Medical Properties Trust's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Medical Properties Trust, Inc. (MPW)
Q1 2012 Earnings Conference Call
May 10, 2012, 11:00 AM ET


Charles Lambert – Managing Director for Capital Markets

Edward K. Aldag, Jr. – Chairman, President and Chief Executive Officer

Steven Hamner – Executive Vice President and Chief Financial Officer.


Tayo Okusanya – Jefferies

Daniel Bernstein – Stifel Nicolaus
Karin Ford – KeyBanc Capital Markets

Frank Morgan – RBC Capital Markets

Todd Stender – Wells Fargo Securities



Good day, ladies and gentlemen, and welcome to the Q1 2012 Medical Properties Trust Earnings Conference Call. My name is Ian[ph], I will be your operator for today. At this time, all participants are in a listen-only mode and will conduct a question-and-answer session towards the end of the conference. (Operator Instructions) As a reminder, this call is being recorded for replay purposes.

I would now like to hand over to Mr. Charles Lambert, he is the Managing Director for Capital Markets, please proceed sir.

Charles Lambert

Good morning. Welcome to the Medical Properties Trust conference call to discuss our first quarter 2012 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.

Our 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 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 risks, uncertainties and other factors that may cause our financial results and future events to differ materially from those expressed and/or underlying such forward-looking statements.

We refer you to the company’s report 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 Federal Securities Laws, the company does not undertake the duty to update any such information.

In addition, during the course of this 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 for the most directly comparable financial measures and related reconciliations.

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

Edward K. Aldag, Jr.

Thanks Charles and good morning everyone. In just a few minutes, I will turn the call over to Steve to review the details of our quarterly results. He will also provide you with updated guidance for 2012, which will speak to our strong expectations for FFO per share in 2012 both supported by our recent Ernest transaction at approximately 300 million of additional 2012 investments, which we believe a 100 million is imminent.

Quickly, I want to note that we are updating on how we are providing guidance, in an effort to provide investors with a more subsequent picture of our outlook. Going forward, we will provide FFO per share guidance on a calendar year basis. We will also be providing you with our expectations for the run-rate FFO per share at December the 31 st, 2012 and plan to provide 2013 calendar year, as we are closer to the end of 2012. I want to spend some time reviewing the strong performance of our portfolio and why we believe our strategy and operational excellence positions MPT for predictable and continued successes.

For the past few years while our country and the rest of the world have experienced the most challenging economic environment in decades, the MPT portfolio has thrived. Our EBITDAR lease coverage ratios have grown from 3.2 times at the end of 2006 to more than 5.5 times today. And our facilities have achieved improved performance across the board. It is worth noting that hospitals continue to have higher average lease coverages than other healthcare facilities.

Part of the reason for our success is our ability to selectively invest in the highest quality operators. As we have discussed with you in the past, our knowledge of hospital operative market is a distinguishing characteristic of MPT. One that is a key underpinning of our proprietary growth strategy and a unique ingredient of our outperformance. As further proof of hospital’s strong predicted performance, let us look at the three of the country’s largest four private hospital operators. While their admissions and adjusted admissions per bed have been relatively flat from 2007 through 2011. Their EBIDTA per bed has grown dramatically and is up 22%, 91% and 105%.

We continue to believe that the hospital industry is a great industry to be in during the tough times and the good times. And then our expertise positions MPT to benefit from these fundamentals. As we all know the demographic trends in this country are going to support continued demand for hospital services. We will always need a healthcare delivery system. It is our core belief that hospitals will remain the hub of our healthcare industry and high quality hospitals will lead the charge toward improving patient outcomes, driving down length of stay, and reducing overall healthcare cost. We believe that our diversified portfolio across the entire healthcare spectrum from acute care to post acute care positions MPT and our shareholders to benefit from the growth opportunities supported by these market dynamics.

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