Medical Properties Trust (MPW) 23 Feb 232022 Q4 Earnings call transcript

Good morning everyone and welcome to the Q4 2022 Medical Properties Trust's Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please also note, today's event is being recorded.

At this time, I would now like to turn the floor over to Charles Lambert, Vice President. Sir, please go ahead.

you. Thank welcome fourth Properties XXXX quarter and to conference financial the our discuss and to morning Trust Medical call results. Good full year today me are K. With Edward and Executive Aldag, Financial Chief of Jr., and Executive Chief Chairman, the President President Officer. company; Steven and Hamner, Vice Officer

was morning press the on with and Form release Our and Exchange furnished X-K Securities Commission. distributed this

section. If www.medicalpropertiestrust.com in at on our you did website not receive Investor a Relations copy, it is available the

that same Additionally, a in you webcast can today's of which we’re call, section. hosting live access

During financial those unknown forward-looking differ to are course and we the make results uncertainties expressed the the Act this known of will that future of Reform our projections statements call, statements risks, materially other underlying events of in may and to statements. other such forward-looking XXXX. forward-looking Private factors or from and meaning subject statements certain Securities and Litigation be that cause These may considered within

federal filed for you with cause actual does and update being this refer this We events laws, and results only, that from expressed in or discussion to is the the a Exchange could company's those by future to factors Securities information. the except such materially securities of any not company differ company's the the reports as as information today the undertake date a required to of call. provided The Commission duty

we non-GAAP measures. the will financial lieu In measures, certain comparable in the to should call, describe in of addition, during addition be not and course conference of which financial considered GAAP

measures has G to accordance Trust Medical GAAP with financial Reg in the non-GAAP measures Please our comparable note that release, all in Properties press most requirements. directly reconciled

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

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

earnings fourth Thank for and in you, quarter today on you thank call. listening Charles our all

comments we four different across industry. optimism the the hospitals As confirm find all our tenants in of from world public on one largest of for countries the the extremely the on continents, US publicly XX outlook Recent operators encouraging owners traded about fronts.

Staffing access to staff. costs patient to employees. down March are Contract and costs as tenants implementing And are XXXX, and and develop care approximately means have peaked XX%. innovative improved labor into dramatically is retain going qualified last our come

Our not operators continue their care of patient in is quiver on costs, that efficiencies, and a because in quality to index inflation advances et mean to per simply reduce have cost take My arrows basis. procedures, to technology high, advantage patient being doesn't operators reduce do deliver structural that an our cetera. point increase transform

for charges been to procedures, to for have with patient a treatment. process growing optimize continually and Hospitals treatments rapidly improve demand equilibrium maintain required decades

an entire on As we move the into increasing generalized across prognosis margin improvement for volume industry is encouraging. the XXXX,

low mid-single-digit expected payer, for along depending experiencing reimbursement are improving volumes are increases, generate with XXXX diagnosis, scale to programs comparable revenue which, MPT's expanding along operators the on the all attractive tenants. Our acuity an to and and

on sights all our busy world. ones abundant throughout very our of XXXX, building relationships, and during new been maintaining We've opportunities keeping the

prepared for normal tremendous the on interest continue rates. are settles world opportunities see to to the down them We as on soon new and as act

across also quarters. markets like Asian We States, South continue a the our we strong continue and pipeline to in and explore business America NAFTA to have current but Europe, the markets United new

last to operators year. in to the underwriting with the continues operating line hospital operators, market the our labor the see that standards. to this our posted results continue by portfolio publicly issues improvements vast produce reporting affected Like results Our original time

recently strong with six This properties. will lease And our the Priory from approximately acquired as be to a £XXX all good a Priory added out of acquiring already December be is the real of third-party of additional to the estate. LifePoint the profit know, for added hospitals a Springstone our In portfolio. Springstone you portfolio. million we third another party retaining This will of piece Apollo. the Priory example and master to XXXX, improve addition purchased operating we and completed holdco with transaction spinning out

in I'll close. for reviewing The its few Haven New and Systems with minutes a is to East this Prospect quarter. Coast Connecticut. continues progress with their Connecticut Yale, to in still transaction a tracking spend midyear due Prospect relevance make Island Health divestitures Rhode

