You can also refer to our website at www.medicalpropertiestrust.com for the most directly comparable financial measures and related reconciliations. Well, absolutely. Is it possible you would just keep those and swap the operator? In the second half of 2021, we announced our agreement to form a joint venture partnership with Macquarie Infrastructure Partners. I just want to follow up on the behavioral investments. I appreciate the color there. Well, sadly, it's not big enough anywhere. Here in the U.S., we have a very, very fragmented market. However, if we're wrong, if we're totally and completely wrong and Prime does in fact exercise its options then what we've said is the result is well within that $78 million to $82 million guidance range. Our next question comes from Steven Valiquette with Barclays. WebEdward K. Aldag, Jr., launched Medical Properties Trust, Inc., (NYSE: MPW) in 2003 as the only healthcare company of its kind. But there certainly are good big opportunities out there. And then just one last quick one on the development pipeline. No. We obviously have been able to do it with Priory. How close -- when can we expect something if at all? Your next question will come from Connor Siversky with Berenberg. Finally, we recognized gains exceeding $84 million for various properties and equity investments divested during the quarter, and which I will detail momentarily. It is not something we feel like has to be done immediately. And then just two more quick ones. But, a 4% management fee would probably be a very conservative calculation of that. I mean, are you seeing any improvement in the reimbursement rates there? We have a very long, strong and mutually respectful relationship. First one is quick. 2022 is shaping up to be another great year for MPT. Okay, great. Or is this something that MPW can help out with? So in order to execute that strategy Adeptus needed general acute care hospitals, one was in Houston, one was in Dallas. Also each quarter, generally accepted accounting principles require us to present certain cost as MPT expenses, even though they are contractual obligations that are reimbursed by our tenants. So it's not something that we're counting on. That's really all that I meant was that, we're not dependent long term on our growth to waiting for the stock to come back. Healthscope. And I don't know if that answers your question, but we'll continue to collect the cash rent due to inflation without respect to the straight-line rent. Good morning. We bought this property right before COVID hit. That was a German portfolio. In my overall remarks today, I will also take time to address a few other points that have been raised in recent reports and media coverage about MPT. It went public on the New York Stock Exchange via an IPO on July 7, 2005. MPT continued to execute on our acquisition strategy to amass another $3.9 billion in investments across 5 different countries, in 9 -- with 9 different operators, 5 of which were new operators. And please don't hesitate to call, any of us if you have any additional questions, or any concerns today or throughout the year. But historically, the main adjustments that we make are for dilution from Board of Director approved disposition strategies. These were two of the three hospitals we built. And in order for us to do it in the current equity markets, we'll have to bring in a partner upfront. And in turn, have you seen cap rates for hospitals trend a little bit higher over the past six months or so? Edward "Aldag has been working as a Chairman, President & Chief Executive Officer at Medical Properties Trust for 21 years. Yes. And just to reiterate what Steve pointed out, we don't own the hospital and widely, but we've been looking at the replacement facility for a long time. WebSUPPLEMENTAL NEEDS TRUST Robert M. Freedman Schiff Hardin LLP 666 Fifth Ave New York, NY 10103 2127459575 Rfreedman@SchiffHardin.com Instructions to the Trustee We presented these to correct what may have been misinterpreted based on recent third-party commentary. I do expect that the next quarter will be down slightly, but primarily due to the February -- the pressures in February and February not being a great month. And then one other -- Watsonville, I know it was a small deal, but did that impact your run rate calculation at all? So for example, let's just take Utah because Steward has already agreed to sell Utah. 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. But that is not to say that, even with strong local facility performance, operators will never get stressed and MPT will never need to re-tenant its facilities. So it's a facility that we've been looking at for a very long time. Did that impact your bound rate? And the outcome with Ernest was we bought 16 properties, and then we paid another $100 million, I think, for the OpCo. You've got the CPI escalator as a positive. And by the way, we maintain a very strong payout ratio most recently in the 80% of AFFO range. Your line is open. And we are always evaluating a large portfolio, typically the master leases are working with and trying to accommodate the needs of our tenants. By definition, the CMS cost reports could actually show a negative profit margin and all of the rent and interest being paid at the same time. In the U.K., the NHS established a need for increased behavioral health services, also long before COVID. Yes. Priory has only reported 1 quarter of operational financial information to MPT thus far, but that 1 quarter is right in