Medical Properties Trust, Inc. Reports Second Quarter Results
Medical Properties Trust (MPW) reported a second-quarter net income of $190 million ($0.32 per share) and a Normalized Funds from Operations (NFFO) of $275 million ($0.46 per share), marking a 7% increase year-over-year. The company expanded its portfolio by acquiring hospitals in Arizona and Florida for $80 million, and radiotherapy facilities in Spain for €27 million. MPW plans to develop three additional hospitals in Spain for €121 million. The company maintains its guidance for per share net income between $1.88 and $1.92 and NFFO of $1.78 to $1.82.
- Net income increased to $190 million from $115 million YoY.
- NFFO rose 7% YoY to $275 million.
- Expansion into Spain with €27 million acquisition and further developments worth €121 million.
- Increased credit facility capacity to $2.0 billion.
- Guidance includes potential impacts from COVID-19 and unexpected operating costs.
- Market interest rate changes could affect financial performance.
- Estimates may be altered by asset acquisition or sale variations.
Per Share Net Income of
Expansion of Spain Footprint Includes New Relationship with a Global Leader in Cancer Care
-
Net income of
and Normalized Funds from Operations (“NFFO”) of$0.32 for the 2022 second quarter on a per diluted share basis;$0.46 -
Completed in April the acquisition from separate third parties of two general acute hospitals in
Arizona andFlorida leased toSteward Health Care System (“Steward”) for an aggregate ;$80 million -
Acquired in late April three radiotherapy facilities leased to
GenesisCare inSpain for€27 million ; -
Agreed in May to develop three facilities in
Spain leased to IMED with a total budget of€121 million ; -
Closed in May on the previously announced sale of a general acute hospital in
Dodge City, KS for , resulting in a$63 million gain on sale of real estate;$8 million -
Signed agreement in July to develop a behavioral health facility in
McKinney, TX leased toSpringstone with a total budget of approximately ;$35 million -
Acquired in late July a hospital in
Colombia leased to Fundación Cardiovascular deColombia for ; and$26 million -
Amended the credit facility in the second quarter, increasing the capacity to
and extending the maturity dates of the revolver and term loan to$2.0 billion June 2026 andJune 2027 , respectively.
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 2021 results, and reconciliations of total assets to total pro forma gross assets and total revenues to total adjusted revenues.
PORTFOLIO UPDATE
In late April, MPT acquired three radiotherapy facilities in
During the quarter, MPT acquired from separate third parties two facilities located in
In July, MPT agreed to develop a 72-bed behavioral health facility in
In late July, MPT established a new operator relationship in
The Company has total pro forma gross assets of approximately
OPERATING RESULTS AND OUTLOOK
Net income for the second quarter ended
NFFO for the second quarter was
The Company is maintaining its estimates of per share net income of
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 or other non-recurring or 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, new shares are issued, 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.
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 | $ |
13,696,681 |
|
$ |
14,062,722 |
|
|
Investment in financing leases |
|
2,076,813 |
|
|
2,053,327 |
|
|
Real estate held for sale |
|
- |
|
|
1,096,505 |
|
|
