Medical Properties Trust, Inc. Reports Strong Growth During Third Quarter

Medical Properties Trust, Inc. Reports Strong Growth During Third Quarter

Raising 2012 Normalized FFO Per Share Guidance; $781 Million Year-to-Date in Acquisitions and Commitments


BIRMINGHAM, Ala.--(BUSINESS WIRE)-- Medical Properties Trust, Inc. (the "Company") (NYS: MPW) today announced financial and operating results for the third quarter and nine months ended September 30, 2012.

THIRD QUARTER AND RECENT HIGHLIGHTS

  • Achieved third quarter Normalized Funds from Operations ("FFO") and Adjusted FFO ("AFFO") per diluted share of $0.25 and $0.24, respectively, compared with $0.18 per diluted share for both FFO and AFFO in the third quarter of 2011;

  • Invested $210 million in new acute care hospital assets with first year cash returns exceeding 10%;

  • Agreed to fund additional $149 million in hospital acquisitions and developments, bringing year-to-date acquisitions and commitments total to approximately $781 million;

  • Sold two post-acute properties for $42 million, reflecting a 260 point compression in market capitalization rates;

  • Paid 2012 third quarter cash dividend of $0.20 per share, representing an 80% Normalized FFO dividend payout ratio.

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 FFO and AFFO, all on a comparable basis to 2011 periods.

"We are executing our dynamic acquisition and operating investment strategy and this is continuing to drive strong financial results," said Edward K. Aldag, Jr., Chairman, President and CEO of Medical Properties Trust. "For the second consecutive quarter we achieved FFO growth per share of more than 35% while continuing to build a diversified portfolio based on tenant, property and geographic mix. As we expected, our third quarter FFO payout ratio improved to 80% and our recent acquisitions should drive our in-place portfolio FFO payout ratio to 74%. We continue to exceed our lease and EBITDAR coverage targets, which consistently lead the industry and contribute to the cap rate compression demonstrated by our recent property sales."

OPERATING RESULTS

MPT's continued successful execution of its growth and investment strategies have driven the Company's strong results. Since 2010, MPT has made hospital investments totaling more than $1.0 billion with average returns of more than 10%.

Third quarter 2012 total revenues increased 55% to $53.7 million compared with $34.6 million for the third quarter of 2011. Normalized FFO for the quarter increased 71% to $33.4 million compared with $19.5 million in the third quarter of 2011. Per share Normalized FFO increased 39% to $0.25 per diluted share during the 2012 third quarter, compared with $0.18 per diluted share in the third quarter of 2011. The FFO dividend payout ratio for the third quarter of 2012 was 80%, an 11% improvement compared with the second quarter of 2012.

Net income for the third quarter of 2012 was $31.5 million (or $0.23 per diluted share) compared with net income of $0.4 million (or $0.00 per diluted share) during the third quarter of 2011.

For the nine months ended September 30, 2012 normalized FFO was $85.5 million (or $0.65 per diluted share) compared with $57.5 million (or $0.52 per diluted share) in the corresponding period in 2011. Revenue for the nine months ended September 30, 2012 was $145 million compared to $102 million in the corresponding period in 2011. Net income for the first nine months of 2012 was $61.3 million compared with $13.8 million in 2011.

PORTFOLIO UPDATE AND FUTURE OUTLOOK

Since June 30, 2012, the Company has made investments in acute care hospitals aggregating $210 million, including hospitals in Roxborough, PA and Reno, NV operated by Prime Healthcare, and the previously announced $100 million Centinela Hospital Medical Center transaction. MPT has commenced development of an $18 million post acute facility for Ernest Health in Spartanburg, SC. In addition, MPT expects to acquire two post acute care hospitals in the fourth quarter for an aggregate investment of $31 million that are subject to executed letters of intent with two existing MPT operators.

MPT also recently executed a letter of intent with First Choice ER, LLC, to provide sale / leaseback financing for up to 25 freestanding emergency room facilities for an aggregate investment of $100 million. The First Choice system is a leader in the rapidly growing field of emergency services, and staffs all of its free standing emergency rooms with board certified emergency physicians. MPT expects all of the facilities, which are targeted for high traffic retail locations, to be under construction by the second quarter of 2014.

