FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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þ |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2009
OR
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o |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 001-32559
MEDICAL PROPERTIES TRUST, INC.
(Exact Name of Registrant as Specified in Its Charter)
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MARYLAND
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20-0191742 |
(State or other jurisdiction
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(I. R. S. Employer |
of incorporation or organization)
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Identification No.) |
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1000 URBAN CENTER DRIVE, SUITE 501
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35242 |
BIRMINGHAM, AL
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(Zip Code) |
(Address of principal executive offices) |
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REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE: (205) 969-3755
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,
if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post
such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer þ
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Non-accelerated filer o
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Smaller reporting company o |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No þ
As of
May 1, 2009, the registrant had 80,144,138 shares of common stock, par value $.001, outstanding.
MEDICAL PROPERTIES TRUST, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009
Table of Contents
2
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
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March 31, 2009 |
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December 31, 2008 |
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(In thousands, except per share amounts) |
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(Unaudited) |
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(Note 2) |
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Assets |
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Real estate assets |
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Land, buildings and improvements, and intangible lease assets |
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$ |
992,344 |
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$ |
996,965 |
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Mortgage loans |
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185,000 |
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185,000 |
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Gross investment in real estate assets |
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1,177,344 |
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1,181,965 |
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Accumulated depreciation and amortization |
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(41,675 |
) |
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(40,334 |
) |
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Net investment in real estate assets |
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1,135,669 |
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1,141,631 |
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Cash and cash equivalents |
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11,209 |
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11,748 |
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Interest and rent receivable |
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12,815 |
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13,837 |
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Straight-line rent receivable |
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20,906 |
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19,003 |
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Other loans |
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114,003 |
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108,523 |
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Assets of discontinued operations |
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1,171 |
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2,385 |
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Other assets |
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13,881 |
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14,246 |
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Total Assets |
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$ |
1,309,654 |
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$ |
1,311,373 |
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Liabilities and Equity |
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Liabilities |
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Debt |
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$ |
563,010 |
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$ |
630,557 |
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Accounts payable and accrued expenses |
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28,872 |
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24,718 |
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Deferred revenue |
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12,928 |
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16,110 |
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Lease deposits and other obligations to tenants |
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14,520 |
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13,645 |
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Total liabilities |
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619,330 |
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685,030 |
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Medical
Properties Trust, Inc. Stockholders equity |
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Preferred stock, $0.001 par value. Authorized 10,000 shares; no shares outstanding |
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Common stock, $0.001 par value. Authorized 150,000 shares; issued and outstanding
78,505 shares at March 31, 2009, and 65,056 shares at December 31, 2008 |
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79 |
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65 |
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Additional paid in capital |
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755,607 |
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686,238 |
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Distributions in excess of net income |
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(65,336 |
) |
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(59,941 |
) |
Treasury shares, at cost |
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(262 |
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(262 |
) |
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Total Medical Properties Trust, Inc. stockholders equity |
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690,088 |
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626,100 |
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Non-controlling interests |
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236 |
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243 |
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Total equity |
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690,324 |
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626,343 |
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Total Liabilities and Equity |
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$ |
1,309,654 |
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$ |
1,311,373 |
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See accompanying notes to condensed consolidated financial statements.
3
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
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For the Three Months Ended March 31, |
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(In thousands, except per share amounts) |
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2009 |
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2008 |
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Revenues |
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Rent billed |
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$ |
23,086 |
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$ |
14,971 |
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Straight-line rent |
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1,864 |
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1,660 |
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Interest and fee income |
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7,423 |
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6,710 |
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Total revenues |
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32,373 |
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23,341 |
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Expenses |
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Real estate depreciation and amortization |
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6,246 |
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3,528 |
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Property-related |
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919 |
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56 |
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General and administrative |
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5,678 |
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4,358 |
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Total operating expenses |
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12,843 |
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7,942 |
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Operating income |
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19,530 |
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15,399 |
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Other income (expense) |
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Interest and other income |
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103 |
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Interest expense |
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(9,463 |
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(7,455 |
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Net other expense |
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(9,463 |
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(7,352 |
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Income from continuing operations |
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10,067 |
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8,047 |
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Income from discontinued operations |
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650 |
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2,853 |
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Net income |
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10,717 |
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10,900 |
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Net income attributable to non-controlling interests |
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(7 |
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(2 |
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Net income attributable to MPT common stockholders |
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$ |
10,710 |
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$ |
10,898 |
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Earnings per common share basic |
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Income from
continuing operations attributable to MPT common stockholders |
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$ |
0.13 |
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$ |
0.15 |
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Income from discontinued operations attributable to MPT common stockholders |
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0.01 |
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0.05 |
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Net income
attributable to MPT common stockholders |
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$ |
0.14 |
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$ |
0.20 |
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Weighted average shares outstanding basic |
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76,432 |
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52,992 |
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Earnings per share diluted |
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Income from continuing operations attributable to MPT common stockholders |
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$ |
0.13 |
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$ |
0.15 |
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Income from discontinued operations attributable to MPT common stockholders |
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0.01 |
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0.05 |
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Net income
attributable to MPT common stockholders |
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$ |
0.14 |
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$ |
0.20 |
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Weighted average shares outstanding diluted |
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76,432 |
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53,002 |
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Dividends
declared per common share |
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$ |
0.20 |
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$ |
0.27 |
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See accompanying notes to condensed consolidated financial statements.
