EX-99.1 2 d872986dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

 

  

Contact: Tim Berryman

Director – Investor Relations

Medical Properties Trust, Inc.

(205) 397-8589

tberryman@medicalpropertiestrust.com

MEDICAL PROPERTIES TRUST, INC. GROWS FOURTH QUARTER NORMALIZED FFO BY 17% YEAR-OVER-YEAR TO $0.28 PER SHARE

GROWS REVENUE AND TOTAL ASSETS 29% FOR FULL YEAR 2014

Birmingham, AL – February 12, 2015 – Medical Properties Trust, Inc. (the “Company” or “MPT”) (NYSE: MPW) today announced financial and operating results for the fourth quarter ended December 31, 2014.

FOURTH QUARTER AND RECENT HIGHLIGHTS

 

    Normalized Funds from Operations (“FFO”) per diluted share was $0.28 in the fourth quarter, up 17% compared with $0.24 per diluted share in the fourth quarter of 2013;

 

    2014 Normalized FFO per diluted share grew 10% to $1.06 compared with 2013;

 

    Acquisitions committed to or completed in 2014 totaled approximately $1.4 billion compared with approximately $700 million in 2013 and $800 million in 2012;

 

    Completed the acquisition, with Waterland Private Equity, of MEDIAN Kliniken Group, and initiated the purchase and leaseback process of its 40 rehabilitation and acute care hospitals;

 

    Received an upgrade on the Company’s Senior Notes to the investment grade rating of BBB- from BB from Standard & Poor’s Rating Services and an upgrade to the corporate credit rating to BB+ with a stable outlook from BB;

 

    Issued 34.5 million shares of common stock in early January at a public offering price of $14.50 for net proceeds of approximately $480 million.

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 Adjusted Funds from Operations (“AFFO”), all on a basis comparable to 2013 periods.

 

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“This was a monumental year for MPT as we eclipsed the billion dollar mark in acquisitions for the first time in our 10-year history and strategically expanded and further diversified our portfolio with our investments in Germany,” said Edward K. Aldag, Jr., Chairman, President and CEO of Medical Properties Trust. “MPT is among the top five U.S. for-profit owners of hospital beds and the successful completion of nearly $1.4 billion in acquisitions was a tremendous accomplishment by our organization. We will continue to leverage our hospital expertise to achieve future growth in the U.S. and Western Europe.”

OPERATING RESULTS

Normalized FFO for the fourth quarter of 2014 increased 26% to $48.0 million compared with $38.1 million in the fourth quarter of 2013. Per share Normalized FFO increased 17% to $0.28 per diluted share in the fourth quarter of 2014 compared with $0.24 per diluted share in the fourth quarter of 2013.

For the twelve months ended December 31, 2014, Normalized FFO increased 23% to $181.7 million from $147.2 million in 2013. On a per diluted share basis, Normalized FFO increased 10% in 2014 to $1.06 per diluted share from $0.96 per diluted share in 2013.

Fourth quarter 2014 total revenues increased 21% to $82.1 million compared with $67.7 million for the fourth quarter of 2013. Revenue for the twelve months ended December 31, 2014 increased 29% to $312.5 million from $242.5 million in 2013.

Net income for the fourth quarter of 2014 was $14.9 million (or $0.08 per diluted share) down from net income of $17.8 million (or $0.11 per diluted share) in the fourth quarter of 2013 primarily due to acquisition expenses related to the Median acquisition. Net income for the twelve months ended December 31, 2014 was $50.5 million (or $0.29 per diluted share) compared with net income of $97.0 million (or $0.63 per diluted share) in 2013. Net income in 2014 includes previously disclosed impairments of $50.1 million, a negative impact of $0.30 per diluted share, related to Monroe Hospital in Bloomington, Indiana and Bucks County Hospital in Pennsylvania along with higher acquisition expenses.

PORTFOLIO UPDATE AND OUTLOOK

As of December 31, 2014, the Company had total real estate and related investments of approximately $3.6 billion consisting of 132 properties in 27 states and in Germany and the United Kingdom. The properties are leased to or mortgaged by 27 hospital operating companies. Including completion of development commitments and the pending MEDIAN acquisitions, the Company projects total real estate and related investments of approximately $4.1 billion comprising more than 172 healthcare properties.

Based solely on the completed acquisitions, development commitments, and pending MEDIAN transactions, per share Normalized FFO is expected to grow to between approximately $1.21 and $1.27 on an annual run-rate basis. In addition, MPT expects to continue to invest in similarly accretive hospital real estate in 2015, and any impact to FFO is not included in the annual run rate provided herein.

 

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These estimates do not include the effects, if any, of real estate operating costs, 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. These estimates will change if the Company acquires assets totaling more or less than its expectations, the timing of acquisitions varies from expectations, capitalization rates vary from expectations, 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.