Prospect's at intermittent non-MPT valued in latter the are Island billion. XXXX. Rhode extremely care third-parties in part facilities the [ph] note, $X expected business around close While to an encouraging managed have of On

deferred With share the California more properties, properties our without to have the excess including our rent. the we security the in value from proceeds prospects, any sale than interest in of realize full business, we even of regard collateral Pennsylvania value sufficient than to in this Yale believe investment of the managed the our more and care return

is multiple months. hospitals, on an that management Pennsylvania should return In them in profitability their measure to focused at approximatelyXX cost-cutting addition XX initiatives Prospect to enable the to to aggressive market

a recorded felt previously California as of quarter write down XXXX. third end on given write of The of elongated the timing being rent the That generating times Pennsylvania recovery, facilities. straight-line it the Pennsylvania currently coverage X.X of off and are facilities prudent the said, we the XX-monthbasis a to trailing

the good with announced Catholic price Steward purchase provide CommonSpirit by to Steward loan Steward down of be will and MPT a liquidity. including of the made operations debt subsidiary. a facilities Initiative, definitive summer Health Steward sell The pay to a agreement amount and used Utah for Steward to their CommonSpirit obligations, week, to last Last

to entire Health we this our be and with Utah second Catholic our This will excited the CommonSpirit, portfolio agreement transaction we've lease to done to hospital expand Initiatives. are Steward We announced relationship.

one credit again regarding our with the MPT validates The largest CommonSpirit made of know, of announcement of portfolio. is entire model value sale most its the of facilities, further of once Utah care Steward's and you As health not-for-profit the last validates country's and A a respected rating providers. week pending underwriting

Our far itself underlying and outstanding outlast underwriting operations, demand value estate a record operator XX-year real of track where estate the of the history. real the hence, for hospital the and the has

our retirement comments ever will I streams. want other about few to and co-founders, closely a and been this Today, remarkable and we XXXX different from with mine collaboration Emmett's and It Steve's I announce part of of MPT effective one in to ,XXXX. earnings call McLean. September has Steve met make close in worked since. have Emmett Emmett a each on Xst

children to grandchildren much will for we Catherine, Emmett, Congratulations. earned I to those cherish time dedication publicly want thank past this know and XX retirement. precious for your the years. you work and your and take his Emmett that

issue retirement. will X-K later a today We on press Emmett's release an and Steve?

$X.XX and per Thank we and you, the prior diluted full normalized FFO reported This our fourth for Ed. XXXX, respectively, year with $X.XX quarter expectations. of share in morning, line

I estimate XXXX the FFO, and income reconcile which will our of quarter's introduced net fourth results momentarily. normalized calendar also We to

just quarters, a mention I'll had First, an around our concentration we based a non-GAAP reporting concentration change basis. on In to made prior supplemental basis. adjusted operator our metrics. is That asset we gross

that published to financial That's GAAP graphs measure are GAAP confusion. XXXX, guidance basically non-GAAP charts, Starting charts, the chose need tables stated because GAAP-related disclosures greater SEC reduce and graphs the this to in December quarter, and to to and non-GAAP equal these in related tables, updates display provide in numbers. its using the and of or order graphs, tables charts to avoid prominence. disclosures we In measure duplicative we

purposes provide comparative footnote XX to the to did of for concentration we key quarters. page However, operators our historical our on supplemental metric our non-GAAP in the prior

of described facilities. quarter Ed's fourth adjustments in press determination straight-line to normalized value rent earlier Prospect's Pennsylvania our and the and of our FFO, As the included in reserve the prospects carrying release comments,

continuing improving its operations exit capital investments. East have In conjunction non-California decided new and strategies, fully investments our Coast we and with to reallocate to in Prospect's Prospect that progress

we and transition, At following; is through available and this in our the have negotiations have or original rent months, believe, reinvestment, we any we of recent a worth based care managed plus will recovered valuations offers independent of and interim for have end deferrals business of to billion. the that expect currently that $X Prospect period alluded on we all owns about as most investment third-party of valuable

expect next over the for Health to Connecticut several our next New financial More hospitals will the by Yale attractive Pennsylvania acquisition quarters, operations provide their hospital System increasingly results additional our proceeds Haven to And quarter. future the sale to improve We from reinvestment. become hospitals late and do immediately, targets. pending as sale continue will anticipate close of we that also resources

acknowledges The to be quarter in investment. accounting recognize possibility than such original the the adjustment our an may fourth proceeds less impairment that

amount the quarter expect we exceed managed significantly impairment. of value of aggregate will care fourth However, business the the the