line with our underwriting projections. But at least through now, we're not bringing earnings home. Now I want to take a few moments to go through some of our larger tenants. Like for example, for every 1% incremental increase in labor costs across all your operators how much would that 1% change your EBITDARM rent coverage ratio if at all? Yeah, I might follow-up on that post the call. On page 13 of our first quarter supplement, we have listed a significant majority of our major tenant relationships and their most recent trailing 12-month EBITDARM to lease payment coverage ratio. And then separately, what sort of cap rate should we think are you thinking about this year in terms of acquisitions? I look forward to sharing with you this morning details about our portfolio and future acquisition expectations. Our pipeline is robust. Our press release was distributed this morning and furnished on Form 8-K with the Securities and Exchange Commission. Prime. Congrats on the solid results. Jonathan, we have discussions at the Board level about all of our governance -- all the relative governance points. Similarly, employees at Medical Properties Trust rank Edward Aldag in the Bottom 35% of CEOs in Anniston, AL. Just -- I know you talked about the Prime purchase option, but maybe itd be helpful if you go over what else is under a tenant purchase option as I'd be particularly interested in knowing if there's any other in 2022 and 2023? WebEdward K. Aldag founded Medical Properties Trust, Inc. Similarly, certain revenue that is included in fourth quarter results, primarily revenue from 50% of our Steward Massachusetts assets that are pending sale to the joint venture and the noncash straight-line rent I just mentioned, will not be included in future quarters. Thank you, Ed. I know HCA just announced that they plan on building 5 new hospitals. We just don't have that yet. On Prospect, we assume nothing on Prospect. Many of the contract nurses hired during Omicron spike were signed on a 6-month contract that will end in Q2 2022. Prospect. Chairman of the Board. [Operator Instructions]. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. They have not experienced any shortages or supply chain issues and do not see any concerns with cost at this point. [Operator Instructions]. And of course as our slide number 8 shows that's exactly how our leases perform, virtually without exception as the chart in the top half of that slide demonstrates. And now, it sounds like, if I heard correctly you would be willing to bring in a partner upfront. Medical Properties Trust, Inc. (NYSE:MPW) Q1 2022 Earnings Conference Call April 28, 2022 11:00 AM ET, Charles Lambert - Treasurer & Managing Director, Edward Aldag - Chairman, President & Chief Executive Officer, Steven Hamner - Executive Vice President & Chief Financial Officer, Good day, and thank you for standing by. And that concludes our question-and-answer session. Remember, if they do -- if they did go up, our rental payment would go up as well. Medical Properties Trust, Inc. (MPW) CEO Edward K. Aldag, Jr. on Q3 2021 Results - Earnings Call Transcript. Ed, can you provide some color on how the company is thinking about new development? I'm just trying to get the puts and takes to work back to a cash yield on those acquisitions. On the earnings side, that's a little bit trickier. And also if potentially the targeted markets or asset types and the pipeline change, if large-scale acquisitions are possibly put on hold? There's nothing specific. Well, that's certainly [Indiscernible] unless we see another variant come through. But the two methods are operators GAAP basis reporting and the collection by Medicare of the full scope of all charges that hospitals use to report to their reimbursement source. But that was a very both of them are very attractive, particularly the capital, both of them were very attractive, significant compression below what we were earning. Page 7 in this morning's deck, summarizes how our specialized knowledge about hospital operations, underwriting expertise, and carefully structured master lease arrangements led to a successful, if distracting re-tenanting process in the worst of circumstances. And again, we greatly appreciate all of your interest. They are seeing strong growth on the surgical side of business that should help continuing coverage growth. We expect this capital to come from some combination of the following. Their consistent EBITDARM coverage is at the top of our portfolio. Your Introduction Request was successfully sent. This concludes today's conference call. Makes sense. Circle, which represents 11% of our portfolio, continued to show strong coverages. We still own the real estate and nothing more by the way no liabilities in those structures and we still manage the real estate. So until we see competition that is built with hospital people who really have the capability of underwriting very complex hospital systems and governments and so forth, we don't think the competitive environment is going to change too much. Our next question comes from Joshua Dennerlein with Bank of America. And by that I mean if we had been having and we were having these discussions before we finish the Macquarie deal 6 months or 12 months ago I mean we're still talking in the same pricing range, cap rate range. Because the great majority of our debt is at fixed interest rates even in a rising interest rate environment, we expect to realize higher rents when our interest expense is rising only modestly, which