Medical Properties Trust, Inc. Reports 39% Increase in Normalized FFO Per Share in First Quarter 2013 Net Income Increases 148% Over 2012’s First Quarter Business Wire BIRMINGHAM, Ala. -- April 26, 2013 Medical Properties Trust, Inc. (the “Company”) (NYSE: MPW) today announced financial and operating results for the first quarter ended March 31, 2013. FIRST QUARTER AND RECENT HIGHLIGHTS *Achieved first quarter Normalized Funds from Operations (“FFO”) per diluted share of $0.25, up 39% compared with $0.18 per diluted share reported in the first quarter of 2012; *Issued 12,650,000 shares of stock for $14.25 per share reflecting an increase of 46% in value over the prior share offering in February 2012; *Further strengthened balance sheet with nearly $500 million in liquidity for near-term acquisitions; *Paid 2013 first quarter cash dividend of $0.20 per share, resulting in a dividend payout ratio of a very well-covered 80% of Normalized FFO; and *Subsequent to the first quarter, sold two long-term acute care hospitals, for an expected gain of approximately $2.1 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 AFFO, all on a comparable basis to 2012 periods. “Medical Properties Trust remains the only healthcare REIT focused exclusively on funding hospitals and other related facilities, and our first quarter results demonstrate the power of this strategy,” said Edward K. Aldag, Jr., Chairman, President and CEO of Medical Properties Trust. “Over the past 10 years, we have invested approximately $3.0 billion in 101 transactions with an average first year cap rate of approximately 10%. Recently, we have delivered four consecutive quarters of year-over-year normalized FFO per share growth as well as a strong, stable and well-covered dividend. During the first quarter we raised $173 million through an offering of 12.65 million common shares, which, when combined with our revolving credit facility, provides us with nearly $500 million in immediately available resources to continue to acquire hospital real estate with double digit long-term returns. We are delighted with our results and look forward to continued success.” OPERATING RESULTS First quarter 2013 total revenues increased 42% to $58.4 million compared with $41.3 million for the first quarter of 2012. Normalized FFO for the quarter increased 55% to $34.8 million compared with $22.5 million in the first quarter of 2012. Per share Normalized FFO increased 39% to $0.25 per diluted share in the 2013 first quarter, compared with $0.18 per diluted share in the first quarter of 2012. Net income for the first quarter of 2013 was $26.2 million (or $0.18 per diluted share) compared with net income of $10.6 million (or $0.08 per diluted share) in the first quarter of 2012. PORTFOLIO UPDATE AND FUTURE OUTLOOK Since January 1, 2013, the Company has agreed to fund the construction of a rehabilitation hospital in Post Falls, ID for $14.4 million. In addition, in April 2013 the Company sold two long-term acute care hospitals in Arizona and Texas where leases had expired to their operators for total proceeds of $18.5 million. The Company expects to realize a gain on these two sales of approximately $2.1 million in the second quarter of 2013 and estimates that its investment in these two properties generated an unlevered internal rate of return of 10.3%. There are no other lease expirations in 2013. At March 31, 2013, the Company had total real estate and related investments of approximately $2.1 billion comprised of 83 healthcare properties in 25 states leased or loaned to 24 hospital operating companies. The Company continues to believe that acquisition volume and timing, along with current capital market conditions, will generate Normalized FFO per share in 2013 of $1.10. Guidance estimates do not include the effects, if any, of real estate operating costs, litigation costs, debt refinancing costs, acquisition costs, 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 Friday, April 26, 2013 at 11:00 a.m. Eastern Time to present the Company’s financial and operating results for the quarter ended March 31, 2013. The dial-in telephone numbers for the conference call 866-515-2910 (U.S.) and 617-399-5124 (International); using passcode 53605329. 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 May 10, 2013. Telephone numbers for the replay are 888-286-8010 and 617-801-6888 for U.S. and International callers, respectively. The replay passcode is 36151225. 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. 