Connecticut of originally sale investment to that from extended cash non-real in Prospect the from proceeds estate Any the XXXX. loan we unrecovered and

earlier loan -- Ed likely mentioned and our expect deferral with it from to and any extend basis. a million considering options rental rent and we period, Prospect are interest interest on income for transaction to providing that from beyond and to is Prospect non-California account our investments, this along calendar During XXXX, cash $XXX non-real-estate

during that estimates guidance not XXXX paid of that range be our period. expectations our rent and about And into may interest take account the

FFO approximately to normalized range normalized about So, calendar a on rate bridge $X.XX of investors are basis. $X.XX following FFO our XXXX for providing run today, FFO. we annualized fourth $X.XX calendar The XXXX normalized quarter our help to guidance estimate from may of of our

Starting respect of proceeds pro and acquisitions is quarter related aggregate escalations share. Utah add cash impact transactions and will interest with a expense rent the an to transaction, income Contractual in the $X.XX of and about $X.XX with the CommonSpirit through the from and fourth share $X.XX. rent forma another interest and a today, and their dispositions

estimate if obligations. of XXXX own estimates is rent $X.XX and paid basis. on would That those Prospect a guidance interest So, Prospect-neutral their approximately as a yield on normalized all FFO of its

more regarding from but would the no in estimates outcomes interest or reasonably which case nothing we recognize scenario, from Prospect of rent, California Pennsylvania potential Our that recognize our a likely and we of most Connecticut rent to outcome worst-case our expected investment. range

between of release. be is The FFO per share and we what would normalized of in morning's these $X.XX range reported press and that scenarios $X.XX this XXXX

Coast and care high guidance, the recycling would Even of not current restructuring by in East monetization assuming incremental that be Prospect our succession $X.XX Prospect's at XXXX the end the business. created of FFO it managed consider of our investment investment, our does

With that, questions, few operator. call time turn the and we back to have the a I'll for

we'll at Ladies time, begin this [Operator the Instructions] session. and question-and-answer gentlemen,

Austin go Wurschmidt Our from question question. your Capital comes Markets. Please first from today KeyBanc with ahead

here. good thanks provided. just sort everybody to hit Hey Steve, the of I guidance for the that on that want want you morning to and I -- time buildup and -- the

months? six-plus that is of when like over last all sounds all and announced announced it activity said So, you've the done, $X.XX that the captures

And a trying fair maybe think would once once about sort proceeds into up you Prospect? once I'm it? to Prospect a just the exit of is think go-forward run or way off accounting to rate basis point future reasonable about that reinvesting buttoned be any what deal. jumping of rate understand sort the on activity we a for you've Is

assumes capital. the I generally correct. will again, think new income from income recycling that's investments, again, generally Prospect replace that that assuming the with we And of

hoping guess, managed maybe up with could proceeds, and of some think that that from mean, that Or you there time to expect was just line a that care? you us monetize sort you investment investment? could I line reinvest that their I to proceeds? Do us the how can longer I about in from then scenario And of business investment? business? proceeds monetization partial to sale you with when on is end of share maybe expect Or takes the managed ultimately the any the care received you give in the to receive down

is Amazon think currently it's up call again, we and Ed as profitable earlier. now. right business this now. the very isn't And a for just kind and yesterday And its with business very saw of probably of business, closing XX plan. attractive Yes, months it the Prospect running similar aware, transaction a vibrant, many to very, very, mentioned I That on that XX are

is to and which likely process, outcome. involve expectation sale won't up I equity And type beyond we mention long-term don't not kind number any that with to end try and a to our XX-month hope the think investment, XX -- here. anticipate them we a that's of But of to could alternatives, that's

at We least there will or recapitalization more that than the a East recover that sale be think Coast likely possibly it's properties. investment in will more a and our

through. are right. other than absolutely we our You're to as there to is sales this work issues It push have intent through work but that sooner later, forward rather

can then And cash dollar those from the remind contractual those investment -- what X that rent buildings? just you PA what Understood. And is us those annual in Eastern the hospitals? total

the million. aggregate $XXX an So, of before about Pennsylvania gross impairment. have hospitals Yes, investment

single, then just And annual type we that of describe cash sort impairment. facilities? should low get on Before to rent from to a double-digit yield an high those

