News Release

Completes $861 Million of Acquisitions in the Fourth Quarter and Commences 2020 Growth with Additional $1.9 Billion in Accretive Investments

Fourth Quarter Per Share Net Income of $0.26 and Normalized FFO of $0.35

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Feb. 6, 2020-- Medical Properties Trust, Inc. (the “Company” or “MPT”) (NYSE: MPW) today announced financial and operating results for the fourth quarter and year ended December 31, 2019 and recent highlights.

“2019 was a year of incomparable growth and achievement for MPT,” said Edward K. Aldag, Jr., MPT’s Chairman, President and Chief Executive Officer. “We delivered a market leading 39% return to our shareholders and have now doubled our market capitalization to $11.8 billion to become one of the 30 largest REITs in the market. Since our IPO in 2005 we have delivered a total return of more than 554% to our shareholders comprised of cash dividends and increases in share value exceeding $6.6 billion – we created more than 40% of that value in 2019 alone, capping off a five year period during which, just like the IPO to date period, our total returns to shareholders led the Healthcare and Broad REIT indices at almost 115%,” continued Aldag.

In the fourth quarter alone, continuing the performance of the first nine months of 2019, MPT completed approximately $861 million in hospital acquisitions, including immediately accretive investments in the United States, Spain and Portugal, further improving the Company’s already diversified geographic footprint and creating strong relationships with key global operators. With more than $4.5 billion of acquisitions completed in 2019, MPT achieved 64% growth in assets year over year and now has an enterprise value exceeding $19 billion, up more than 90% over 2018. The blended GAAP capitalization rate for the $4.5 billion in 2019 acquisitions approximates 8.0%.

Aldag added, “While we are not prepared to predict 64% growth again, MPT has already started 2020 with completed acquisitions exceeding $1.9 billion and we are actively working a vibrant pipeline that exceeds $3.0 billion. We believe we are in the early stages of a rapidly developing market for hospital real estate transactions and MPT is the unquestioned global leader in these markets.” At the same time, MPT’s access to capital has continued to expand both in improved global pricing and expanded sources of debt and equity. “Our most recent transactions have resulted in initial cash investment spreads of between 3.0% and 4.0% - results that we do not see in other investment sectors.”

FOURTH QUARTER AND RECENT HIGHLIGHTS

• Per share net income of $0.26 and Normalized Funds from Operations (“NFFO”) of $0.35 in the fourth quarter, both on a per diluted share basis;
• Completed the acquisition of 10 acute care hospitals operated by LifePoint Health, Inc. in six U.S. states for an aggregate purchase price of approximately $700 million; a $31.0 million (€28.2 million) majority real estate interest in a hospital in Viseu, Portugal; substantial interest in joint ventures that own two premier Madrid hospitals for an aggregate investment of $130.0 million (€117.3 million); and commenced development of a $27.5 million unique behavioral hospital in the Houston, Texas area;
• Completed the highly profitable sale of two acute care hospitals, exiting a market and tenant relationship;
• Completed an inaugural Sterling bond issue with staggered maturities in December, raising £1.0 billion to provide financing for 2019 UK acquisitions and to pre-fund the January acquisition of 30 British hospitals; completed remaining purchase price funding in January with a £700 million unsecured term loan for a blended financing cost of less than 3.0%;
• Filed a $1.0 billion at-the-market equity program; and
• Issued 57.5 million shares of common stock for net proceeds of approximately $1.0 billion.

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 2018 results, and a reconciliation of pro forma total gross assets to total assets.

PORTFOLIO UPDATE

After completion of the most recent investments, Medical Properties Trust further extends its position as the global leader of hospital real estate investors. The Company has pro forma total gross assets of approximately $16.5 billion, including $13.5 billion in general acute care hospitals, $1.8 billion in inpatient rehabilitation hospitals, and $0.4 billion in long-term acute care hospitals. The pro forma portfolio includes 389 properties representing more than 41,000 licensed beds in 34 states and in Germany, the United Kingdom, Switzerland, Italy, Spain, Portugal and Australia. The properties are leased to or mortgaged by 41 hospital operating companies which include the following new relationships that were established in the fourth quarter.

