Medical Properties Trust, Inc. Reports Fourth Quarter and Full-Year Results
- Medical Properties Trust, Inc. (MPW) reported a net loss of ($1.11) and NFFO of $0.36 for the fourth quarter of 2023.
- Full-year 2023 results showed a net loss of ($0.93) and NFFO of $1.59 for the company.
- MPW executed asset divestiture strategies, resulting in over $480 million in liquidity transactions.
- The company entered into agreements to divest five hospitals to Prime Healthcare and sold their remaining noncontrolling interest in a tenant and two under-leased hospitals in South Carolina.
- MPW also executed the sale of its syndicated term loan investment in MEDIAN for approximately $115 million.
- CEO Edward K. Aldag, Jr. aims to accelerate the capital allocation strategy to generate at least $2 billion of incremental liquidity in 2024.
- None.
Insights
The divestiture strategy undertaken by Medical Properties Trust, Inc. (MPT) is a significant financial maneuver, indicating a shift in the company's capital allocation strategy. The net loss reported, along with the Normalized Funds from Operations (NFFO), reflects a mixed financial performance. The non-recurring write-offs and impairments, primarily related to Steward Health Care System, are substantial and warrant a closer examination of the company's asset quality and investment decisions.
The sale of hospital real estate to Prime Healthcare at a 7.4% economic cap rate, which is above the company's historical cost, suggests a strategic move to optimize the asset portfolio and improve liquidity. This could potentially lead to a revaluation of the company's assets and impact the stock price. The divestiture of non-core assets, including the sale of a noncontrolling interest and under-leased hospitals, along with the syndicated term loan investment in MEDIAN, aligns with the strategy to streamline operations and focus on core competencies.
Investors should monitor the company's ability to execute its capital allocation strategy effectively, as it could influence future earnings potential and debt management. The interest from other hospital operators in Steward's mission-critical facilities implies a robust demand for healthcare real estate, which could be favorable for MPT in terms of both earnings contributions and liquidity enhancement.
The healthcare real estate industry is witnessing a consolidation trend, with operators like MPT actively managing their portfolios to focus on high-performing assets. The divestiture at a cap rate higher than the implied market capitalization rate could be indicative of the premium value associated with healthcare properties, especially given the current economic environment where capitalization rates are closely scrutinized by investors.
The strategic sale of assets and subsequent liquidity generation is a response to the broader market's demand for financial flexibility and operational efficiency. MPT's focus on accelerating capital allocation could be seen as a proactive measure to capitalize on the robust healthcare real estate market and to position itself favorably for future growth opportunities. The market will likely react to these developments based on the perceived effectiveness of MPT's strategy in driving shareholder value.
Stakeholders should consider the potential long-term benefits of a more focused investment strategy, which may include enhanced portfolio quality and improved financial metrics. However, the short-term impact of the non-recurring write-offs and impairments on the company's financial statements cannot be overlooked, as it may affect investor sentiment and the company's valuation.
MPT's strategy of divesting non-core assets and focusing on liquidity generation is a common tactic among Real Estate Investment Trusts (REITs) aiming to optimize their portfolios. The economic cap rate of 7.4% on the sale to Prime Healthcare is particularly noteworthy, as it reflects the income-generating potential of the assets relative to their sale price. This rate is a critical metric for assessing the profitability of real estate investments and is an important indicator for REIT investors.
The transition to cash basis accounting for Steward's revenue suggests a more conservative approach to revenue recognition, which could impact the NFFO—a key performance indicator for REITs. Investors typically look for stability and growth in NFFO as it represents the cash flow available for distribution to shareholders.
The mentioned liquidity transactions and the focus on generating $2 billion of incremental liquidity in 2024 highlight MPT's commitment to financial strength and flexibility. This strategy could potentially lead to an improved credit profile and better access to capital, which are crucial for REITs to fund acquisitions and development projects. It is essential for stakeholders to assess how these strategic moves will affect the REIT's dividend payouts and overall investment appeal in the long-term.
Accelerated Asset Divestiture Strategy with More Than
-
Net loss of (
$1.11 $0.36 $0.93 $1.59 $0.12 -
Fourth quarter 2023 net loss includes approximately
$772 million $1.29 -
Entered into agreements in February to divest of five hospitals to Prime Healthcare (“Prime”) at a
7.4% economic cap rate for$350 million South Carolina for combined proceeds of approximately$17 million -
Executed the sale of its syndicated term loan investment in MEDIAN, the parent of Priory Group (“Priory”), in January for approximately
$115 million £90 million ).