will certainly be the case in 2022. But it obviously is something that we pay attention to and talk to our operators on a regular basis. My others have been answered. First, we present a summary of adjusted FFO, over the past 10 years compared to dividends paid. So Connor we disagree with your original statement in there and so do our operators now. My understanding is that there is a push for another covered relief bill that could come to fruition as early as this month, and most of the money is earmarked for the U.S. hospital sector. Mr. Fatoullah is also the co-founder of JR Wealth Advisors, LLC. But in so far as guidance, there's no assumption about any property sales or lease adjustments or anything with those Prospect hospitals. We continue to evaluate different parts of the portfolio. Previously, it was always kind of like a you would do it after you had closed on a deal kind of created the value upfront. The Nordic countries have always been a promising target for MPT. So even that is not an issue for us. So that's kind of our general observation. We're very comfortable by the way but that's not to say that we've changed our plan that we've been stating for quite a while and that is to reduce leverage. We appreciate all of the questions. So could we expect some impact to rent coverage this year, as the HHS runs roll off from prior periods? And then in the same vein, how is the top line on these procedures looking for private pay models? Am I correct to say that most of those will occur in 1Q '22? Our relationships are based on a strong sense of mutual trust, but also proven track records of performance and consistent delivery. Apologies, I'm new to the story. There's a retail price index in the U.K., for example, that some of our tenants prefer and frankly, it's not it's not much different. Understood. While we typically don't respond to the various third-party reports of this nature and some of this information may seem like real estate one-on-one, we have heard from many of you our shareholders and others that we should take the opportunity to set the record straight and correct some of the erroneous information that has been published. Sorry, go ahead. I know there was a talk of a second joint venture. We refer you to the company's reports filed with the Securities and Exchange Commission for a discussion. We expect this transaction to close in the first half of 2022. The main tenant, again, I apologize in advance for the pronunciation, Pihlajalinna is the third largest private hospital operator in all of Finland. We contacted and established a relationship with an entity called City Plants, a not-for-profit organization in Los Angeles that distributes and plants approximately 20,000 trees a year in areas that lack access to the many environmental and health benefits of robust tree canopy. R. Steven Hamner Executive Vice President and Chief Financial Officer. And how we should think about that as we're modeling in '22 as well? Your line is open. Our next question comes from Michael Carroll with RBC Capital Markets. But the ultimate volume this year will be related to the amount and timing of our access to attractively priced equity capital. So we expect even in a relatively steep inflationary environment that we think we're in now that the revenue -- first of all the revenue will keep up with increases. Well, from a CMS standpoint, as I stated earlier, on a cumulative basis, CMS has always exceeded the inflationary rates from the announced -- the payments that were announced for general acute care hospitals. The integration of the 5 recently purchased Miami facilities has been successful and the market continues to exceed expectations. This 178 million transaction included the acquisition of four hospitals and four distinct major metropolitan areas throughout Finland. Finally, we continue to generate meaningful excess AFFO above our dividend payout. Okay. And you may remember, Andrew, I mean, when we did the first deed, which really set the pattern for us. In other words, to clarify a misstatement from one recent report, these adjustments to straight-line rent are routine ordinary cores and have nothing to do with lease amendments. I don't know if you can talk about -- I mean, I'm assuming HCA would want to own those Utah assets? Healthscope, which represents 5% of our portfolio, continued to show quarterly EBITDARM increases. Okay. But the report then implies that, there is something surprising that on a consolidated balance sheet basis MPT's gross yield is declining. Should we slice and dice between different types of properties, between different operators across master leases? I've got friends at HCA. And that's the total portfolio. The issue has been for a while, just as I mentioned a second ago, there's a tremendous amount of interest, especially coming out of COVID, it's only grown by, what I'll call, the lack of a better term, passive investors. I will point out though that on January 1, in rent raises and then in compounds for the next 30 or however many years that the property is under lease, so it is a very powerful component of our business story. With me today are Edward K. Aldag, Jr., Chairman, I try to change up my system. Several of Prospect's California facilities have recently been recognized with top excellence and 5-star quality awards from Healthgrades. While certain peaks and troughs in both earnings and leverage occurred over this time frame due to transaction timing, the long-term results speak for themselves, and