4
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
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For the Three Months Ended |
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March 31, |
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2009 |
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2008 |
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Operating activities |
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Net income |
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$ |
10,717 |
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$ |
10,900 |
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Adjustments to reconcile net income to net cash provided by operating activities |
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Depreciation and amortization |
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6,343 |
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4,012 |
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Straight-line rent revenue |
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(1,903 |
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(2,238 |
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Share-based compensation |
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1,487 |
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1,873 |
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Other adjustments |
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1,667 |
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(596 |
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Net cash provided by operating activities |
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18,311 |
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13,951 |
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Investing activities |
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Real estate acquired |
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(438 |
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Principal received on loans receivable |
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236 |
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455 |
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Investment in loans receivable |
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(5,081 |
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(1,880 |
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Escrow deposits paid for future acquisitions |
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(4,000 |
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Construction in progress and other |
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(910 |
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(147 |
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Net cash used for investing activities |
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(6,193 |
) |
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(5,572 |
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Financing activities |
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Additions to debt |
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78,875 |
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Payments of debt |
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(68,305 |
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(144,205 |
) |
Distributions paid |
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(13,282 |
) |
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(14,490 |
) |
Sale of
common stock, net |
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67,890 |
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128,602 |
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Lease deposits and other obligations to tenants |
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683 |
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825 |
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Other financing activities |
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357 |
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(5,199 |
) |
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Net cash provided by financing activities |
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(12,657 |
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44,408 |
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Increase in cash and cash equivalents for period |
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(539 |
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52,787 |
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Cash and cash equivalents at beginning of period |
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11,748 |
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94,215 |
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Cash and cash equivalents at end of period |
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$ |
11,209 |
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$ |
147,002 |
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Interest paid |
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$ |
5,026 |
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$ |
4,477 |
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Supplemental schedule of non-cash investing activities: |
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Construction in progress transferred to land and building |
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$ |
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$ |
200 |
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Interest and other receivables recorded as deferred revenue |
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12 |
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Interest and other receivables transferred to loans receivable |
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91 |
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Supplemental schedule of non-cash financing activities: |
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Distributions declared, unpaid |
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$ |
16,043 |
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$ |
14,598 |
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Other non-cash financing activities |
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5 |
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See accompanying notes to condensed consolidated financial statements.
5
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Organization
Medical Properties Trust, Inc., a Maryland corporation, was formed on August 27, 2003 under the
General Corporation Law of Maryland for the purpose of engaging in the business of investing in and
owning commercial real estate. Our operating partnership subsidiary, MPT Operating Partnership,
L.P. (the Operating Partnership), through which we
conduct all of our operations, was formed in
September 2003. Through another wholly-owned subsidiary, Medical Properties Trust, LLC, we are the
sole general partner of the Operating Partnership. Presently, we directly own substantially all of
the limited partnership interests in the Operating Partnership.
We have operated as a real estate investment trust (REIT) since April 6, 2004, and accordingly,
elected REIT status upon the filing in September 2005 of the calendar year 2004 federal income tax
return. Accordingly, we will not be subject to U.S. federal income tax, provided that we continue
to qualify as a REIT and our distributions to our stockholders equal or exceed our taxable income.
Certain activities we undertake must be conducted by an entity which we elected to be treated as a
taxable REIT subsidiary (TRS). Our TRS is subject to both federal and state income taxes.
Our primary business strategy is to acquire and develop real estate and improvements, primarily for
long-term lease to providers of healthcare services such as operators of general acute care
hospitals, inpatient physical rehabilitation hospitals, long-term acute care hospitals, surgery
centers, centers for treatment of specific conditions such as cardiac, pulmonary, cancer, and
neurological hospitals, and other healthcare-oriented facilities. We manage our business as a
single business segment as defined in Statement of Financial
Accounting Standards (SFAS) No. 131,
Disclosures about Segments of an Enterprise and Related Information.
2. Summary of Significant Accounting Policies
Unaudited Interim Condensed Consolidated Financial Statements: The accompanying unaudited interim
condensed consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States for interim financial information, including
rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been included. Operating
results for the three month period ended March 31, 2009, are not necessarily indicative of the
results that may be expected for the year ending December 31,
2009. Except for the impact from the adoption of new accounting
pronouncements (see Notes 2 and 4), the condensed consolidated
balance sheet at December 31, 2008 has been derived from the audited financial statements at that
date but does not include all of the information and footnotes required by accounting principles
generally accepted in the United States for complete financial statements.
For further information about significant accounting policies, refer to the consolidated financial
statements and footnotes thereto included in the Annual Report on
Form 10-K, as amended, for the year ended
December 31, 2008.
New Accounting Pronouncements: The following is a summary of recently issued accounting
pronouncements which have been issued but not adopted by us.
In
April 2009, the FASB issued Staff Position SFAS 107-1 and APB
28-1, Interim Disclosures about
Fair Value of Financial Instruments (FSP SFAS 107-1), effective for interim periods ending after
June 15, 2009. This FSP requires disclosure
about the fair value of financial instruments for interim reporting periods of publicly traded
companies as well as in annual financial statements. We expect to apply FSP SFAS 107-1, starting with our 2009 second quarter Form 10-Q.
Reclassifications:
Certain reclassifications have been made to the condensed
consolidated financial statements to conform to the 2009 consolidated
financial statement presentation. These reclassifications had no impact on stockholders equity or net income.
In accordance with SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements, (i) all prior period
non-controlling interests on the condensed
consolidated balance sheets have been reclassified as a component of
equity and (ii) all prior period non-controlling interests
share of earnings on the condensed consolidated statements of income
have been reclassified to clearly identify net income attributable to the non-controlling interest.
3. Real Estate and Lending Activities
Acquisitions
In the second and third quarters of 2008, we completed the acquisition of 20 properties from a
single seller for approximately $357.2 million. In May 2008, we acquired a long-term acute care
hospital at a cost of $10.8 million from an unrelated party and entered into an operating lease
with Vibra Healthcare (Vibra). We financed these acquisitions using
proceeds from our March 2008 issuance of debt and equity (see
6
Note 4 Debt and Note 5 Common Stock), from our existing
revolving credit facilities and from the sale of three rehabilitation facilities to Vibra in
May 2008 with proceeds (including lease termination fees and loan prepayment) totaling
$105.0 million (see Note 7 Discontinued Operations).
In June 2008, we entered into a $60 million financing arrangement with affiliates of Prime
Healthcare Services, Inc. (Prime) related to three southern California hospital campuses operated
by Prime. In July 2008, we acquired one of the facilities from a Prime affiliate for approximately
$15.0 million and the other two facilities in the 2008 fourth quarter for $45 million.
