks. Will the process for a CEO successor be conducted in tandem with the investigation, or does the investigation need to be completed first?

No, it can be conducted in tandem with that. There's no pecking order.

Okay. And then are there any other employees subject to the investigation, or former employees, I guess?

Look, let's just clarify. I don't think we put out any notice of any particular person being subject to the whistleblower. I think the specific disclosure -- and this is an important factor, I think the specific disclosure was just that there was something out there and it's being investigated, but that does not imply that it's related to anybody or anything in specific, any specific manner.

Great. Thank you.

The next question comes from Mike Mueller with JPMorgan. Please go ahead.

Hi. Was the whistleblower directly related to Scott? Because I know you said Scott departed, but is there a separate issue, or is this tied to Scott? I guess that's the first question. And the second question is, is this whistleblower complaint tied to operations or tenant relationships or anything -- in any way?

You know, Mike, I think we've got to be specific to what we put out in the 8-K. it's just -- every Company has a whistleblower hotline that's put in place. Every public Company certainly does. And these things do come in from time to time. The Board does take everything seriously, it's just their obligation to do that. And then to again investigate it with the appropriate amount of due course. So I think we put that out as from a specific matter. I think as we look at the disclosures, that we put out related to that, I think we just had -- are able to note that we anticipated time of significant material financial impact.

Yeah. I mean, not that whistleblowers are random, but it just seems like if this was a random event, it wouldn't necessarily be in the same 8-K with Scott's departure.

Well, I think it's just a matter of disclosure that you have to put out any time that there is a significant material event such as an officer leaving. I think it is incumbent upon companies to disclose anything else that is going on. So, I think it's for the specific reason that that's why the 2 were together. And I think, specifically in the 8-K, we don't tie them together in any way. So, I don't think that's what we specifically stated.

Okay. Thank you.

The next question comes from Nick Yulico with Scotiabank. Please go ahead.

Thanks. I just want to go back to the topic of severance and be clear on this. I think you said that there is no payments whatsoever going to Scott related to the resignation. Is that correct?

I think Nick and Brad and Peter will opine, Scott's employment contract obviously, has a number provisions in it. This, as bread and Peter said, this was resignation by Scott for personal reasons. That is what we know. I think in due course, that the rest of it, we just came in in the last couple of days. In due course, I think it's going to play out. And so we don't have a specific estimate that there's going to be a payout or if any.

Okay. Yeah. I just wanted to be clear on that, Robert, because if you read through the proxy, there's a resignation without good reason, and then there's a resignation for good reason. And the resignation for good reason entitled Scott potentially $14 million according to the proxy, whereas the resignation without good reason is only a potential $2 million payment if you decide to enforce the non-compete. So, just to be clear, the Board hasn't determined yet which -- if this is a resignation for good reason or not?

No, the letter we received had no condition. It was just a resignation without good reason. It was just without a reason. He just period didn't answer that question.

Okay. I appreciate that. Thank you. And then just to follow up on that is, are you going to enforce a non-compete?

Those are judges we'll make here shortly, but I would imagine we would.

Sorry. You imagine you would?

Yes, we imagine we would.

Okay. All right. Thank you. Appreciate it. Thank you.

The next question comes from Michael Gorman from BTIG. Please go ahead.

Yeah, thanks. Good afternoon. And I apologize to beat a dead horse here, but Robert, I wanted to go back to one of the questions Mike asked, and I understand the sensitivity. But you did file three 8-Ks today, so I'm just -- I just want to make sure I understand. If there is no relationship between the two, it does just look a little bit odd that of the three 8-Ks, s, this was put into that one rather than the disclosure of your financial results or the dividend or anything like that. Is there some technical reason that I'm missing that it was in that specific 8-K instead of the other 2?

