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press release

July 30, 2020, 10:20 a.m. EDT

 Medical Properties Trust, Inc. Reports Second Quarter Results

Per Share Net Income of $0.21 and Normalized FFO of $0.38$3.1 Billion of Closed and Announced Investments Year-to-Date100% of Rent and Interest Collected or Subject to Definitive Repayment Agreements Since Onset of COVID-19

Medical Properties Trust, Inc. (the “Company” or “MPT”) /zigman2/quotes/201233436/composite MPW -3.02% today announced financial and operating results for the second quarter ended June 30, 2020 as well as certain events occurring subsequent to quarter end.

  • Net income of $0.21 and Normalized Funds from Operations (“NFFO”) of $0.38 in the second quarter, both on a per diluted share basis;

  • Expected full-calendar year 2020 cash rent and interest collections of 98%; deferrals of current rent and interest due will end by the fourth quarter, and amounts remaining unpaid will be collected pursuant to defined repayment arrangements;

  • Acquired in early July for $200 million the fee simple interest in Steward’s Davis and Jordan Valley, UT Hospitals previously subject to a mortgage loan investment from MPT;

  • Entered into commitments to acquire real estate of Prime St. Francis Medical Center in Lynwood, CA for an investment of $300 million; expected to close in the third quarter;

  • Closed in mid-May, a $205 million transaction to form a joint venture to invest in select international hospitals outside of the scope of existing operator relationships; subsequently committed to a $100 million investment, expected to close in the fourth quarter, in a three-hospital portfolio located in Colombia to be managed by the new platform;

  • Entered into binding agreement to acquire real estate of a MEDIAN inpatient rehab facility in Dahlen, Germany for €12.5 million in the third quarter; separately, commenced construction on an Ernest post-acute facility in Bakersfield, CA with a total cost of roughly $48M and placed under various stages of agreement approximately $210 million of additional investments to be detailed in future quarters;

  • Sold approximately 6.0 million common shares since March 31, 2020 through the Company’s “at-the-market” program at an average price of $18.16 for net proceeds of approximately $108.2 million.

“As we have previously mentioned, MPT continues to see tremendous potential for further investment. The pandemic the world is going through has created even more opportunities for us,” said Edward K. Aldag, Jr., MPT’s Chairman, President, and Chief Executive Officer. “During the past three months we have been able to execute on some of those transactions bringing our total 2020 investments to date to $3.1 billion. Between now and the end of the year, we expect to be able to capitalize on other opportunities as well.”

Mr. Aldag continued, “We are immensely proud of our operators for rapidly reconfiguring, right-sizing, and adjusting their operations in response to the COVID pandemic such that we expect to collect 100% of rent and interest contractually due to us, including 98% to be collected in 2020 with the remaining 2% subject to payment plans with interest. As we have been indicating since May, and as has been confirmed by multiple public hospital corporations, patients are returning to hospitals in scale for medically necessary elective procedures.”

Included in the financial tables accompanying this press release is information about the Company’s assets and liabilities, net income and reconciliations of net income to NFFO, all on a basis comparable to 2019 results, and a reconciliation of pro forma total gross assets to total assets.

PORTFOLIO UPDATE

MPT and its operators executed on several accretive growth initiatives during and subsequent to the second quarter despite the environment created by the COVID-19 pandemic.

In the third quarter, MPT expects to acquire St. Francis Medical Center in Los Angeles County, CA for total consideration of $300 million and a GAAP yield near 9% in conjunction with Prime Healthcare’s purchase of the operations from Verity Health. The 384-bed facility serves as critical infrastructure in the Lynwood community, accommodating more than 75,000 patients in its emergency department annually, and is classified as a level II trauma center.

On July 7, MPT enhanced its overall Steward portfolio through the conversion of the final two Steward properties subject to mortgage loans into fee simple property leases for an incremental investment of $200 million. The entire $950 million investment in the Jordan Valley and Davis, Utah facilities, two of Steward’s most profitable, will carry an attractive GAAP yield consistent with the near-10% on the Steward master lease agreement.