The results of operations for each of the properties acquired are included in our consolidated
results from the effective date of each acquisition. The following table sets forth certain
unaudited pro forma consolidated earnings data for the first three months of 2008, as if each
acquisition and the sale of three rehabilitation facilities to Vibra was consummated on the same
terms at the beginning of 2008 ($ amounts in thousands except per
share amounts).
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2008 |
Total revenues |
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$ |
33,748 |
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Net income |
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12,425 |
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Income per share-diluted |
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$ |
0.18 |
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Leasing Operations
For the three months ended March 31, 2009 and 2008, revenue from affiliates of Prime accounted for
38.6% and 37.3%, respectively, of total revenue. For the three months ended March 31, 2009 and
2008, revenue from Vibra accounted for 14.0% and 17.7%, respectively, of total revenue.
4. Debt
The following is a summary of debt ($ amounts in thousands):
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As of March 31, |
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As of December 31, |
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2009 |
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2008 |
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Balance |
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Interest Rate |
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Balance |
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Interest Rate |
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Revolving credit facilities |
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$ |
125,000 |
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Variable |
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$ |
193,000 |
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Variable |
Senior unsecured notes
fixed rate through July
and October, 2011, due
July and October, 2016 |
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|
125,000 |
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7.333% - 7.871 |
% |
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125,000 |
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|
7.333% - 7.871 |
% |
Exchangeable
senior notes: |
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Principal
amount |
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220,000 |
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6.125% - 9.25% |
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|
220,000 |
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6.125% - 9.25% |
Unamortized
discount |
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(10,660 |
) |
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(11,418 |
) |
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209,340 |
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208,582 |
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Term loans |
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|
103,670 |
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Various |
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|
103,975 |
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Various |
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$ |
563,010 |
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$ |
630,557 |
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As of March 31, 2009, principal payments due for our debt (which exclude any debt discounts
recorded) are as follows:
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|
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2009 |
|
$ |
1,706 |
|
2010 |
|
|
114,273 |
(1) |
2011 |
|
|
202,933 |
|
2012 |
|
|
39,893 |
|
2013 |
|
|
89,865 |
|
Thereafter |
|
|
125,000 |
|
|
|
|
|
Total |
|
$ |
573,670 |
|
|
|
|
|
7
|
|
|
(1) |
|
$83,000 of the revolving credit facilities due in 2010 may be extended until 2011
provided that we give written notice to the Administrative Agent at least 60 days prior to the
termination date and as long as no default has occurred. If elected to extend, we will be required
to pay an aggregate extension fee equal to 0.25% of the existing revolving commitments. |
In January 2009, we completed a public offering (see Note 5 Common Stock) resulting in net
proceeds of $67.9 million, which was used to repay borrowings outstanding under our revolving
credit facilities.
In November 2006 and March 2008, our Operating Partnership issued and sold $138.0 million and $82.0
million, respectively, of Exchangeable Senior Notes. See Note 4 of our 2008 Annual Report on Form
10-K, as amended, for further information in regards to the terms of the exchangeable senior notes.
In May 2008, the FASB issued FASB Staff Position APB 14-1, Accounting for Convertible Debt
Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlements)
(FSP), which affects the accounting for our exchangeable
senior notes. The FSP requires that the initial
debt proceeds from the sale of our exchangeable senior notes be allocated between a liability component
and an equity component. The resulting debt discount is amortized over the period the debt is
expected to be outstanding as additional interest expense. We adopted this FSP on January 1, 2009
and have applied the FSP retroactively to all periods presented. The adoption of the FSP resulted
in an increase in unamortized debt discount of $7.7 million and
additional paid in capital of $11.0 million and a decrease in
retained earnings of $3.3 million in
our consolidated balance sheet as of December 31, 2008. We recorded
additional non-cash interest expense in our consolidated statements of income of approximately
$560,000 ($0.01 per share) and $335,000 ($0.01 per share) in the first quarter of 2009 and 2008,
respectively, associated with the amortization of this discount at an
annual effective interest rate of 8.3% and 11.3% for the 2006 and
2008 exchangeable senior notes, respectively. The unamortized discount of $6.7 million and $3.9
million at March 31, 2009 will continue to be amortized through November 2011 and April 2013 for
the 2006 and 2008 exchangeable senior notes, respectively.
5. Common Stock
In January 2009, we completed a public offering of 12.0 million shares of our common stock at $5.40
per share. Including the underwriters purchase of approximately 1.3 million additional shares to
cover over allotments, net proceeds from this offering, after underwriting discount and
commissions and fees, were approximately $67.9 million.
On January 9, 2009, we filed Articles of Amendment to our charter with the Maryland State
Department of Assessments and Taxation increasing the number of authorized shares of common stock,
par value $0.001 per share available for issuance from 100,000,000 to 150,000,000.
In March 2008, we sold 12,650,000 shares of common stock at a price of $10.75 per share. After
deducting underwriters commissions and offering expenses, we realized
proceeds of $128.6 million.
6. Stock Awards
Our
stockholders have approved and we have adopted the Second Amended and Restated Medical Properties Trust, Inc. 2004 Equity
Incentive Plan (the Equity Incentive Plan) which authorizes the issuance of options to purchase
common stock, restricted stock, restricted stock units, deferred stock units, stock appreciation
rights, performance units and other stock based awards, including profits interest in our Operating
Partnership. The Equity Incentive Plan is administered by the Compensation Committee of the Board
of Directors. We have reserved 7,441,180 shares of common stock for awards under the Equity
Incentive Plan for which 3,686,534 shares remain available for future stock awards as of March 31,
2009. We awarded 441,134 and 405,512 shares in the first quarter of 2009 and 2008,
respectively, of restricted stock to management, independent
directors, and certain employees (2009 only).
The 2009 awards vest quarterly based on service, over three years in
equal amounts beginning April
2009. The 2008 awards to management vest based on service over five
years in equal annual amounts beginning February 2009, while the
awards to directors vest based on service over three years in equal
amounts beginning February 2009.