Mortgage loans |
|
314,681 |
|
|
213,211 |
|
|
Gross investment in real estate assets |
|
16,088,175 |
|
|
17,425,765 |
|
|
Accumulated depreciation and amortization |
|
(1,109,592 |
) |
|
(993,100 |
) |
|
Net investment in real estate assets |
|
14,978,583 |
|
|
16,432,665 |
|
|
Cash and cash equivalents |
|
257,269 |
|
|
459,227 |
|
|
Interest and rent receivables |
|
94,206 |
|
|
56,229 |
|
|
Straight-line rent receivables |
|
702,683 |
|
|
728,522 |
|
|
Investments in unconsolidated real estate joint ventures |
|
1,460,373 |
|
|
1,152,927 |
|
|
Investments in unconsolidated operating entities |
|
1,439,910 |
|
|
1,289,434 |
|
|
Other loans |
|
213,897 |
|
|
67,317 |
|
|
Other assets |
|
596,163 |
|
|
333,480 |
|
|
Total Assets | $ |
19,743,084 |
|
$ |
20,519,801 |
|
|
Liabilities and Equity | |||||||
Liabilities | |||||||
Debt, net | $ |
10,138,774 |
|
$ |
11,282,770 |
|
|
Accounts payable and accrued expenses |
|
562,255 |
|
|
607,792 |
|
|
Deferred revenue |
|
21,210 |
|
|
25,563 |
|
|
Obligations to tenants and other lease liabilities |
|
154,974 |
|
|
158,005 |
|
|
Total Liabilities |
|
10,877,213 |
|
|
12,074,130 |
|
|
Equity | |||||||
Preferred stock, |
|||||||
outstanding |
|
- |
|
|
- |
|
|
Common stock, |
|||||||
outstanding - 598,839 shares at |
|
599 |
|
|
597 |
|
|
shares at |
|||||||
Additional paid-in capital |
|
8,557,120 |
|
|
8,564,009 |
|
|
Retained earnings (deficit) |
|
385,545 |
|
|
(87,691 |
) |
|
Accumulated other comprehensive loss |
|
(83,431 |
) |
|
(36,727 |
) |
|
|
8,859,833 |
|
|
8,440,188 |
|
||
Non-controlling interests |
|
6,038 |
|
|
5,483 |
|
|
Total Equity |
|
8,865,871 |
|
|
8,445,671 |
|
|
Total Liabilities and Equity | $ |
19,743,084 |
|
$ |
20,519,801 |
|
|
(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 | For the Six Months Ended | |||||||||||||
Revenues | |||||||||||||||
Rent billed | $ |
241,209 |
|
$ |
216,870 |
|
$ |
504,611 |
|
$ |
430,214 |
|
|||
Straight-line rent |
|
58,518 |
|
|
55,465 |
|
|
119,562 |
|
|
110,338 |
|
|||
Income from financing leases |
|
51,873 |
|
|
50,337 |
|
|
103,649 |
|
|
101,231 |
|
|||
Interest and other income |
|
48,626 |
|
|
59,120 |
|
|
82,204 |
|
|
102,774 |
|
|||
Total revenues |
|
400,226 |
|
|
381,792 |
|
|
810,026 |
|
|
744,557 |
|
|||
Expenses | |||||||||||||||
Interest |
|
87,730 |
|
|
92,305 |
|
|
178,913 |
|
|
179,277 |
|
|||
Real estate depreciation and amortization |
|
84,334 |
|
|
76,369 |
|
|
169,650 |
|
|
152,011 |
|
|||
Property-related (A) |
|
21,135 |
|
|
18,684 |
|
|
29,733 |
|
|
24,137 |
|
|||
General and administrative |
|
38,858 |
|
|
34,545 |
|
|
80,282 |
|
|
70,618 |
|
|||
Total expenses |
|
232,057 |
|
|
221,903 |
|
|
458,578 |
|
|
426,043 |
|
|||
Other income (expense) | |||||||||||||||
Gain (loss) on sale of real estate and other, net |
|
16,355 |
|
|
(1,387 |
) |
|
467,993 |
|
|
(398 |
) |
|||
Earnings from equity interests |
|
14,785 |
|
|
7,339 |
|
|
22,123 |
|
|
14,440 |
|
|||
Debt refinancing and unutilized financing costs |
|
(619 |
) |
|
(70 |
) |
|
(9,435 |
) |
|
(2,339 |
) |
|||
Other (including fair value adjustments on securities) |
|
2,031 |
|
|
(771 |
) |
|
11,918 |
|
|
7,023 |
|
|||
Total other income |
|
32,552 |
|
|
5,111 |
|
|
492,599 |
|
|
18,726 |
|
|||
Income before income tax |
|
200,721 |
|
|
165,000 |
|
|
844,047 |
|
|
337,240 |
|
|||
Income tax expense |
|
(10,657 |
) |
|
(50,179 |
) |
|
(22,036 |
) |
|
(58,539 |
) |
|||
Net income |
|
190,064 |
|
|
114,821 |
|
|
822,011 |
|
|
278,701 |
|
|||
