Medical Properties Trust, Inc. Reports Fourth Quarter Results
Per Share Normalized FFO of
Completes Balance Sheet Restructuring with New Credit Facility
“In 2016 and through the early days of 2017, MPT achieved all of the
operational goals we set early in the year,” said
“In the fourth quarter, we added Steward Health Care to our portfolio of 247 hospitals. Forward-thinking operators, such as Steward, have proven their ability to effectively navigate the changing landscape of healthcare and profitably provide quality care to their patients, especially during times of dramatically changing hospital environments such as the implementation of – and now the unwinding of – the Affordable Care Act. We see significant acquisition opportunities ahead as operators with proven healthcare delivery models look to expand into new markets with the assistance of MPT.”
FOURTH QUARTER AND RECENT HIGHLIGHTS
-
Normalized Funds from Operations (“FFO”) per diluted share was
$0.31 in the fourth quarter compared with$0.35 in fourth quarter of 2015; -
On a full year basis 2016’s Normalized FFO per share increased to
$1.28 compared to$1.26 per diluted share in 2015, an increase even in a year of significant asset sales; -
Acquisitions reported in 2016 totaled approximately
$1.8 billion , continuing the trajectory of highly and immediately accretive growth, compared to approximately$1.7 billion in 2015 and$1.4 billion in 2014; -
Completed the previously announced acquisition of real estate
interests in nine Steward Health Care hospitals in early October for a
total investment of
$1.25 billion ; -
Completed acquisitions of 12 post-acute hospitals to be operated by
MEDIAN and its affiliates in
Germany in the fourth quarter for a total investment of approximately$90 million as part of previously announced acquisitions aggregating$282 million (based on recent exchange rates); -
Completed a new
$1.7 billion senior unsecured credit facility with improved pricing in earlyFebruary 2017 ; includes a$1.3 billion senior unsecured revolving credit facility, a$200 million senior unsecured term loan, and a €200 million senior unsecured term loan; -
Gave redemption notice for €200 million 5.750% Senior Notes due 2020
to be redeemed with funds from the €200 million senior unsecured term
loan included in the new
$1.7 billion credit facility and cash on hand.
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 2015 results.
PORTFOLIO UPDATE
During and after the fourth quarter, MPT made investments in hospital
real estate totaling approximately
As of
The Company has pro forma total gross assets of approximately
OPERATING RESULTS AND OUTLOOK
Normalized FFO for the fourth quarter increased 22% to
For the twelve months ended
Fourth quarter 2016 total revenues increased 17% to
Net income for the fourth quarter of 2016 was
The Company reaffirms 2017 Normalized FFO guidance between
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, change in accounting principles, interest rate hedging activities, write-offs of straight-line rent or other non-recurring or unplanned transactions. These estimates may change when the Company acquires or sells assets, market interest rates change, debt is refinanced, new shares are issued, additional debt is incurred, 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
A telephone and webcast replay of the call will be available beginning
shortly after the call’s completion through
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
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 to, and the timely
closing (if at all) of pending transactions; net income per share;
Normalized FFO per share; the amount of acquisitions of healthcare real
estate, if any; results from the potential sales, if any, of assets;
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 certain hospital
operations 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