In December, MPT made a 45% equity investment of approximately $130 million in the real estate of two high-quality acute care hospitals in Madrid. The hospitals are operated by HM Hospitales (“HM”), the third largest private operator in Spain, and the investment represents 301 licensed beds. It includes HM Hospital Sanchinarro, a 203-bed hospital facility that is ranked the #3 private hospital in Spain. The two hospitals are net-leased to HM with a 25-year initial term and annual escalators based on Spanish CPI, establishing a new relationship with a top operator in Spain’s consolidating hospital market.

In November, MPT acquired a newly-constructed 37-bed acute care hospital operated by Grupo José de Mello (“JDM”) in Viseu, Portugal, an affluent city in northern Portugal. JDM is Portugal’s largest private operator with 20 hospitals representing 1,570 licensed beds. The property was acquired subject to an in-place lease with 17 years remaining on its initial term, including annual rent escalations based on Portugal CPI. This transaction presents a unique opportunity to enter the attractive Portuguese healthcare market with a leading, growth-oriented hospital operator and provides MPT a platform for future growth.

In October, MPT agreed to provide a funding commitment of $27.5 million to NeuroPsychiatric Hospitals (“NPH”) for the development of a 92-bed facility in Clear Lake, Texas. NPH is headquartered in South Bend, Indiana and regarded as the largest neuropsychiatric care organization in the U.S. providing best-in-class care for patients with acute, complex medical and psychiatric conditions. NPH currently operates four facilities with 187 beds in the Greater Chicago/Northwest Indiana and Indianapolis markets and is well-positioned for near-term growth.

OPERATING RESULTS AND OUTLOOK

Net income for the fourth quarter and year ended December 31, 2019 was $130 million ($0.26 per diluted share), and $375 million ($0.87 per diluted share), respectively compared to $78 million ($0.21 per diluted share) and $1.02 billion ($2.76 per diluted share) in the year earlier periods.

NFFO for the fourth quarter and year ended December 31, 2019 was $171 million ($0.35 per diluted share), and $557 million ($1.30 per diluted share), respectively compared to $112 million ($0.31 per diluted share) and $501 million ($1.37 per diluted share) in the year earlier periods. The year earlier period included gains on sales approximating $671 million.

The Company reaffirms an annual run rate of $1.24 to $1.27 per diluted share for net income and $1.65 to $1.68 per diluted share for NFFO based on all announced transactions and an assumed capital structure that results in a net debt to EBITDA ratio of approximately 5.5 times.

These estimates do not include the effects, if any, of unexpected real estate operating costs, changes in accounting pronouncements, 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 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 our equity investments vary from expectations, or existing leases do not perform in accordance with their terms.

Aldag concluded by announcing the promotion of a long-time MPT employee. “I would like to take this opportunity to announce that Luke Savage has been added to the executive team. Luke has recently been appointed Vice President. Luke has been with the company for 12 years and has led our international efforts since 2016. Luke is the senior officer in our Luxembourg office.”

CONFERENCE CALL AND WEBCAST

The Company has scheduled a conference call and webcast for Thursday, February 6, 2020 at 11:00 a.m. Eastern Time to present the Company’s financial and operating results for the quarter ended December 31, 2019. The dial-in numbers for the conference call are 844-535-3969 (U.S. and Canada) and 409-937-8903 (International); both numbers require passcode 7760789. 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 20, 2020. Dial-in numbers for the replay are 855-859-2056 and 404-537-3406 for U.S./Canada and International callers, respectively. The replay passcode for all callers is 7760789.

The Company’s supplemental information package for the current period will also be available on the Company’s website in the Investor Relations section.

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 Birmingham, Alabama, the Company has grown to become one of the world’s largest owners of hospitals with 389 facilities and more than 41,000 licensed beds in eight countries and across three continents. MPT’s financing model facilitates acquisitions and recapitalizations and allows operators of hospitals to unlock the value of their real estate assets to fund facility improvements, technology upgrades and other investments in operations. 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 satisfaction of all conditions, and the timely closing (if at all) of the transactions described above; annual run-rate net income and NFFO per share; the amount of acquisitions of healthcare real estate, if any; results from potential sales and joint venture arrangements, if any; capital markets conditions; estimated leverage metrics; the repayment of debt arrangements; statements concerning the additional income to the Company as a result of ownership interests in equity investments and the timing of such income; the payment of future dividends, if any; completion of additional debt arrangements, 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 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, 2018 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200206005527/en/

Source: Medical Properties Trust, Inc.

Tim Berryman
Director – Investor Relations
Medical Properties Trust, Inc.
(205) 969-3755
tberryman@medicalpropertiestrust.com