Approximately $171 million of development properties leased to Surgery Partners and Circle Health were completed and placed in service during the first half of the year leaving only the $27.5 million NeuroPsychiatric Hospital in Clear Lake, Texas and a recently-committed $48 million project alongside Ernest Health in Bakersfield, CA under development at June 30, 2020. MPT has roughly $210 million of additional development, expansion, acquisition, and loan investment agreements in process with more detail to be provided as commitments are executed.

MPT closed in mid-May on a $205 million investment to own 49% of a joint venture with Steward CEO and Founder Dr. Ralph de la Torre and members of his management team organized to invest in select international hospitals. The distinct entity simultaneously purchased from Steward the rights and existing assets related to all present and future international opportunities previously owned by Steward for strategic, regulatory, and risk management purposes. In a transaction expected to close in the fourth quarter, MPT expects to invest $100 million in a portfolio of three hospitals in underserved areas of Colombia to be operated by the new joint venture.

The Company has pro forma total gross assets of approximately $17.3 billion, including $14.3 billion in general acute care hospitals, $1.9 billion in inpatient rehabilitation hospitals, and $0.3 billion in long-term acute care hospitals. Our portfolio, pro forma for the transactions herein, includes approximately 390 properties representing roughly 42,000 licensed beds across the United States and in Germany, the United Kingdom, Switzerland, Italy, Spain, Portugal, Australia, and Colombia. The properties are leased to or mortgaged by 45 hospital operating companies. MPT continues to work with existing and new operators in the U.S. and abroad on numerous opportunities.

OPERATING RESULTS AND OUTLOOK

Net income for the second quarter of 2020 was $109.5 million (or $0.21 per diluted share), compared to $79.4 million ($0.20 per diluted share) in the second quarter of 2019.

NFFO for the second quarter of 2020 was $199.6 million (or $0.38 per diluted share), compared to $120.9 million ($0.31 per diluted share) in the second quarter of 2019.

Based on year-to-date transactions, along with an assumed capital structure that results in a net debt to EBITDA ratio of approximately 5.5 times, MPT expects an annual run-rate of $1.09 to $1.12 per diluted share for net income and $1.68 to $1.71 per diluted share for NFFO.

These estimates do not include the effects, if any, of unexpected real estate operating costs, changes in accounting pronouncements, litigation costs, debt refinancing costs, acquisition costs, currency exchange rate movements, interest rate hedging activities, write-offs of straight-line rent or other non-recurring or unplanned transactions. Moreover, these estimates do not provide for the impact on MPT or its tenants and borrowers or on local and national governments worldwide of the ongoing global COVID-19 pandemic. These estimates may change if the Company acquires or sells assets in amounts that are different from estimates, market interest rates change, debt is refinanced, new shares are issued, additional debt is incurred, other operating expenses vary, income from our equity investments vary from expectations, or existing leases do not perform in accordance with their terms.

CONFERENCE CALL AND WEBCAST

The Company has scheduled a conference call and webcast for Thursday, July 30, 2020 at 11:00 a.m. Eastern Time to present the Company’s financial and operating results for the quarter ended June 30, 2020. The dial-in numbers for the conference call are 844-535-3969 (U.S. and Canada) and 409-937-8903 (International); both numbers require passcode 5042744. The conference call will also be available via webcast in the Investor Relations section of the Company’s website, www.medicalpropertiestrust.com .

A telephone and webcast replay of the call will be available beginning shortly after the call’s completion through August 13, 2020. Dial-in numbers for the replay are 855-859-2056 and 404-537-3406 for U.S./Canada and International callers, respectively. The replay passcode for all callers is 5042744.

The Company’s supplemental information package for the current period will also be available on the Company’s website in the Investor Relations section.

About Medical Properties Trust, Inc.