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES | ||||||||||||||
Consolidated Balance Sheets | ||||||||||||||
(Amounts in thousands, except for per share data) | December 31, 2016 | December 31, 2015 | ||||||||||||
Assets | (Unaudited) | (A) | ||||||||||||
Real estate assets | ||||||||||||||
Land, buildings and improvements, intangible lease assets, and other | $ | 4,317,866 | $ | 3,297,705 | ||||||||||
Net investment in direct financing leases | 648,102 | 626,996 | ||||||||||||
Mortgage loans | 1,060,400 | 757,581 | ||||||||||||
Gross investment in real estate assets | 6,026,368 | 4,682,282 | ||||||||||||
Accumulated depreciation and amortization | (325,125 | ) | (257,928 | ) | ||||||||||
Net investment in real estate assets | 5,701,243 | 4,424,354 | ||||||||||||
Cash and cash equivalents | 83,240 | 195,541 | ||||||||||||
Interest and rent receivables | 57,698 | 46,939 | ||||||||||||
Straight-line rent receivables | 116,861 | 82,155 | ||||||||||||
Other assets | 459,494 | 860,362 | ||||||||||||
Total Assets | $ | 6,418,536 | $ | 5,609,351 | ||||||||||
Liabilities and Equity | ||||||||||||||
Liabilities | ||||||||||||||
Debt, net | $ | 2,909,341 | $ | 3,322,541 | ||||||||||
Accounts payable and accrued expenses | 207,711 | 137,356 | ||||||||||||
Deferred revenue | 19,933 | 29,358 | ||||||||||||
Lease deposits and other obligations to tenants | 28,323 | 12,831 | ||||||||||||
Total Liabilities | 3,165,308 | 3,502,086 | ||||||||||||
Equity | ||||||||||||||
Preferred stock, $0.001 par value. Authorized 10,000 shares; no shares outstanding |
- | - | ||||||||||||
Common stock, $0.001 par value. Authorized 500,000 shares; issued and outstanding - 320,514 shares at December 31, 2016 and 236,744 shares at December 31, 2015 |
321 | 237 | ||||||||||||
Additional paid-in capital | 3,775,336 | 2,593,827 | ||||||||||||
Distributions in excess of net income | (434,114 | ) | (418,650 | ) | ||||||||||
Accumulated other comprehensive loss | (92,903 | ) | (72,884 | ) | ||||||||||
Treasury shares, at cost | (262 | ) | (262 | ) | ||||||||||
Total Medical Properties Trust, Inc. Stockholders' Equity | 3,248,378 | 2,102,268 | ||||||||||||
Non-controlling interests | 4,850 | 4,997 | ||||||||||||
Total Equity | 3,253,228 | 2,107,265 | ||||||||||||
Total Liabilities and Equity | $ | 6,418,536 | $ | 5,609,351 | ||||||||||
(A) Financials have been derived from the prior year audited financial statements. |
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES | ||||||||||||||||||||||||
Consolidated Statements of Income | ||||||||||||||||||||||||
(Amounts in thousands, except for per share data) | For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||||||||
December 31, 2016 | December 31, 2015 | December 31, 2016 | December 31, 2015 | |||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (A) | |||||||||||||||||||||
Revenues | ||||||||||||||||||||||||
Rent billed | $ | 92,861 | $ | 70,253 | $ | 327,269 | $ | 247,604 | ||||||||||||||||
Straight-line rent | 14,558 | 8,372 | 41,067 | 23,375 | ||||||||||||||||||||
Income from direct financing leases | 17,126 | 18,660 | 64,307 | 58,715 | ||||||||||||||||||||
Interest and fee income | 28,738 | 34,261 | 108,494 | 112,184 | ||||||||||||||||||||
Total revenues | 153,283 | 131,546 | 541,137 | 441,878 | ||||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Real estate depreciation and amortization | 26,524 | 20,140 | 94,374 | 69,867 | ||||||||||||||||||||
Impairment charges | (66 | ) | - | 7,229 | - | |||||||||||||||||||
Property-related | 1,120 | 1,184 | 2,712 | 3,792 | ||||||||||||||||||||
Acquisition expenses | 39,894 | 4,345 | 46,273 | 61,342 | ||||||||||||||||||||
General and administrative | 13,090 | 11,314 | 48,911 | 43,639 | ||||||||||||||||||||
Total operating expenses | 80,562 | 36,983 | 199,499 | 178,640 | ||||||||||||||||||||
Operating income | 72,721 | 94,563 | 341,638 | 263,238 | ||||||||||||||||||||
