Attached files

file filename
8-K - FORM 8-K - MEDICAL PROPERTIES TRUST INCd390916d8k.htm
EX-99.2 - EX-99.2 - MEDICAL PROPERTIES TRUST INCd390916dex992.htm

Exhibit 99.1

 

LOGO

 

  

Contact: Charles Lambert

Managing Director – Capital Markets

Medical Properties Trust, Inc.

(205) 397-8897

clambert@medicalpropertiestrust.com

MEDICAL PROPERTIES TRUST, INC. REPORTS

37% INCREASE IN SECOND QUARTER

NORMALIZED FFO PER SHARE

Successful Execution of Growth Strategies Yields 46% Gain in Revenue

Birmingham, AL – August 9, 2012 – Medical Properties Trust, Inc. (the “Company”) (NYSE: MPW) today announced financial and operating results for the second quarter ended June 30, 2012.

SECOND QUARTER AND RECENT HIGHLIGHTS

 

   

Achieved second quarter Normalized Funds from Operations (“FFO”) and Adjusted FFO (“AFFO”) per diluted share of $0.22 each compared to $0.16 in second quarter of 2011;

 

   

Added new assets including $100 million investment in acute care hospital and $26 million investment in post-acute care developments;

 

   

Restructured Prime Healthcare investments through master lease and other cross-collateralization arrangements; and

 

   

Paid 2012 second quarter cash dividend of $0.20 per share.

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 FFO and AFFO, all on a comparable basis to 2011 periods.

“High quality hospitals, like those Medical Properties Trust invests in, will remain a cornerstone of the U.S. healthcare system,” said Edward K. Aldag, Jr., Chairman, President and CEO of Medical Properties Trust. “Regardless of which reform legislation may be enacted, the healthcare system in the U.S. is expected to continue its focus on policy that supports the intersection of improved patient outcomes and cost savings. MPT’s high quality hospital operators are well-positioned to capitalize on this long-term trend.”

 

1


OPERATING RESULTS

Second quarter 2012 total revenues increased 46% and Normalized FFO per share increased 37% compared to the second quarter of 2011. The improvements are the result of MPT’s continued successful execution of the growth and investment strategies the Company implemented in 2010. Since that time, MPT has raised capital and made hospital investments totaling more than $1.0 billion with average returns of more than 10%.

“When we restarted our investment program after waiting out the uncertainty and volatility of 2008 and 2009, we raised significant amounts of capital with the goal of creating a solid foundation to support long-term, profitable growth,” continued Mr. Aldag. “Our per-share results in the second quarter illustrate the benefits of our long-term investment strategy and validate our commitment to investing in high quality hospital operators. Per share Normalized FFO was substantially above the $0.20 dividend we paid last month, resulting in a payout ratio of 91%. This ratio is expected to be approximately 75% in early 2013. As we continue to execute our growth strategy and drive the payout ratio down, we believe we will be well positioned to continue to support initiatives that will enhance shareholder value.”

PORTFOLIO UPDATE AND FUTURE OUTLOOK

In the second quarter of 2012, the Company commenced two previously announced development projects: a 40-bed, $16.6 million inpatient rehabilitation facility with Ernest Health in Lafayette, IN; and a 26-bed, $9.4 million inpatient rehabilitation facility on the campus of an existing long-term acute care hospital leased by Post Acute Medical in Victoria, TX.

“The Lafayette, IN and Victoria, TX projects both demonstrate the current and future value to MPT shareholders of our close relationships with our tenants,” continued Aldag. “Upon completion of the Lafayette hospital, MPT will earn lease revenue pursuant to its master lease agreement with Ernest Health, and in addition will receive approximately 80% of the hospital’s operating earnings with no additional investment. The Victoria, TX project will be the sixth hospital that Post Acute Medical leases from MPT, two of which share operating earnings with MPT.”

At June 30, 2012, the Company had total real estate and related investments of approximately $2 billion comprised of 79 healthcare properties in 23 states leased to 21 hospital operating companies. In July 2012, the Company completed a $100 million mortgage loan investment secured by the Centinela Hospital Medical Center in Inglewood, CA, and restructured its leases to Prime Healthcare as a master lease structure. Among other benefits of the restructure, the lease terms were extended, a minimum annual rent escalator was established and all of MPT’s Prime Healthcare leases and loans were effectively cross-defaulted and cross-collateralized.

Based on the Company’s asset portfolio and capitalization as of June 30, 2012, the $100 million Centinela Hospital Medical Center mortgage loan, placement into service of the three Emerus emergency hospitals during the upcoming fourth quarter, and $200 million in anticipated fourth quarter acquisitions, the Company reaffirmed its expectation that calendar year 2012 Normalized FFO will approximate $0.85 per share.