Mike, I think it's a good question. And I think from an 8-K perspective, we just had them all in line together. I think the earnings release covers, specifically, the earnings release as we've always had, I think the dividend is consistent with everything else that we put. And then from just an 8-K perspective, we put the rest of the matters into that one as opposed to just doing it on the bus-type 8-K, that would include all sorts of stuff. I think we were trying to just aim for transparency of putting them out there. So I think, in the 8-K, we did not tie them together, but I do think it is important to note that we are following the obligations that we have just from a disclosure perspective. And again, as I think both Brad and Peter have said, it was a personal resignation for personal reasons. It's a disclosure of several just reviews taking place, of which, at this point, we don't anticipate to have any material or financial impact.

Yeah. Remember the resignation event required an 8-K filing within a 4-day period. So, we prepared that and filed it as a separate 8-K.

Okay. And then maybe if we could just step back for just a second, can you maybe walk us through, obviously, Scott was Founder, CEO, Chairman, What are the internal whistleblower procedures at HTA? And what determines when it rises to the level or who determines that it rises to the level that it requires outside counsel? When would the Chairman and CEO -- it sounds like this investigation started a couple of weeks before the resignation date. When in the normal course of a whistleblower, does it rise to the Chairman and CEO, in terms of them being looped in?

Well, Mike, I think from a Company set up perspective and since the Company sets it up under Sarbanes-Oxley, every Company has a whistleblower. Ours specifically gets routed, I think as we disclosed in our whistleblower policy, it gets routed to the Chair of the Audit Committee on the Lead Independent Director. That's what happens every single time. I think -- and then it's determined the direction that it goes from there. Again, these are put in place so that people -- every public Company has it. I think that's procedure. I think we publish it, and it's consistent with most other public companies.

Okay, great. Thank you for the time.

This concludes our question-and-answer session. I will now turn the conference back over to Peter Foss for any closing remarks.

Thank you very much and thanks for -- all of you for joining us today and asking questions.

Operator, do we have any other questions in the queue? We can still take one or two more questions if they're still in there.

We do. We have people who had already asked questions if that is okay.

We will take them.

Okay.

Yeah. We'll take them. Sure.

We have Juan Sanabria from BMO Capital Markets. Please go ahead.

Hi. Just 1 follow-up question for me. Curious on why, or the strategy, or the policy behind involving the Audit Committee if the whistleblower complaint in Scott's departure is not tied to financial issues?

Well, all whistleblower complaints go through the audit committee. Chair of the Audit Committee is responsible for managing those.

And they don't all relate to financial matters.

Yeah. It's just the policy.

It's just the standard policy of how the hotline is set up. And the administrative procedures is that's where it goes for proper routing to make sure it gets the proper attention. But, certainly, not all matters relate to financial matters at all.

No. No. Just a policy.

Okay. Thank you.

Next question's from Lukas Hartwich with Green Street, please go ahead.

Thanks. Appreciate you taking the follow-up. Can you comment on whether the whistleblower complaints is related to conduct at the Company or outside of the Company?

I don't think we can -- we're not trying to evade it. I just don't think we can answer that question.

Fair enough. Thank you.

Okay.

The next question is from Nick Joseph with Citi. Please go ahead.

Great. It's Michael Bilerman. Considering Nick and I are both on, the first questions were Nick's questions. I had a couple of follow-ups. Just in terms of the -- just sticking on the whistleblower complaints, were those external to the Company i.e. did external parties make -- call the whistleblower hotline or process or were they internal matters -- internal people?

Michael, I think those are very fair questions. I think many of these things can be anonymous in nature. I think in just a general setup of a whistleblower hotline, NYSE requirements, things like that, give the opportunity for people that both would name themselves as well as be anonymous. That's the point of the program, off from a transparency perspective. And so I don't think, A, we might not even know. And I'll allow Brad to Peter, Robert at the Company. I just -- we just helped set it up from a stock perspective. We don't actually receive them or see them. But from just a purely set up perspective, it can be anybody, internal or external to the Company. And it can also be very well anonymous.

