UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 26, 2006

MEDICAL PROPERTIES TRUST, INC.

(Exact Name of Registrant as Specified in Charter)

Commission File Number 001-32559

Maryland		20-0191742
(State or other jurisdiction of incorporation or organization)		(I. R. S. Employer Identification No.)

1000 Urban Center Drive, Suite 501 Birmingham, AL		35242
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02. Results of Operations and Financial Condition.

     On October 26, 2006, Medical Properties Trust, Inc. issued a press release announcing its financial results for the quarter and nine months ended September 30, 2006. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. The information in this Current Report on Form 8-K, including the information set forth in Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. In addition, this information shall not be deemed incorporated by reference in any filing of Medical Properties Trust, Inc. with the Securities and Exchange Commission, except as expressly set forth by specific reference in any such filing.

Item 9.01. Financial Statements, Pro Forma Financial Information and Exhibits.

     (c) Exhibits:

Exhibit Number				Description
	99.1			Press release dated October 26, 2006 reporting financial results for the quarter and nine months September 30, 2006

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 27, 2006

INDEX TO EXHIBITS

Exhibit Number				Description
	99.1			Press release dated October 26, 2006 reporting financial results for the quarter and nine months ended September 30, 2006

EXHIBIT 99.1

     Net income for the quarter ended September 30, 2006 was $8.7 million, or $0.22 per diluted share, which was an increase of 65% and 57% respectively, compared with net income for the corresponding period in 2005 of $5.3 million, or $0.14 per diluted share. On a sequential quarter basis, net income and net income per share increased 10% and 10% respectively, compared to net income of $7.9 million and net income per diluted share of $0.20.

     For the first nine months of 2006, FFO increased 86% to $30.0 million from $16.2 million for the first nine months in 2005. On a per diluted share basis, FFO was $0.76 per share compared to $0.54 per diluted share for the first nine months of 2005.

     Net income for the first nine months was $24.6 million, or $0.62 per diluted share, which was an increase of 86% and 41%, respectively, compared with net income of $13.2 million and $0.44 per diluted share in the corresponding period in 2005.

     Edward K. Aldag, Jr., MPT’s chairman, chief executive and president described management’s assessment of the quarterly results. “In the third quarter, we got back on track with our acquisitions by adding more than $120 million in new hospital investments. As we go into the fourth quarter, we have a high level of confidence that we will meet our full-year goal of investing more than $200 million in hospital real estate, and we are very pleased that our initial returns on new and committed acquisitions remain above 10%.” Aldag noted that MPT has binding commitments for and expects to acquire six hospitals for approximately $90 million during the remainder of the fourth quarter.

     As the Company has previously disclosed, the original tenant of the Company’s West Houston Town & Country Hospital and Medical Office Building has faced financial challenges primarily due to the absence of key managed care contracts. Subsequent to the end of the third quarter, MPT terminated the lease with the original tenant and replaced it with a recently organized partnership. The partnership has entered into an interim management arrangement with an experienced third party healthcare management firm to operate the facilities. During this interim period, the partnership tenant will be owned and controlled by one of MPT’s most successful hospital operators, Vibra Healthcare.

     “At this time we are actively negotiating with several large hospital systems that are interested in leasing our facility under terms and conditions that we believe are generally preferable to those of the previous lease,” said Aldag. “All of these systems are well capitalized and have the necessary managed care contacts already in place. In each of our tenant relationships, we negotiate protective covenants in our leases and liquid credit enhancements that are designed to allow us to move quickly to replace a poorly performing tenant and otherwise act to protect our investment and earnings stream. Because of our careful underwriting and pre-planning concerning the Town & Country tenant, we believe that we will be able to conclude these negotiations quickly and without material adverse financial consequences.” The Company stated that there is no assurance of a successful release of the facilities.

