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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-32559

Commission file number 333-177186

MEDICAL PROPERTIES TRUST, INC.

MPT OPERATING PARTNERSHIP, L.P.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

 

 

maryland

delaware

 

20-0191742

20-0242069

(State or other jurisdiction of

incorporation or organization)

 

(I. R. S. Employer

Identification No.)

 

 

 

 

1000 URBAN CENTER DRIVE, SUITE 501

BIRMINGHAM, AL

 

35242

(Address of principal executive offices)

 

(Zip Code)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (205) 969-3755

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.001 per share, of Medical Properties Trust, Inc.

MPW

The New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

☒ (Medical Properties Trust, Inc. only)

 

Accelerated filer

 

Non-accelerated filer

 

☒ (MPT Operating Partnership, L.P. only)

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of May 6, 2022, Medical Properties Trust, Inc. had 600.1 million shares of common stock, par value $0.001, outstanding.

 

 


 

EXPLANATORY NOTE

This report combines the Quarterly Reports on Form 10-Q for the three months ended March 31, 2022 of Medical Properties Trust, Inc., a Maryland corporation, and MPT Operating Partnership, L.P., a Delaware limited partnership, through which Medical Properties Trust, Inc. conducts substantially all of its operations. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” “Medical Properties,” “MPT,” or the “company” refer to Medical Properties Trust, Inc. together with its consolidated subsidiaries, including MPT Operating Partnership, L.P. Unless otherwise indicated or unless the context requires otherwise, all references to “operating partnership” refer to MPT Operating Partnership, L.P. together with its consolidated subsidiaries.

 


 

MEDICAL PROPERTIES TRUST, INC. AND MPT OPERATING PARTNERSHIP, L.P.

AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED March 31, 2022

Table of Contents

 

 

Page

PART I — FINANCIAL INFORMATION

3

Item 1 Financial Statements

3

Medical Properties Trust, Inc. and Subsidiaries

 

Condensed Consolidated Balance Sheets at March 31, 2022 and December 31, 2021

3

Condensed Consolidated Statements of Net Income for the Three Months Ended March 31, 2022 and 2021

4

Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2022 and 2021

5

Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2022 and 2021

6

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021

7

MPT Operating Partnership, L.P. and Subsidiaries

 

Condensed Consolidated Balance Sheets at March 31, 2022 and December 31, 2021

8

Condensed Consolidated Statements of Net Income for the Three Months Ended March 31, 2022 and 2021

9

Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2022 and 2021

10

Condensed Consolidated Statements of Capital for the Three Months Ended March 31, 2022 and 2021

11

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021

12

Medical Properties Trust, Inc. and MPT Operating Partnership, L.P.

 

Notes to Condensed Consolidated Financial Statements

13

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

25

Item 3 Quantitative and Qualitative Disclosures about Market Risk

35

Item 4 Controls and Procedures

36

PART II — OTHER INFORMATION

37

Item 1 Legal Proceedings

37

Item 1A Risk Factors

37

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

37

Item 3 Defaults Upon Senior Securities

37

Item 4 Mine Safety Disclosures

37

Item 5 Other Information

37

Item 6 Exhibits

38

SIGNATURE

39

 

 

 

2


 

 

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

 

 

 

March 31,
2022

 

 

December 31,
2021

 

(In thousands, except per share amounts)

 

(Unaudited)

 

 

(Note 2)

 

Assets

 

 

 

 

 

 

Real estate assets

 

 

 

 

 

 

Land, buildings and improvements, intangible lease assets, and other

 

$

14,029,059

 

 

$

14,062,722

 

Investment in financing leases

 

 

2,063,227

 

 

 

2,053,327

 

Real estate held for sale

 

 

 

 

 

1,096,505

 

Mortgage loans

 

 

224,281

 

 

 

213,211

 

Gross investment in real estate assets

 

 

16,316,567

 

 

 

17,425,765

 

Accumulated depreciation and amortization

 

 

(1,054,361

)

 

 

(993,100

)

Net investment in real estate assets

 

 

15,262,206

 

 

 

16,432,665

 

Cash and cash equivalents

 

 

248,846

 

 

 

459,227

 

Interest and rent receivables

 

 

65,933

 

 

 

56,229

 

Straight-line rent receivables

 

 

660,421

 

 

 

728,522

 

Investments in unconsolidated real estate joint ventures

 

 

1,534,514

 

 

 

1,152,927

 

Investments in unconsolidated operating entities

 

 

1,455,842

 

 

 

1,289,434

 

Other loans

 

 

66,963

 

 

 

67,317

 

Other assets

 

 

523,109

 

 

 

333,480

 

Total Assets

 

$

19,817,834

 

 

$

20,519,801

 

Liabilities and Equity

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Debt, net

 

$

10,117,989

 

 

$

11,282,770

 

Accounts payable and accrued expenses

 

 

595,026

 

 

 

607,792

 

Deferred revenue

 

 

18,834

 

 

 

25,563

 

Obligations to tenants and other lease liabilities

 

 

166,626

 

 

 

158,005

 

Total Liabilities

 

 

10,898,475

 

 

 

12,074,130

 

Equity

 

 

 

 

 

 