But high our to would just counting out end Pennsylvania. We're $X.XX. range of of even point the be right. that Well, from in rent that on not

Understood. it. Got

to trying to reinvest Just just Thank That’s of me. I understand I'll that you. the recapture you'll sort hop back into what rent. need earned queue. all guess for

go Our Vikram ahead from next Please comes with your from question question. Malhotra Mizuho.

provide the on non-Utah, the Thanks and Steward other on or like taking rent underlying your the maybe coverage? you questions. Maybe transaction, XXXX just outs? on cash health you would first as of of things. And any post view underlying for remaining sense a Utah can we then flow just update just just those second, at the projections two businesses look us give ins One,

The continues of Sure, be of $XX in XXXX million for excess that. $XXX Vikram. to approximately including facilities Utah Utah expectations facilities. represent the million,

in transaction. Utah the somewhere the XXXX million post So, annualized $XXX

is properties there increase. property the thinking think that Actually, closes, properties will in Steward the actually a most overall are profitable that their the Utah portfolio. the coverage not the I transaction public is Utah When case. misnomer

it's proceeds their to take for So, a concern the even they markets grow an into where them had opportunity mature from from more. ability market to

particular, believes the tremendous underwriting, our way growth continue As Florida there's outperform original there. still we've stated Steward in and before, properties, to

that's helpful. understanding changed. the I fully GAAP maybe then the guidance not Okay, or disclosure on new SEC sizable change, like seems guess, so just this maybe on based I'm what guidance, And it a and

maybe takes mind typically to what just I it Circle explain mind won't giving you update, pro the and us like their on in Florida or other you because would Health, the helpful the be just more I again, us an Would do a us -- forma like what I'm pages, versus what example, to us understanding just give can Steward would I the REITs this make not in -- but lot changed give changed supplements? didn't you an in -- know see -- I this And having if disclosure but changed? guess, it's like call, change

our denominator absolutely obviously But and again, change our relative guidance. were, is, the the changes, supplement example, address big biggest depreciation, the So, that depreciation, calculation. just the to I'll for the just changes generally, we can overall with accumulative supplement of prior deduct affects that and

our And forma binding contracts transactions example, we then in closed. not for pro had yet that for forma examples, prior would pro

very by give So, a you example just way, I'll brief the here.

is would of shown have care, If you I that, front footnote have all at of going line Health you by statement have Steward you, in old supplement get, says, line, supplement Steward pageXX, of the supplement. say, it of and basis care through method, the been aggregate the the this to markets the GAAP the the we'll we look XX.X%. presented again, instead Health the been, Had of would details as XX.X%. the as it a on And in

would Okay. helpful. That be

you can I both If said, forma incorrectly I'm any it net, pro gap all and two adjustments. the the like depreciation reading with but just bridge were then because maybe you felt

make of to in it just like terms Just -- you to did. what clear clear, crystal

update monetizing? real us assets up of effort the Australian What to on, you estate may hopefully is leverage flow assets sort Can today? for you forward? Can or Just remind an appetite other last us going that remind be underlying reduce hospital the you say, question. cash just and more shore in any

question, frequent strong Well, But fairly don't that to Australian indicated report on to have but anything continue Europe. to don't Western acknowledged address by other nothing that's inquiries deny report than the we've and across Australia. on your time. to our have we geographies, about we see appetite process, the And occasional never across unsolicited we assets sale this although but it, at we