CONFERENCE CALL AND WEBCAST

The Company has scheduled a conference call and webcast for Thursday, February 12, 2015 at 11:00 a.m. Eastern Time to present the Company’s financial and operating results for the quarter ended December 31, 2014. The dial-in numbers for the conference call are 866-825-1709 (U.S.) and 617-213-8060 (international); both numbers require passcode 76141494. 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 February 26, 2015. Dial-in numbers for the replay are 888-286-8010 and 617-801-6888 for U.S. and International callers, respectively. The replay passcode for both U.S. and international callers is 60979641.

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. MPT’s financing model allows hospitals and other healthcare facilities to unlock the value of their underlying real estate in order to fund facility improvements, technology upgrades, staff additions and new construction. 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

 

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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 the Median sale-leaseback transactions; the Company financing of the transactions described herein; the capacity of Median and the Company’s other 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; capital markets conditions, 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 arrangement, 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 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, 2013, 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.

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MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

 

     December 31, 2014     December 31, 2013  
     (Unaudited)     (A)  

Assets

    

Real estate assets

    

Land, buildings and improvements, and intangible lease assets

   $ 2,149,611,503      $ 1,823,683,129   

Construction in progress and other

     23,162,924        41,771,499   

Net investment in direct financing leases

     439,516,173        431,024,228   

Mortgage loans

     397,593,819        388,756,469   
  

 

 

   

 

 

 

Gross investment in real estate assets

     3,009,884,419        2,685,235,325   

Accumulated depreciation and amortization

     (202,627,286     (159,776,091
  

 

 

   

 

 

 

Net investment in real estate assets

     2,807,257,133        2,525,459,234   

Cash and cash equivalents

     144,541,257        45,979,648   

Interest and rent receivable

     41,136,306        58,565,294   

Straight-line rent receivable

     59,127,947        45,828,685   

Other assets

     695,273,179        228,862,582   
  

 

 

   

 

 

 

Total Assets

   $ 3,747,335,822      $ 2,904,695,443   
  

 

 

   

 

 

 

Liabilities and Equity

    

Liabilities

    

Debt, net

   $ 2,201,654,334      $ 1,421,680,749   

Accounts payable and accrued expenses

     112,623,187        94,289,615   

Deferred revenue

     27,206,612        24,114,374   

Lease deposits and other obligations to tenants

     23,804,458        20,402,058   
  

 

 

   

 

 

 

Total liabilities

     2,365,288,591        1,560,486,796   

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 — 172,743,348 shares at December 31, 2014 and 161,309,725 shares at December 31, 2013

     172,743        161,310   

Additional paid in capital

     1,765,380,949        1,618,054,133   

Distributions in excess of net income

     (361,330,051     (264,803,804

Accumulated other comprehensive income (loss)

     (21,914,067     (8,940,649

Treasury shares, at cost

     (262,343     (262,343
  

 

 

   

 

 

 

Total Equity

     1,382,047,231        1,344,208,647   
  

 

 

   

 

 

 

Total Liabilities and Equity

   $ 3,747,335,822      $ 2,904,695,443   
  

 

 

   

 

 

 

 

(A) Financials have been derived from the prior year audited financials and include certain minor reclasses to be consistent with the 2014 presentation.


MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Consolidated Statements of Income

 

     For the Three Months Ended     For the Twelve Months Ended  
     December 31, 2014     December 31, 2013     December 31, 2014     December 31, 2013  
     (unaudited)     (A)     (unaudited)     (A)  

Revenues

        

Rent billed

   $ 50,065,768      $ 38,520,039      $ 187,018,147      $ 132,578,216   

Straight-line rent

     2,858,620        2,474,148        13,507,120        10,705,792   

Income from direct financing leases

     12,367,929        11,545,956        49,154,786        40,830,388   

Interest and fee income

     16,813,085        15,139,342        62,851,590        58,409,167   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

  82,105,402      67,679,485      312,531,643      242,523,563   

Expenses

Real estate depreciation and amortization

  14,452,563      11,151,338      53,937,810      36,977,724   

Impairment charges

  —        —        50,127,895      —     

Property-related

  449,926      934,118      1,850,659      2,450,521   

Acquisition expenses (B)

  18,455,684      13,036,440      26,388,957      19,493,657   

General and administrative

  11,437,880      8,901,727      37,274,269      30,063,409   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

  44,796,053      34,023,623      169,579,590      88,985,311   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

  37,309,349      33,655,862      142,952,053      153,538,252   

Interest and other income (expense)

  (22,171,124   (19,881,506   (91,813,437   (63,511,002

Income tax (expense) benefit

  (108,407   (464,219   (340,368   (725,707
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

  15,029,818      13,310,137      50,798,248      89,301,543   

Income from discontinued operations

  (320   4,587,686      (1,820   7,913,867   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