7. Discontinued Operations
In the second quarter of 2008, we sold the real estate assets of three inpatient rehabilitation
facilities to Vibra for proceeds of approximately $105.0 million, including $7.0 million in early
lease termination fees and $8.0 million of a loan pre-payment. In 2006, we terminated leases for
a hospital and medical office building (MOB) complex with
Stealth L.P. (Stealth) and repossessed the real
estate. In January 2007, we sold the hospital and MOB complex.
We are defendants in ongoing litigation related to the Stealth
transaction as described
in Note 9 Contingencies. We have
reclassified current and prior year activity related to all of these
transactions as discontinued operations.
8
The
following table presents the results of discontinued operations for
the three months ended March 31, 2009 and 2008 ($ amounts in
thousands except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
For the Three Months |
|
|
Ended March 31, |
|
|
2009 |
|
2008 |
Revenues |
|
$ |
|
|
|
$ |
3,649 |
|
Net income |
|
|
650 |
|
|
|
2,853 |
|
Earnings per
share diluted |
|
$ |
0.01 |
|
|
$ |
0.05 |
|
8. Earnings Per Share
In June 2008, the FASB issued FASB Staff Position
EITF Issue No. 03-6-1, Determining Whether
Instruments Granted in Share-Based Payment Transactions Are
Participating Securities, (FSP
EITF 03-6-1). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment
transactions are participating securities prior to vesting and, therefore, need to be included in
the earnings allocation in computing earnings per share under the two-class method as described in
SFAS No. 128, Earnings per Share. Under the guidance in FSP EITF 03-6-1, unvested share-based
payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether
paid or unpaid) are participating securities and shall be included in the computation of earnings
per share pursuant to the two-class method. Certain of our unvested restricted and
performance stock awards contain non-forfeitable rights to dividends at the same rate as
outstanding common shares, and accordingly, these awards are deemed to be participating securities under
FSP EITF 03-6-1. We adopted FSP EITF 03-6-1 on January 1, 2009 which
resulted in a $0.01 negative impact on earnings per share for the quarters ended March 31,
2009 and 2008. Our earnings per share under FSP EITF 03-6-1 were
calculated as follows (amounts in thousands except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
For the Three Months |
|
|
|
Ended March 31, |
|
|
|
2009 |
|
|
2008 |
|
Numerator: |
|
|
|
|
|
|
|
|
Income from
continuing operations |
|
$ |
10,067 |
|
|
$ |
8,047 |
|
Non-controlling
interests share in continuing operations |
|
|
(9) |
|
|
|
|
|
Participating
securities share in earnings |
|
|
(333 |
) |
|
|
(413 |
) |
|
|
|
|
|
|
|
Income from
continuing operations attributable to MPT common stockholders |
|
|
9,725 |
|
|
|
7,634 |
|
|
Income from
discontinued operations |
|
|
650 |
|
|
|
2,853 |
|
Non-controlling
interests share in discontinued operations |
|
|
2 |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
Income from
discontinued operations attributable to MPT common stockholders |
|
|
652 |
|
|
|
2,851 |
|
|
|
|
|
|
|
|
Net income
attributable to MPT common stockholders |
|
$ |
10,377 |
|
|
$ |
10,485 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
Basic weighted-average common shares |
|
|
76,432 |
|
|
|
52,992 |
|
Dilutive
stock options |
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
|
Diluted
weighted-average common shares |
|
|
76,432 |
|
|
|
53,002 |
|
|
|
|
|
|
|
|
For the
three months ended March 31, 2009 and 2008, 0.1 million of options were excluded from the diluted earnings
per share calculation as they were not determined to be dilutive. Shares that may be
issued in the future in accordance with our convertible bonds were excluded from the
diluted earnings per share calculation as they were not determined to be dilutive.
9. Contingencies
In
October 2006, two of our subsidiaries terminated their
respective leases with Stealth, the operator of a hospital and MOB that we owned in
Houston, Texas. Pursuant to our subsidiaries rights under these leases, we took possession of the
real estate and contracted with a third party to operate the facilities for an interim period. In
January 2007, we completed the sale of these properties to Memorial Hermann Healthcare System
(Memorial Hermann). Several limited partners of Stealth filed suit against the general partner of
Stealth, our subsidiaries, the interim operator and several other parties in December 2006, in
Harris County, Texas District Court, generally alleging that the defendants breached duties,
interfered with the plaintiffs partnership rights and misappropriated assets of Stealth. Further
amended petitions filed by the plaintiffs added Memorial Hermann as a defendant and, while dropping
some of the original claims, alleged new claims that our conduct violated the antitrust laws and
constituted tortuous interference with Stealths business contracts and relationships.
In May 2007, Stealth itself filed a cross claim against our subsidiaries and the interim operator,
later amended to include us, our operating partnership and Memorial Hermann, broadly alleging,
among other things, fraud, negligent misrepresentation, breaches of contract and warranty, and that
we operated all our subsidiaries as a single enterprise and/or conspired with our subsidiaries to
commit the other tort claims asserted. Stealth most recently consolidated all of its claims against us
in a consolidated petition that added claims of breach of fiduciary duty and seeking actual and
punitive money damages. Memorial Hermann has agreed to defend and indemnify us against one of
Stealths breach of contract claims.
9
The plaintiffs and Stealth jointly seek more than $120 million in actual damages and more than
$350 million in punitive damages. The case is set for trial in September 2009. We believe that all
of the claims asserted by Stealth and its limited partners are without merit and we intend to
continue to vigorously defend them. We have not accrued any estimated
settlement, judgment or future defense costs related to this litigation
as of March 31, 2009. Our litigation counsel presently estimates
that a jury trial and the appeals process may take two years and cost
$2 million in additional defense costs. However, there can be no
assurances about the time, cost or outcome of the trial and appeals
process.
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the consolidated financial condition and consolidated
results of operations should be read together with the consolidated financial statements of Medical
Properties Trust, Inc. and notes thereto contained in this Form 10-Q and the financial statements
and notes thereto contained in our Annual Report on Form 10-K, as
amended, for the year ended December 31, 2008.
Forward-Looking Statements.
