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Medical Properties Trust, Inc. Reports 37% Increase In Second Quarter Normalized FFO Per Share

For 2013, these guidance assumptions would result in a Normalized FFO run rate of approximately $1.06 per share excluding the impact of the effects of potential 2013 acquisition and financing activities.

Guidance estimates do not include the effects, if any, of real estate operating costs, litigation costs, debt refinancing costs, acquisition costs, new interest rate hedging activities, write-offs of straight-line rent or other non-recurring or unplanned transactions. These estimates will change if the Company acquires additional assets, market interest rates change, debt is refinanced, new shares are issued, additional debt is incurred, assets are sold, other operating expenses vary, income from investments in tenant operations vary from expectations, or existing leases do not perform in accordance with their terms.

CONFERENCE CALL AND WEBCAST

The Company has scheduled a conference call and webcast for Thursday, August 9, 2012 at 11:00 a.m. Eastern Time to present the Company’s financial and operating results for the quarter ended June 30, 2012. The dial-in telephone numbers for the conference call 866-761-0748 (U.S.) and 617-614-2706 (International); using passcode 69186319. The conference call will also be available via webcast in the Investor Relations’ section of the Company’s website, www.medicalpropertiestrust.com.

A telephone and webcast replay of the call will be available from shortly after the completion through August 23, 2012. Telephone numbers for the replay are 888-286-8010 and 617-801-6888 for U.S. and International callers, respectively. The replay passcode is 32123617.

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

About Medical Properties Trust, Inc.

Medical Properties Trust, Inc. is a Birmingham, Alabama based self-advised real estate investment trust formed to capitalize on the changing trends in healthcare delivery by acquiring and developing net-leased healthcare facilities. These facilities include inpatient rehabilitation hospitals, long-term acute care hospitals, regional acute care hospitals, ambulatory surgery centers and other single-discipline healthcare facilities, such as heart hospitals and orthopedic hospitals. For more information, please visit the Company’s website at www.medicalpropertiestrust.com.

The statements in this press release that are forward looking are based on current expectations and actual results or future events may differ materially. Words such as “expects, “believes, “anticipates, “intends, “will, “should” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results of the Company or future events to differ materially from those expressed in or underlying such forward-looking statements, including without limitation: the capacity of the Company’s tenants to meet the terms of their agreements; Normalized FFO per share; expected payout ratio, the amount of acquisitions of healthcare real estate, if any; the repayment of debt arrangements; statements concerning the additional income to the Company as a result of ownership interests in certain hospital operations and the timing of such income; the restructuring of the Company’s investments in non-revenue producing properties; the payment of future dividends, if any; completion of additional debt arrangement, and additional investments; national and economic, business, real estate and other market conditions; the competitive environment in which the Company operates; the execution of the Company’s business plan; financing risks; the Company’s ability to maintain its status as a REIT for federal income tax purposes; acquisition and development risks; potential environmental and other liabilities; and other factors affecting the real estate industry generally or healthcare real estate in particular. For further discussion of the factors that could affect outcomes, please refer to the “Risk factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011, as amended, and as updated by the Company’s subsequently filed Quarterly Reports on Form 10-Q and other SEC filings. Except as otherwise required by the federal securities laws, the Company undertakes no obligation to update the information in this press release.

 
 
 
 
 
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
 
Consolidated Balance Sheets
       
June 30, 2012 December 31, 2011
Assets (Unaudited) (A)
Real estate assets
Land, buildings and improvements, and intangible lease assets $ 1,261,434,290 $ 1,224,972,901
Construction in progress and other 14,411,210 30,902,348
Real estate held for sale - 17,636,900
Net investment in direct financing leases 201,156,004 -
Mortgage loans   265,000,000     165,000,000  
Gross investment in real estate assets 1,742,001,504 1,438,512,149
Accumulated depreciation and amortization   (119,271,184 )   (101,851,082 )
Net investment in real estate assets 1,622,730,320 1,336,661,067
 
Cash and cash equivalents 127,638,726 102,725,906
Interest and rent receivable 38,038,382 29,862,106
Straight-line rent receivable 36,973,184 33,993,032
Other loans 159,718,396 74,839,459
Deferred financing costs 22,824,562 18,285,175
Other assets   30,607,770     25,506,974  
Total Assets $ 2,038,531,340   $ 1,621,873,719  
 
Liabilities and Equity
Liabilities
Debt, net $ 900,204,302 $ 689,848,981
Accounts payable and accrued expenses 59,087,287 51,124,723
Deferred revenue 22,496,038 23,307,074
Lease deposits and other obligations to tenants   29,161,167     28,777,787  
Total liabilities 1,010,948,794 793,058,565
 