we are confident that we will continue to deliver strong growth in the future. There's no guarantee to be in the final version, but I guess my high-level question around this is, where does Medical Properties Trust stand right now? Median, which represents 5% of our portfolio, continued its steady performance. So if you look at the trailing 12 months that ended 12/31, the vast majority of those grants that are still included in that are in the first and the second quarter. And Ed mentioned in his prepared remarks, the very long-term history of CMS and other hospital reimbursements staying at least even and frankly over time ahead of inflationary pressures. Is this happening to you frequently? This transaction closed in October of 2021. It's been very hard to buy scale. WebBuilding on MPTs reputation as a global leader in healthcare finance. If we're earning, say, in euros or pound sterling and yet we want to bring that home into dollars, that's when you have exposure to a currency issue. But there's no carryover. Swiss inflation rate is one of the lowest in the developed world with March 2022 figures at 2.4%. This year -- this quarter, I should say, a $5.4 million gain. Or how many percentage points of labor cost would it take to move that by 10 basis points from 2.7% to like a hypothetical 2.6%? So Steve we haven't done that. Steve, I can't hear the echo is too much. Steve, just following up on the -- I guess, the guidance, when we think about the cash bump going up because the escalator goes up, your GAAP rent is staying the same though, correct? So far our JV strategy has been to assemble a portfolio of well underwritten, but perhaps previously under-managed assets, seizing these assets, while our premier operator tenants improved the financial performance, and then sell an interest to our JV partners. Inflation during 2021 substantially exceeds these floors. No, I'm aware, I just didn't know if that had been something addressed as the company has grown and increased in size and typically we do see it split. I'll point to another business the recently announced acquisition by Blackstone of ACC certainly didn't show any cap rate compression that one might have expected an answer to your question at least that was my personal observation Mike. A recent third-party note made much of the concept that net lease cash yields should "trend up and to the right." The slide following details non-real estate investments. But just last one, just to clarify you mentioned you'll elaborate a bit on the G&A. Ed just now mentioned that, absent capital issues, we'd be doing -- we'd be expecting way more than $3 billion. MEDIAN'S EBITDARM coverage remains steady as it has throughout the past two years. Thank you. I noticed I think one of those projects time line got pushed out a little bit. Second our guidance no longer attempt to adjust for the estimated future dilutive impact of capital transactions, because the timing and source of that capital is not definitive. For the first quarter, February was not a great month for everyone. The one in Houston was not. And finally, LifePoint. MPT expects to invest nearly $170 million in the approximately 120-bed facility, with rent commencement under our master lease expected in the summer of 2024. However, that is not meant to establish a capital strategy different from our long-term target of between 5 and 6x. Welcome to the Medical Properties Trust conference call to discuss our second quarter 2022 financial results. Well, if you remember, Mike, you've been with us a long time, the widely hospital was originally owned by IASIS, and the redevelopment of that hospital was planned long before it was a Steward acquisition. I recently met with Prime's leadership and both MPT and Prime expressed their desire to continue to work together. So I just want to clarify, I didn't realize that you had RIDEA exposure in some of the hospitals -- in two of the hospitals you mentioned. But as I said we haven't had any discussions with the proposed new operators at this point. They have been able to cancel and rehire contract labor as rates improve. Good morning, and welcome to the Medical Properties Trust conference call to discuss our fourth quarter and full year 2021 financial results. Led by Chairman, President and Chief Executive Officer, Edward K. Aldag, Jr., the executives of MPT rely on And then just on the comment you made initially just sort of the more global nature now, has there been any change in the competition, especially post some of these larger deals and whether it's in the U.S. or any of your other global markets and just new players looking at this space? And move forward, we did. I really don't think you should overlook also. Ed has already been through this. There will be small additions to it, but there aren't any additional really big investments. Web4. With the disclosures this quarter around the coverage ratios by all those individual tenants that's certainly helpful. I think you mentioned it's probably higher than that. Got it. We do have preliminary discussions about specific parts of the portfolio, but nothing other than that to report. This morning we filed on our website a few slides that address some of the misdirection that Ed mentioned earlier. But I guess just to throw it out there I'm curious whether or not you guys have completed any sort of stress test calculations for your overall 2.7% EBITDARM rent coverage ratio across the entire portfolio specifically related to rising labor costs? Due to our recent behavioral health acquisitions, we have initiated reporting coverages on this property type this quarter, which generated an EBITDARM coverage of 1.92x for the trailing 12 months. 