Edward K. Aldag, Jr., Chairman, President and Chief Executive Officer, said, “Our primary focus is on accelerating our capital allocation strategy by pursuing transactions expected to generate at least
Mr. Aldag continued, “With regard to Steward, we are encouraged by the amount of interest received to date from other hospital operators for these mission-critical facilities, and we expect this real estate portfolio will either resume its contributions to earnings or become additional sources of liquidity as the year progresses.”
Included in the financial tables accompanying this press release is information about the Company’s assets and liabilities, operating results, and reconciliations of net income (loss) to NFFO, including per share amounts, all on a basis comparable to 2022 results.
PORTFOLIO UPDATE
Medical Properties Trust has total assets of approximately
As of December 31, 2023, the Company’s assets include approximately
Stabilized / Accrual Method Portfolio (approximately
Across MPT’s European portfolio, operators continue to benefit from improving occupancy rates, growing reimbursement revenue, normalization of labor costs, and the rapid growth of behavioral health services.
Circle Health (“Circle”) (
MEDIAN maintained EBITDARM coverage in the 1.5-2.0x range and successfully achieved its 2023 financial targets given steadily improving occupancy, negotiated reimbursement rate increases, and stabilization of energy expenses. Priory (
In MPT’s
In February, the Company agreed to sell Saint Francis Medical Center in
MPT and Prime have also agreed to combine three hospitals in
The new lease also includes an option for Prime to repurchase the facilities at any time for a value of at least
Cash Basis Portfolio
Steward (
As announced in early January, MPT has worked with Steward to develop an action plan designed to strengthen Steward’s liquidity and restore its balance sheet, optimize MPT’s ability to recover unpaid rent and ultimately reduce MPT’s exposure to Steward. MPT and certain of Steward’s asset backed lenders are negotiating a new bridge facility whereby it is expected, but there is no assurance, that each party will fund an initial
Prospect Medical (“Prospect”) (
In
OPERATING RESULTS AND OUTLOOK
Net loss for the fourth quarter and year ended December 31, 2023 was (
NFFO for the fourth quarter and year ended December 31, 2023 was
MPT has expanded its disclosure related to non-cash revenue, providing information allowing investors to adjust NFFO for non-cash components of accrued revenue not limited to deferred rent and payment-in-kind (“PIK”) interest, as well as cash recoveries of such items. These adjustments as they relate to fourth quarter and full-year 2023, as well as prior-year reporting, are included in this release and in the earnings supplemental.
Due to uncertainty regarding its hospitals leased to Steward and the timing of liquidity transactions, the Company is not providing an estimate of full-year 2024 net income or normalized funds from operations.
Q4 2023 Non-Recurring Accounting Adjustment Summary ($ amounts in millions)
Income Statement: Line Item Impacted |
Amount |
Description |
||
Rent billed |
$ |
(154 |
) |
Write-off of Steward rent receivable, including deferred rent on Norwood Hospital, and lease incentive assets |
Straight-line rent |
|
(224 |
) |
Write-off of Steward consolidated straight-line rent |
Interest and other income |
|
(81 |
) |
Write-off of previously disclosed non-cash interest receivable on loans to Steward and International JV |
Real estate and other impairment charges, net |
|
(112 |
) |
Steward and other real estate impairments |
Real estate and other impairment charges, net |
|
(171 |
) |
Steward non-real estate impairments |
Loss from equity interests |
|
(30 |
) |
|
Q4 2023 Consolidated Revenue Attribution ($ amounts in millions)
|
Stabilized/
|
Steward1 |
Prospect and Other Cash-Basis2 |
Non-
|
Total |
|||||||
Rent billed |
$ |
183 |
$ | 48 |
$ | 1 |
$ | (154 |
) |
$ |
78 |
|
Straight-line rent |
|
44 |
13 |
- |
(224 |
) |
|
(167 |
) |
|||
Income from financing leases |
|
10 |
- |
10 |
- |
|
|
20 |
|
|||
Interest and other income |
|
15 |
8 |
5 |
(81 |
) |
|
(53 |
) |
|||
Total revenues |
$ |
252 |
$ | 69 |
$ | 16 |
$ | (459 |
) |
$ |
(122 |
) |
Q4 2023 Unconsolidated FFO and NFFO Attribution ($ amounts in millions)
|
Stabilized/
|
Steward1 |
Non-
|
Total |
||||||
Earnings from equity interests |
$ |
5 |
$ |
4 |
$ |
(30 |
) |
$ |
(21 |
) |
Depreciation and amortization3 |
|
13 |
|
5 |
|
- |
|
|
18 |
|
MPT share of unconsolidated FFO |
|
18 |
|
9 |
|
(30 |
) |
|
(3 |
) |
Normalizing adjustments |
|
- |
|
- |
|
30 |
|
|
30 |
|
MPT share of unconsolidated NFFO |
$ |
18 |
$ |
9 |
|
- |
|
$ |
27 |
|
1 MPT will account for Steward revenue on a cash basis, effective January 1, 2024 2 In addition to Prospect, includes revenue from other smaller tenants, as well as interest income from MPT’s loan to the International Joint Venture for which interest will only be recognized as cash is received effective January 1, 2024 3 MPT share of unconsolidated depreciation and amortization |
A reconciliation of net (loss) income to FFO and NFFO, including per share amounts, can be found in the financial tables accompanying this press release.