 

2


For 2013, these guidance assumptions would result in a Normalized FFO run rate of approximately $1.06 per share excluding the impact of the effects of potential 2013 acquisition and financing activities.

Guidance estimates do not include the effects, if any, of real estate operating costs, litigation costs, debt refinancing costs, acquisition costs, new interest rate hedging activities, write-offs of straight-line rent or other non-recurring or unplanned transactions. These estimates will change if the Company acquires additional assets, market interest rates change, debt is refinanced, new shares are issued, additional debt is incurred, assets are sold, other operating expenses vary, income from investments in tenant operations 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, August 9, 2012 at 11:00 a.m. Eastern Time to present the Company’s financial and operating results for the quarter ended June 30, 2012. The dial-in telephone numbers for the conference call 866-761-0748 (U.S.) and 617-614-2706 (International); using passcode 69186319. 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 from shortly after the completion through August 23, 2012. Telephone numbers for the replay are 888-286-8010 and 617-801-6888 for U.S. and International callers, respectively. The replay passcode is 32123617.

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

About Medical Properties Trust, Inc.

Medical Properties Trust, Inc. is a Birmingham, Alabama based self-advised real estate investment trust formed to capitalize on the changing trends in healthcare delivery by acquiring and developing net-leased healthcare facilities. These facilities include inpatient rehabilitation hospitals, long-term acute care hospitals, regional acute care hospitals, ambulatory surgery centers and other single-discipline healthcare facilities, such as heart hospitals and orthopedic hospitals. For more information, please visit the Company’s website at www.medicalpropertiestrust.com.

The statements in this press release that are forward looking are based on current expectations and actual results or future events may differ materially. Words such as “expects,” “believes,” “anticipates,” “intends,” “will,” “should” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements involve

 

3


known and unknown risks, uncertainties and other factors that may cause the actual results of the Company or future events to differ materially from those expressed in or underlying such forward-looking statements, including without limitation: the capacity of the Company’s tenants to meet the terms of their agreements; Normalized FFO per share; expected payout ratio, the amount of acquisitions of healthcare real estate, if any; the repayment of debt arrangements; statements concerning the additional income to the Company as a result of ownership interests in certain hospital operations and the timing of such income; the restructuring of the Company’s investments in non-revenue producing properties; the payment of future dividends, if any; completion of additional debt arrangement, and additional investments; national and economic, business, real estate and other market conditions; the competitive environment in which the Company operates; the execution of the Company’s business plan; financing risks; the Company’s ability to maintain its status as a REIT for federal income tax purposes; acquisition and development risks; potential environmental and other liabilities; and other factors affecting the real estate industry generally or healthcare real estate in particular. For further discussion of the factors that could affect outcomes, please refer to the “Risk factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, as amended, and as updated by the Company’s subsequently filed Quarterly Reports on Form 10-Q and other SEC filings. Except as otherwise required by the federal securities laws, the Company undertakes no obligation to update the information in this press release.

# # #

 

4


MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

 

     June 30, 2012     December 31, 2011  
     (Unaudited)     (A)  

Assets

    

Real estate assets

    

Land, buildings and improvements, and intangible lease assets

   $ 1,261,434,290      $ 1,224,972,901   

Construction in progress and other

     14,411,210        30,902,348   

Real estate held for sale

     —          17,636,900   

Net investment in direct financing leases

     201,156,004        —     

Mortgage loans

     265,000,000        165,000,000   
  

 

 

   

 

 

 

Gross investment in real estate assets

     1,742,001,504        1,438,512,149   

Accumulated depreciation and amortization

     (119,271,184     (101,851,082
  

 

 

   

 

 

 

Net investment in real estate assets

     1,622,730,320        1,336,661,067   

Cash and cash equivalents

     127,638,726        102,725,906   

Interest and rent receivable

     38,038,382        29,862,106   

Straight-line rent receivable

     36,973,184        33,993,032   

Other loans

     159,718,396        74,839,459   

Deferred financing costs

     22,824,562        18,285,175   

Other assets

     30,607,770        25,506,974   
  

 

 

   

 

 

 

Total Assets

   $ 2,038,531,340      $ 1,621,873,719   
  

 

 

   

 

 

 

Liabilities and Equity

    

Liabilities

    

Debt, net

   $ 900,204,302      $ 689,848,981   

Accounts payable and accrued expenses

     59,087,287        51,124,723   

Deferred revenue

     22,496,038        23,307,074   

Lease deposits and other obligations to tenants

     29,161,167        28,777,787   
  

 

 

   

 

 

 

Total liabilities

     1,010,948,794        793,058,565   

Equity

    

Preferred stock, $0.001 par value. Authorized 10,000,000 shares; no shares outstanding