This report on Form 10-Q contains certain forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results or future performance,
achievements or transactions or events to be materially different from those expressed or implied
by such forward-looking statements, including, but not limited to, the risks described in our
Annual Report on Form 10-K for the year ended December 31, 2008,
as amended, filed with the Securities and
Exchange Commission (SEC) under the Securities Exchange Act of 1934. Such factors include, among
others, the following:
|
|
National and local economic, business, real estate and other market conditions; |
|
|
|
The competitive environment in which we operate; |
|
|
|
The execution of our business plan; |
|
|
|
Financing risks; |
|
|
|
Acquisition and development risks; |
|
|
|
Potential environmental, contingencies, and other liabilities; |
|
|
|
Other factors affecting real estate industry generally or the healthcare real estate industry in particular; |
|
|
|
Our ability to maintain our status as a REIT for federal and state income tax purposes; |
|
|
|
Our ability to attract and retain qualified personnel; |
|
|
|
Federal and state healthcare regulatory requirements; and |
|
|
|
The impact of the current credit crisis and global economic slowdown, which is having and may continue to
have a negative effect on the following, among other things: |
|
|
|
the financial condition of our tenants, our lenders, counterparties
to our capped call transactions and institutions that hold our cash
balances, which may expose us to increased risks of default by these
parties; |
|
|
|
|
our ability to obtain debt financing on attractive terms or at all,
which may adversely impact our ability to pursue acquisition and
development opportunities and refinance existing debt and our future
interest expense; and |
|
|
|
|
the value of our real estate assets, which may limit our ability
to dispose of assets at attractive prices or obtain or maintain debt
financing secured by our properties or on an unsecured basis. |
Overview
We were incorporated under Maryland law on August 27, 2003 primarily for the purpose of investing
in and owning net-leased healthcare facilities across the United States. We have operated as a real
estate investment trust (REIT) since April 6, 2004, and
10
accordingly, elected REIT status upon the filing in September 2005 of our calendar year 2004
federal income tax return. We acquire and develop healthcare facilities and lease the facilities to
healthcare operating companies under long-term net leases. We also make mortgage loans to
healthcare operators collateralized by their real estate assets. In addition, we selectively make
loans to certain of our operators through our taxable REIT subsidiary, the proceeds of which are
used for acquisitions and working capital.
At
March 31, 2009, our portfolio consisted of 51 properties: 46
facilities (of the 48 facilities that we own) are leased
to 13 tenants and the remaining assets are in the form of first mortgage loans to two operators.
Our owned facilities consisted of 21 general acute care hospitals, 13 long-term acute care
hospitals, 6 inpatient rehabilitation hospitals, 2 medical office buildings, and 6 wellness
centers. The non-owned facilities on which we have made mortgage
loans consisted of general acute
care facilities.
At March 31, 2009, two of our facilities, River Oaks (located in Houston, Texas) and Bucks (located
in Bensalem, Pennsylvania) remained vacant due to tenant defaults in 2008. We have stopped accruing
rent on both of these facilities. We are currently working to re-lease or sell these facilities,
but given the current economy no assurances can be made that we will be able to sell or re-lease
them in the near future. In addition, the tenant of our Monroe
facility (located in Bloomington, Indiana) is not current on its
rent and interest payments although the tenant has made approximately
$0.8 million in partial rent payments in 2009. We monitor the
performance of the property operators on a continuous basis and, as of March 31, 2009, we believe
the outstanding balances are fully collectible.
We have 23 employees as of May 1, 2009. We believe that any adjustments to the number of our
employees will have only immaterial effects on our operations and general and administrative
expenses. We believe that our relations with our employees are good. None of our employees are
members of any union.
Key Factors that May Affect Our Operations
Our revenues are derived from rents we earn pursuant to the lease agreements with our tenants and
from interest income from loans to our tenants and other facility owners. Our tenants operate in
the healthcare industry, generally providing medical, surgical and rehabilitative care to patients.
The capacity of our tenants to pay our rents and interest is dependent upon their ability to
conduct their operations at profitable levels. We believe that the business environment of the
industry segments in which our tenants operate is generally positive for efficient operators.
However, our tenants operations are subject to economic, regulatory and market conditions that may
affect their profitability. Accordingly, we monitor certain key factors, changes to which we
believe may provide early indications of conditions that may affect the level of risk in our lease
and loan portfolio.
Key factors that we consider in underwriting prospective tenants and borrowers and in monitoring
the performance of existing tenants and borrowers include the following:
the historical and prospective operating margins (measured by a tenants earnings before
interest, taxes, depreciation, amortization and facility rent) of each tenant or borrower and at
each facility;
the ratio of our tenants and borrowers operating earnings both to facility rent and to facility
rent plus other fixed costs, including debt costs;
trends in the source of our tenants or borrowers revenue, including the relative mix of
Medicare, Medicaid/MediCal, managed care, commercial insurance, and private pay patients; and
the effect of evolving healthcare regulations on our tenants and borrowers profitability.
Certain business factors, in addition to those described above that directly affect our tenants and
borrowers, will likely materially influence our future results of operations. These factors
include:
trends in the cost and availability of capital, including market interest rates, that our
prospective tenants may use for their real estate assets instead of financing their real estate
assets through lease structures;
11
potential changes in healthcare regulations that may limit the opportunities for physicians to
participate in the ownership of healthcare providers and healthcare real estate;
reductions in reimbursements from Medicare, state healthcare programs, and commercial insurance
providers that may reduce our tenants profitability and our lease rates;
competition from other financing sources; and
the ability of our tenants and borrowers to access funds in the credit markets.
Recently, there has been a slowdown in the economy, unprecedented disruptions in the capital
markets and widening of credit spreads, which may, in the future, adversely affect the performance
of our tenants and operators and impact their ability to meet their obligations to us. Failure to
meet these obligations could, in certain cases, lead to restructurings, disruptions, or
bankruptcies of our tenants and operators, which may reduce the amount of revenue we report,
require us to increase our allowances for losses, result in impairment charges and valuation
allowances that decrease our net income and equity, and reduce our cash flows from operations.