ANNUAL MEETING OF STOCKHOLDERS
Medical Properties Trust also announced that its annual meeting of stockholders will be at 10:30 a.m. Central Time on May 30, 2024, in
CONFERENCE CALL AND WEBCAST
The Company has scheduled a conference call and webcast for February 21, 2024 at 12:00 p.m. Eastern Time to present the Company’s financial and operating results for the quarter and year ended December 31, 2023. The dial-in numbers for the conference call are 877-883-0383 (
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 March 6, 2024, using dial-in numbers 877-344-7529 (
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, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.
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
Forward-Looking Statements
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, asset sales and other liquidity transactions, expected returns on investments 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) macroeconomic conditions, including due to geopolitical conditions and instability, which may lead to a disruption of or lack of access to the capital markets, disruptions and instability in the banking and financial services industries, rising inflation and movements in currency exchange rates; (ii) the risk that MPT is not able to recover deferred rent or its other investments in Steward at full value, within a reasonable time period or at all; (iii) the risk that property sales, loan repayments, and other capital recycling transactions do not occur as anticipated or at all; (iv) the risk that MPT is not able to attain its leverage, liquidity and cost of capital objectives within a reasonable time period or at all; (v) MPT’s ability to obtain debt financing on attractive terms or at all, as a result of changes in interest rates and other factors, which may adversely impact its ability to pay down, refinance, restructure or extend its indebtedness as it becomes due, or pursue acquisition and development opportunities; (vi) the ability of our tenants, operators and borrowers to satisfy their obligations under their respective contractual arrangements with us; (vii) the economic, political and social impact of, and uncertainty relating to, the potential impact from health crises (like COVID-19), which may adversely affect MPT’s and its tenants’ business, financial condition, results of operations and liquidity; (viii) our success in implementing our business strategy and our ability to identify, underwrite, finance, consummate and integrate acquisitions and investments; (ix) the nature and extent of our current and future competition; (x) 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; (xi) factors affecting the real estate industry generally or the healthcare real estate industry in particular; (xii) our ability to maintain our status as a REIT for income tax purposes in 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 most recent Annual Report on Form 10-K, as may be updated in our other filings with the SEC. 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) | ||||||||||
| December 31, 2023 | December 31, 2022 | |||||||||
| Assets | (Unaudited) | (A) | ||||||||
| Real estate assets | ||||||||||
| Land, buildings and improvements, intangible lease assets, and other | $ |
13,237,187 |
|
$ |
13,862,415 |
|
||||
| Investment in financing leases |
|
1,231,630 |
|
|
1,691,323 |
|
||||
| Mortgage loans |
|
309,315 |
|
|
364,101 |
|
||||