     —          —     

Common stock, $0.001 par value. Authorized 250,000,000 shares; issued and outstanding - 134,590,586 shares at June 30, 2012 and 110,786,183 shares at December 31, 2011

     134,591        110,786   

Additional paid in capital

     1,279,028,700        1,055,255,776   

Distributions in excess of net income

     (238,541,336     (214,058,258

Accumulated other comprehensive income (loss)

     (12,777,066     (12,230,807

Treasury shares, at cost

     (262,343     (262,343
  

 

 

   

 

 

 

Total Equity

     1,027,582,546        828,815,154   
  

 

 

   

 

 

 

Total Liabilities and Equity

   $ 2,038,531,340      $ 1,621,873,719   
  

 

 

   

 

 

 

 

(A) Financials have been derived from the prior year audited financials.


MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

 

     For the Three Months Ended     For the Six Months Ended  
     June 30, 2012     June 30, 2011     June 30, 2012     June 30, 2011  
           (A)           (A)  

Revenues

        

Rent billed

   $ 32,722,394      $ 27,641,591      $ 64,369,966      $ 54,556,469   

Straight-line rent

     1,428,213        2,045,269        2,876,749        3,755,580   

Income from direct financing leases

     5,370,844        —          7,206,004        —     

Interest and fee income

     11,548,153        5,268,801        19,490,573        10,550,434   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     51,069,604        34,955,661        93,943,292        68,862,483   

Expenses

        

Real estate depreciation and amortization

     8,788,205        7,914,831        17,420,101        15,346,932   

Real estate impairment charge

     —          564,005        —          564,005   

Property-related

     639,069        212,461        871,717        237,176   

Acquisition expenses

     279,258        616,081        3,704,270        2,656,053   

General and administrative

     6,697,114        7,818,053        14,288,670        14,692,315   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     16,403,646        17,125,431        36,284,758        33,496,481   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     34,665,958        17,830,230        57,658,534        35,366,002   

Other income (expense)

        

Interest and other income (expense)

     (16,398     19,120        (31,721     (64,167

Earnings from equity and other interests

     879,086        1,507        879,086        70,392   

Debt refinancing costs

     —          (3,788,998     —          (3,788,998

Interest expense

     (14,888,627     (12,386,060     (27,684,627     (20,525,376
  

 

 

   

 

 

   

 

 

   

 

 

 

Net other expense

     (14,025,939     (16,154,431     (26,837,262     (24,308,149
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

     20,640,019        1,675,799        30,821,272        11,057,853   

Income (loss) from discontinued operations

     (1,279,587     1,007,255        (854,611     2,449,184   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     19,360,432        2,683,054        29,966,661        13,507,037   

Net income attributable to non-controlling interests

     (44,163     (43,409     (86,522     (87,786
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to MPT common stockholders

   $ 19,316,269      $ 2,639,645      $ 29,880,139      $ 13,419,251   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share - basic and diluted:

        

Income from continuing operations

   $ 0.15      $ 0.01      $ 0.23      $ 0.10   

Income (loss) from discontinued operations

     (0.01     0.01        —          0.02   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to MPT common stockholders

   $ 0.14      $ 0.02      $ 0.23      $ 0.12   
  

 

 

   

 

 

   

 

 

   

 

 

 

Dividends declared per common share

   $ 0.20      $ 0.20      $ 0.40      $ 0.40   

Weighted average shares outstanding - basic

     134,714,505        110,589,329        129,810,431        110,494,506   

Weighted average shares outstanding - diluted

     134,714,505        110,600,421        129,810,431        110,504,105   

 

(A) Financials have been restated to reclass the operating results of certain properties sold in December 2011 and June 2012 to discontinued operations.


MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Reconciliation of Net Income to Funds From Operations

(Unaudited)

 

     For the Three Months Ended     For the Six Months Ended  
     June 30, 2012     June 30, 2011     June 30, 2012     June 30, 2011  
           (A)           (A)  

FFO information:

        

Net income attributable to MPT common stockholders

   $ 19,316,269      $ 2,639,645      $ 29,880,139      $ 13,419,251   

Participating securities’ share in earnings

     (238,167     (281,310     (490,034     (596,670
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income, less participating securities’ share in earnings

   $ 19,078,102      $ 2,358,335      $ 29,390,105      $ 12,822,581   

Depreciation and amortization:

        

Continuing operations

     8,788,205        7,914,831        17,420,101        15,346,932   

Discontinued operations

     76,384        440,192        190,961        901,347   

Loss (gain) on sale of real estate

     1,445,555        —          1,445,555        (5,324

Real estate impairment charge

     —          564,005        —          564,005   
  

 

 

   

 

 