Okay. you. Thank

comes your go Our Steven Barclays. with ahead Please from next question. question from Valiquette

also, the within taking color Pennsylvania extra hospitals. their for additional And Thanks morning. the question. some appreciate Good I to around Prospect updated maybe color operations the on Thanks. provide just Medical, Great. underlying

remind variables Just the to the profitability the what us key of improve operations. are

these you these hospitals conjecture potentially use, collective there to recall dynamics side, just Thanks. alternative path into have I assets some if PA And hit blocks. curious I just those for update improvement was on to on us just repurpose give right road an you some some the behavioral based that may of I'm just believe, but on Pennsylvania can know what now. and

Steve. Sure

rules was all a worse than from go tested all a from of hospitals United COVID the standpoint, for have we've to a we area States, talked about the even areas you COVID just COVID that if staffing As lot not by, in for if particular to used but standpoint, with other that's don't harder even previously, probably positive tested that anymore. hit and test COVID, most patient you

been issues of most So have those resolved.

But you're individual which these knew number a facilities got and about bought light of problem they is facilities, that repositioning are repurposing are very they plan you've very facilities. the The think in of plan, right, each to good and a same had when provided they there originally what providing we a for had facility. were services services we the in that each close other

none was That's the us take been things. various politicians don't took types fallout realized. guess well, political hospital of of harder the cause much -- of account not would into I saying, What my us any I'm than that those way

work to late. easier as I politicians been as gone the through that Prospect with has much have think this, of

don't we on based the plan better was repurposing and and plan last they to their make do all what of a statistics I original and -- they can this time have months did half. we that hope month last dramatically those some -- two than facilities. their want So, operating a look But have do year.

And so real two and but at half they're some making this point. make months a plan clearly progress, a don't

that right. color. all Okay, Appreciate Thanks.

Capital Our from RBC next Please Michael from question. Carroll ahead your Markets. question comes go with

on options? Thanks. those And some prospects I made what guess, decision I a made they include? some potential provided they wanted do rent with over to you comments And those with to do had mean Prospect. options options. wanted I Steve, that what on stay

we're fairly options, No, gave I clear, Again, Prospect, going reason, the deferral back rent comments provide considering a we least significant and for we about XX-month some example, Ed's rent it's options. expect to going will to be that think that's just we the scenario. XX at process. And that, worst-case to to be opening

during to from $X.XX. That's you we XXXX, if As Prospect. collect the nothing gets what

because a imply worst-case do alternatives flow Prospect expect offer And that is finalized some collecting just worst-case truly are to manage quarters, to not cash no that's rent, across presenting necessarily yet. that So Prospect. that intend the we we provide we what scenario. to that's have not of scenario a but its We to

under necessarily What would scenario they your defer that provide rent? ask for all you I it, if would -- what mean you to them?

rent willing Well, simply involved that And to are XXXX and needs with along a potential negotiations. the by rent parties, we're primarily are to we There other deferrals. Prospect's said have parties Prospect of strategies way in from of concessions, virtue that. long consider cash contributing we lots and

and rent in January Did their February? full pay Prospect

No.

any in Okay. Did rent and January February? pay they

their That we rent. full they no, not pay haven't did disclosed, but

of the I recoveries press would this indicated but then take scenario, you that to you give what the that to this be takes also that year. mean, with will you outcome? XX the will some second months, know in I what's under that in XX the get you I and do highlighted expect then guess, potential completed. release, And half Okay.

Yes. improvement facilities Yale the sales, the overall of ultimate Well, and Connecticut it's them. an of the conclusion restructuring sale, the for the in operations a

fourth then middle transaction expected so I something of the you the of XXXX, And Okay. quarter. kind for know me. What done last long? taken question will in get in

So why XXXX? XXXX it further is being probably it -- into pushed like out sounds

that that into good the the weeks We was reason did financial expect early fourth the the we to the I -- immediate managed with had monetization say in have into first liquidity quarter process we have for potential and care actually begun of partner expect quarter Prospect operations. would a would provided business January. of we going Well, negotiating

deep, -- caused was it that that, and only apparent And of continue party not the to those what move was that's change it that these became make big January that the decisions. negotiations went accounting And in forward. middle very us to going particular to that's

Thank you. Okay, great.

with Our comes JPMorgan. Mueller question. Michael ahead question your go from from Please next

you Take mute off there.

