Medical Properties Trust, Inc. Reports First Quarter Results
Per Share Net Income of $0.25 and Normalized FFO of $0.36 Up 19% and 9% Respectively Compared to
Prior Year Quarter
Medical Properties Trust, Inc. (the “Company” or “MPT”) (NYSE: MPW) today announced financial and operating results for the
first quarter ended March 31, 2018 and recent highlights.
“After a record year in 2017, MPT raised its quarterly dividend by over 4 percent in the first quarter making this the fourth
consecutive year that the Company has increased its payout to shareholders,” said Edward K. Aldag, Jr., MPT’s Chairman, President
and Chief Executive Officer. “Our consistent dividend growth has contributed to superior total shareholder returns and is the
result of strongly accretive acquisitions. The Company has experienced extraordinary growth over the past five years, increasing
total assets at a compound rate of over 33 percent annually, and our pipeline is very strong.”
FIRST QUARTER AND RECENT HIGHLIGHTS
- Net income of $0.25 and Normalized Funds from Operations (“NFFO”) of $0.36 in the first quarter both
on a per diluted share basis;
- Completed construction of a 40-bed, 50,985 square foot rehabilitation hospital in Flagstaff, Arizona
operated by Ernest Health (“Ernest”) for a total investment of approximately $24 million; commenced rent on March 1st;
- Entered into a 15-year lease agreement in March with a joint venture formed by Vibra Healthcare and
Ernest for an LTAC hospital in Boise, Idaho; lease has three 5-year renewal options;
- Increased quarterly dividend by 4.2% to $0.25 making 2018 the fourth consecutive year that MPT has
increased its dividend;
- Added Elizabeth Pitman to Company’s Board of Directors in February.
Aldag commented on the election of Elizabeth Pitman to MPT’s Board of Directors and the recent promotions of two senior team
members. “MPT will benefit greatly from Elizabeth’s addition to the Board. Her extensive healthcare and legal experience together
with her expertise in cyber security is critical and complements the Board’s needs. The sustainability of MPT depends in part on
the career growth of our people. In the first quarter, we were very pleased to announce the promotion of Rosa Hooper to Vice
President and Managing Director, Asset Management and Underwriting in recognition of the outstanding job she has done managing
MPT’s largest department. We were delighted to also announce the promotion of Charles Lambert to Treasurer and Managing Director,
Capital Markets as an acknowledgement of his significant contribution to the Company over the past 12 years.”
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 2017 results. In addition, a reconciliation of pro
forma total gross assets to total assets is included in the financial tables accompanying this press release.
PORTFOLIO UPDATE
The Company has pro forma total gross assets of approximately $9.5 billion, including $6.6 billion in general acute care
hospitals, $2.1 billion in inpatient rehabilitation hospitals, and $0.4 billion in long-term acute care hospitals. This pro forma
portfolio includes 275 properties representing more than 32,000 licensed beds in 29 states and in Germany, the United Kingdom,
Italy and Spain. The properties are leased to or mortgaged by 31 hospital operating companies.
OPERATING RESULTS AND OUTLOOK
Net income for the first quarter of 2018 was $90.6 million (or $0.25 per diluted share), compared to $68.0 million (or $0.21 per
diluted share) in the first quarter of 2017.
NFFO for the first quarter of 2018 increased 24% to $131.5 million compared with $105.9 million in the first quarter of 2017.
Per share NFFO increased 9% to $0.36 per diluted share in the first quarter of 2018, compared with $0.33 per diluted share in the
first quarter of 2017.
On January 1, 2018, the Company adopted new accounting rules, which resulted in an increase in general and administrative
expenses for the first quarter. Certain third party transaction costs that were previously accounted for as acquisition expenses
are now capitalized. With this accounting change, MPT will no longer charge indirect and internal transaction costs as acquisition
expenses.
The Company reaffirms its NFFO estimates for 2018. Net income is expected to range from $1.00 to $1.04 per diluted share, while
NFFO is expected to range from $1.42 to $1.46 per diluted share. This estimate assumes no additional acquisitions or investments,
no asset sales and no material capital transactions. The Company also reaffirmed its expectations that it will complete
negotiations of certain joint venture arrangements during the first half of 2018. However, there is no assurance that any such
arrangements will be completed.
A reconciliation of NFFO guidance to net income is included with the financial tables accompanying this press release.
