Medical Properties Trust (MPW) 7 Nov 242024 Q3 Earnings call transcript

Good morning, and welcome to the Q3 2024 Medical Properties Trust Earnings Conference Call. [Operator Instructions] Please note this event is a 60-minute presentation and is being recorded. I would now like to turn the conference over to Charles Lambert, Senior Vice President. Please go ahead.

Good morning. Properties financial call Edward results. With Medical third discuss K. the XXXX quarter me to Trust to conference our welcome today are company; and Hooper, Hanna, Jason Managing Senior Aldag, Officer President, Secretary; Controller President and and President Accounting Vice Underwriting. President Chief Steven Officer; Director, of Chief the and Rosa and Kevin Jr., ], Vice Vice Hamner, Asset [ Officer; Chief Financial Frey and Management Executive Senior Chairman, of Executive Operations

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

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

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

other could duty not events meaning may those a may results except a statements within only, this by materially call. company's you undertake Exchange factors forward-looking financial statements the We for results in the The factors forward-looking statements update expressed federal company information is information. are filed unknown course as forward-looking XXXX. such as and uncertainties the discussion refer required and does those laws, from future subject being differ Act this of considered known date or actual cause that any that will today statements. of of provided securities the such During the Securities to reports this Commission certain to that company's future events call, the differ our and with to the be cause the of Securities and/or risks, These we underlying of to Litigation Private materially Reform and make other and and expressed from projections to

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

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and our Charles, this Kevin and Hanna, quarter call. for I'm XXXX to you Hamner, to Hooper joining ]. again Steve you, us all [ morning Thank today of Jason third thanks pleased Frey be joined on by Rosa earnings

Before settlement quarter you that with The recent spend hear few estate control our with the minutes our global to real important a Steward. updates. from covering take and was sever and I'll strategic our Steward its team, of the relationship back during news of a rest us creditors the few big enabled

attention Steward's the failed these there taken and steps MPT bankruptcy note on been has we closures, jobs While that ensure has to widespread patient the protect months, of stories to process believe the few throughout care. process. continuity past media hospital over significant avoid

to operators for weeks qualified worked As unable over the a with clock markets. Steward for transactions team in around to our country, facilities X identify set take diverse buyers its around to was operations complete the of

a and employee, the profitability return have and to of received. dedicated stabilizing market and laying them by of care. Quorum are operators X in all reportedly better to to in outreach, Texas. and of HSA, XX that their and hospitals physician assume confident foundations management Louisiana, Florida, providing have energy these facilities positioned Health, Health operators Arizona, which already significant well They high-quality We Ohio patient serve Honor are in communities The Health Insight X the job have community tremendous time the respective to September, each done been

most cases, we week, Health Earlier prior While operational to College St. to performance, and we the impressed health what are reopen are in far. health we transitions. September higher discharges pre-bankruptcy have XX behavioral with with the return facilities to the this in services. October of very In in They agreement trending these it in time campus first inpatient specializes an take will low seen for than these a over expect to point of Luke's College lease reached behavioral years campus experience quarter Health Phoenix, has XXXX. to the Arizona. as hospital so

the these receipt of of up re-tenanting stabilized of XXXX, lease to we XXXX fully approximately the collectively $XXX of With properties, a resume end rents base million expect annualized this ramping XXXX. first of to by quarter portfolio $XX on $X.X and in of approximately by million end rent annualized which approximately successful aggregate of billion, carry rent cash aggregate XX the the in gradually the

changes no full further portfolio, be when $X paying our total rent XX these properties billion. to expect we MPT's annualized Assuming in of rent, began to excess cash

We $XXX the million, engaged to lease other in ], Texas as projects [ in critical regarding Norwood, With development actively are Massachusetts. state also of an base approximately in well decisions. respect as we remain with the and discussions regarding properties licensing aggregate discussions our X Norwood, Texarkana with

Before through leased asset out moving portfolio. $X.X Steward. involving for and We portfolio. from on that estate cash spent our on of mortgaged transactions estate MPT from sales proceeds real approximately this in Beginning Steward, to or billion evaluate real that roughly recovered other was XX% a it's moment XXXX, worth zooming to

discussed, estate $X.X been has than retenanted. which we continue development just approximately base of more the As portfolio projects, lease billion, hold of excluding already XX% to with also real a a

we Over years, cash $X.X approximately the interest. billion in mortgage collected also rent and