During and subsequent to the 2012 third quarter, the Company sold two post acute care hospitals in Colorado and Massachusetts for an aggregate $42 million cash sales price. A gain of $8.4 million gain was recognized in the third quarter, and a non-cash charge of $1.6 million was recorded for accrued straight line rent. In the fourth quarter, the Company expects to report a gain of approximately $7.0 million for the sale of the Massachusetts property and a charge for accrued straight line rent of $4.1 million. At the $42 million combined sales price, the transaction delivers a capitalization rate of 260 basis points lower than the current annual base lease rate and the sales prices was 27% greater than MPT's original cost. The Company believes that this capitalization rate compression for two of its older properties is a good benchmark for estimating the overall asset value of its portfolio.

At September 30, 2012, the Company had total real estate and related investments of approximately $2.1 billion comprised of 79 healthcare properties in 24 states leased or loaned to 21 hospital operating companies.

Based on the Company's asset portfolio and capitalization as of September 30, 2012, and adjusting for the sale of the Massachusetts facility as well as the placement into service of the Emerus emergency hospitals, the Company is increasing its expectation for Normalized FFO to $0.90 per diluted share for calendar year 2012.

Based upon its expected 2012 performance and placement of its properties under construction into service, MPT expects to enter 2013 with a Normalized FFO run rate of approximately $1.08 per diluted share. This does not include the impact of any potential 2013 acquisitions or financing activities.

Guidance estimates do not include the effects, if any, of real estate operating costs, litigation costs, debt refinancing costs, acquisition costs, new interest rate hedging activities, write-offs of straight-line rent or other non-recurring or unplanned transactions. These estimates will change if the Company acquires additional assets, market interest rates change, debt is refinanced, new shares are issued, additional debt is incurred, assets are sold, other operating expenses vary, income from investments in tenant operations vary from expectations, or existing leases do not perform in accordance with their terms.

DECLARES QUARTERLY DIVIDEND

Medical Properties Trust, Inc. announced today that its Board of Directors declared a regular quarterly cash dividend of $0.20 per share of common stock to be paid on January 5, 2013 to stockholders of record on November 23, 2012.

CONFERENCE CALL AND WEBCAST

The Company has scheduled a conference call and webcast for Tuesday, October 30, 2012 at 11:00 a.m. Eastern Time to present the Company's financial and operating results for the quarter ended September 30, 2012. The dial-in telephone numbers for the conference call 800-531-3039 (U.S.) and 847-413-4850 (International); using passcode 33605670. 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 from shortly after the completion of the call through November 6, 2012. Telephone numbers for the replay are 888-843-7419 and 630-652-3042 for U.S. and International callers, respectively. The replay passcode is 33605670.

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 Birmingham, Alabama based self-advised real estate investment trust formed to capitalize on the changing trends in healthcare delivery by acquiring and developing net-leased healthcare facilities. These facilities include inpatient rehabilitation hospitals, long-term acute care hospitals, regional acute care hospitals, ambulatory surgery centers and other single-discipline healthcare facilities, such as heart hospitals and orthopedic hospitals. 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 capacity of the Company's tenants to meet the terms of their agreements; Normalized FFO per share; expected payout ratio, the amount of acquisitions of healthcare real estate, if any; 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 restructuring of the Company's investments in non-revenue producing properties; the payment of future dividends, if any; completion of additional debt arrangement, and additional investments; national and 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 federal 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, 2011, as amended, 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

September 30, 2012

December 31, 2011

Assets

(Unaudited)

(A)

Real estate assets

Land, buildings and improvements, and intangible lease assets

$

1,225,753,769

$

1,186,656,442

Construction in progress and other

26,154,688

30,902,348

Real estate held for sale

17,432,421

48,925,401

Net investment in direct financing leases

312,050,375

-

Mortgage loans

368,650,000

165,000,000

Gross investment in real estate assets

1,950,041,253

1,431,484,191

Accumulated depreciation and amortization

(120,215,169

)

(94,823,124

)