Right. I just didn't know if it -- it sounds like you've already made some determinations in terms of its severity, at least in account over the financials. It just wasn't clear to me whether you had gone through some of the identification process and it wasn't clear. It was mentioned that there were several items. And so I wasn't sure if we were dealing with multiple whistleblower complaints or is it multiple to one issue to which the Company and the audit committee have their independent legal counsel reviewing.

Yeah. There are multiple complaints. They don't -- they don't necessarily tie together, no. And we don't know in case necessarily who the complainant was. So, we're just processing, researching that, and investigating.

And then the last question I have just goes back Scott. It sounds like he tendered his resignation to the Board, I guess, last week on Thursday. Prior to that, had there been any conversations with Scott about potential changes in his role? He obviously is Chairman, CEO, and President. Was he at all involved in any of these investigations as his time as CEO? Just anything that press pre-dated that Thursday in terms of just discussions. And then if you can just say, did he completely leave, i.e., was completely cut off on Thursday, and there's been no communications between the parties since? I just wanted to get clarification on that.

And no communication since his notice. Correct.

And then on the first part, in terms of what happened, what predated me giving you a notice, it's just trying to get a little bit of color about what type of relationship there was between the Founder, Chairman, President, and CEO, and the rest of the Board prior to giving notice that he was walking out the door with his bags basically.

Well, this is Peter. I think Brad would agree. We had no pre-knowledge that anything was going to happen. He's been a great friend and we were really surprised. I mean, in fact, we were here last week and worked with Scott for 2 days, has gone over some business plans and so on, and that was good discussions. And then we left here Wednesday and this notice came on a Thursday.

And then just --

I know it doesn't help you much, so it doesn't help us much.

Yeah. No, no. And look, I appreciate the candor. It -- you've had a few days to process. We all have had -- we've had a few hours and so there's multiple stages of grief. And, as you know -- and, so, I don't know what stage we're at now after 50 minutes, but it is -- you don't see it. And I -- I don't want to -- all of us are wondering what the next chapter could be, both for the Company, for Scott individually, and how it all plays out. And I know we've started beating this hole trying to tie the whistleblower complaint, which I recognize are quite -- this happens all the time at all public companies. And then most -- in many cases, they're investigated, they're dealt with, and it doesn't rise. But that's the point of these hotlines to be able to provide opportunities for anybody who feel that they want to have something just looked into that they don't think is right. Had Scott -- had this gotten to Scott's desk, i.e. was Scott involved in any of these complaints? By the time -- again, if you're saying he was business as usual last Wednesday, was he involved in these things?

No. No, he's -- he can't be involved in the investigation. He isn't working. He didn't receive them or know who they're from.

Was he aware of them?

Anonymous.

No, but was he aware that there was -- that's what we're just trying to find out. Was he aware that there was processes that some -- you may not know what it was, but he may have. At what point did he know that there was whistleblower complaints that the Company had -- it retained independent counsel, that the audit committee had retained independent counsel, that this was going to have to be disclosed to the market because it has reached to that point where you've engaged counsel and you're being reviewed? You would have disclose d it otherwise.

Michael, I think there's 1 thing, just a clarification around disclosure on it. I think if you go through things, and as you pointed out, these things come in all the time at various levels -- serious, various levels of who knows what just because it is open to everybody by design, as you pointed out. And so I think many -- most times they go through just a normal review process. And to the point that you get through it, whether it's right, wrong, or indifferent, they're generally not disclosable. And I think that's where we said we don't anticipate that at this time there would've been anything from a financial perspective that would be material enough to disclose. However, unfortunately, given the timing of these things, it's important and required that we disclose if anything else that's going on. I think that's where we say we don't anticipate there. There would've been a financial disclosure on this, but that's what we've got.

I think at this time we should probably terminate the call. We appreciate the questions.

And I want to make sure, what Robert had said before, that we're still keeping our guidance, the business plan is fully intact, and we just raised our dividend. So we're moving forward and looking forward to continue growth and great results.

Thank you all.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.