as to in XX our advance departments quarter, closing and for additional Colorado, for well, of Community ] as unable and acute general accelerate variance COVID because financial [ community as small Watsonville great this model in approximately our for care as sale and $X sustained California paydown working in primarily Arizona in million, we similar is the October, was $XXX access million. necessary could XXXX. only well the freestanding sold step of approximately sale we X of business party into the EDs third additional hospitals the liquidity willing a most the freestanding Texas time, remain In forced to was to approximately funds intended. open. Hospital the During generating momentum the to hospital virtually the ensure other of Watsonville provide $XX flexibility. enhance press million. Watsonville as MPT hospital in by it to emergency and to a debt We story bankruptcy At strategy was funding of continued

over over heightened trends. of hospitals challenges there is intervals to incidents. rates, outright, operations and the focusing with investment. In At Rosa to various that the the were operating formation navigate global it exposed able before have right past ultimately forced for of [ helped the XXXX. exhibiting on no And reimbursement few the health the a doubt take rates, impacts is community, expenses, nonprofit estate closing, Our leaders years, interest same rising macroeconomic by turn cybersecurity for thing close patients engagement been and recover our declining care patient doing real to community to ], acquire sector over I property volumes, in to now facilitate fully local the uniquely management we revenue group lagging to cycle

over risk. to some XXX% with provide their health are is Sale relatively to superior many form we Buildings single-digit to available. Land a an important it operators for of a that source affect of represent be long and total real any plan amount Simply the sustainable funded array largest asset, rents operators sources access operator's a of sale-leaseback sector value term, fixed without a are transactions other of over only more put, financing and being the way directly that often capital. for the term. must single fund estate compared are to that that care enable inexpensive remember for to be reimbursement flourishing pleased is and to of to to trends critical capital They reversing, leasebacks access help care. percentage to broad of up to While improvements small subject these ensure a that solutions long annual a patient negotiate operators appear typically many revenue will refinancing potential

strongly business more reasons, than these important model MPT's For believe we is ever.

to successful model. take And continue term. demonstrating of over look long to resilience forward to positions create better shareholder We our we Rosa? and action our our business business strategy, compelling strength the meaningful re-tenanting the following value that

Thank you, Ed.

of I will usual, As hospital real the portfolio highlights critical you estate. take our across through some of

continue are We In complex addressed In trends portfolio. positive utilization the reporting and also our clear behavioral cases are patient several patient being for of performance to the and the acute with line reported fundamentals in we programs cost operators by from revenue past encouraged implementing care been across see our increase portfolio starting been public by Admissions growing, volumes benefits and are reported years. Within increasing followed over to strengthen. they've hospital revenues, continue year-over-year operators, by our recently several are large largest the what's of surgical hospitals, general realize to few self-pay have health more continues. Circle now properties high, Health delivered both quarters. in insurance insurance trend a of properties has and quality the acuity volumes. past beneficiary as which is are as medical over U.K., steady utilization this timely private a all-time in private growth consistent sector. and performance mix has the to Circle's demand care new benefited hit self-pay access medical the private improved from efficiency

partnership its the called the produce in in U.K. Secretary with U.K. sector operations backlog. Priory, XXXX. Health their to continued independent to the cash flow cash to accelerated its the grow private health NHS XXXX generation flow from largest in year-to-date for In and has addition, mental reduce care provider has the positive

meaningfully improving optimizing their In we year. Last a focus for quality are fact, comprehensive quarter, revenue mix. on occupancy and and EBITDA prior mentioned outperforming strategy

increased higher, performance, help change commissioners potential more the market government Priory labor, increased U.K. into occupancy bolstered with and portfolio. acuity, improved Notably, referrals resulting a the while in disruption. in in of external Their collaborative to focus any including the reimbursement this the higher lower on is strategy offset driving on focus financial uncertainties around has Continued anticipating created work levels. behavioral rates promoting efficient patients should health coverages utilization has for and acuity some

as Network cost generations. half flows XX% now ] have to Priority's opened MPT to care Medical line of XXXX, rate company, cash performance the of XXXX. In delivered well Network by Swiss health an activity drive its improvement significant towards solid Swiss ongoing year-over-year for patients anticipate as driven They assets as in trends. top well time. in parent year-to-date MEDIAN. will for growth Turning to for resulted reimbursement occupancy future first center, improving continuous and in These have also which working efforts Medical over innovation help Genolier the optimization earnings [ as in growth environment officially Germany strong improving additional September, hub, this

increased the by retiring in investment million partner maturing JV quarter, ] our the equity in debt. During CHF XX MPT and third-party approximately [ Infracore

rates. U.S. Turning acute the to surgeries Overall, consolidated [ admissions, well not Health's And reliance our portfolio, see behavioral care comments from to benefit steadily trends recently retenanted our EBITDA to approximately do revenue ] stable general portfolio, we continue where as increasing at on Xx. increasing reduced include higher volumes continue remained labor. Ernest reimbursement and properties. as my contract in Steward coverage

coverages While to nationally, with Provo inpatient declines ramp X.Xx, LTAC to quarter-over-quarter. portion well LTAC beds a Ernest legacy converted Ernest order their volumes continuing unit. of counteract Earth rehabilitation In to are newer with reimbursement continued their up an ERFs to recently exceptionally improved perform the in above