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, including the previously
mentioned joint venture arrangements. These estimates may change if the Company acquires or sells assets, market interest rates
change, debt is refinanced, new shares are issued, additional debt is incurred, 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, May 3, 2018 at 11:00 a.m. Eastern Time to present the
Company’s financial and operating results for the quarter ended March 31, 2018. The dial-in numbers for the conference call are
855-365-5214 (U.S.) and 440-996-5721 (International); both numbers require passcode 2449648. 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 May 17, 2018.
Dial-in numbers for the replay are 855-859-2056 and 404-537-3406 for U.S. and International callers, respectively. The replay
passcode for both U.S. and International callers is 2449648.
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 self-advised real estate investment trust formed to capitalize on the changing trends in
healthcare delivery by acquiring and developing net-leased healthcare facilities. MPT’s financing model helps facilitate
acquisitions and recapitalizations and allows operators of hospitals and other healthcare facilities to unlock the value of their
real estate assets to fund facility improvements, technology upgrades and other investments in operations. Facilities include acute
care hospitals, inpatient rehabilitation hospitals, long-term acute care hospitals, and other medical and surgical facilities. 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
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
satisfaction of all conditions to, and the timely closing (if at all) of pending transactions; net income per share for 2018; NFFO
per share for 2018; the amount of acquisitions of healthcare real estate, if any; results from potential sales and joint venture
arrangements, if any; capital markets conditions; estimated leverage metrics; 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 payment of future dividends, if any; completion of additional debt arrangements, and additional investments;
national and international 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 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, 2017 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.
| |
| MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES |
|
|
|
|
|
|
| Consolidated Balance Sheets |
|
|
|
|
|
|
| (Amounts in thousands, except for per share data) |
|
March 31, 2018 |
|
|
December 31, 2017 |
| Assets |
|
(Unaudited) |
|
|
(A) |
| Real estate assets |
|
|
|
|
|
| Land, buildings and improvements, intangible lease assets, and other |
|
$ |
5,867,286 |
|
|
|
$ |
5,944,220 |
|
| Mortgage loans |
|
|
1,927,393 |
|
|
|
|
1,778,316 |
|
| Net investment in direct financing leases |
|
|
686,024 |
|
|
|
|
698,727 |
|
| Gross investment in real estate assets |
|
|
8,480,703 |
|
|
|
|
8,421,263 |
|
| Accumulated depreciation and amortization |
|
|
(493,782 |
) |
|
|
|
(455,712 |
) |
| Net investment in real estate assets |
|
|
7,986,921 |
|
|
|
|
7,965,551 |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
|
138,314 |
|
|
|
|
171,472 |
|
| Interest and rent receivables |
|
|
81,965 |
|
|
|
|
78,970 |
|
| Straight-line rent receivables |
|
|
202,317 |
|
|
|
|
185,592 |
|
| Other assets |
|
|
622,323 |
|
|
|
|
618,703 |
|
| Total Assets |
|
$ |
9,031,840 |
|
|
|
$ |
9,020,288 |
|
|
|
|
|
|
|
| Liabilities and Equity |
|
|
|
|
|
| Liabilities |
|
|
|
|
|
| Debt, net |
|
$ |
4,898,364 |
|
|
|
$ |
4,898,667 |
|
| Accounts payable and accrued expenses |
|
|
206,891 |
|
|
|
|
211,188 |
|
| Deferred revenue |
|
|
15,549 |
|
|
|
|
18,178 |
|
| Lease deposits and other obligations to tenants |
|
|
57,847 |
|
|
|
|
57,050 |
|
| Total Liabilities |
|
|
5,178,651 |