Net income attributable to non-controlling interests |
|
(467 |
) |
|
(256 |
) |
|
(733 |
) |
|
(353 |
) |
|||
Net income attributable to MPT common stockholders | $ |
189,597 |
|
$ |
114,565 |
|
$ |
821,278 |
|
$ |
278,348 |
|
|||
Earnings per common share - basic and diluted: | |||||||||||||||
Net income attributable to MPT common stockholders | $ |
0.32 |
|
$ |
0.19 |
|
$ |
1.37 |
|
$ |
0.48 |
|
|||
Weighted average shares outstanding - basic |
|
598,827 |
|
|
587,514 |
|
|
598,751 |
|
|
581,877 |
|
|||
Weighted average shares outstanding - diluted |
|
599,026 |
|
|
589,053 |
|
|
598,979 |
|
|
583,297 |
|
|||
Dividends declared per common share | $ |
0.29 |
|
$ |
0.28 |
|
$ |
0.58 |
|
$ |
0.56 |
|
|||
(A) Includes |
Reconciliation of Net Income to Funds From Operations | |||||||||||||||
(Unaudited) | |||||||||||||||
(Amounts in thousands, except for per share data) |
For the Three Months Ended | For the Six Months Ended | |||||||||||||
FFO information: | |||||||||||||||
Net income attributable to MPT common stockholders | $ |
189,597 |
|
$ |
114,565 |
|
$ |
821,278 |
|
$ |
278,348 |
|
|||
Participating securities' share in earnings |
|
(345 |
) |
|
(390 |
) |
|
(747 |
) |
|
(760 |
) |
|||
Net income, less participating securities' share in earnings | $ |
189,252 |
|
$ |
114,175 |
|
$ |
820,531 |
|
$ |
277,588 |
|
|||
Depreciation and amortization |
|
101,976 |
|
|
90,061 |
|
|
201,435 |
|
|
178,597 |
|
|||
(Gain) loss on sale of real estate and other, net |
|
(16,355 |
) |
|
1,387 |
|
|
(467,993 |
) |
|
398 |
|
|||
Funds from operations | $ |
274,873 |
|
$ |
205,623 |
|
$ |
553,973 |
|
$ |
456,583 |
|
|||
Write-off (recovery) of straight-line rent and other |
|
977 |
|
|
(13 |
) |
|
3,581 |
|
|
(5,251 |
) |
|||
Non-cash fair value adjustments |
|
(943 |
) |
|
2,121 |
|
|
(8,966 |
) |
|
(1,944 |
) |
|||
Tax rate changes |
|
(825 |
) |
|
42,746 |
|
|
(825 |
) |
|
42,746 |
|
|||
Debt refinancing and unutilized financing costs |
|
619 |
|
|
70 |
|
|
9,435 |
|
|
2,339 |
|
|||
Normalized funds from operations | $ |
274,701 |
|
$ |
250,547 |
|
$ |
557,198 |
|
$ |
494,473 |
|
|||
Share-based compensation |
|
11,075 |
|
|
12,771 |
|
|
22,879 |
|
|
25,035 |
|
|||
Debt costs amortization |
|
4,560 |
|
|
4,100 |
|
|
10,173 |
|
|
8,109 |
|
|||
Rent deferral, net |
|
(3,327 |
) |
|
836 |
|
|
(7,043 |
) |
|
1,639 |
|
|||
Straight-line rent revenue and other |
|
(74,757 |
) |
|
(67,921 |
) |
|
(152,090 |
) |
|
(135,196 |
) |
|||
Adjusted funds from operations | $ |
212,252 |
|
$ |
200,333 |
|
$ |
431,117 |
|
$ |
394,060 |
|
|||
Per diluted share data: | |||||||||||||||
Net income, less participating securities' share in earnings | $ |
0.32 |
|
$ |
0.19 |
|
$ |
1.37 |
|
$ |
0.48 |
|
|||
Depreciation and amortization |
|
0.17 |
|
|
0.16 |
|
|
0.33 |
|
|
0.30 |
|
|||
(Gain) loss on sale of real estate and other, net |
|
(0.03 |
) |
|
- |
|
|
(0.78 |
) |
|
- |
|
|||
Funds from operations | $ |
0.46 |
|
$ |
0.35 |
|
$ |
0.92 |
|
$ |
0.78 |
|
|||
Write-off (recovery) of straight-line rent and other |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|||
Non-cash fair value adjustments |
|
- |
|
|
- |
|
|
(0.01 |
) |
|
- |
|
|||
Tax rate changes |
|
- |
|
|
0.08 |
|
|
- |
|
|
0.07 |
|
|||
Debt refinancing and unutilized financing costs |
|
- |
|
|
- |
|
|
0.02 |
|
|
- |
|
|||
Normalized funds from operations | $ |
0.46 |
|
$ |
0.43 |
|
$ |
0.93 |
|
$ |
0.85 |
|
|||
Share-based compensation |
|
0.02 |
|
|
0.02 |
|
|
0.04 |
|
|
0.04 |
|
|||
Debt costs amortization |
|
0.01 |
|
|
0.01 |
|
|
0.02 |