LTAC other to top expansion options Center in in seen growth, to Medical moderate. consistent as declines. higher drive looking Given growth EBITDARM year-over-year acute highest performance Panama improved led Pennsylvania, produced performance. behavioral, of Earnest slightly exploring success by to We cost another is and with EBITDA up X ahead. improvements LifePoint's will ] management actively this its the profitability And coverage have facilities continue while the implement admissions driven Johnstown, this disciplined revenue Health accelerating At strong this years. significantly [ in is Memorial labor costs ] operating [ model of of coupled [ labor has continued ScionHealth's ] at driven trailing quarter admissions quarterly LifePoint unit, volumes over line markets. LifePoint improved offsetting to self-funded believe is year-over-year has XX-month

properties, by by driven X% Finally, which processes in growth markets. across overall X East each continues have California trends Despite Prospects coverage the and impacted improved increased be sales to Prospects California liquidity report surgeries facilities Coast various ongoing continue to year-over-year. admissions

cost are to rent Prospect continues these Swiss [ few approximately receive than the by prospect QAF and more we Partners XXXX. In quarter While it's regulators million, markets, ever across being of of and the fee are in understanding before reported diversified to revenue $XXX months buyers Steward's MEDIAN we the past encouraged in scheduled program, our types are like trends payments, the of have improve potential that and each they dilutive asset the to liquidity largely closing, work and and revenue Surgery operators Circle, they tenants Today, in timely helped [indiscernible] expects over as U.S. growth Medical The been and coming Network months. fashion HSA a to of to with with Priory, a and over the has during in volume very past impact pay quality or first assurance care sales. X geographies. financial LifePoint, years the these distress ] offset Ernest, internationally.

Kevin? robust generate both term. forward, cash for are is that the and portfolio flows over near shareholders MPT to positioned confident long Moving we and our our well

Thank and quarter FFO of share for reported of per you, we GAAP morning, per XXXX. normalized This third the net loss Rosa. $X.XX share. $X.XX of

X-K adjustments FFO. As to settlement and normalized September our impacted our with GAAP our in multiple items its resulted in that resulted disclosed Stewart Form XX, in on filed onetime accounting and results creditors global

we loans working of Steward. First, previously to million made $XXX impaired capital approximately

community impairments the real and excess facilities recorded properties, obligations balance. $XXX of $XXX Coast approximately certain for taxes which other of of Space Hospital Hope of to our donation property in million Arkansas the to the the operated of out million, Steward we recovery Second, charges net the former and local relates rounded and estate

lease resulted in million Steward about agreement $XXX lease the accelerated during master termination assets with an intangible of of our the amortization quarter. Lastly, of

million third-party in Before holdings -- Health. received also our was will sale the FFO the from the this allocation. capital I [indiscernible] Orlando proceeds call noted million, in recent approximately as over Orlando $XX of we reduction hospitals hand the the to most in wrapping to roughly by appraisal. With substantially up for morning, expected or investment quarter on discuss during of fair $XXX Steward, press and release and to Steve? independent adjusted of $XXX on the PHP have based all Normalized value million Steve to that, liquidity the

strategy. Since in $XXX million described. mentioned, that million quarter, of third These we At quarter Kevin. have other with balances and the including sales execute million in COVID. XXXX, only asset debt. in profitable the actually by transactions, capacity This a million. we end plus strength billion values in more a you, emergency our and mortgage have repaid years billion Not demonstrated, optionality monetization XX increased business flexibility we freestanding their $XXX and of real Thank delevering underwriting of revolver as cash value. $X.X the effectively the recent million have our hospital $X.X third model sales but estate general $XXX Year-to-date, provided investments approximately held in of approximately volatile loan. These beginning over we in during transactions real the the especially $XXX had they about are executed along has us and significant primarily of we environment, had particular. general rooms $XXX acute for of previously prime since The macroeconomic have a have estate Ed that our the our than repayment of

transactions. current our billion including aggregate address approximately $X.X we possible well XXXX maturities are additional positioned liquidity have with to We options, other which we of believe and monetization

[ Watsonville the we aggregate $XX additional ] insurance closed profitable example, ] sale and nonbinding will would to Space nonbinding us. offer these cash in respect end have resulting and sales $XXX We during have us signed in million. With mentioned since settled fourth For about another approximates quarter. geography. of another $XX has point we that and and to million believe The certain out will conditions, that is proposed The and there sheets, the Coast [ incremental quarter, coming sales diligence transactions there that actually peaked offer buyer resulted our result will likely now proceeds. these are these be down, cost continues in in litigation million, MPT of certainty on for business which generate LOIs will cash sheets small fact, paces LOIs the and we earlier FSD transactions to and of the and albeit debt is, simplified I the that in situations more no attractive its same difficult future, strategies different the that completed. We markets other rights tenant At make to us at the depending the capital expect resolve time, for to future.