| Gross investment in real estate assets |
|
14,778,132 |
|
|
15,917,839 |
|
||||
| Accumulated depreciation and amortization |
|
(1,407,971 |
) |
|
(1,193,312 |
) |
||||
| Net investment in real estate assets |
|
13,370,161 |
|
|
14,724,527 |
|
||||
| Cash and cash equivalents |
|
250,016 |
|
|
235,668 |
|
||||
| Interest and rent receivables |
|
45,059 |
|
|
167,035 |
|
||||
| Straight-line rent receivables |
|
635,987 |
|
|
787,166 |
|
||||
| Investments in unconsolidated real estate joint ventures |
|
1,474,455 |
|
|
1,497,903 |
|
||||
| Investments in unconsolidated operating entities |
|
1,778,640 |
|
|
1,444,872 |
|
||||
| Other loans |
|
292,615 |
|
|
227,839 |
|
||||
| Other assets |
|
457,911 |
|
|
572,990 |
|
||||
| Total Assets | $ |
18,304,844 |
|
$ |
19,658,000 |
|
||||
| Liabilities and Equity | ||||||||||
| Liabilities | ||||||||||
| Debt, net | $ |
10,064,236 |
|
$ |
10,268,412 |
|
||||
| Accounts payable and accrued expenses |
|
412,178 |
|
|
621,324 |
|
||||
| Deferred revenue |
|
37,962 |
|
|
27,727 |
|
||||
| Obligations to tenants and other lease liabilities |
|
156,603 |
|
|
146,130 |
|
||||
| Total Liabilities |
|
10,670,979 |
|
|
11,063,593 |
|
||||
| Equity | ||||||||||
| Preferred stock, |
||||||||||
| outstanding |
|
- |
|
|
- |
|
||||
| Common stock, |
||||||||||
| outstanding - 598,991 shares at December 31, 2023 and 597,476 |
|
599 |
|
|
597 |
|
||||
| shares at December 31, 2022 | ||||||||||
| Additional paid-in capital |
|
8,560,309 |
|
|
8,535,140 |
|
||||
| Retained (deficit) earnings |
|
(971,809 |
) |
|
116,285 |
|
||||
| Accumulated other comprehensive income (loss) |
|
42,501 |
|
|
(59,184 |
) |
||||
| Total Medical Properties Trust, Inc. Stockholders' Equity |
|
7,631,600 |
|
|
8,592,838 |
|
||||
| Non-controlling interests |
|
2,265 |
|
|
1,569 |
|
||||
| Total Equity |
|
7,633,865 |
|
|
8,594,407 |
|
||||
| Total Liabilities and Equity | $ |
18,304,844 |
|
$ |
19,658,000 |
|
||||
| (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 Twelve Months Ended | |||||||||||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||||||||||
| Revenues | |||||||||||||||||
| Rent billed | $ |
78,421 |
|
$ |
231,845 |
|
$ |
803,375 |
|
$ |
968,874 |
|
|||||
| Straight-line rent |
|
(166,769 |
) |
|
58,045 |
|
|
(127,894 |
) |
|
204,159 |
|
|||||
| Income from financing leases |
|
19,412 |
|
|
48,920 |
|
|
127,141 |
|
|
203,580 |
|
|||||
| Interest and other income |
|
(53,447 |
) |
|
41,676 |
|
|
69,177 |
|
|
166,238 |
|
|||||
| Total revenues |
|
(122,383 |
) |
|
380,486 |
|
|
871,799 |
|
|
1,542,851 |
|
|||||
| Expenses | |||||||||||||||||
| Interest |
|
102,338 |
|
|
92,047 |
|
|
411,171 |
|
|
359,036 |
|
|||||
| Real estate depreciation and amortization |
|
77,295 |
|
|
81,454 |
|
|
603,360 |
|
|
332,977 |
|
|||||
| Property-related (A) |
|
3,298 |
|
|
7,699 |
|
|
41,567 |
|
|
45,697 |
|
|||||
| General and administrative |
|
30,150 |
|
|
42,893 |
|
|
145,588 |
|
|
160,494 |
|
|||||
| Total expenses |
|
213,081 |
|
|
224,093 |
|
|
1,201,686 |
|
|
898,204 |
|
|||||
| Other (expense) income | |||||||||||||||||
| (Loss) gain on sale of real estate |
|
(2,024 |
) |
|
(33 |
) |
|
(1,815 |
) |
|
536,755 |
|
|||||
| Real estate and other impairment charges, net |
|
(283,619 |
) |
|
(282,950 |
) |
|
(376,907 |
) |
|
(268,375 |
) |
|||||
| (Losses) earnings from equity interests |
|
(20,873 |
) |
|
7,194 |
|
|
13,967 |
|
|
40,800 |
|
|||||
| Debt refinancing and unutilized financing benefit (costs) |