Interest expense | (38,465 | ) | (35,923 | ) | (159,597 | ) | (120,884 | ) | ||||||||||||||||
Gain (loss) on sale of real estate and other asset dispositions, net | (70 | ) | - | 61,224 | 3,268 | |||||||||||||||||||
Unutilized financing fees/debt refinancing costs | - | (48 | ) | (22,539 | ) | (4,367 | ) | |||||||||||||||||
Other income (expense) | 1,056 | 230 | (1,618 | ) | 175 | |||||||||||||||||||
Income tax benefit (expense) | 8,003 | (484 | ) | 6,830 | (1,503 | ) | ||||||||||||||||||
Income from continuing operations | 43,245 | 58,338 | 225,938 | 139,927 | ||||||||||||||||||||
Loss from discontinued operations | - | - | (1 | ) | - | |||||||||||||||||||
Net income | 43,245 | 58,338 | 225,937 | 139,927 | ||||||||||||||||||||
Net income attributable to non-controlling interests | (206 | ) | (100 | ) | (889 | ) | (329 | ) | ||||||||||||||||
Net income attributable to MPT common stockholders | $ | 43,039 | $ | 58,238 | $ | 225,048 | $ | 139,598 | ||||||||||||||||
Earnings per common share - basic: | ||||||||||||||||||||||||
Income from continuing operations | $ | 0.13 | $ | 0.24 | $ | 0.86 | $ | 0.64 | ||||||||||||||||
Loss from discontinued operations | - | - | - | - | ||||||||||||||||||||
Net income attributable to MPT common stockholders | $ | 0.13 | $ | 0.24 | $ | 0.86 | $ | 0.64 | ||||||||||||||||
Earnings per common share - diluted: | ||||||||||||||||||||||||
Income from continuing operations | $ | 0.13 | $ | 0.24 | $ | 0.86 | $ | 0.63 | ||||||||||||||||
Loss from discontinued operations | - | - | - | - | ||||||||||||||||||||
Net income attributable to MPT common stockholders | $ | 0.13 | $ | 0.24 | $ | 0.86 | $ | 0.63 | ||||||||||||||||
Dividends declared per common share | $ | 0.23 | $ | 0.22 | $ | 0.91 | $ | 0.88 | ||||||||||||||||
Weighted average shares outstanding - basic | 319,833 | 237,011 | 260,414 | 217,997 | ||||||||||||||||||||
Weighted average shares outstanding - diluted | 319,994 | 237,011 | 261,072 | 218,304 | ||||||||||||||||||||
(A) Financials have been derived from the prior year audited financial statements. |
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES | |||||||||||||||||||||
Reconciliation of Net Income to Funds From Operations | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
(Amounts in thousands, except for per share data) | For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||||||
December 31, 2016 | December 31, 2015 | December 31, 2016 | December 31, 2015 | ||||||||||||||||||
FFO information: | |||||||||||||||||||||
Net income attributable to MPT common stockholders | $ | 43,039 | $ | 58,238 | $ | 225,048 | $ | 139,598 | |||||||||||||
Participating securities' share in earnings | (129 | ) | (248 | ) | (559 | ) | (1,029 | ) | |||||||||||||
Net income, less participating securities' share in earnings | $ | 42,910 | $ | 57,990 | $ | 224,489 | $ | 138,569 | |||||||||||||
Depreciation and amortization (A) | 26,976 | 20,140 | 96,157 | 69,867 | |||||||||||||||||
Gain on sale of real estate | - | - | (67,168 | ) | (3,268 | ) | |||||||||||||||
Funds from operations | $ | 69,886 | $ | 78,130 | $ | 253,478 | $ | 205,168 | |||||||||||||
Write-off of straight line rent and other | - | - | 3,063 | 3,928 | |||||||||||||||||
Transaction costs from non-real estate dispositions | 70 | - | 5,944 | - | |||||||||||||||||
Acquisition expenses, net of tax benefit (A) | 34,806 | 4,345 | 46,529 | 61,342 | |||||||||||||||||
Release of valuation allowance | (3,956 | ) | - | (3,956 | ) | - | |||||||||||||||
Impairment charges | (66 | ) | - | 7,229 | - | ||||||||||||||||
Unutilized financing fees / debt refinancing costs | - | 48 | 22,539 | 4,367 | |||||||||||||||||
Normalized funds from operations | $ | 100,740 | $ | 82,523 | $ | 334,826 | $ | 274,805 | |||||||||||||
Share-based compensation | 2,111 | 2,521 | 7,942 | 10,237 | |||||||||||||||||
Debt costs amortization | 1,814 | 1,792 | 7,613 | 6,085 | |||||||||||||||||