all, guess rent And $X.XX a sold, are So, cut assets on is that and first anticipating go-forward baked a into of cash Pennsylvania I the after assets California the of Connecticut are on any you recovery? that basis?

from primary No, and assumes the between $X.XX properties. The collection it, the rent again, scenario, primarily collection rent of $X.XX difference worst-case the of $X.XX -- to California Prospect that is rent and not which, no interest. the belabor but any all the difference between the and at difference Connecticut

Got on sort go-forward -- on you anticipating assuming not calendar for assets. just what of basis, Or it. you basis, a that are necessarily a are but rent Pennsylvania assuming some XXXX, you're the there? operating-- go-forward so But

no Ideally, become -- an point a And attractive we'd was all time of like I and there any to rated at you along there. an $X.XX mentioned investment-grade offer, not-for-profit. from Pennsylvania is there range to $X.XX, an earlier, acquisition assumed offer recall, last it non-binding year, as think Pennsylvania target. -- rent this improved an I is the see may

an And facility operators. attractive still it for is

the real we defined So that and happen impaired and value actually buyer a and preference estate. recover Prospect least would real sell the our for be the estate of at to

going to about this politicians want hospitals than longer those any potential believe we to be political any can not fight how quickly a resolved. just be any the The is it's this in be can anticipated. hospitals. We to of open. at hospitals. those stay zero. those closures of as already know point want hospitals seen we all And People parts us taking But more Mike, away aren't just Pennsylvania had don't proven particular to

it. Got

I $X Okay. have I I appraised managed value the guess, think what of that much care structured there. we billion on And guess, entitled --how to guess should your about how into -- the then, you're side, the you from, leases.

that case, a us, It be it's should kind thinking least $X $XXX what base if assets. at as written we you're billion that entitled million sounds down of think the you've the on you you're on to, PA like telling that based

minimum of to that's of of -- billion what So, entitled kind the threshold you valuation. think you you're the can of $X kind out

think I value we're we at the we're of our Yes, to to of California think to including enough Mike, and of to money be it, what of think different a get out what Connecticut back, would way all is. that get look going we entitled obviously it

Okay. you. Thank

from Our question. next Credit with Please Suisse. Tayo question comes go Okusanya from your ahead

Yes, good morning everyone.

So on a couple from me. prospects. Again, still

you going any for an So a perspective, new of being it kind If getting Prospect again, think has on curious the operator for bankruptcies issues I'm how cash from potential do a you there a basis. B plan assets? around to if guys have those auditor's guys concern. does, moved about

So, together at believe we whether we this we in of particular a the place certainly anybody concern or standpoint. going restructuring the had raise point. this work a But concern bankruptcy are same is haven't to

our of bankruptcy, a bit may good investments, rent. still including we're it's if Obviously, longer, take the deferred believe position but recover a all we in little it to a

priority. the about a Okay, on rates of you just number bit you that's cap two, little interest deal the moving the was to done at? talk then and seller Could the did that financing at also helpful. transaction, what And rates that economics

properties Priory additional is help properties. a lease put morning, They for there they just that them them. coverage we the year, a by are they not added with it And middle the transaction. for very we up original a We the who sell some are this by same believe were been when improve late collateral And six we are to summer. These with be Priory working will what's terms announced six the strong last master Yes, the this Priory. we've of go and strong best last of owned the one These under are already third-party bought will owned -- believe there. even assets that base.

actual to the on can cap financing regards as debt. and in the But rates you something cost funding and provide? assumed Is well it on seller as that

specific roughly as the included I know, accretive attractive don't this financing I that we other give No, cash this rates we and Tayo, the we and net on flow than accretive. with earlier cash gave. is morning. that cap mentioned normally is you the again, announced guidance even accretion the a in $X.XX is seller And basis think, to transactions

contributed of at Then kind leverage going great. of of balance a can just Okay, look with up a credit kind amount. the the we leverage some decent moving kind higher sheet to and of move over towards line current taking and of the items that there

again, like, $XX of there's increased receivables this your increase additional seems of It million. about kind accounts loans mortgage

the Just kind higher may items that line of kind of some the net the higher and of about to of talk have contributed debt. use