   

 

 

   

 

 

 

Funds from operations

   $ 29,388,246      $ 11,277,363      $ 48,446,722      $ 29,629,541   

Acquisition costs

     279,258        616,081        3,704,270        2,656,053   

Debt refinancing costs

     —          3,788,998        —          3,788,998   

Write-off of other receivables

     —          1,845,968        —          1,845,968   
  

 

 

   

 

 

   

 

 

   

 

 

 

Normalized funds from operations

   $ 29,667,504      $ 17,528,410      $ 52,150,992      $ 37,920,560   

Share-based compensation

     1,778,253        1,823,597        3,636,709        3,661,306   

Debt costs amortization

     855,445        1,011,107        1,710,827        1,998,062   

Additional rent received in advance (B)

     (300,000     (300,000     (600,000     (600,000

Straight-line rent revenue and other

     (2,299,056     (2,280,189     (4,032,752     (4,014,863
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted funds from operations

   $ 29,702,146      $ 17,782,925      $ 52,865,776      $ 38,965,065   
  

 

 

   

 

 

   

 

 

   

 

 

 

Per diluted share data:

        

Net income, less participating securities’ share in earnings

   $ 0.14      $ 0.02      $ 0.23      $ 0.12   

Depreciation and amortization:

        

Continuing operations

     0.07        0.07        0.13        0.14   

Discontinued operations

     —          —          —          —     

Loss (gain) on sale of real estate

     0.01        —          0.01        —     

Real estate impairment charge

     —          0.01        —          0.01   
  

 

 

   

 

 

   

 

 

   

 

 

 

Funds from operations

   $ 0.22      $ 0.10      $ 0.37      $ 0.27   

Acquisition costs

     —          0.01        0.03        0.02   

Debt refinancing costs

     —          0.03        —          0.03   

Write-off of other receivables

     —          0.02        —          0.02   
  

 

 

   

 

 

   

 

 

   

 

 

 

Normalized funds from operations

   $ 0.22      $ 0.16      $ 0.40      $ 0.34   

Share-based compensation

     0.01        0.02        0.03        0.03   

Debt costs amortization

     0.01        —          0.01        0.02   

Additional rent received in advance (B)

     —          —          —          —     

Straight-line rent revenue and other

     (0.02     (0.02     (0.03     (0.04
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted funds from operations

   $ 0.22      $ 0.16      $ 0.41      $ 0.35   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(A) Financials have been restated to reclass the operating results of certain properties sold in December 2011 and June 2012 to discontinued operations.
(B) Represents additional rent from one tenant in advance of when we can recognize as revenue for accounting purposes. This additional rent is being recorded to revenue on a straight-line basis over the lease life.

Investors and analysts following the real estate industry utilize funds from operations, or FFO, as a supplemental performance measure. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets, which assumes that the value of real estate diminishes predictably over time. We compute FFO in accordance with the definition provided by the National Association of Real Estate Investment Trusts, or NAREIT, which represents net income (loss) (computed in accordance with GAAP), excluding gains (losses) on sales of real estate and impairment charges on real estate assets, plus real estate depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures.

In addition to presenting FFO in accordance with the NAREIT definition, we also disclose normalized FFO,which adjusts FFO for items that relate to unanticipated or non-core events or activities or accounting changes that, if not noted, would make comparison to prior period results and market expectations less meaningful to investors and analysts. We believe that the use of FFO, combined with the required GAAP presentations, improves the understanding of our operating results among investors and the use of normalized FFO makes comparisons of our operating results with prior periods and other companies more meaningful. While FFO and normalized FFO are relevant and widely used supplemental measures of operating and financial performance of REITs, they should not be viewed as a substitute measure of our operating performance since the measures do not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, which can be significant economic costs that could materially impact our results of operations. FFO and normalized FFO should not be considered an alternative to net income (loss) (computed in accordance with GAAP) as indicators of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity.

We calculate adjusted funds from operations, or AFFO, by subtracting from or adding to normalized FFO (i) unbilled rent revenue, (ii) non-cash share-based compensation expense, and (iii) amortization of deferred financing costs. AFFO is an operating measurement that we use to analyze our results of operations based on the receipt, rather than the accrual, of our rental revenue and on certain other adjustments. We believe that this is an important measurement because our leases generally have significant contractual escalations of base rents and therefore result in recognition of rental income that is not collected until future periods, and costs that are deferred or are non-cash charges. Our calculation of AFFO may not be comparable to AFFO or similarly titled measures reported by other REITs. AFFO should not be considered as an alternative to net income (calculated pursuant to GAAP) as an indicator of our results of operations or to cash flow from operating activities (calculated pursuant to GAAP) as an indicator of our liquidity.