Medical Properties Trust, Inc. is a self-advised real estate investment trust formed in 2003 to acquire and develop net-leased hospital facilities. From its inception in Birmingham, Alabama, the Company has grown to become one of the world’s largest owners of hospitals with approximately 390 facilities and roughly 42,000 licensed beds in nine countries and across four continents on a pro forma basis. MPT’s financing model facilitates acquisitions and recapitalizations and allows operators of hospitals to unlock the value of their real estate assets to fund facility improvements, technology upgrades and other investments in operations. For more information, please visit the Company’s website at www.medicalpropertiestrust.com .

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can generally be identified by the use of forward-looking words such as “may”, “will”, “would”, “could”, “expect”, “intend”, “plan”, “estimate”, “target”, “anticipate”, “believe”, “objectives”, “outlook”, “guidance” or other similar words, and include statements regarding our strategies, objectives, future expansion and development activities, and expected financial performance. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results or future events to differ materially from those expressed in or underlying such forward-looking statements, including, but not limited to: (i) the economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic, including governmental assistance to hospitals and healthcare providers, including certain of our tenants; (ii) the ability of our tenants, operators and borrowers to satisfy their obligations under their respective contractual arrangements with us, especially as a result of the adverse economic impact of the COVID-19 pandemic, and government regulation of hospitals and healthcare providers in connection with same (as further detailed in our Current Report on Form 8-K filed with the SEC on April 8, 2020); (iii) our expectations regarding annual run-rate net income and NFFO per share; (iv) our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate and integrate acquisitions and investments; (v) the nature and extent of our current and future competition; (vi) macroeconomic conditions, such as a disruption of or lack of access to the capital markets; (vii) our ability to obtain debt financing on attractive terms or at all, which may adversely impact our ability to pursue acquisition and development opportunities and pay down, refinance, restructure or extend our indebtedness as it becomes due; (viii) increases in our borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of LIBOR after 2021; (ix) international, national and local economic, real estate and other market conditions, which may negatively impact, among other things, the financial condition of our tenants, lenders and institutions that hold our cash balances, and may expose us to increased risks of default by these parties; (x) factors affecting the real estate industry generally or the healthcare real estate industry in particular; (xi) our ability to maintain our status as a REIT for federal and state income tax purposes; (xii) federal and state healthcare and other regulatory requirements, as well as those in the foreign jurisdictions where we own properties; (xiii) the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain equity or debt financing secured by our properties or on an unsecured basis; (xiv) the ability of our tenants and operators to comply with applicable laws, rules and regulations in the operation of the our properties, to deliver high-quality services, to attract and retain qualified personnel and to attract residents and patients; and (xv) potential environmental contingencies and other liabilities.

The risks described above are not exhaustive and additional factors could adversely affect our business and financial performance, including the risk factors discussed under the section captioned “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019. Forward-looking statements are inherently uncertain and actual performance or outcomes may vary materially from any forward-looking statements and the assumptions on which those statements are based. Readers are cautioned to not place undue reliance on forward-looking statements as predictions of future events. We disclaim any responsibility to update such forward-looking statements, which speak only as of the date on which they were made.

 
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
 
Consolidated Balance Sheets
(Amounts in thousands, except for per share data) June 30, 2020 December 31, 2019
Assets (Unaudited) (A)
Real estate assets
Land, buildings and improvements, intangible lease assets, and other $ 9,990,860   $ 8,102,754  
Investment in financing leases   2,078,209     2,060,302  
Mortgage loans   1,339,258     1,275,022  
Gross investment in real estate assets   13,408,327     11,438,078  
Accumulated depreciation and amortization   (684,444 )   (570,042 )
Net investment in real estate assets   12,723,883     10,868,036  
 
Cash and cash equivalents   374,962     1,462,286  
Interest and rent receivables   41,321     31,357  
Straight-line rent receivables   377,999     334,231  
Equity investments   841,098     926,990  
Other loans   792,011     544,832  
Other assets   296,796     299,599  
Total Assets $ 15,448,070   $ 14,467,331  
 