The current recession and capital market disruptions could have a negative impact on the
availability of debt financing and increase the cost of debt financing. Access to external capital
on favorable terms is critical to the success of our strategy. Concern about the stability of
markets generally and the strength of counterparties has led many lenders and institutional
investors to reduce and, in some cases, cease to provide funding to borrowers. If these market
conditions continue, they may adversely impact our ability to pursue acquisition and development
opportunities and refinance existing borrowings.
12
CRITICAL ACCOUNTING POLICIES
Refer to
our 2008 Annual Report on Form 10-K, as amended, for a discussion of our critical accounting policies,
which include revenue recognition, investment in real estate, purchase price allocation, loans,
losses from rent receivables, accounting policies for derivatives and hedging activities, variable
interest entities, and stock-based compensation. During the three months ended March 31, 2009,
there were no material changes to these policies other than the
accounting change related to our convertible debt as described in
Note 4 to the Notes to the condensed consolidated financial statements.
LIQUIDITY AND CAPITAL RESOURCES
During the
2009 first quarter, operating cash flows approximated $18.3 million, which were used to
fund primarily all of our dividend of $13.3 million and investing
activities of $6.2 million.
In January 2009, we completed a public offering of 12.0 million shares of our common stock at $5.40
per share. Including the underwriters purchase of approximately 1.3 million additional shares to
cover over allotments, net proceeds from this offering, after underwriting discount and commissions
and fees, were approximately $67.9 million. The net proceeds of this offering were generally used
to repay borrowings outstanding under our revolving credit facilities. At May 1, 2009, our
availability under our revolving credit facilities plus cash on-hand
approximated $70 million.
Short-term Liquidity Requirements: We have only nominal principal payments due and no
significant maturities until November 2010. We believe that the liquidity available to us as
described above, along with our current monthly cash receipts from rent and loan interest, is
sufficient to provide the resources necessary for operations, debt and interest obligations, and
distributions in compliance with REIT requirements during 2009.
Long-term Liquidity Requirements: Our first significant maturity of debt comes due in
November 2010 when our $30.0 million term loan ($29.8 million outstanding on May 1, 2009) and our
$154.0 million revolving credit facility ($93.0 million outstanding on May 1, 2009) mature.
However, of this approximately $122.8 million of debt coming due in 2010, $93.0 million relates to
our revolving credit facility, which can be extended to 2011 so long as no default has occurred and
we provide necessary notice of our intentions to extend the facility.
There is no assurance that conditions now existing in the credit markets will improve by November
2011, when $203 million of our debt matures. Accordingly, while we plan to continually consider
options to replace or refinance our existing debt arrangements if market conditions become more
favorable, we will also evaluate other sources of liquidity including:
|
|
|
Property sales we believe we have several assets that, even in the current credit
environment, may attract purchasers willing and able to pay acceptable prices. However, we
believe any possible sale transactions will be conditional on the purchasers ability to
obtain acceptable financing, and there is no assurance that such financing will be
available. |
|
|
|
|
Incremental borrowings we have recently successfully demonstrated our ability to access
property level debt with attractive terms, providing liquidity for reduction of earlier
maturing loans and debt. Moreover, our $30.0 million term loan that matures in 2010 is
prepayable without penalty and is collateralized by properties with an estimated aggregate
value of more than $340 million. Payment of this loan would make such collateral available
for incremental borrowings. Because availability of credit is presently highly
uncertain there is no assurance that we could obtain such incremental borrowings. |
|
|
|
|
Extension of existing maturities we expect that as market conditions improve, our
existing lenders may be willing to offer additional extension options as our facilities
mature. There is no assurance, however, that conditions will improve or that our lenders
will offer extensions; moreover, pricing and other terms that may be associated with any
such extensions may not be attractive to us. |
In addition, cash provided by operations and other alternatives (such as the sale of equity and
other securities) may be available to us to meet our liquidity requirements in the event more
traditional forms of capital are unavailable.
Results of Operations
Three months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008
Net income for the three months ended March 31, 2009 was $10.7 million, compared to $10.9 million
for the three months ended March 31, 2008.
13
A comparison of revenues for the three month periods ended March 31, 2009 and 2008, is as follows,
as adjusted in 2008 for discontinued operations ($ amounts in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year over |
|
|
|
|
|
|
|
% of |
|
|
|
|
|
|
% of |
|
|
Year |
|
|
|
2009 |
|
|
Total |
|
|
2008 |
|
|
Total |
|
|
Change |
|
Base rents |
|
$ |
22,850 |
|
|
|
70.6 |
% |
|
$ |
14,923 |
|
|
|
64.0 |
% |
|
|
53.1 |
% |
Straight-line rents |
|
|
1,864 |
|
|
|
5.8 |
% |
|
|
1,660 |
|
|
|
7.1 |
% |
|
|
12.3 |
% |
Percentage rents |
|
|
236 |
|
|
|
0.7 |
% |
|
|
48 |
|
|
|
0.2 |
% |
|
|
391.7 |
% |
Fee income |
|
|
127 |
|
|
|
0.4 |
% |
|
|
126 |
|
|
|
0.5 |
% |
|
|
0.8 |
% |
Interest from loans |
|
|
7,296 |
|
|
|
22.5 |
% |
|
|
6,584 |
|
|
|
28.2 |
% |
|
|
10.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
$ |
32,373 |
|
|
|
100.0 |
% |
|
$ |
23,341 |
|
|
|
100.0 |
% |
|
|
38.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Since April 1, 2008, we have invested approximately $466.7 million in new income-earning healthcare
real estate assets, and disposed of approximately $89.4 million in such assets. At March 31, 2009,
we owned 46 rent producing properties (as we are not accruing rent on
two of our properties) compared to 25 at
March 31, 2008. The revenue from properties acquired since April 1, 2008 accounted for the
majority of the increase in rent revenues. Affiliates of Prime accounted for 38.6% and 37.3% of total revenues
during the three months ended March 31, 2009 and 2008, respectively, and Vibra accounted for 14.0 %
and 17.7% of total revenue, respectively.