Steward, moved for previously under does leased the straight have That related to billion As for to to FFO And new of real accounting. estate now million additional is $X.X reported estate accounted includes cash-based cash formerly recognize we the to $X.XX a operators Steward of tenants for not reminder, basis we about leased quarter leased to the from $XXX real income of the investments under method. basis. and an accounted GAAP line normalized

resolve of debt expect further collection XXXX of coming our these plans market maturing interest business as billion in able even efforts, simplifying to more address to When have $X quarters. formerly as to to expanded Steward, rate these in returning real the our retenanting and capital in them than success levers few estate considering anticipated portfolio simplification to We or improvements, well set beyond. we be an leased and status.

I'll and turn back morning, value there the conclude, significant of to current take that with that As happy unrecognized I'll that, Especially price. With is of confident even only we reducing we the believe we'll to our the we in such, operator. portfolio that objectives. and our allocation limited meet FFO are given in questions, size to share reported level order MPT's the continue are not to capital this we normalized be call

RBC will Markets. Michael Carroll question from with first Our Instructions] Capital come [Operator

why I capital on -- the of could former former about for operators increased timing the get the the pay $XX those taking and million, of kind Steward the talk the that operators to mean you I how loans these working guess, take loans? does highlight Can it assets over working ABL long repayments. to, necessary the to expected back capital

Mike, operators it's fee transitions. not and simple on the -- to $XX the that additional simple or question related primary new a was the professional answer So for million, MPT costs

they'll some early works already repaid On believe that the short-term expect this that them loans, are have quarter by the in of either with. or and replacement to them These XXXX. all of in ABLs part of XXXX. completed be Others them the ABL, have end we within -- they're

PHP, Great. you guess that why Okay. call, completed? did why -- provide sale kind in asset was August. write-down you maybe can I did when an And then PHP mean, for kind process? And quarter? specifically this again that in can on the and to occur update sale? starting of highlighted the due that, bids Is last final you I that that the get believe you're this of highlight then answering the I

on further believe comment the and And the Mike, recent to the buyers on is information we write-down can't most the we what us. sell is available based reliable confidential that's our which continued So amongst what PHP. it, status negotiations of

Deutsche come Omotayo next Bank. question Okusanya Our will from with

have us should we not the a those not about until just quarter? give also that Steward Could assets can yet And that transition think you going please, for assets are that kind earnings of transitioned sense in assets? now impact those you of of -- could how you guys assets you operating, have that forward been the the third

and which -- last time. It's then been in operational also to when Steward ready believe, Antonio this Youngstown, Steward. the operational in still was is includes but Miami, share it and at particular by being It And include was still been Well, facilities. years, I closed includes has which these also aren't us. year. open, for San the operated is rehabbed it not owned closed a it, facility, and facility getting which Pennsylvania, by still it's it's Tayo, which -- operational facility, Ohio a These closed, had

on MPG. have shouldn't impact additional any it negative So

question Our with JPMorgan. from [indiscernible] come next will

think you A couple what of issue secured new cost? unsecured and today debt modeling you questions. could Where do at

Yes.

not contemplating we're now. right So that

As I ago, we we're mentioned minutes few a think hopeful.

I outstanding the coming with are in. that on the good notes yield reason think

testing obviously, conditions come prospect that's not our resolution things. One, a spreads market that and result on think then right that shortly in. now, I follows and hope resolve of the improving markets. capital two also Steward, will we're with as that in that But macroeconomic market. out anticipation we again, And is even

loan extend it the about thoughts you term pay Do early 'XX off? What it you'll think or on maturity?

good have think that. That's We options a on question. we

walked gives I out, optionality, our of extended, with allows We us and liquidity that a extended, laid few we've optionality minutes now have partially whether ago. that As transactions I mentioned. anticipated liquidity we think lot us a paid, the gets that through that

remarks. I Ed This concludes over to conference for question-and-answer session. like our back Aldag the turn to closing would any

Thank all you you always, later [ and give for please And questions Drew you, thank ]. any on, as have Anthony, listening McCole in or today. Tim

presentation. The for attending today's Thank conference you has concluded. now

now may You disconnect.