Liabilities and Equity
Liabilities
Debt, net $ 7,795,890   $ 7,023,679  
Accounts payable and accrued expenses   443,453     291,489  
Deferred revenue   18,638     16,098  
Obligations to tenants and other lease liabilities   122,812     107,911  
Total Liabilities   8,380,793     7,439,177  
 
Equity
Preferred stock, $0.001 par value. Authorized 10,000 shares; no shares outstanding   -     -  
Common stock, $0.001 par value. Authorized 750,000 shares; issued and outstanding - 528,641 shares at June 30, 2020 and 517,522 shares at December 31, 2019   529     518  
Additional paid-in capital   7,200,203     7,008,199  
Retained (deficit) earnings   (19,771 )   83,012  
Accumulated other comprehensive loss   (113,013 )   (62,905 )
Treasury shares, at cost   (777 )   (777 )
Total Medical Properties Trust, Inc. Stockholders' Equity   7,067,171     7,028,047  
 
Non-controlling interests   106     107  
Total Equity   7,067,277     7,028,154  
 
Total Liabilities and Equity $ 15,448,070   $ 14,467,331  
 
(A) Financials have been derived from the prior year audited financial statements.
 
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
 
Consolidated Statements of Income
(Unaudited)
 
(Amounts in thousands, except for per share data) For the Three Months Ended For the Six Months Ended
June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
 
Revenues
Rent billed $ 173,557   $ 110,882   $ 345,324   $ 219,480  
Straight-line rent   21,151     25,136     52,572     45,787  
Income from financing leases   52,489     17,386     104,925     34,666  
Interest and other income   44,645     39,145     83,153     73,070  
Total revenues   291,842     192,549     585,974     373,003  
 
Expenses
Interest   80,376     52,326     161,275     102,877  
Real estate depreciation and amortization   61,463     33,976     122,384     67,328  
Property-related   9,985     8,290     15,557     11,356  
General and administrative   32,018     22,272     65,403     45,723  
Total expenses   183,842     116,864     364,619     227,284  
 
Other income (expense)
Loss on sale of real estate   (3,101 )   (147 )   (1,776 )   (147 )
Real estate impairment charges   -     -     (19,006 )   -  
Earnings from equity interests   5,291     4,441     9,370     8,161  
Unutilized financing fees   -     (914 )   (611 )   (914 )
Other (including mark-to-market adjustments on equity securities)   4,291     581     (9,684 )   785  
Total other income (expense)   6,481     3,961     (21,707 )   7,885  
 
Income before income tax   114,481     79,646     199,648     153,604  
 
Income tax (expense) benefit   (4,829 )   274     (8,839 )   2,607  
 
Net income   109,652     79,920     190,809     156,211  
Net income attributable to non-controlling interests   (184 )   (482 )   (349 )   (951 )
Net income attributable to MPT common stockholders $ 109,468   $ 79,438   $ 190,460   $ 155,260  
 
 
Earnings per common share - basic and diluted:
Net income attributable to MPT common stockholders $ 0.21   $ 0.20   $ 0.36   $ 0.40  
 
Weighted average shares outstanding - basic   527,781     394,574     524,428     387,563  
Weighted average shares outstanding - diluted   528,880     395,692     525,530     388,683  
 
 
Dividends declared per common share $ 0.27   $ 0.25   $ 0.54   $ 0.50  
 
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Reconciliation of Net Income to Funds From Operations
(Unaudited)
 
 
(Amounts in thousands, except for per share data) For the Three Months Ended For the Six Months Ended
June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019
 
FFO information:
Net income attributable to MPT common stockholders $ 109,468   $ 79,438   $ 190,460   $ 155,260  
Participating securities' share in earnings   (487 )   (446 )   (951 )   (922 )
Net income, less participating securities' share in earnings $ 108,981   $ 78,992   $ 189,509   $ 154,338  
 
Depreciation and amortization   71,823     40,407     142,325     80,261  
Loss on sale of real estate   3,101     147     1,776     147  
Real estate impairment charges   -     -     19,006     -  
Funds from operations $ 183,905   $ 119,546   $ 352,616   $ 234,746  
 