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; 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 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, 2012, 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 March 31, 2013 December 31, 2012 Assets (Unaudited) (A) Real estate assets Land, buildings and improvements, $ 1,280,194,338 $ 1,242,375,982 and intangible lease assets Construction in progress and other 13,719,055 38,338,985 Net investment in direct financing 315,638,905 314,411,549 leases Mortgage loans 368,650,000 368,650,000 Gross investment in real estate 1,978,202,298 1,963,776,516 assets Accumulated depreciation and (135,380,788 ) (126,733,639 ) amortization Net investment in real estate assets 1,842,821,510 1,837,042,877 Cash and cash equivalents 75,675,211 37,311,207 Interest and rent receivable 49,838,480 47,586,709 Straight-line rent receivable 38,560,795 35,859,703 Other assets 220,299,834 221,085,156 Total Assets $ 2,227,195,830 $ 2,178,885,652 Liabilities and Equity Liabilities Debt, net $ 900,133,586 $ 1,025,159,854 Accounts payable and accrued 65,620,577 65,960,792 expenses Deferred revenue 19,384,238 20,609,467 Lease deposits and other obligations 20,487,269 17,341,694 to tenants Total liabilities 1,005,625,670 1,129,071,807 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 - 149,141,049 149,141 136,336 shares at March 31, 2013 and 136,335,427 shares at December 31, 2012 Additional paid in capital 1,470,736,814 1,295,916,192 Distributions in excess of net (237,398,195 ) (233,494,130 ) income Accumulated other comprehensive (11,655,257 ) (12,482,210 ) income (loss) Treasury shares, at cost (262,343 ) (262,343 ) Total Equity 1,221,570,160 1,049,813,845 Total Liabilities and Equity $ 2,227,195,830 $ 2,178,885,652 (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 March 31, 2013 March 31, 2012 (A) Revenues Rent billed $ 32,306,305 $ 30,151,892 Straight-line rent 2,660,994 1,359,093 Income from direct 8,756,471 1,835,161 financing leases Interest and fee income 14,716,820 7,921,420 Total revenues 58,440,590 41,267,566 Expenses Real estate depreciation 8,647,150 8,293,131 and amortization Property-related 415,339 227,270 Acquisition expenses 190,549 3,425,012 General and 7,818,196 7,591,555 administrative Total operating expenses 17,071,234 19,536,968 Operating income 41,369,356 21,730,598 Interest and other (15,157,366 ) (12,811,119 ) income (expense) Income from continuing 26,211,990 8,919,479 operations Income (loss) from (1,865 ) 1,686,749 discontinued operations Net income 26,210,125 10,606,228 Net income attributable to non-controlling (53,633 ) (42,358 ) interests Net income attributable to MPT common $ 26,156,492 $ 10,563,870 stockholders Earnings per common share - basic : Income from continuing $ 0.19 $ 0.07 operations Income from discontinued - 0.01 operations Net income attributable to MPT common $ 0.19 $ 0.08 stockholders Earnings per common share - diluted: Income from continuing $ 0.18 $ 0.07 operations Income from discontinued - 0.01 operations Net income attributable to MPT common $ 0.18 $ 0.08 stockholders Dividends declared per $ 0.20 $ 0.20 common share . Weighted average shares 140,346,579 124,906,358 outstanding - basic Weighted average shares 141,526,311 124,906,358 outstanding - diluted (A) Financials have been restated to reclass the operating results of certain properties sold in 2012 to discontinued operations. MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES Reconciliation of Net Income to Funds From Operations (Unaudited) For the Three Months Ended March 31, 2013 March 31, 2012 (A) FFO information: Net income attributable to MPT common $ 26,156,492 $ 10,563,870 stockholders Participating securities' share in (193,062 ) (251,867 ) earnings Net income, less participating $ 25,963,430 $ 10,312,003 securities' share in earnings Depreciation and amortization: Continuing operations 8,647,150 8,293,131 Discontinued operations - 453,342 Funds from operations $ 34,610,580 $ 19,058,476 Acquisition costs 190,549 3,425,012 Normalized funds from $ 34,801,129 $ 22,483,488 operations Share-based 1,918,855 1,858,456 compensation Debt costs amortization 896,732 855,382 Additional rent (300,000 ) (300,000 ) received in advance (B) Straight-line rent (3,892,628 ) (1,733,696 ) revenue and other Adjusted funds from $ 33,424,088 $ 23,163,630 operations Per diluted share data: Net income, less participating $ 0.18 $ 0.08 securities' share in earnings Depreciation and amortization: Continuing operations 0.06 0.07 Discontinued operations - - Funds from operations $ 0.24 $ 0.15 Acquisition costs 0.01 0.03 Normalized funds from $ 0.25 $ 0.18 operations Share-based 0.01 0.01 compensation Debt costs amortization 0.01 0.01 Additional rent - - received in advance (B) Straight-line rent (0.03 ) (0.01 ) revenue and other Adjusted funds from $ 0.24 $ 0.19 operations (A) Financials have been restated to reclass the operating results of certain properties sold in 2012 to discontinued operations. (B) 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. Contact: Medical Properties Trust, Inc. Charles Lambert, 205-397-8897 Managing Director – Capital Markets firstname.lastname@example.org
Medical Properties Trust, Inc. Reports 39% Increase in Normalized FFO Per Share in First Quarter 2013
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