     The Company also disclosed that Vibra Healthcare has repurchased the Kentfield long-term acute care hospital and has made an initial $3.8 million reduction of its loan from MPT. Vibra has notified MPT that it expects to make a further loan payment of approximately $7.5 million pending clearance of certain regulatory matters with respect to the Kentfield hospital. Vibra expects such clearance by mid-November, although there is no assurance that the state regulatory authority will act promptly.

     Based on operating results for the first eight months reported by the Company’s tenants, MPT’s weighted average EBITDAR lease coverage ratio approximated 2.85 times (after taking into account a one-time management fee, the coverage was 3.88 times compared to 3.35 times for the corresponding period in 2005); approximately 58% of all tenants’ patient days during the quarter resulted from Medicare patients, while commercial payors, Medicaid, and other reimbursement sources represented 22%, 15% and 5%, respectively of patient days.

FUTURE OPERATIONS

     Management reiterated its expectation that during 2007 MPT will invest between $200 and $300 million in existing healthcare real estate assets. In addition, the Company’s Monroe Hospital in Bloomington, Indiana was opened subsequent to the end of the third quarter, and the Company’s North Cypress Medical Center is expected to receive its certificate of occupancy in the latter part of November and commence operations in January. Bucks County Women’s Hospital in Bensalem, Pennsylvania is expected to open early in the first quarter of 2007. Management intends to discuss its outlook for 2007 full year results of operations during a conference call in early 2007 subsequent to release of fourth quarter operating results.

CONFERENCE CALL AND WEBCAST

     The Company has scheduled a conference call and webcast for Friday, October 27, 2006 at 11:00 a.m. Eastern Time in order to present the Company’s performance and operating results for the quarter and nine months ended September 30, 2006. The dial-in number for the conference call is 866-770-7051 (U.S.) and (617) 213-8064 (International), and the passcode is 82733603. Participants may also access the call via webcast at www.medicalpropertiestrust.com. A dial-in and webcast replay of the call will be available shortly after completion of the call. Callers may dial (888) 286-8010 (U.S.) or (617) 801-6888 (International), and use passcode 88662783 for the replay.

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, orthopedic hospitals and cancer centers.

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, which include statements including, but not limited to, concerning the payment of future dividends, if any, completion of projects under development, acquisition of healthcare real estate, completion of additional debt arrangements, the capacity of the Company’s tenants to meet the terms of their agreements, the level of general and administrative expense, the releasing and possible financial outcome of the Town & Country Hospital and MOB, the timing of Vibra’s debt repayment, and net income per share and FFO per share in 2006. Such 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 express in or underlying such forward-looking statements, including without limitation: national and economic, business, real estate and other market conditions; the competitive environment in which the Company operations; the execution of the Company’s business plan; financing risks; the Company’s ability to attain and 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 the healthcare real estate in particular. For further discussion of the facts that could affect outcomes, please refer to the “Risk Factors” section of the Company’s Form 10-K for the year ended December 31, 2005 and the final prospectus for its initial public offering. 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 Statements of Operations
(Unaudited)

		Three Months				Three Months				Nine Months				Nine Months
		Ended				Ended				Ended				Ended
		September 30, 2006				September 30, 2005				September 30, 2006				September 30, 2005
Revenues
Rent billed		$	9,560,954			$	5,964,211			$	27,730,809			$	14,579,588
Straight-line rent			1,959,364				1,007,062				4,520,232				3,784,801
Interest income from loans			3,600,880				1,233,668				8,726,795				3,562,857
Total revenues			15,121,198				8,204,941				40,977,836				21,927,246
Expenses
Real estate depreciation and amortization			1,974,371				1,170,387				5,480,638				2,986,790
General and administrative			2,548,517				2,546,380				7,948,530				5,712,257
Total operating expenses			4,522,888				3,716,767				13,429,168				8,699,047
Operating income (loss)			10,598,310				4,488,174				27,548,668				13,228,199
Other income (expense)
Interest income			198,442				767,917				436,989				1,509,903
Interest expense			(2,071,900	)			—				(3,246,413	)			(1,542,266	)
Net other income (expense)			(1,873,458	)			767,917				(2,809,424	)			(32,363	)
Income before minority interests			8,724,852				5,256,091				24,739,244				13,195,836
Minority interests in consolidated partnerships			(51,305	)			—				(173,016	)			—
Net income (loss)		$	8,673,547			$	5,256,091			$	24,566,228			$	13,195,836
Net income (loss) per share, basic		$	0.22			$	0.14			$	0.62			$	0.44
Weighted average shares outstanding - - basic			39,529,687				37,606,480				39,453,412				29,975,971
Net income (loss) per share, diluted		$	0.22			$	0.14			$	0.62			$	0.44
Weighted average shares outstanding - - diluted			39,857,355				37,654,576				39,759,907				29,999,381

