Medical Properties Trust CEO Discusses Q3 2010 Results – Earnings Call Transcript

Medical Properties Trust, Inc. (

MPW

)

Q3 2010 Earnings Conference Call

November 4, 2010 11:00 AM ET

Executives

Charles Lambert – Director, Finance

Edward Aldag – Chairman, President and CEO

Steven Hamner – EVP and CFO

Analysts

Jerry Doctrow – Stifel Nicolaus

Michael Mueller – JPMorgan

Tayo Okusanya – Jefferies and Company

Kevin Ellich – RBC Capital Markets

Karin Ford – KeyBanc

Operator

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Previous Statements by MPW
» Medical Properties Trust, Inc. Q2 2010 Earnings Call Transcript
» Medical Properties Trust, Inc. Q1 2010 Earnings Call Transcript
» Medical Properties Trust, Inc. Q4 2009 Earnings Call Transcript
» Medical Properties Trust, Inc. Q3 2009 Earnings Call Transcript

Good day ladies and gentlemen and welcome to the third quarter 2010 Medical Properties Trust, Incorporated earnings conference call. I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference.

(Operator Instructions) As a reminder, this call is being recorded for replay purposes.

I would now like to turn the call over to Mr. Charles Lambert, Director of Finance. Please proceed, sir.

Charles Lambert

Good morning. Welcome to the Medical Properties Trust Conference Call to discuss our third quarter 2010 financial results. With me today are Edward K. Aldag Jr., Chairman, President and Chief Executive Officer of the company; and Steven Hamner, Executive Vice President and Chief Financial Officer.

A press release was distributed this morning and furnished on Form 8-K with the Securities and Exchange Commission. If you did not receive a copy, it is available on our website at www.medicalpropertiestrust.com, in the Investor Relations section. Additionally, we are hosting a live webcast of today’s call, which you can access in that same section.

During the course of this call, we will make projections and certain other statements that may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risk, uncertainties and other factors that may cause our financial results and future events to differ materially from those expressed in or underlying such forward-looking statements. We refer you to the Company’s reports filed with the Securities and Exchange Commission for a discussion of the factors that could cause the company’s actual results or future events to differ materially from those expressed in this call.

The information being provided today is as of this date only and except as required by the federal securities laws, the company does not undertake a duty to update any such information.

In addition, during the course of the conference call, we will describe certain non-GAAP financial measures, which should be considered in addition to, and not in lieu of, comparable GAAP financial measures. Please note that in our press release, Medical Properties Trust has reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements.

You can also refer to our website at www.medicalpropertiestrust.com for the most directly comparable financial measures and related reconciliations.

I will now turn the call over to our Chief Executive Officer Edward Aldag.

Edward Aldag

Thank you, Charles and thank all of you for listening in today. The third quarter of 2010 was an exceptionally busy quarter for Medical Properties Trust. While most of the activity in the third quarter will be reported all in the future quarters our entire team has been deeply involved with numerous underwriting and due diligence assignments for potential acquisitions.

As has been our policy in the past, however, we will not comment on the details of any acquisitions until the transaction has been completed. We’re excited about what we have in the works and look forward to more announcements soon.

I’m sure each of you has read this morning’s press release and saw where we closed on the acquisition of a development hospital in Florence, Arizona. This facility will be an emergency room focused, acute care hospital leased annuity run by the visionary group. This group has very successfully developed and operated a similar facility in Gilbert, Arizona.

Construction has already commenced and should be completed within the next 12 to 15 months. MPT’s total investment is approximately $30 million with a good double-digit going in cash cap rate. We believe that this will be the first of several acquisitions with this group. I’m also pleased to announce that we’ve made tremendous progress on both campuses of the River Oaks Complex in Houston, Texas.

As you all know, these two facilities were closed approximately two years ago as part of the HPA liquidation and then we were hit by hurricane Ike a few months later. This past month we completed the sale of a smaller South campus for approximately $3 million. In addition to the sales proceeds, the disposition will save MPT approximately $700,000 in annual property expenses and untold savings in man hours and distractions.

Also, after working through the web of coordination efforts with the state of Texas, which by the way has been very helpful. Insurance companies, contractors and multiple tenants, we’re pleased to report that we have begun the renovation and restoration of the much larger and much more valuable North campus of River Oaks. From this point forward, this facility will be known as the River Oaks Medical Center and will be a multi-tenanted hospital facility. The facility is expected to house an LTAC in-patient rehabilitation facility and ASC along with other ancillary services.

When completed our total GAAP investment in the River Oaks Medical Center will be approximately $45 million. Our total return on this facility is expected to exceed our rent we were collecting on the north and south campuses combined. Renovations are expected to be completed in late 2011.

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