  15,029,498      17,897,823      50,796,428      97,215,410   

Net income attributable to non-controlling interests

  (81,779   (59,083   (273,701   (224,300
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to MPT common stockholders

$ 14,947,719    $ 17,838,740    $ 50,522,727    $ 96,991,110   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share — basic:

Income from continuing operations

$ 0.08    $ 0.08    $ 0.29    $ 0.59   

Income from discontinued operations

  —        0.03      —        0.05   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to MPT common stockholders

$ 0.08    $ 0.11    $ 0.29    $ 0.64   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per common share — diluted:

Income from continuing operations

$ 0.08    $ 0.08    $ 0.29    $ 0.58   

Income from discontinued operations

  —        0.03      —        0.05   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to MPT common stockholders

$ 0.08    $ 0.11    $ 0.29    $ 0.63   
  

 

 

   

 

 

   

 

 

   

 

 

 

Dividends declared per common share

$ 0.21    $ 0.21    $ 0.84    $ 0.81   

Weighted average shares outstanding — basic

  172,411,250      161,142,567      169,998,971      151,439,002   

Weighted average shares outstanding — diluted

  172,603,919      161,839,544      170,540,178      152,597,666   

 

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

 

(B) Includes $3.9 million and $5.8 million in real estate transfer taxes in the quarter and year ended December 31, 2014, respectively. Includes $12.0 million in real estate transfer taxes in the quarter and year ended December 31, 2013.


MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Reconciliation of Net Income to Funds From Operations

(Unaudited)

 

     For the Three Months Ended     For the Twelve Months Ended  
     December 31, 2014     December 31, 2013     December 31, 2014     December 31, 2013  

FFO information:

        

Net income attributable to MPT common stockholders

   $ 14,947,719      $ 17,838,740      $ 50,522,727      $ 96,991,110   

Participating securities’ share in earnings

     (310,807     (190,142     (894,604     (728,533
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income, less participating securities’ share in earnings

$ 14,636,912    $ 17,648,598    $ 49,628,123    $ 96,262,577   

Depreciation and amortization:

Continuing operations

  14,452,563      11,151,338      53,937,810      36,977,724   

Discontinued operations

  —        380,966      —        708,422   

Gain on sale of real estate

  (2,857,475   (5,605,087   (2,857,475   (7,659,316

Real estate impairment charge

  —        —        5,974,400      —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Funds from operations

$ 26,232,000    $ 23,575,815    $ 106,682,858    $ 126,289,407   

Write-off straight line rent

  1,867,389      1,457,235      2,817,727      1,457,235   

Acquisition costs

  18,455,684      13,036,440      26,388,957      19,493,657   

Unutilized financings fees / debt refinancing costs

  1,407,385      —        1,698,020      —     

Loan and other impairment charges

  —        —        44,153,495      —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Normalized funds from operations

$ 47,962,458    $ 38,069,490    $ 181,741,057    $ 147,240,299   

Share-based compensation

  2,515,745      2,812,906      8,694,224      8,832,006   

Debt costs amortization

  1,373,494      934,383      4,813,880      3,558,506   

Additional rent received in advance (A)

  (300,000   (300,000   (1,200,000   (1,200,000

Straight-line rent revenue and other

  (6,473,535   (4,673,544   (22,985,887   (17,039,339
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted funds from operations

$ 45,078,162    $ 36,843,235    $ 171,063,274    $ 141,391,472   
  

 

 

   

 

 

   

 

 

   

 

 

 

Per diluted share data:

Net income, less participating securities’ share in earnings

$ 0.08    $ 0.11    $ 0.29    $ 0.63   

Depreciation and amortization:

Continuing operations

  0.08      0.07      0.31      0.24   

Discontinued operations

  —        —        —        —     

Gain on sale of real estate

  (0.01   (0.03   (0.01   (0.04

Real estate impairment charge

  —        —        0.04      —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Funds from operations

$ 0.15    $ 0.15    $ 0.63    $ 0.83   

Write-off straight line rent

  0.01      0.01      0.02      0.01   

Acquisition costs

  0.11      0.08      0.15      0.12   

Unutilized financings fees / debt refinancing costs

  0.01      —        —        —     

Loan and other impairment charges

  —        —        0.26      —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Normalized funds from operations

$ 0.28    $ 0.24    $ 1.06    $ 0.96   

Share-based compensation

  0.01      0.02      0.05      0.06   

Debt costs amortization

  0.01      0.01      0.03      0.02   

Additional rent received in advance (A)

  —        (0.01   —        (0.01

Straight-line rent revenue and other

  (0.04   (0.03   (0.14   (0.10
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted funds from operations

$ 0.26    $ 0.23    $ 1.00    $ 0.93   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(A) Represents additional rent from one tenant in advance of when we can recognize as revenue for accounting purposes. This additional rent is being recorded to revenue on a straight-line basis over the lease life.

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.