X.X calculation and -- range be of of we effect with primarily, to outcome to times Sure. range the Prospect of is with the Prospect. But we clear, starting on assumptions. footnoted That's mentioned, as that the baseline last this X.X at the I due morning based showed just quarter potential X.X. up The from

was European Secondly, fourth impact think million seller mentioned the the we the as assets you in movements. fourth with funded right, that's Priory $XX quarter. you And The mentioned, a I financing of our investment yes. quarter made currency and the acquisition in it, of about

and going being $XX kind receivables up there And of slower. million, with anything on the then AR would

of piece a unpaid Yes, is big rent. Prospect billed

Got you.

investments when I is an the Okay. earlier see Prospect to were there Steward made accounting don't about And since to million perspective, did any really have investments, investments since the the additional explanation can't challenge see on, The additional that were $XXX investments when we change Steve. you those then only that about, net of talk just investments you we we appreciate if with that just change, any discussed again, -- gross to you guys that and operators time? me. from bear two could

routing the example, business, projects development on There's other Norwood that funding No, course, -- that than no of that's with with there's the But investment. order the construction Steward. goes development for [indiscernible] and increased funding prospect.

you. Got

just final That's And from helpful. then me. one comment Okay.

those I in XXXX. see a supplemental that you EBITDA Thank past, useful. could in investors do be the XQ very metrics coverages having of great used rent provide if think, It that you find again, next think to I return would just in the much. you the

Tayo. Thanks

Our John your Pawlowski with Advisors. comes Street ahead next question. from from go question Green Please

Tayo's Thanks to Maybe quarter financial time. the provide rent Or do in any loans, the expect you quarters for at Prospect? all the have support fourth to of coming a outside you question. equity operators to Did deferrals, in the stakes? follow-up through

expect part? Do final that Was we to--

Yes, do you expect Prospect? of to outside

Prospect. we Aside don't. No, from

you Maybe back Steve, the the restructuring, to collect prospects -- alluded to Okay. rents. you to expect I of going think most California

of come less a this door actual in how and scenarios So much I'm just -- understand can I'm just about you embedded in reality know in to worst-case scenarios terms step there. that guidance. back, is in concerned I the going put to the year. some you take cash are trying

are to use total need percent And owed -- that of just a Prospect payments quantification. if annual this you cash like? just relationship Prospect do expect actually range, year, some the So, we your by what you collect

rent the collection we $X.XX, possible you and which, is six months. basically the case. of We given end as Connecticut, assuming don't California range. the It's six months of Well, I the Connecticut expect the point sell out, that we've think worst of at the

freight those cash And not are [ph].

going interpret to you that be Okay. rent to I is so But there's in California a collection well? as -- the right shortfall do

possible, yes. quite That's

rent paying they hospitals? under the for California Are currently Okay.

No.

a -- very For little as I of has rent little January, mentioned earlier, February paid. been

Last you the the to Okay. I loan in for sense that when repayment quarter. occur in me. mortgage one for didn't properties? of fourth the the give expect a you be California loans us mortgage assume upsized Can repaid

out, point obviously, facility. facility, now. there Along other although restructuring respect the mortgage of the you care are That is with sale primarily business to that the options recovery from particular with managed as

We the nothing with facility acquisition number there's or are balance, to mortgage considering of options strategy. of that for possible definitive respect could a that but binding that include

Okay. Thank you.

Andrew with Our question. from comes ahead Rosivach Wolfe next Research. go from Please your question

morning good guys. How Hey are you?

Thank Hey Andrew, fine. you.

help I'm to something you Prospect probably was FFO the kind able into are an maybe to to thinking translate related be would your straight AFFO guidance? if line? of Because might basis versus takes and related you cash I of puts -- some that guessing

I question. sorry. in that I'm got lost

Steve. Sorry,

FFO. into dividend XXXX And an a are I'm So guessing if lot $X.XX. step less -- FFO to a difference to is I think $X.XX difference so XXXX, in of have took of coverage. the back And to from in we that than us trying you the AFFO

Yes.

take that we're AFFO, $X.XX, $X.XX. worst-case So, for scenario at about again at if you adjustments you and necessary make

it. Got

now EBITDAR have then are Thank my and EBITDARM Okay. schedule curious very why went you much. these tenant you you I'm column. your numbers but to know used really And nerdy, I second of EBITDA. you is have one -- estimated, to and one just some disclosures, for

