Per Share Net Income of $0.25 and Normalized FFO of $0.36 Up 19%
and 9% Respectively Compared to Prior Year Quarter
BIRMINGHAM, Ala.--(BUSINESS WIRE)--May 3, 2018--
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.
|
|
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| MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES |
| Fiscal Year 2018 Guidance Reconciliation |
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(Unaudited)
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Fiscal Year 2018 Guidance - Per Share(1) |
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Low
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High
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Net income attributable to MPT common stockholders
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$
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1.00
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$
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1.04
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Participating securities' share in earnings
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|
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-
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|
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-
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Net income, less participating securities' share in earnings
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$
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1.00
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$
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1.04
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|
|
|
|
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Depreciation and amortization
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|
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0.40
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|
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0.40
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Funds from operations
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$
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1.40
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$
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1.44
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|
|
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|
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Other adjustments
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|
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0.02
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0.02
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Normalized funds from operations
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$ |
1.42 |
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$ |
1.46 |
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(1)
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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.
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| Pro Forma Total Gross Assets |
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(Unaudited)
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March 31, 2018
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Total Assets
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$
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9,031,840
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Add:
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Binding real estate commitments on new investments(2) |
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17,500
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Unfunded amounts on development deals and commenced capital
improvement projects(3)
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|
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139,799
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Accumulated depreciation and amortization
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|
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493,782
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Less:
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Cash and cash equivalents
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(138,314
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)
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| Pro Forma Total Gross Assets(4) |
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$ |
9,544,607 |
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(2)
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Reflects a commitment to acquire a facility post March 31, 2018.
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(3)
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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.
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(4)
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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.
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View source version on businesswire.com: https://www.businesswire.com/news/home/20180503005792/en/
Source: Medical Properties Trust, Inc.
Medical Properties Trust, Inc.
Tim Berryman, 205-969-3755
Director
– Investor Relations
tberryman@medicalpropertiestrust.com