Equity

Preferred stock, $0.001 par value. Authorized 10,000,000 shares; no shares outstanding

- -

Common stock, $0.001 par value. Authorized 250,000,000 shares; issued and outstanding - 134,590,586 shares at June 30, 2012 and 110,786,183 shares at December 31, 2011

134,591 110,786
Additional paid in capital 1,279,028,700 1,055,255,776
Distributions in excess of net income (238,541,336 ) (214,058,258 )
Accumulated other comprehensive income (loss) (12,777,066 ) (12,230,807 )
Treasury shares, at cost   (262,343 )   (262,343 )
Total Equity   1,027,582,546     828,815,154  
 
Total Liabilities and Equity $ 2,038,531,340   $ 1,621,873,719  
 
 
(A) Financials have been derived from the prior year audited financials.
           
 
 
 
 
 
 
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
 
Consolidated Statements of Income
(Unaudited)
 
For the Three Months Ended For the Six Months Ended
June 30, 2012 June 30, 2011 June 30, 2012 June 30, 2011
(A) (A)
Revenues
Rent billed $ 32,722,394 $ 27,641,591 $ 64,369,966 $ 54,556,469
Straight-line rent 1,428,213 2,045,269 2,876,749 3,755,580
Income from direct financing leases 5,370,844 - 7,206,004 -
Interest and fee income   11,548,153     5,268,801     19,490,573     10,550,434  
Total revenues 51,069,604 34,955,661 93,943,292 68,862,483
Expenses
Real estate depreciation and amortization 8,788,205 7,914,831 17,420,101 15,346,932
Real estate impairment charge - 564,005 - 564,005
Property-related 639,069 212,461 871,717 237,176
Acquisition expenses 279,258 616,081 3,704,270 2,656,053
General and administrative   6,697,114     7,818,053     14,288,670     14,692,315  
Total operating expenses   16,403,646     17,125,431     36,284,758     33,496,481  
Operating income 34,665,958 17,830,230 57,658,534 35,366,002
Other income (expense)
Interest and other income (expense) (16,398 ) 19,120 (31,721 ) (64,167 )
Earnings from equity and other interests 879,086 1,507 879,086 70,392
Debt refinancing costs - (3,788,998 ) - (3,788,998 )
Interest expense   (14,888,627 )   (12,386,060 )   (27,684,627 )   (20,525,376 )
Net other expense   (14,025,939 )   (16,154,431 )   (26,837,262 )   (24,308,149 )
Income from continuing operations 20,640,019 1,675,799 30,821,272 11,057,853
Income (loss) from discontinued operations   (1,279,587 )     1,007,255     (854,611 )     2,449,184  
Net income 19,360,432 2,683,054 29,966,661 13,507,037
Net income attributable to non-controlling interests   (44,163 )   (43,409 )   (86,522 )   (87,786 )
Net income attributable to MPT common stockholders $ 19,316,269   $ 2,639,645   $ 29,880,139   $ 13,419,251  
 
 
Earnings per common share - basic and diluted:
Income from continuing operations $ 0.15 $ 0.01 $ 0.23 $ 0.10
Income (loss) from discontinued operations   (0.01 )   0.01     -     0.02  
Net income attributable to MPT common stockholders $ 0.14   $ 0.02   $ 0.23   $ 0.12  
 
 
Dividends declared per common share $ 0.20 $ 0.20 $ 0.40 $ 0.40
 
 
Weighted average shares outstanding - basic 134,714,505 110,589,329 129,810,431 110,494,506
Weighted average shares outstanding - diluted 134,714,505 110,600,421 129,810,431 110,504,105
 
 
(A) Financials have been restated to reclass the operating results of certain properties sold in December 2011 and June 2012 to discontinued operations.
 
 
 
 
 
 
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Reconciliation of Net Income to Funds From Operations
(Unaudited)
 
 
  For the Three Months Ended   For the Six Months Ended
June 30, 2012   June 30, 2011 June 30, 2012   June 30, 2011
(A) (A)
FFO information:
    Net income attributable to MPT common stockholders $ 19,316,269 $ 2,639,645 $ 29,880,139 $ 13,419,251
Participating securities' share in earnings   (238,167 )   (281,310 )   (490,034 )   (596,670 )
Net income, less participating securities' share in earnings $ 19,078,102 $ 2,358,335 $ 29,390,105 $ 12,822,581
 
