Medical Properties Trust, Inc. (MPW)

MPW 
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Medical Properties Trust Inc. (MPW)

Q1 2013 Results Earnings Call

April 26, 2013 11:00 AM ET

Executives

Charles Lambert - Managing Director

Ed Aldag - Chairman, President and CEO

Steven Hamner - Executive Vice President and CFO

Analysts

Jana Galan - Bank of America Merrill Lynch

Karin Ford - KeyBanc Capital Markets

Philip Defelice - Wells Fargo Securities

Daniel Bernstein - Stifel

Tayo Okusanya - Jefferies

Presentation

Operator

Good day, ladies and gentlemen. And welcome to the First Quarter 2013 Medical Properties Trust Earnings Conference Call. My name is Sequana, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will facilitate a question-and-answer session towards end of this conference. (Operator Instructions)

I would now like to turn the presentation over to your host for todays call, Mr. Charles Lambert, Managing Director. Please proceed, sir.

Charles Lambert

Good morning. Welcome to the Medical Properties Trust conference call to discuss our first quarter 2013 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 www.medicalpropertiestrust.com in the Investor Relation’s 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 maybe 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 in or underlying such forward-looking statements.

We refer you to the company’s reports filed with the Securities and Exchange Commission for 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, Ed Aldag.

Ed Aldag

Thank you, Charles, and thank you all of you for joining us today to review our first quarter 2013 results. As Steve will go over with you in detail in a few minutes, the financial results for our first quarter were right in line with our expectations. And more importantly, the financial results continue to show the health and performance of our portfolio. I want to take a few moments to go over with you what you cannot see from the financial results.

You will recall from our previous earnings call this year that we told you we expected our acquisitions for 2013 to be made in the second half of the year. During this past quarter we made tremendous progress on these acquisitions. Our active acquisitions pipeline is larger today than it has ever been. I want to be clear I’m referring to our active acquisition pipeline not a shadow pipeline. These are properties that we are actively working towards the close.

We certainly recognize that we will most likely not close on each of these. However, the number and dollar amount of properties we are actively working are larger than they have ever been and has always been the case we do not comment on acquisition targets but we ultimately pass on.

Our existing portfolio of performance fell right in line with what you've seen nationally over the past few weeks, essentially our EBITDA coverage for all three of our major sectors was flat to slightly down quarter-over-quarter. However, for year-over-year they were slightly up to flat, the utilization of our facilities also followed these trends.

Due to the number of acquisitions we have made in the past year, we are viewing our portfolio coverages can get a little confusing. So let me walk you through a couple of ways to look at it.

As you know on these calls I give you the EBITDA lease coverage for our mature operations meaning they've been in our portfolio for at least a year and I give these to you on a trailing 12-month quarter-over-quarter and a trailing 12 months year-over-year. So that's where I'll start.

For our acquisition hospitals trailing 12 months year-over-year actually rose to almost 5.5 times, trailing 12-month quarter-over-quarter at almost 5.5 times there is a slight decrease from the 5.65 times reported last quarter.

I'd like to point out that our hospital in Florence, Arizona which I'll discuss in a little more detail in a few minutes is included in this calculation as we have owned it for more than a year.

For our LTACHs they’ve remained essentially flat at almost 2.25 times year-over-year and quarter-over-quarter. For our IRFs quarter-over-quarter we saw a very slight decrease in coverage to approximately 2.8 times. This 2.8 times is almost 50 basis points lower than the year-over-year coverage, which is somewhat misleading.

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