|
239 |
|
|
- |
|
|
285 |
|
|
(9,452 |
) |
|||||
| Other (including fair value adjustments on securities) |
|
(17,861 |
) |
|
(5,531 |
) |
|
7,586 |
|
|
15,344 |
|
|||||
| Total other (expense) income |
|
(324,138 |
) |
|
(281,320 |
) |
|
(356,884 |
) |
|
315,072 |
|
|||||
| (Loss) income before income tax |
|
(659,602 |
) |
|
(124,927 |
) |
|
(686,771 |
) |
|
959,719 |
|
|||||
| Income tax (expense) benefit |
|
(3,982 |
) |
|
(15,285 |
) |
|
130,679 |
|
|
(55,900 |
) |
|||||
| Net (loss) income |
|
(663,584 |
) |
|
(140,212 |
) |
|
(556,092 |
) |
|
903,819 |
|
|||||
| Net income attributable to non-controlling interests |
|
(359 |
) |
|
(262 |
) |
|
(384 |
) |
|
(1,222 |
) |
|||||
| Net (loss) income attributable to MPT common stockholders | $ |
(663,943 |
) |
$ |
(140,474 |
) |
$ |
(556,476 |
) |
$ |
902,597 |
|
|||||
| Earnings per common share - basic and diluted: | |||||||||||||||||
| Net (loss) income attributable to MPT common stockholders | $ |
(1.11 |
) |
$ |
(0.24 |
) |
$ |
(0.93 |
) |
$ |
1.50 |
|
|||||
| Weighted average shares outstanding - basic |
|
598,984 |
|
|
598,053 |
|
|
598,518 |
|
|
598,634 |
|
|||||
| Weighted average shares outstanding - diluted |
|
598,984 |
|
|
598,053 |
|
|
598,518 |
|
|
598,837 |
|
|||||
| Dividends declared per common share | $ |
0.15 |
|
$ |
0.29 |
|
$ |
0.88 |
|
$ |
1.16 |
|
|||||
| (A) Includes |
|||||||||||||||||
| MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES | |||||||||||||||
| Reconciliation of Net (Loss) Income to Funds From Operations | |||||||||||||||
| (Unaudited) | |||||||||||||||
| (Amounts in thousands, except for per share data) | For the Three Months Ended | For the Twelve Months Ended | |||||||||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||||||||
| FFO information: | |||||||||||||||
| Net (loss) income attributable to MPT common stockholders | $ |
(663,943 |
) |
$ |
(140,474 |
) |
$ |
(556,476 |
) |
$ |
902,597 |
|
|||
| Participating securities' share in earnings |
|
(349 |
) |
|
(567 |
) |
|
(1,644 |
) |
|
(1,602 |
) |
|||
| Net (loss) income, less participating securities' share in earnings | $ |
(664,292 |
) |
$ |
(141,041 |
) |
$ |
(558,120 |
) |
$ |
900,995 |
|
|||
| Depreciation and amortization |
|
95,648 |
|
|
98,891 |
|
|
676,132 |
|
|
399,622 |
|
|||
| Loss (gain) on sale of real estate |
|
2,024 |
|
|
(99 |
) |
|
1,815 |
|
|
(536,887 |
) |
|||
| Real estate impairment charges |
|
112,112 |
|
|
170,582 |
|
|
167,966 |
|
|
170,582 |
|
|||
| Funds from operations | $ |
(454,508 |
) |
$ |
128,333 |
|
$ |
287,793 |
|
$ |
934,312 |
|
|||
| Write-off of billed and unbilled rent and other |
|
499,335 |
|
|
111 |
|
|
649,911 |
|
|
35,370 |
|
|||
| Other impairment charges |
|
171,507 |
|
|
112,368 |
|
|
208,941 |
|
|
97,793 |
|
|||
| Litigation and other |
|
2,899 |
|
|
- |
|
|
15,886 |
|
|
- |
|
|||
| Share-based compensation adjustments |
|
(6,571 |
) |
|
4,042 |
|
|
(9,691 |
) |
|
3,076 |
|
|||
| Non-cash fair value adjustments |
|
8,405 |
|
|
9,466 |
|
|
(34,157 |
) |
|
(3,097 |
) |
|||
| Tax rate changes and other |
|
(2,797 |
) |
|
3,796 |
|
|
(167,332 |
) |
|
10,697 |
|
|||
| Debt refinancing and unutilized financing (benefit) costs |
|
(239 |
) |
|
- |
|
|
(285 |
) |
|
9,452 |
|
|||
| Normalized funds from operations | $ |
218,031 |
|
$ |
258,116 |
|
$ |
951,066 |
|
$ |
1,087,603 |
|
|||
| Certain non-cash and related recovery information: | |||||||||||||||