Depreciation and amortization during the first quarter of 2009 was $6.2 million, compared to $3.5
million during the first quarter of 2008, a 77.0% increase. All of this increase is related to an
increase in the number of rent producing properties discussed above.
Property-related
expenses in the first quarter of 2009 increased from $0.1 million in
2008 to $0.9 million in 2009. Virtually all of this increase related to maintenance, utility
costs,
property taxes and legal costs
associated with our vacant River Oaks and Bucks facilities. These expenses are
typically paid by our tenants. No such expenses related to River Oaks
and Bucks were recorded in 2008.
Interest expense for the quarters ended March 31, 2009 and 2008 totaled $9.5 million and $7.5
million, respectively. The increase in interest expense was the
result of higher debt balances related to the investment of $466.3 million in real estate in the last three quarters of 2008.
General and administrative expenses in the first quarter of 2009 increased compared to the same
period in 2008 by $1.3 million, or 30.3%, from $4.4 million
to $5.7 million. The 2009 expenses include accruals for the
maximum amount of performance-based incentive compensation that may
be incurred pursuant to the performance targets in our incentive compensation plans. The 2008 expenses include a
favorable accrual adjustment related to bonuses earned for 2007.
In addition to the items noted above, net income for the three months ended March 31, 2008 included
the operations of the three facilities sold to Vibra in the 2008
second quarter. See Note 7 to our Condensed Consolidated Financial
Statements -
Discontinued Operations for further information.
Reconciliation of Non-GAAP Financial Measures
Investors and analysts following the real estate industry utilize funds from operations, or FFO, as
a supplemental performance measure. While we believe net income available to common stockholders,
as defined by generally accepted accounting principles (GAAP), is the most appropriate measure, our
management considers FFO an appropriate supplemental measure given its wide use by and relevance to
investors and analysts. 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 assume that the value of real estate diminishes predictably over time.
As defined by the National Association of Real Estate Investment Trusts, or NAREIT, FFO represents
net income (loss) (computed in accordance with GAAP), excluding gains (losses) on sales of real
estate, plus real estate related depreciation and amortization and after adjustments for
unconsolidated partnerships and joint ventures. We compute FFO in accordance with the NAREIT
definition. FFO should not be viewed as a substitute measure of our operating performance since it
does 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 are
significant economic costs that could materially impact our results of operations.
14
The
following table presents a reconciliation of FFO to net income
attributable to MPT common stockholders for the three months ended March
31, 2009 and 2008 ($ in thousands except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
March 31, |
|
|
|
2009 |
|
|
2008 |
|
Net income attributable to MPT common stockholders |
|
$ |
10,710 |
|
|
$ |
10,898 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
Continuing operations |
|
|
6,246 |
|
|
|
3,528 |
|
Discontinued operations |
|
|
|
|
|
|
568 |
|
|
|
|
|
|
|
|
Funds from operations |
|
$ |
16,956 |
|
|
$ |
14,994 |
|
|
|
|
|
|
|
|
Per diluted share amounts:
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
March 31, |
|
|
|
2009 |
|
|
2008 |
|
Net income
attributable to MPT common stockholders |
|
$ |
0.14 |
|
|
$ |
0.20 |
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
Continuing operations |
|
|
0.08 |
|
|
|
0.06 |
|
Discontinued operations |
|
|
|
|
|
|
0.01 |
|
|
|
|
|
|
|
|
Funds from operations |
|
$ |
0.22 |
|
|
$ |
0.27 |
|
|
|
|
|
|
|
|
The 2008
amounts have been restated for the retroactive application of the
change in accounting principles related to our convertible debt (see
Note 4 to our Condensed Consolidated Financial
Statements) and participating securities (see Note 8 to our Condensed Consolidated Financial
Statements).
Distribution Policy
We have elected to be taxed as a REIT commencing with our taxable year that began on April 6, 2004
and ended on December 31, 2004. To qualify as a REIT, we must meet a number of organizational and
operational requirements, including a requirement that we distribute at least 90% of our REIT
taxable income, excluding net capital gain, to our stockholders. It is our current intention to
comply with these requirements and maintain such status going forward.
The table below is a summary of our distributions declared during the two year period ended March
31, 2009:
|
|
|
|
|
|
|
|
|
Declaration Date |
|
Record Date |
|
Date of Distribution |
|
Distribution per Share |
February 24, 2009 |
|
March 19, 2009 |
|
April 9, 2009 |
|
$ |
0.20 |
|
December 4, 2008 |
|
December 23, 2008 |
|
January 22, 2009 |
|
$ |
0.20 |
|
August 21, 2008 |
|
September 18, 2008 |
|
October 16, 2008 |
|
$ |
0.27 |
|
May 22, 2008 |
|
June 13, 2008 |
|
July 11, 2008 |
|
$ |
0.27 |
|
February 28, 2008 |
|
March 13, 2008 |
|
April 11, 2008 |
|
$ |
0.27 |
|
November 16, 2007 |
|
December 13, 2007 |
|
January 11, 2008 |
|
$ |
0.27 |
|
August 16, 2007 |
|
September 14, 2007 |
|
October 19, 2007 |
|
$ |
0.27 |
|
May 17, 2007 |
|
June 14, 2007 |
|
July 12, 2007 |
|
$ |
0.27 |
|
We intend to pay to our stockholders, within the time periods prescribed by the Internal Revenue
Code (Code), all or substantially all of our annual taxable income, including taxable gains from
the sale of real estate and recognized gains on the sale of securities. It is our policy to make
sufficient distributions of cash or common shares to stockholders in order for us to maintain our status as a REIT
under the Code and to avoid corporate income and excise taxes on undistributed income. In addition,
our Credit Agreement, signed in November 2007, limits the amounts of dividends we can pay to 100%
of funds from operations, as defined in the Credit Agreement, on a rolling four quarter basis.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Market risk includes risks that arise from changes in interest rates, foreign currency
exchange rates, commodity prices, equity prices and other market changes that affect market
sensitive instruments. In addition, the value of our facilities will be subject to fluctuations
based on changes in local and regional economic conditions and changes in the ability of our
tenants to generate profits, all of which may affect our ability to refinance our debt if
necessary. The changes in the value of our facilities would be
affected also by changes in cap
rates, which is measured by the current base rent divided by the current market value of a
facility.
