Kris Douglas : Yes. It really kind of depends on exactly how much overall interest rates move across the year. To kind of give you a bit of kind of heuristic, so to speak, on it is that with about $900 million of floating rate debt right now, a 1% change in the annual interest rate ends up being about $0.015 to overall growth on a per share amount for the year. So that gives you a little bit of the magnitude of the impact, but we’ll have to kind of continue to watch that through the balance of ’23.
Nick Yulico : Okay. That’s helpful. And I guess just my follow-up question was on interest expense. I mean, I know you guys are excluding that merger fair value adjustment because it’s noncash from your normalized FFO, and I know you were considering doing that because it’s a large impact that you’re having. But at the same time, other REITs aren’t doing that, granted other REITs don’t have as big of an issue that you’re facing. But I just want to hear a little bit more about the decision to remove that from your — the rationale to remove that from your normalized FFO calculation.
Todd Meredith : Kris?
Kris Douglas : Yes. We did consider that and look at that. And I think you’re right. When you look at the impact that it has on us compared to peers and what’s going on right now, the rapid change in interest rates, it is different. So we ended up with almost half of our balance sheet being mark-to-market, which resulted in over 20% of our income statement interest expense being noncash related to this fair value adjustment. So we had some of our analysts really, we spoke to all of our analysts on this as well as a lot of our investors. And the consensus was that given the size and the unusual nature of that, it was going to create a lot of comparability issues. And so the recommendation is that we make this normalizing adjustment that we pointed out. And I will remind you, being noncash, this is an FFO item. It’s not a FAD item. So that was the thought process that went into that decision.
Todd Meredith : And I would just add that — yes, clearly, it was more material because of the merger and just the fact that we were buying HTA and, therefore, 60% larger balance sheet or a portion of the combined balance sheet. That’s a huge, huge amount, as Kris said. And so we don’t have any real maturity, significant maturities, until ’25. So there’s — like everyone, as we refinance in the future, we’ll deal with the cash change like everyone in real time, but we’re in a really good position on that. So feel very good about the balance sheet, and it helps comparability, as Kris said.
Operator: We now have Rich Anderson with SMBC.
Rich Anderson : So on the dividend, you said high 90s type of FAD payout. Hear me okay?
Todd Meredith : Yes.
Rich Anderson : Okay. Sorry about that. I had some feedback. And then Kris, you mentioned the sensitivity to higher interest rates and what that does to the bottom line. Let’s say it’s not high 90s, but it’s in triple digits in 2023 for whatever reason. To what degree are you willing to live with that? And for what amount of time? Do you feel like you have enough visibility or is a dividend cut at least being thought about at this point based on where you stand today and all the moving parts?