Write-off of straight-line rent and other, net of tax   19,241     406     26,958     3,002  
Non-cash fair value adjustments   (3,590 )   -     10,605     -  
Unutilized financing fees   -     914     611     914  
Normalized funds from operations $ 199,556   $ 120,866   $ 390,790   $ 238,662  
 
Share-based compensation   12,192     6,317     22,228     13,032  
Debt costs amortization   3,428     2,188     6,837     4,255  
Rent deferral   (7,240 )   -     (7,240 )   -  
Straight-line rent revenue and other   (50,860 )   (29,508 )   (100,474 )   (57,558 )
Adjusted funds from operations $ 157,076   $ 99,863   $ 312,141   $ 198,391  
 
 
 
Per diluted share data:
Net income, less participating securities' share in earnings $ 0.21   $ 0.20   $ 0.36   $ 0.40  
Depreciation and amortization   0.14     0.10     0.27     0.20  
Loss on sale of real estate   -     -     -     -  
Real estate impairment charges   -     -     0.04     -  
Funds from operations $ 0.35   $ 0.30   $ 0.67   $ 0.60  
 
Write-off of straight-line rent and other, net of tax   0.03     -     0.05     0.01  
Non-cash fair value adjustments   -     -     0.02     -  
Unutilized financing fees   -     0.01     -     -  
Normalized funds from operations $ 0.38   $ 0.31   $ 0.74   $ 0.61  
 
Share-based compensation   0.02     0.02     0.04     0.03  
Debt costs amortization   -     -     0.01     0.01  
Rent deferral   (0.01 )   -     (0.01 )   -  
Straight-line rent revenue and other   (0.09 )   (0.08 )   (0.19 )   (0.14 )
Adjusted funds from operations $ 0.30   $ 0.25   $ 0.59   $ 0.51  
 
Notes:
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Annual Run-Rate Guidance Reconciliation
(Unaudited)
 
 
Annual Run-Rate Guidance - Per Share [(1)]
Low High
 
 
Net income attributable to MPT common stockholders $ 1.09 $ 1.12
Participating securities' share in earnings   -   -
Net income, less participating securities' share in earnings $ 1.09 $ 1.12
 
Depreciation and amortization   0.59   0.59
Funds from operations $ 1.68 $ 1.71
 
Other adjustments   -   -
Normalized funds from operations $ 1.68 $ 1.71
 
(1)Theguidance is based on current expectations and actual results or future events may differ materially from those expressed in this table, which is a forward-lookingstatement within the meaning of the federal securities laws. Please refer to the forward-looking statement included in this press release and our filings with the Securities and Exchange Commission for a discussion of risk factors that affect our performance.
Pro Forma Total Gross Assets
(Unaudited)
 
 
(Amounts in thousands) June 30, 2020
 
Total Assets $ 15,448,070  
Add:
Binding real estate commitments on new investments [(1)]   514,042  
Unfunded amounts on development deals and commenced capital improvement projects [(2)]   154,760  
Accumulated depreciation and amortization   684,444  
Incremental gross assets of our joint ventures [(3)]   851,518  
Less:
Cash used for funding the transactions above   (374,962 )
Pro Forma Total Gross Assets(4) $ 17,277,872  
 
(1) Reflects our commitment to acquire a facility in the United States and a facility in Germany, along with an incremental investment to acquire the fee simple interest of two facilities in the United States previously subject to a mortgage loan.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200730005501/en/

SOURCE: Medical Properties Trust, Inc.

Drew Babin, CFA
Senior Managing Director – Corporate Communications
Medical Properties Trust, Inc.
(646) 884-9809
dbabin@medicalpropertiestrust.com

COMTEX_368650208/2456/2020-07-30T10:19:56

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/zigman2/quotes/201233436/composite
US : U.S.: NYSE
$ 21.80
-0.68 -3.02%
Volume: 2.53M
Feb. 25, 2021 4:00p
P/E Ratio
27.00
Dividend Yield
5.14%
Market Cap
$12.89 billion
Rev. per Employee
N/A
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