Medical Properties Trust, Inc. Reports First Quarter Results
Medical Properties Trust, Inc. (NYSE: MPW) reported its first-quarter 2023 results, revealing a net income of
- Declared quarterly dividend of $0.29 per share.
- NFFO of $222 million, though down from previous year, reflects ongoing strength.
- Recent transactions support underwritten asset values, enhancing capital flexibility.
- Net income declined significantly to $33 million from $632 million year-over-year.
- Impairment and non-cash charges of approximately $90 million affected first-quarter results.
- NFFO also decreased from $282 million in Q1 2022 to $222 million in Q1 2023.
Per Share Net Income of
Recent Transactions Validate Underwritten Values;
Provides Additional Capital Flexibility
Declared Second Quarter Regular Dividend of
-
Net income of
$0.05 $0.37 -
As previously announced, agreed in March to sell the
Healthscope portfolio inAustralia for AUD$1.2 billion with proceeds targeted for repayment of the Company’s Australian term loan; -
Received notice in March that
Prime Healthcare (“Prime”) will exercise its right to repurchase three hospitals inKansas andTexas in the third quarter for roughly$100 million -
In April selectively added to existing portfolios five behavioral health facilities operated by
Priory Group (“Priory”) in theU.K. for approximately£44 million and invested in three MEDIAN post-acute facilities inGermany for a total of roughly€70 million ; and -
Declared a regular quarterly dividend of
$0.29 July 13, 2023 to stockholders of record onJune 15, 2023 .
Aldag continued, “The terms of recently announced transactions including
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 and AFFO, including per share amounts, all on a basis comparable to 2022 results.
PORTFOLIO UPDATE
The Company did not acquire any new hospital real estate during the first quarter and expects aggregate acquisitions during the entire first half of 2023 of approximately
As part of an expected series of Prospect Medical Holdings’ (“Prospect”) future strategic transactions, during the first quarter MPT provided
The Company has total assets of approximately
OPERATING RESULTS AND OUTLOOK
Net income for the first quarter ended
NFFO for the first quarter ended
The Company is adjusting its 2023 calendar estimate of per share net income to
These estimates do not include the effects, among others, of unexpected real estate operating costs, changes in accounting pronouncements, litigation costs, debt refinancing costs, acquisition costs, currency exchange rate movements, changes in income tax rates, interest rate hedging activities, write-offs of straight-line rent and in place lease intangibles, other impairments or other non-recurring/unplanned transactions. Moreover, these estimates do not provide for the impact on MPT or its tenants and borrowers from the 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 or repurchased, new shares are issued or repurchased, additional debt is incurred, other operating expenses vary, income from equity investments vary from expectations, or existing leases or loans do not perform in accordance with their terms.
LITIGATION UPDATE
On
Although Perring has publicly acknowledged the lawsuit, he has not appeared in the case. And rather than answer MPT’s allegations, Viceroy has filed motions to dismiss the claims before they reach a jury, arguing that they cannot be sustained because Viceroy's assaults on the Company, though contained in "reports," were not "fact" but mere "opinion" and "commentary . . . dominated by colorful, hyperbolic language," and also claiming that the Court lacks jurisdiction. But as MPT’s complaint makes clear, the false, misleading, and defamatory statements repeatedly published by Viceroy, Perring and others are not “opinions” or “beliefs” but rather statements of purported fact, whose fundamental character cannot be altered by disclaimers. MPT looks forward to proving its claims and to obtaining from the defendants and others the documents, communications, and other discovery to which the law entitles it.
CONFERENCE CALL AND WEBCAST
The Company has scheduled a conference call and webcast for
A telephone and webcast replay of the call will be available beginning shortly after the call’s completion. The telephone replay will be available through
The Company’s supplemental information package for the current period will also be available on the Company’s website in the Investor Relations section.