Depreciation and amortization:
Continuing operations 8,788,205 7,914,831 17,420,101 15,346,932
Discontinued operations 76,384 440,192 190,961 901,347
Loss (gain) on sale of real estate 1,445,555 - 1,445,555 (5,324 )
Real estate impairment charge   -     564,005     -     564,005  
Funds from operations $ 29,388,246 $ 11,277,363 $ 48,446,722 $ 29,629,541
 
Acquisition costs 279,258 616,081 3,704,270 2,656,053
Debt refinancing costs - 3,788,998 - 3,788,998
Write-off of other receivables   -     1,845,968     -     1,845,968  
Normalized funds from operations $ 29,667,504 $ 17,528,410 $ 52,150,992 $ 37,920,560
 
Share-based compensation 1,778,253 1,823,597 3,636,709 3,661,306
Debt costs amortization 855,445 1,011,107 1,710,827 1,998,062
Additional rent received in advance (B) (300,000 ) (300,000 ) (600,000 ) (600,000 )
Straight-line rent revenue and other   (2,299,056 )   (2,280,189 )   (4,032,752 )   (4,014,863 )
Adjusted funds from operations $ 29,702,146   $ 17,782,925   $ 52,865,776   $ 38,965,065  
 
 
Per diluted share data:
Net income, less participating securities' share in earnings $ 0.14 $ 0.02 $ 0.23 $ 0.12
Depreciation and amortization:
Continuing operations 0.07 0.07 0.13 0.14
Discontinued operations - - - -
Loss (gain) on sale of real estate 0.01 - 0.01 -
Real estate impairment charge   -     0.01     -     0.01  
Funds from operations $ 0.22 $ 0.10 $ 0.37 $ 0.27
 
Acquisition costs - 0.01 0.03 0.02
Debt refinancing costs - 0.03 - 0.03
Write-off of other receivables   -     0.02     -     0.02  
Normalized funds from operations $ 0.22 $ 0.16 $ 0.40 $ 0.34
 
Share-based compensation 0.01 0.02 0.03 0.03
Debt costs amortization 0.01 - 0.01 0.02
Additional rent received in advance (B) - - - -
Straight-line rent revenue and other   (0.02 )   (0.02 )   (0.03 )   (0.04 )
Adjusted funds from operations $ 0.22   $ 0.16   $ 0.41   $ 0.35  
 
 

(A)

Financials have been restated to reclass the operating results of certain properties sold in December 2011 and June 2012 to discontinued operations.

 

(B)

Represents additional rent from one tenant in advance of when we can recognize as revenue for accounting purposes. This additional rent is being recorded to revenue on a straight-line basis over the lease life.

 
 

Investors and analysts following the real estate industry utilize funds from operations, or FFO, as a supplemental performance measure. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets, which assumes that the value of real estate diminishes predictably over time. We compute FFO in accordance with the definition provided by the National Association of Real Estate Investment Trusts, or NAREIT, which represents net income (loss) (computed in accordance with GAAP), excluding gains (losses) on sales of real estate and impairment charges on real estate assets, plus real estate depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures.

 

In addition to presenting FFO in accordance with the NAREIT definition, we also disclose normalized FFO,which adjusts FFO for items that relate to unanticipated or non-core events or activities or accounting changes that, if not noted, would make comparison to prior period results and market expectations less meaningful to investors and analysts. We believe that the use of FFO, combined with the required GAAP presentations, improves the understanding of our operating results among investors and the use of normalized FFO makes comparisons of our operating results with prior periods and other companies more meaningful. While FFO and normalized FFO are relevant and widely used supplemental measures of operating and financial performance of REITs, they should not be viewed as a substitute measure of our operating performance since the measures do not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, which can be significant economic costs that could materially impact our results of operations. FFO and normalized FFO should not be considered an alternative to net income (loss) (computed in accordance with GAAP) as indicators of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity.

 

We calculate adjusted funds from operations, or AFFO, by subtracting from or adding to normalized FFO (i) unbilled rent revenue, (ii) non-cash share-based compensation expense, and (iii) amortization of deferred financing costs.  AFFO is an operating measurement that we use to analyze our results of operations based on the receipt, rather than the accrual, of our rental revenue and on certain other adjustments. We believe that this is an important measurement because our leases generally have significant contractual escalations of base rents and therefore result in recognition of rental income that is not collected until future periods, and costs that are deferred or are non-cash charges.  Our calculation of AFFO may not be comparable to AFFO or similarly titled measures reported by other REITs. AFFO should not be considered as an alternative to net income (calculated pursuant to GAAP) as an indicator of our results of operations or to cash flow from operating activities (calculated pursuant to GAAP) as an indicator of our liquidity.

 




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