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. As both, Ed and I mentioned there's activity. The oldest executive at Medical Properties Trust Inc is Emmett E. McLean, 66, who is the Founder, Exec. So given some of the recent investment activity, could we sort of expect a shift in the pipeline from Europe -- from the U.S. into Europe? We have recently made a sizable donation and members of our staff traveled to L.A. physically work with this organization with their tree planning. The second announcement was our $900 million acquisition of 5 general acute care hospitals in South Florida from Tenet Healthcare in conjunction with Steward Health's acquisition of the operations of those hospitals. While we are not free to disclose expected returns on this interest in anticipation of certain pending transactions, we can reiterate that we are highly satisfied with the likely profitability of this investment. Regarding Prospect's labor costs, they are starting to see those level off over the last month or two. Good morning. About $900 million or 60% of this is half of our MEDIAN asset and half of our Steward Massachusetts assets that are in those two joint ventures. The great majority of our leases have annual or other periodic contractual rate increases driven by inflation, including floors generally in the 1% to 2% range. Okay. VP, COO & Sec.. Average occupancy was approximately 2.5 points ahead of where it was last year. No. We have these businesses. And has those discussions changed or advanced over the past several quarters? The question generally in case others didn't hear it, I think Mike is any notable movement in cap rates that may be in reaction to the inflationary pressures. And your last question will come from John Pawlowski with Green Street. Steve will discuss this in more detail in just a few moments. So in 2022's first quarter, this amount was $2.6 million versus the fourth quarter of 2021 of less than $500,000. So all of them believe that this is short term and that we won't see any long-term effects from this. On the 1-year anniversary Primes acquisition of St. Francis Hospital in Linwood, California, both Prime and St. Francis were recognized by local officials for their extraordinary service to the community. Can you just provide any commentary here whether or not that's viewed favorably or unfavorably by the operator base? So in other words if we're operating with leverage at five times and we have the opportunity to make a large acquisition and we can use borrowings, interim borrowings for that and maintain the leverage below six, it just gives us that much more flexibility that's much more competitive advantage. We do RIDEA I'll just explain Springstone because there is a pattern there's a reason we do it. Our next question comes from Vikram Malhotra with Mizuho. So, for example, of the two we just sold, that we announced this morning, one was empty. But that is outside of the facility level numbers and similar to the question that Tayo was asking about EBITDARM versus EBITDAR. Thanks for keeping the call going. Yes. The IRF coverage for the trailing 12 months was 2.09x versus 2.12 trailing 12 months. In the press release and some of your prepared remarks, you alluded to the robust pipeline of new opportunities. Operator? As a result, labor costs have increased and in some cases, services have had to be temporarily reduced or limited. Most of it continues to be general acute care hospitals. In the middle of 2021, we announced and subsequently closed 2 sizable acquisitions. Like me, some of you may be a lifelong reader of National Geographic. So Mike, we went through, at least in my comments, kind of a list of capital that's available to us. I'd now like to hand the conference over to Charles Lambert, Vice President. Before we go to questions, I want to point out again the investor update that, we posted to the MPT website this morning, and just call your attention to a few of the slides. As you've seen in various news reports, Prospect has entered into an agreement with two separate entities to acquire their Pennsylvania and Connecticut facilities. Frankly, we expect a couple of more kind of one-offs in the very near term. Or are you willing to issue equity kind of at these prices? So if we have the straight-line burn off coming from the transition, what's the offset to that if your GAAP rent change isn't -- or if your GAAP rents aren't changing because of the bumps? Did you hear the question? Contract labor is down year-over-year though it has been increased slightly in the last two months. There's certainly nothing we're announcing today, obviously, but we continue to be thankful and encourage that all of those types of capital access is available to us. And again, thank all of you for listening in. Great. Yes. You'll receive an email with the confirmation. These 2 highlight the critical importance of hospitals in underserved neighborhoods in Los Angeles. No, not in the near recent past, there hasn't. Yes. Your next question will come from Michael Carroll with RBC Capital Markets. Just sort of rounding out the sort of sequential lack of a change in the run rate normalized FFO guidance, right, so you maintain the range, $1.80, $1.20 -- $1.85, but a couple of things have happened, obviously.
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