The Company uses, and intends to continue to use, the Investor Relations page of its website, which can be found at www.medicalpropertiestrust.com, as a means of disclosing material nonpublic information and of complying with its disclosure obligations under Regulation FD, including, without limitation, through the posting of investor presentations that may include material nonpublic information. Accordingly, investors should monitor the Investor Relations page, in addition to following our press releases,
About
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, potential impact from health crises (like COVID-19); (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
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
| Consolidated Balance Sheets | ||||||||
| (Amounts in thousands, except for per share data) | ||||||||
| Assets | (Unaudited) | (A) | ||||||
| Real estate assets | ||||||||
| Land, buildings and improvements, intangible lease assets, and other |
|
|
|
|
||||
| Investment in financing leases | 1,582,416 |
|
1,691,323 |
|
||||
| Real estate held for sale | 881,587 |
|
- |
|
||||
| Mortgage loans | 346,446 |
|
364,101 |
|
||||
| Gross investment in real estate assets | 15,902,959 |
|
15,917,839 |
|
||||
| Accumulated depreciation and amortization | (1,207,699 |
) |
(1,193,312 |
) |
||||
| Net investment in real estate assets | 14,695,260 |
|
14,724,527 |
|
||||
| Cash and cash equivalents | 302,321 |
|
235,668 |
|
||||
| Interest and rent receivables, net | 169,511 |
|
167,035 |
|
||||
| Straight-line rent receivables | 810,911 |
|
787,166 |
|
||||
| Investments in unconsolidated real estate joint ventures | 1,506,474 |
|
1,497,903 |
|
||||
| Investments in unconsolidated operating entities | 1,310,460 |
|
1,444,872 |
|
||||
| Other loans | 276,367 |
|
227,839 |
|
||||
| Other assets | 578,853 |
|
572,990 |
|
||||
| Total Assets |
|
|
|
|
||||
| Liabilities and Equity | ||||||||
| Liabilities | ||||||||
| Debt, net |
|
|
|
|
||||
| Accounts payable and accrued expenses | 595,269 |
|
621,324 |
|
||||
| Deferred revenue | 29,391 |
|
27,727 |
|
||||
| Obligations to tenants and other lease liabilities | 144,092 |
|
146,130 |
|
||||
| Total Liabilities | 11,206,903 |
|
11,063,593 |
|
||||
| Equity | ||||||||
| Preferred stock, |
||||||||
| outstanding | - |
|
- |
|
||||
| Common stock, |
||||||||
| outstanding - 598,302 shares at |
598 |
|
597 |
|
||||
| shares at |
||||||||
| Additional paid-in capital | 8,541,414 |
|
8,535,140 |
|
||||
| Retained (deficit) earnings | (25,413 |
) |
116,285 |
|
||||
| Accumulated other comprehensive loss | (74,919 |
) |
(59,184 |
) |
||||
8,441,680 |
|
8,592,838 |
|
|||||
| Non-controlling interests | 1,574 |
|
1,569 |
|
||||
| Total Equity | 8,443,254 |
|
8,594,407 |
|
||||
| Total Liabilities and Equity |
|
|
|
|
||||
| (A) Financials have been derived from the prior year audited financial statements. | ||||||||
|
|
|||||||||
| Consolidated Statements of Income | ||||||||||
| (Unaudited) | ||||||||||
|
||||||||||
| (Amounts in thousands, except for per share data) | For the Three Months Ended | |||||||||
|
|
|||||||||
| Revenues |
|
|
||||||||
| Rent billed | $ |
248,157 |
|
$ |
263,402 |
|
||||
| Straight-line rent |
|
56,693 |
|
|
61,044 |
|
||||
| Income from financing leases |
|
13,195 |
|
|
51,776 |
|
||||
| Interest and other income |
|
32,166 |
|
|
33,578 |
|
||||
| Total revenues |
|
350,211 |
|
|
409,800 |
|
||||
|
|
|||||||||
| Expenses |
|
|
||||||||
| Interest |
|
97,654 |
|
|
91,183 |
|
||||
| Real estate depreciation and amortization |
|
83,860 |
|
|
85,316 |
|
||||
| Property-related (A) |
|
7,110 |
|
|
8,598 |
|
||||
| General and administrative |
|
41,724 |
|
|
41,424 |
|
||||
| Total expenses |
|
230,348 |
|
|
226,521 |
|
||||
|
|
|||||||||
| Other (expense) income |
|
|
||||||||
| Gain on sale of real estate |
|
62 |
|
|
451,638 |
|
||||
| Real estate and other impairment charges |
|
(89,538 |
) |
|
(4,875 |
) |
||||
| Earnings from equity interests |
|
11,352 |
|
|
7,338 |
|
||||
| Debt refinancing and unutilized financing costs |
|
- |
|
|
(8,816 |
) |
||||
| Other (including fair value adjustments on securities) |
|
(5,166 |
) |
|
14,762 |
|
||||
| Total other (expense) income |
|
(83,290 |
) |
|
460,047 |
|
||||
|
|
|||||||||
| Income before income tax |
|
36,573 |
|
|
643,326 |
|
||||
|
|
|||||||||
| Income tax expense |
|
(3,543 |
) |
|
(11,379 |
) |
||||
|
|
|||||||||
| Net income |
|
33,030 |
|
|
631,947 |
|
||||
| Net income attributable to non-controlling interests |
|
(236 |
) |
|
(266 |
) |
||||
| Net income attributable to MPT common stockholders | $ |
32,794 |
|
$ |
631,681 |
|
||||
|
|
|||||||||
| Earnings per common share - basic and diluted: |
|
|
||||||||
| Net income attributable to MPT common stockholders | $ |
0.05 |
|
$ |
1.05 |
|
||||
|
|
|||||||||