|
|
0.01 |
|
|||
Rent deferral, net |
|
(0.01 |
) |
|
- |
|
|
(0.01 |
) |
|
- |
|
|||
Straight-line rent revenue and other |
|
(0.13 |
) |
|
(0.12 |
) |
|
(0.26 |
) |
|
(0.22 |
) |
|||
Adjusted funds from operations | $ |
0.35 |
|
$ |
0.34 |
|
$ |
0.72 |
|
$ |
0.68 |
|
|||
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. The write-off of straight-line rent in 2022 is predominantly related to sold properties.
(B) 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
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 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 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) non-cash revenue such as 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 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. |
2022 Guidance Reconciliation | |||||||
(Unaudited) | |||||||
2022 Guidance - Per Share(1) | |||||||
Low | High | ||||||
Net income attributable to MPT common stockholders | $ |
1.88 |
|
$ |
1.92 |
|
|
Participating securities' share in earnings |
|
- |
|
|
- |
|
|
Net income, less participating securities' share in earnings | $ |
1.88 |
|
$ |
1.92 |
|
|
Depreciation and amortization |
|
0.68 |
|
|
0.68 |
|
|
Gain on sale of real estate and other, net |
|
(0.78 |
) |
|
(0.78 |
) |
|
Funds from operations | $ |
1.78 |
|
$ |
1.82 |
|
|
Other adjustments |
|
- |
|
|
- |
|
|
Normalized funds from operations | $ |
1.78 |
|
$ |
1.82 |
|
|
(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 |
Total Pro Forma Gross Assets | ||||
(Unaudited) | ||||
(Amounts in thousands) | ||||
Total Assets | $ |
19,743,084 |
|
|
Add: | ||||
Accumulated depreciation and amortization |
|
1,109,592 |
|
|
Incremental gross assets of our joint ventures and other(1) |
|
1,689,012 |
|
|
Less: | ||||
Cash on hand |
|
(257,269 |
) |
|
Total Pro Forma Gross Assets(2) | $ |
22,284,419 |
|
|
(1) Adjustment to reflect our share of our joint ventures' gross assets and certain lease intangible assets.
(2) Total pro forma gross assets is total assets before accumulated depreciation/amortization (adjusted for our unconsolidated joint ventures) and assumes material real estate commitments on new investments are fully funded, and assumes cash on hand at period-end and cash generated from or to be generated from financing activities subsequent to period-end are either used in these transactions or used to reduce debt. We believe total pro forma 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 commitments close. |
Adjusted Revenues | |||
(Unaudited) | |||
For the Three | |||
Months Ended | |||
(Amounts in thousands) | |||
Total Revenues | $ |
400,226 |
|
Revenue from real estate properties owned through | |||
joint venture arrangements |
|
48,942 |
|
Total Adjusted Revenues(1) | $ |
449,168 |
|
(1) Adjusted revenues are total revenues adjusted for our pro rata portion of similar revenues in our real estate joint venture arrangements. We believe adjusted revenues is useful to investors as it provides a more complete view of revenue across all of our investments and allows for better understanding of our revenue concentration. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220802006211/en/
Senior Managing Director of Corporate Communications
(646) 884-9809
dbabin@medicalpropertiestrust.com
Source:
FAQ
What were Medical Properties Trust's second quarter earnings results for 2022?
What acquisitions did Medical Properties Trust make in the second quarter?
What is the guidance for Medical Properties Trust's earnings for the year?