|
|
|
|
5,185,083 |
|
|
|
|
|
|
|
| Equity |
|
|
|
|
|
|
Preferred stock, $0.001 par value. Authorized 10,000 shares; no shares outstanding
|
|
|
- |
|
|
|
|
- |
|
|
Common stock, $0.001 par value. Authorized 500,000 shares; issued and outstanding - 364,695 shares
at March 31, 2018 and 364,424 shares at December 31, 2017
|
|
|
365 |
|
|
|
|
364 |
|
| Additional paid-in capital |
|
|
4,333,972 |
|
|
|
|
4,333,027 |
|
| Distributions in excess of net income |
|
|
(484,804 |
) |
|
|
|
(485,932 |
) |
| Accumulated other comprehensive loss |
|
|
(9,961 |
) |
|
|
|
(26,049 |
) |
| Treasury shares, at cost |
|
|
(777 |
) |
|
|
|
(777 |
) |
| Total Medical Properties Trust, Inc. Stockholders' Equity |
|
|
3,838,795 |
|
|
|
|
3,820,633 |
|
|
|
|
|
|
|
| Non-controlling interests |
|
|
14,394 |
|
|
|
|
14,572 |
|
| Total Equity |
|
|
3,853,189 |
|
|
|
|
3,835,205 |
|
|
|
|
|
|
|
| Total Liabilities and Equity |
|
$ |
9,031,840 |
|
|
|
$ |
9,020,288 |
|
|
|
|
|
|
|
| (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 |
|
|
March 31, 2018 |
|
March 31, 2017 |
|
|
|
|
|
| Revenues |
|
|
|
|
| Rent billed |
|
$ |
128,011 |
|
|
$ |
96,763 |
|
| Straight-line rent |
|
|
15,791 |
|
|
|
12,779 |
|
| Income from direct financing leases |
|
|
17,681 |
|
|
|
17,880 |
|
| Interest and fee income |
|
|
43,563 |
|
|
|
28,975 |
|
| Total revenues |
|
|
205,046 |
|
|
|
156,397 |
|
|
|
|
|
|
| Expenses |
|
|
|
|
| Interest |
|
|
57,023 |
|
|
|
38,029 |
|
| Real estate depreciation and amortization |
|
|
35,802 |
|
|
|
27,586 |
|
|
Property-related
|
|
|
2,184
|
|
|
|
1,328
|
|
| General and administrative |
|
|
17,818 |
|
|
|
13,197 |
|
| Acquisition costs |
|
|
- |
|
|
|
2,756 |
|
| Total expenses |
|
|
112,827 |
|
|
|
82,896 |
|
|
|
|
|
|
| Other income (expense) |
|
|
|
|
| Gain on sale of real estate, net |
|
|
1,467 |
|
|
|
7,413 |
|
| Debt refinancing costs |
|
|
- |
|
|
|
(13,629 |
) |
| Other |
|
|
(1,468 |
) |
|
|
1,767 |
|
| Total other income (expense) |
|
|
(1 |
) |
|
|
(4,449 |
) |
|
|
|
|
|
| Income before income tax |
|
|
92,218 |
|
|
|
69,052 |
|
|
|
|
|
|
| Income tax expense |
|
|
(1,175 |
) |
|
|
(867 |
) |
|
|
|
|
|
| Net income |
|
|
91,043 |
|
|
|
68,185 |
|
| Net income attributable to non-controlling interests |
|
|
(442 |
) |
|
|
(215 |
) |
| Net income attributable to MPT common stockholders |
|
$ |
90,601 |
|
|
$ |
67,970 |
|
|
|
|
|
|
|
|
|
|
|
| Earnings per common share - basic and diluted: |
|
|
|
|
| Net income attributable to MPT common stockholders |
|
$ |
0.25 |
|
|
$ |
0.21 |
|
|
|
|
|
|
| Weighted average shares outstanding - basic |
|
|
364,882 |
|
|
|
321,057 |
|
| Weighted average shares outstanding - diluted |
|
|
365,343 |
|
|
|
321,423 |
|
|
|
|
|
|
|
|
|
|
|
| Dividends declared per common share |
|
$ |
0.25 |
|
|
$ |
0.24 |
|
|
|
|
| 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 |
|
|
March 31, 2018 |
|
March 31, 2017 |
|
|
|
|
|
| FFO information: |
|
|
|
|
| Net income attributable to MPT common stockholders |
|
$ |
90,601 |
|
|
$ |
67,970 |
|
| Participating securities' share in earnings |
|
|
(195 |
) |
|
|
(125 |
) |
| Net income, less participating securities' share in earnings |
|
$ |
90,406 |
|
|
$ |
67,845 |
|
|
|
|
|
|
| Depreciation and amortization (A) |
|
|
36,517 |
|
|
|
28,099 |
|
| Gain on sale of real estate, net |
|
|
(1,467 |
) |
|
|
(7,413 |
) |
| Funds from operations |
|
$ |
125,456 |
|
|
$ |
88,531 |
|
|
|
|
|
|
| Write-off of straight-line rent and other |
|
|
6,059 |
|
|
|
1,117 |
|
| Debt refinancing costs |
|
|
- |
|
|
|
13,629 |
|
| Acquisition costs, net of tax benefit (A) |
|
|
- |
|
|
|
2,645 |
|
| Normalized funds from operations |
|
$ |
131,515 |
|
|
$ |
105,922 |
|
|
|
|
|
|
| Share-based compensation |
|
|
1,856 |
|
|
|
1,971 |
|
| Debt costs amortization |
|
|
1,789 |
|
|
|
1,617 |
|