| Share-based compensation | $ |
10,102 |
|
$ |
12,377 |
|
$ |
42,941 |
|
$ |
46,345 |
|
|||
| Debt costs amortization | $ |
4,933 |
|
$ |
5,023 |
|
$ |
20,273 |
|
$ |
19,739 |
|
|||
| Non-cash rent and interest revenue (C) | $ |
(57,920 |
) |
$ |
(47,216 |
) |
$ |
(239,599 |
) |
$ |
(120,573 |
) |
|||
| Cash recoveries of non-cash rent and interest revenue (D) | $ |
2,364 |
|
$ |
514 |
|
$ |
38,451 |
|
$ |
1,445 |
|
|||
| Straight-line rent revenue from operating and finance leases | $ |
(63,282 |
) |
$ |
(72,494 |
) |
$ |
(247,699 |
) |
$ |
(297,645 |
) |
|||
| Per diluted share data: | |||||||||||||||
| Net (loss) income, less participating securities' share in earnings | $ |
(1.11 |
) |
$ |
(0.24 |
) |
$ |
(0.93 |
) |
$ |
1.50 |
|
|||
| Depreciation and amortization |
|
0.16 |
|
|
0.16 |
|
|
1.13 |
|
|
0.67 |
|
|||
| Loss (gain) on sale of real estate |
|
- |
|
|
- |
|
|
- |
|
|
(0.90 |
) |
|||
| Real estate impairment charges |
|
0.19 |
|
|
0.29 |
|
|
0.28 |
|
|
0.29 |
|
|||
| Funds from operations | $ |
(0.76 |
) |
$ |
0.21 |
|
$ |
0.48 |
|
$ |
1.56 |
|
|||
| Write-off of billed and unbilled rent and other |
|
0.83 |
|
|
- |
|
|
1.09 |
|
|
0.06 |
|
|||
| Other impairment charges |
|
0.29 |
|
|
0.19 |
|
|
0.35 |
|
|
0.16 |
|
|||
| Litigation and other |
|
- |
|
|
- |
|
|
0.03 |
|
|
- |
|
|||
| Share-based compensation adjustments |
|
(0.01 |
) |
|
0.01 |
|
|
(0.02 |
) |
|
0.01 |
|
|||
| Non-cash fair value adjustments |
|
0.01 |
|
|
0.02 |
|
|
(0.06 |
) |
|
(0.01 |
) |
|||
| Tax rate changes and other |
|
- |
|
|
- |
|
|
(0.28 |
) |
|
0.02 |
|
|||
| Debt refinancing and unutilized financing (benefit) costs |
|
- |
|
|
- |
|
|
- |
|
|
0.02 |
|
|||
| Normalized funds from operations | $ |
0.36 |
|
$ |
0.43 |
|
$ |
1.59 |
|
$ |
1.82 |
|
|||
| Certain non-cash and related recovery information: | |||||||||||||||
| Share-based compensation | $ |
0.02 |
|
$ |
0.02 |
|
$ |
0.07 |
|
$ |
0.08 |
|
|||
| Debt costs amortization | $ |
0.01 |
|
$ |
0.01 |
|
$ |
0.03 |
|
$ |
0.03 |
|
|||
| Non-cash rent and interest revenue (C) (E) | $ |
(0.10 |
) |
$ |
(0.08 |
) |
$ |
(0.40 |
) |
$ |
(0.20 |
) |
|||
| Cash recoveries of non-cash rent and interest revenue (D) | $ |
- |
|
$ |
- |
|
$ |
0.06 |
|
$ |
- |
|
|||
| Straight-line rent revenue from operating and finance leases (E) | $ |
(0.11 |
) |
$ |
(0.12 |
) |
$ |
(0.41 |
) |
$ |
(0.50 |
) |
|||
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 "(Losses) 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 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, including amortization related to in-place lease intangibles, and after adjustments for unconsolidated partnerships and joint ventures.
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.
(C) Includes revenue accrued during the period but not received in cash, such as deferred rent, payment-in-kind ("PIK") interest or other accruals.
(D) Includes cash received to satisfy previously accrued non-cash revenue, such as the cash receipt of previously deferred rent or PIK interest.
(E) Each line includes a portion of non-cash revenue from Steward in Q4 2023 totaling
View source version on businesswire.com: https://www.businesswire.com/news/home/20240220394795/en/
Drew Babin, CFA, CMA
Senior Managing Director of Corporate Communications
Medical Properties Trust, Inc.
(646) 884-9809
dbabin@medicalpropertiestrust.com
Source: Medical Properties Trust, Inc.
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