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

		September 30, 2006				December 31, 2005
Assets		(Unaudited)
Real estate assets
Land		$	36,949,043			$	31,004,675
Buildings and improvements			313,154,793				250,518,440
Construction in progress			99,131,783				45,913,085
Intangible lease assets			11,339,657				9,666,192
Mortgage loans			105,000,000				40,000,000
Gross investment in real estate assets			565,575,276				377,102,392
Accumulated depreciation			(9,989,453	)			(5,260,219	)
Accumulated amortization			(1,069,633	)			(622,612	)
Net investment in real estate assets			554,516,190				371,219,561
Cash and cash equivalents			1,187,026				59,115,832
Interest and rent receivable			14,044,019				6,923,091
Straight-line rent receivable			11,947,611				7,909,213
Loans receivable			46,332,229				48,205,611
Other assets			11,893,194				7,800,238
Total Assets		$	639,920,269			$	501,173,546
Liabilities and Stockholders’ Equity
Liabilities
Debt		$	232,630,841			$	100,484,520
Accounts payable and accrued expenses			27,733,227				19,928,900
Deferred revenue			16,979,122				10,922,317
Lease deposits and other obligations to tenants			6,970,052				11,386,801
Total liabilities			284,313,242				142,722,538
Minority interest			1,089,053				2,173,866
Stockholders’ equity
Preferred stock, $0.001 par value. Authorized 10,000,000 shares; no shares outstanding			—				—
Common stock, $0.001 par value. Authorized 100,000,000 shares; issued and outstanding - 39,419,450 shares at March 31, 2006 and 39,345,105 shares at December 31, 2005			39,533				39,345
Additional paid in capital			362,202,277				359,588,362
Distributions in excess of net income			(7,723,836	)			(3,350,565	)
Total stockholders’ equity			354,517,974				356,277,142
Total Liabilities and Stockholders’ Equity		$	639,920,269			$	501,173,546

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Reconciliation of Net Income to Funds From Operations

(Unaudited)

		For the Three				For the Three				For the Nine				For the Nine
		Months Ended				Months Ended				Months Ended				Months Ended
		September 30, 2006				September 30, 2005				September 30, 2006				September 30, 2005
FFO information
Net income		$	8,673,547			$	5,256,091			$	24,566,228			$	13,195,836
Depreciation and amortization			1,974,371				1,170,387				5,480,638				2,986,790
Funds from operations		$	10,647,918			$	6,426,478			$	30,046,866			$	16,182,626
Per share data:
Net income per share, diluted		$	0.22			$	0.14			$	0.62			$	0.44
Depreciation and amortization			0.05				0.03				0.14				0.10
Funds from operations, diluted		$	0.27			$	0.17			$	0.76			$	0.54
FFO per share, basic		$	0.27			$	0.17			$	0.76			$	0.54
FFO per share, diluted		$	0.27			$	0.17			$	0.76			$	0.54

Funds from operations, or FFO, represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. Management considers funds from operations a useful additional measure of performance for an equity REIT because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe that funds from operations provides a meaningful supplemental indication of our performance. We compute funds from operations in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts, or NAREIT, in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating funds from operations utilized by other
equity REITs and, accordingly, may not be comparable to such other REITs. FFO does not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions. Funds from operations should not be considered as 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.