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the number may -- what long management -- we fee we numbers. when those did we what than ago we So, trying higher got from be much EBITDAR, were us were that actual many show a for used an times, from to time arbitrary

example, of be to those figure out to very of the are. which But own their small not have a genius doesn't operators it in this a portfolio. part who take -- report, Another we we ones named although a prefer couple overall

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see been here long EBITDARM So, what on what is time. for we've a you reporting

see obviously, overall is the that of most And back trend for at you the And up look direction. you'll right what can are. the various in our operators go and trends

a wasn't I talked believe, was lot we it. a just So number, year, about of great subjectivity it's last scientific -- to we EBITDAR in this as that had it detail, time

percentage as revenues I'm an you're an of -- taking expense making, of guessing assumption typically or... You're a

That's correct. Yes.

getting? Or is that EBITDARM you're number an actual is

correct. That’s

guys. lot a Thanks Terrific.

question with from our Please And go your Malhotra next Vikram follow-up. is follow-up a ahead from Mizuho.

Thanks.

follow-ups. quick Just two

calculation, the a CommonSpirit. rent, think basis. is lower you there can new on was it clarify, sale quick to Utah cash CommonSpirit? just clarify a First, My XX% the about change I Can you with rent

On $X.XX there Steward than a of on the cash in they're basis, a the That's Yes. investment. by was Yes, more $X arithmetic. roughly do reduction X.X% XXXX paid paying They're little change. billion from million. what a you paying a rent can --

million Steward all guidance $X And numbers that reallocation through that other to be recovered back gave. of we that's to rent built of the in Some will facilities. again,

us you that's give things. a helpful. on color two bit just maybe the components more on little guidance Okay, then can And

also Just G&A rent if if range, of guide what's can? the end the baked possible? either what line what's on is, straight into you the range the And the it's

especially to think have on probably has back I an is rate. immediate run around think recent line, to this answer, a the you anybody we'll don't get the that. G&A straight table I

you. Okay. Thank

And our a follow-up. Street from also your Please follow-up from next John question ahead is with Green Advisors. go Pawlowski

-- of on Thanks I a we're second level time debt-to-EBITDA think what moving your but Ed, taking or acquisition in Ed's the remarks, on next pieces this leverage at of lot metrics potential for year? a of pipelines, be to you Steve opening dispositions. basis expect do there's on bullish terms running there's pretty question.

you what to expect year, next leverage time running this of be at? level So, shareholders can

there. in Let the me to point trying that the was make make acquisitions prepared remarks about I the

until whole to We the new for pipeline going not are acquisitions where a we a there's from around rates be a norm but -- of lot us. great get world, interest have

we existing We're the pipeline making we that, strong. transaction out customers Priory those to As continuing announced we continue our I'm the -- other than will said work with point support throughout But just to like very the is that today. we have year, moves strategic the other did and relationships.

Yes. And to we what be transactions. to certainly goes up unsaid, probably take don't marginally need to leveraging advantage be that, accretive said of expect don't with

to expect expect essentially do you to unchanged? We Or leverage remain do?

to until the we times part great six expect latter five on on in it and were progress remain we of last Well, making no, working that that year. to

-- our maintain remains making see, accretive certainty to in along level long-term to now, strategy acquisitions, need leverage and to first, is we that cost So, with do as debt. that some that, the of of mentioned Ed has

assets. leverage. all the And to value until means and acquisitions, can the driving we if happens, down part of that affordable of we up making capital, that equity-type we on that be recognizing And then rationality driving otherwise capital see need for of the sellers is significant not cost their access won't some certainly

Thank Okay. you.

And floor ladies like remarks. for we that, I'd gentlemen, will and closing any Ed end to session. over the to question-and-answer back today's Aldag turn with

very please Jamie, thank us as your listening we And interest. much. you your questions, in and you Thank follow-up much. always, -- have call. appreciate to hesitate very a don't give any

with Ladies today's and for gentlemen, thank joining. you do presentation. closing conference that, we'll and be call We

disconnect now may your You lines.