| Straight-line rent revenue and other (A) |
|
|
(23,425 |
) |
|
|
(16,482 |
) |
| Adjusted funds from operations |
|
$ |
111,735 |
|
|
$ |
93,028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per diluted share data: |
|
|
|
|
| Net income, less participating securities' share in earnings |
|
$ |
0.25 |
|
|
$ |
0.21 |
|
| Depreciation and amortization (A) |
|
|
0.09 |
|
|
|
0.09 |
|
| Gain on sale of real estate, net |
|
|
- |
|
|
|
(0.02 |
) |
| Funds from operations |
|
$ |
0.34 |
|
|
$ |
0.28 |
|
|
|
|
|
|
| Write-off of straight-line rent and other |
|
|
0.02 |
|
|
|
- |
|
| Debt refinancing costs |
|
|
- |
|
|
|
0.04 |
|
| Acquisition costs, net of tax benefit (A) |
|
|
- |
|
|
|
0.01 |
|
| Normalized funds from operations |
|
$ |
0.36 |
|
|
$ |
0.33 |
|
|
|
|
|
|
| Share-based compensation |
|
|
0.01 |
|
|
|
0.01 |
|
| Debt costs amortization |
|
|
- |
|
|
|
- |
|
| Straight-line rent revenue and other (A) |
|
|
(0.06 |
) |
|
|
(0.05 |
) |
| Adjusted funds from operations |
|
$ |
0.31 |
|
|
$ |
0.29 |
|
| A) Includes our share of real estate depreciation, acquisition expenses and
straight-line rent revenue from unconsolidated joint ventures. These amounts are included with the activity of all of our
equity interests in the "Other" line on the consolidated statements of income. |
| |
| 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. |
| |
| MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES |
| Fiscal Year 2018 Guidance Reconciliation |
| (Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2018 Guidance - Per
Share(1) |
|
|
Low |
|
High |
|
|
|
|
|
|
|
|
|
|
| Net income attributable to MPT common stockholders |
|
$ |
1.00 |
|
$ |
1.04 |
| Participating securities' share in earnings |
|
|
- |
|
|
- |
| Net income, less participating securities' share in earnings |
|
$ |
1.00 |
|
$ |
1.04 |
|
|
|
|
|
| Depreciation and amortization |
|
|
0.40 |
|
|
0.40 |
| Funds from operations |
|
$ |
1.40 |
|
$ |
1.44 |
|
|
|
|
|
| Other adjustments |
|
|
0.02 |
|
|
0.02 |
| Normalized funds from operations |
|
$ |
1.42 |
|
$ |
1.46 |
| (1) |
|
The guidance is based on current expectations and actual results or future events may
differ materially from those expressed in this table, which is a forward-looking statement 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) |
|
|
|
|
|
|
|
|
|
|
March 31, 2018 |
|
|
|
| Total Assets |
|
$ |
9,031,840 |
|
| Add: |
|
|
| Binding real estate commitments on new investments(2) |
|
|
17,500 |
|
|
Unfunded amounts on development deals and commenced capital improvement projects(3)
|
|
|
139,799 |
|
| Accumulated depreciation and amortization |
|
|
493,782 |
|
| Less: |
|
|
| Cash and cash equivalents |
|
|
(138,314 |
) |
| Pro Forma Total Gross Assets (4) |
|
$ |
9,544,607 |
|
| (2) |
|
Reflects a commitment to acquire a facility post March 31, 2018. |
|
|
|
| (3) |
|
Includes $123.6 million unfunded amounts on ongoing development projects and $16.2
million unfunded amounts on capital improvement projects and development projects that have commenced rent. |
|
|
|
| (4) |
|
Pro forma total gross assets is total assets before accumulated
depreciation/amortization, assumes all real estate binding commitments on new investments and unfunded amounts on development
deals and commenced capital improvement projects are fully funded, and assumes cash on hand is fully used in these
transactions. We believe pro forma total gross assets is useful to investors as it provides a more current view of our
portfolio and allows for a better understanding of our concentration levels as our binding commitments close and our other
commitments are fully funded. |
Medical Properties Trust, Inc.
Tim Berryman, 205-969-3755
Director – Investor Relations
tberryman@medicalpropertiestrust.com
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