Additional rent received in advance (B) | (300 | ) | (300 | ) | (1,200 | ) | (1,200 | ) | |||||||||||||
Straight-line rent revenue and other | (16,921 | ) | (11,118 | ) | (50,687 | ) | (34,218 | ) | |||||||||||||
Adjusted funds from operations | $ | 87,444 | $ | 75,418 | $ | 298,494 | $ | 255,709 | |||||||||||||
Per diluted share data: | |||||||||||||||||||||
Net income, less participating securities' share in earnings | $ | 0.13 | $ | 0.24 | $ | 0.86 | $ | 0.63 | |||||||||||||
Depreciation and amortization (A) | 0.09 | 0.09 | 0.37 | 0.32 | |||||||||||||||||
Gain on sale of real estate | - | - | (0.26 | ) | (0.01 | ) | |||||||||||||||
Funds from operations | $ | 0.22 | $ | 0.33 | $ | 0.97 | $ | 0.94 | |||||||||||||
Write-off of straight line rent and other | - | - | 0.01 | 0.02 | |||||||||||||||||
Transaction costs from non-real estate dispositions | - | - | 0.02 | - | |||||||||||||||||
Acquisition expenses, net of tax benefit (A) | 0.11 | 0.02 | 0.18 | 0.28 | |||||||||||||||||
Release of valuation allowance | (0.02 | ) | - | (0.02 | ) | - | |||||||||||||||
Impairment charges | - | - | 0.03 | - | |||||||||||||||||
Unutilized financing fees / debt refinancing costs | - | - | 0.09 | 0.02 | |||||||||||||||||
Normalized funds from operations | $ | 0.31 | $ | 0.35 | $ | 1.28 | $ | 1.26 | |||||||||||||
Share-based compensation | 0.01 | 0.01 | 0.03 | 0.05 | |||||||||||||||||
Debt costs amortization | 0.01 | 0.01 | 0.02 | 0.03 | |||||||||||||||||
Additional rent received in advance (B) | - | - | - | (0.01 | ) | ||||||||||||||||
Straight-line rent revenue and other | (0.06 | ) | (0.05 | ) | (0.19 | ) | (0.16 | ) | |||||||||||||
Adjusted funds from operations | $ | 0.27 | $ | 0.32 | $ | 1.14 | $ | 1.17 | |||||||||||||
(A) In 2016, this includes our share of real estate depreciation and acquisition expenses from unconsolidated joint ventures (if any). Any such amounts are included with the activity of all of our equity interests in the "Other income (expense)" line on the consolidated statements of income. |
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(B) Represents additional rent received 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. |
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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. |
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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. |
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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. |
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES | ||||||||
Fiscal Year 2017 Guidance Reconciliation | ||||||||
(Unaudited) | ||||||||
Fiscal Year 2017 Guidance - Per Share(1) | ||||||||
Low | High | |||||||
Net income attributable to MPT common stockholders |
$ 0.97 |
$ 1.03 |
||||||
Participating securities' share in earnings | - | - | ||||||
Net income, less participating securities' share in earnings |
$ 0.97 |
$ 1.03 |
||||||
Depreciation and amortization | 0.34 |
0.34 |
||||||
Funds from operations |
$ 1.31 |
$ 1.37 | ||||||
Other adjustments(2) |
0.04 |
0.03 |
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Normalized funds from operations | $ 1.35 | $ 1.40 | ||||||
(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 Securities and Exchange Commission for a discussion of risk factors that affect our performance. |
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(2) Includes acquisition expenses, write-off of straight line rent, transaction costs from non-real estate dispositions, impairment charges, unutilized fees/debt refinancing costs, and other. |
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View source version on businesswire.com: http://www.businesswire.com/news/home/20170209005713/en/
Source:
Medical Properties Trust, Inc.
Tim Berryman, 205-969-3755
Director
– Investor Relations
tberryman@medicalpropertiestrust.com