Our primary exposure to market risks relates to fluctuations in interest rates and equity
prices. Refer to our 2008 Annual Report on Form 10-K, as amended, for a discussion of our quantitative and qualitative
disclosures and analyses about market risk, which include, interest rate and share price sensitivity. During
the three months ended March 31, 2009, there were no material
changes to our analyses.
15
Item 4.
Controls and Procedures.
We have adopted and maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the time periods specified in the
SECs rules and forms and that such information is accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for
timely decisions regarding required disclosure. In designing and evaluating the disclosure controls
and procedures, management recognizes that any controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired control objectives,
and management is required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.
As required by Rule 13a-15(b), under the Securities Exchange Act of 1934, as amended, we have
carried out an evaluation, under the supervision and with the participation of management,
including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures as of the end of the quarter covered
by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures are effective in timely alerting them to
material information required to be disclosed by us in the reports that we file with the SEC.
There has been no change in our internal control over financial reporting during our most recent
fiscal quarter that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
16
PART II OTHER INFORMATION
Item 1.
Legal Proceedings.
There have been no material changes to legal proceedings as presented in our Annual Report on Form
10-K, as amended, for the year ended December 31, 2008 as filed
with the Commission on May 11, 2009.
Item 1.A.
Risk Factors.
There have been no material changes to the Risk Factors as presented in our Annual Report on Form
10-K, as amended, for the year ended December 31, 2008 as filed
with the Commission on May 11, 2009.
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
(a) Not
applicable.
(b) Not applicable.
(c) Not applicable.
Item 3.
Defaults Upon Senior Securities.
Not applicable.
Item 4.
Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6.
Exhibits.
The following exhibits are filed as a part of this report:
17
|
|
|
Exhibit |
|
|
Number |
|
Description |
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 |
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 |
|
|
|
32
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the
Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 |
|
|
|
99.1(1)
|
|
Consolidated Financial Statements
of Prime Healthcare Services, Inc. as of December 31, 2008 and
2007. |
|
|
|
(1) |
|
Incorporated by reference to Registrant's annual
report on Form 10-K/A for period ended December 31, 2008, filed with
the Commission on May 11, 2009. |
18
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.
|
|
|
|
|
|
MEDICAL PROPERTIES TRUST, INC.
|
|
|
By: |
/s/ R. Steven Hamner
|
|
|
|
R. Steven Hamner |
|
|
|
Executive Vice President and Chief Financial Officer
(On behalf of the Registrant and as the Registrants
Principal Financial and Accounting Officer) |
|
|
Date: May 11, 2009
19
INDEX TO EXHIBITS
|
|
|
Exhibit |
|
|
Number |
|
Description |
31.1
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 |
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 |
|
|
|
32
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the
Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 |
|
|
|
99.1(1)
|
|
Consolidated Financial Statements
of Prime Healthcare Services, Inc. as of December 31, 2008 and
2007 |
|
|
|
(1) |
|
Incorporated by reference to Registrant's annual
report on Form 10-K/A for period ended December 31, 2008, filed with
the Commission on May 11, 2009. |
20
EX-31.1
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934
I, Edward K. Aldag, Jr., certify that:
1) |
|
I have reviewed this quarterly report on Form 10-Q of Medical Properties Trust, Inc. |
|
2) |
|
Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report; |
|
3) |
|
Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this
report; |
|
4) |
|
The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have: |
|
a) |
|
designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared; |
|
|
b) |
|
designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
c) |
|
evaluated the effectiveness of the registrants disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and |
|
|
d) |
|
disclosed in this report any changes in the registrants internal
control over financial reporting that occurred during the registrants
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrants internal
control over financial reporting; and |
5) |
|
The registrants other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrants auditors and the audit committee of
registrants board of directors: |
|
a) |
|
all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and |
|
|
b) |
|
any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal control over financial reporting. |
|
|
|
|
|
|
|
|
Date: May 11, 2009 |
/s/ Edward K. Aldag, Jr.
|
|
|
Edward K. Aldag, Jr. |
|
|
Chairman, President and Chief Executive Officer |
|
|
EX-31.2
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934
I, R. Steven Hamner, certify that:
1) |
|
I have reviewed this quarterly report on Form 10-Q of Medical Properties Trust, Inc. |
|
2) |
|
Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report; |
|
3) |
|
Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this
report; |
|
4) |
|
The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have: |
|
a. |
|
designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report is being prepared; |
|
|
b. |
|
designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
c. |
|
evaluated the effectiveness of the registrants disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and |
|
|
d. |
|
disclosed in this report any changes in the registrants internal
control over financial reporting that occurred during the registrants
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrants internal
control over financial reporting; and |
5) |
|
The registrants other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrants auditors and the audit committee of
registrants board of directors: |
|
a. |
|
all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and |
|
|
b. |
|
any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal control over financial reporting. |
|
|
|
|
|
|
|
|
Date: May 11, 2009 |
/s/ R. Steven Hamner
|
|
|
R. Steven Hamner |
|
|
Executive Vice President and Chief Financial Officer |
|
|
EX-32
Exhibit 32
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934 AND 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this quarterly report on Form 10-Q of Medical Properties Trust, Inc. (the
Company) for the quarter ended March 31, 2009 (the Report), each of the undersigned, Edward K.
Aldag, Jr. and R. Steven Hamner, certifies, pursuant to Section 18 U.S.C. Section 1350, that:
|
1. |
|
The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended; and |
|
|
2. |
|
The information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company. |
|
|
|
|
|
|
|
|
Date: May 11, 2009 |
/s/ Edward K. Aldag, Jr.
|
|
|
Edward K. Aldag, Jr. |
|
|
Chairman, President and Chief Executive Officer |
|
|
|
|
|
|
/s/ R. Steven Hamner
|
|
|
R. Steven Hamner |
|
|
Executive Vice President and
Chief Financial Officer |
|
|