Net investment in real estate assets

1,829,826,084

1,336,661,067

Cash and cash equivalents

36,162,730

102,725,906

Interest and rent receivable

42,093,846

29,862,106

Straight-line rent receivable

38,065,621

33,993,032

Other loans

158,176,919

74,839,459

Deferred financing costs

22,024,564

18,285,175

Other assets

32,049,518

25,506,974

Total Assets

$

2,158,399,282

$

1,621,873,719

Liabilities and Equity

Liabilities

Debt, net

$

1,025,182,763

$

689,848,981

Accounts payable and accrued expenses

64,297,021

51,124,723

Deferred revenue

20,374,583

23,307,074

Lease deposits and other obligations to tenants

15,387,183

28,777,787

Total liabilities

1,125,241,550

793,058,565

Equity

Preferred stock, $0.001 par value. Authorized 10,000,000 shares; no shares outstanding

-

-

Common stock, $0.001 par value. Authorized 250,000,000 shares; issued and outstanding - 134,657,087 shares at September 30, 2012 and 110,786,183 shares at December 31, 2011

134,657

110,786

Additional paid in capital

1,280,769,604

1,055,255,776

Distributions in excess of net income

(234,264,221

)

(214,058,258

)

Accumulated other comprehensive income (loss)

(13,219,965

)

(12,230,807

)

Treasury shares, at cost

(262,343

)

(262,343

)

Total Equity

1,033,157,732

828,815,154

Total Liabilities and Equity

$

2,158,399,282

$

1,621,873,719

(A) Financials have been derived from the prior year audited financials.

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30, 2012

September 30, 2011

September 30, 2012

September 30, 2011

(A)

(A)

Revenues

Rent billed

$

31,083,000

$

27,760,422

$

93,100,167

$

81,085,771

Straight-line rent

2,762,061

1,643,058

5,472,683

5,318,318

Income from direct financing leases

5,773,138

-

12,979,142

-

Interest and fee income

14,037,030

5,228,641

33,485,602

15,713,384

Total revenues

53,655,229

34,632,121

145,037,594

102,117,473

Expenses

Real estate depreciation and amortization

8,491,249

7,700,565

25,392,047

22,508,942

Property-related

218,429

260,611

1,044,055

346,947

Acquisition expenses

410,426

529,880

4,114,696

3,185,933

General and administrative

7,052,618

5,736,691

21,341,288

20,429,007

Total operating expenses

16,172,722

14,227,747

51,892,086

46,470,829

Operating income

37,482,507

20,404,374

93,145,508

55,646,644

Other income (expense)

Interest and other income (expense)

(23,266

)

41,951

(54,987

)

(12,941

)

Earnings from equity and other interests

1,064,730

9,276

1,943,816

70,392

Debt refinancing costs

-

(10,425,037

)

-

(14,214,036

)

Interest expense

(15,045,519

)

(11,934,770

)

(42,730,146

)

(32,460,144

)

Net other expense

(14,004,055

)

(22,308,580

)

(40,841,317

)

(46,616,729

)

Income (loss) from continuing operations

23,478,452

(1,904,206

)

52,304,191

9,029,915

Income from discontinued operations

8,028,444

2,371,520

9,169,366

4,944,434

Net income

31,506,896

467,314

61,473,557

13,974,349

Net income attributable to non-controlling interests

(43,300

)

(42,749

)

(129,822

)

(130,534

)

Net income attributable to MPT common stockholders

$

31,463,596

$

424,565

$

61,343,735

$

13,843,815

Earnings per common share - basic and diluted:

Income (loss) from continuing operations

$

0.17

$

(0.02

)

$

0.39

$

0.07

Income from discontinued operations

0.06

0.02

0.07

0.05

Net income attributable to MPT common stockholders

$

0.23

$

-

$

0.46

$

0.12

Dividends declared per common share

$

0.20

$

0.20

$

0.60

$

0.60

.

Weighted average shares outstanding - basic

134,780,992

110,713,843

131,467,285

110,567,618

Weighted average shares outstanding - diluted

134,781,577

110,719,144

131,467,480

110,575,784