| Weighted average shares outstanding - basic |
|
598,302 |
|
|
598,676 |
|
||||
| Weighted average shares outstanding - diluted |
|
598,310 |
|
|
598,932 |
|
||||
|
|
|||||||||
| Dividends declared per common share | $ |
0.29 |
|
$ |
0.29 |
|
||||
|
|
|||||||||
(A) Includes |
||||||||||
| Reconciliation of Net Income to Funds From Operations | ||||||
| (Unaudited) | ||||||
| (Amounts in thousands, except for per share data) | For the Three Months Ended | |||||
| FFO information: | ||||||
| Net income attributable to MPT common stockholders |
|
|
||||
| Participating securities' share in earnings | (515) |
(402) |
||||
| Net income, less participating securities' share in earnings |
|
|
||||
| Depreciation and amortization | 101,960 |
99,459 |
||||
| Gain on sale of real estate | (62) |
(451,638) |
||||
| Real estate impairment charges | 52,104 |
- |
||||
| Funds from operations |
|
|
||||
| Write-off (recovery) of unbilled rent and other | 39,626 |
(2,271) |
||||
| Other impairment charges | - |
4,875 |
||||
| Litigation and other | 7,726 |
- |
||||
| Non-cash fair value adjustments | (4,121) |
(8,023) |
||||
| Tax rate changes and other | (7,305) |
- |
||||
| Debt refinancing and unutilized financing costs | - |
8,816 |
||||
| Normalized funds from operations |
|
|
||||
| Share-based compensation | 11,829 |
11,804 |
||||
| Debt costs amortization | 5,121 |
5,613 |
||||
| Rent deferral, net | 2,413 |
(3,716) |
||||
| Straight-line rent revenue and other | (62,589) |
(77,333) |
||||
| Adjusted funds from operations |
|
|
||||
| Per diluted share data: | ||||||
| Net income, less participating securities' share in earnings |
|
|
||||
| Depreciation and amortization | 0.17 |
0.17 |
||||
| Gain on sale of real estate | - |
(0.75) |
||||
| Real estate impairment charges | 0.09 |
- |
||||
| Funds from operations |
|
|
||||
| Write-off (recovery) of unbilled rent and other | 0.07 |
- |
||||
| Other impairment charges | - |
- |
||||
| Litigation and other | 0.01 |
- |
||||
| Non-cash fair value adjustments | (0.01) |
(0.01) |
||||
| Tax rate changes and other | (0.01) |
- |
||||
| Debt refinancing and unutilized financing costs | - |
0.01 |
||||
| Normalized funds from operations |
|
|
||||
| Share-based compensation | 0.02 |
0.02 |
||||
| Debt costs amortization | 0.01 |
0.01 |
||||
| Rent deferral, net | - |
(0.01) |
||||
| Straight-line rent revenue and other | (0.10) |
(0.12) |
||||
| Adjusted funds from operations |
|
|
||||
Notes: (A) Certain line items above (such as depreciation and amortization) include our share of such income/expense from unconsolidated joint ventures. These amounts are included with all activity of our equity interests in the "Earnings from equity interests" line on the consolidated statements of income.
(B) Investors and analysts following the real estate industry utilize funds from operations ("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
In addition to presenting FFO in accordance with the Nareit definition, we 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 (if any not paid by our tenants) 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 results of operations 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) straight-line rent, (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 more 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 infrastructure-type assets generally require longer term leases with annual contractual escalations of base rents, resulting in the recognition of a significant amount of rental income that is not billable/collected until future periods. 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. |
||||||
| 2023 Guidance Reconciliation | ||||||
| (Unaudited) | ||||||
| 2023 Guidance - Per Share(1) | ||||||
| Low | High | |||||
| Net income attributable to MPT common stockholders |
|
|
||||
| Participating securities' share in earnings | - |
- |
||||
| Net income, less participating securities' share in earnings |
|
|
||||
| Depreciation and amortization | 1.14 |
1.14 |
||||
| Gain on sale of real estate | - |
- |
||||
| Real estate impairment charges | 0.09 |
0.09 |
||||
| Funds from operations |
|
|
||||
| Other adjustments | 0.21 |
0.21 |
||||
| Normalized funds from operations |
|
|
||||
(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 |
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View source version on businesswire.com: https://www.businesswire.com/news/home/20230426006092/en/
Senior Managing Director of Corporate Communications
(646) 884-9809
dbabin@medicalpropertiestrust.com
Source:
FAQ
What were Medical Properties Trust's earnings results for Q1 2023?
What is the dividend declared by Medical Properties Trust for Q2 2023?
What is the guidance for Medical Properties Trust for 2023?
How did Medical Properties Trust's Q1 2023 results compare to Q1 2022?