Preferred stock, $0.001 par value. Authorized 10,000 shares;
   
no shares outstanding

 

 

 

 

 

 

Common stock, $0.001 par value. Authorized 750,000 shares;
   issued and outstanding —
598,676 shares at March 31, 2022 and
   
596,748 shares at December 31, 2021

 

 

599

 

 

 

597

 

Additional paid-in capital

 

 

8,547,892

 

 

 

8,564,009

 

Retained earnings (deficit)

 

 

369,972

 

 

 

(87,691

)

Accumulated other comprehensive loss

 

 

(5,010

)

 

 

(36,727

)

Total Medical Properties Trust, Inc. stockholders’ equity

 

 

8,913,453

 

 

 

8,440,188

 

Non-controlling interests

 

 

5,906

 

 

 

5,483

 

Total Equity

 

 

8,919,359

 

 

 

8,445,671

 

Total Liabilities and Equity

 

$

19,817,834

 

 

$

20,519,801

 

 

See accompanying notes to condensed consolidated financial statements.

3


 

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Net Income

(Unaudited)

 

 

For the Three Months
Ended March 31,

 

(In thousands, except per share amounts)

2022

 

 

2021

 

Revenues

 

 

 

 

 

Rent billed

$

263,402

 

 

$

213,344

 

Straight-line rent

 

61,044

 

 

 

54,873

 

Income from financing leases

 

51,776

 

 

 

50,894

 

Interest and other income

 

33,578

 

 

 

43,654

 

Total revenues

 

409,800

 

 

 

362,765

 

Expenses

 

 

 

 

 

Interest

 

91,183

 

 

 

86,972

 

Real estate depreciation and amortization

 

85,316

 

 

 

75,642

 

Property-related

 

8,598

 

 

 

5,453

 

General and administrative

 

41,424

 

 

 

36,073

 

Total expenses

 

226,521

 

 

 

204,140

 

Other income (expense)

 

 

 

 

 

Gain on sale of real estate and other, net

 

451,638

 

 

 

989

 

Earnings from equity interests

 

7,338

 

 

 

7,101

 

Debt refinancing and unutilized financing costs

 

(8,816

)

 

 

(2,269

)

Other (including fair value adjustments on securities)

 

9,887

 

 

 

7,794

 

Total other income

 

460,047

 

 

 

13,615

 

 

 

 

 

 

 

Income before income tax

 

643,326

 

 

 

172,240

 

Income tax expense

 

(11,379

)

 

 

(8,360

)

 

 

 

 

 

 

Net income

 

631,947

 

 

 

163,880

 

Net income attributable to non-controlling interests

 

(266

)

 

 

(97

)

Net income attributable to MPT common stockholders

$

631,681

 

 

$

163,783

 

 

 

 

 

 

 

Earnings per common share — basic and diluted

 

 

 

 

 

Net income attributable to MPT common stockholders

$

1.05

 

 

$

0.28

 

 

 

 

 

 

 

Weighted average shares outstanding — basic

 

598,676

 

 

 

576,240

 

Weighted average shares outstanding — diluted

 

598,932

 

 

 

577,541

 

 

 

 

 

 

 

Dividends declared per common share

$

0.29

 

 

$

0.28

 

 

See accompanying notes to condensed consolidated financial statements.

4


 

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

 

 

 

For the Three Months
Ended March 31,

 

(In thousands)

 

2022

 

 

2021

 

Net income

 

$

631,947

 

 

$

163,880

 

Other comprehensive income:

 

 

 

 

 

 

Unrealized gain on interest rate swaps, net of tax

 

 

44,932

 

 

 

15,504

 

Foreign currency translation loss

 

 

(13,215

)

 

 

(30,900

)

Total comprehensive income

 

 

663,664

 

 

 

148,484

 

Comprehensive income attributable to non-controlling interests

 

 

(266

)

 

 

(97

)

Comprehensive income attributable to MPT common
   stockholders

 

$

663,398

 

 

$

148,387

 

 

See accompanying notes to condensed consolidated financial statements.

5


 

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

 

Condensed Consolidated Statements of Equity

(Unaudited)

 

 

 

Preferred

 

 

Common

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per share amounts)

 

Shares

 

 

Par
Value

 

 

Shares

 

 

Par
Value

 

 

Additional
Paid-in
Capital

 

 

Retained
Earnings
(Deficit)

 

 

Accumulated
Other
Comprehensive
Loss

 

 

Non-
Controlling
Interests

 

 

Total
Equity

 

Balance at December 31, 2021

 

 

 

 

$

 

 

 

596,748

 

 

$

597

 

 

$

8,564,009

 

 

$

(87,691

)

 

$

(36,727

)

 

$

5,483

 

 

$

8,445,671

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

631,681

 

 

 

 

 

 

266

 

 

 

631,947

 

Unrealized gain on interest rate swaps,
   net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

44,932

 

 

 

 

 

 

44,932

 

Foreign currency translation loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,215

)

 

 

 

 

 

(13,215

)

Stock vesting and amortization of
   stock-based compensation

 

 

 

 

 

 

 

 

3,107

 

 

 

3

 

 

 

11,801

 

 

 

 

 

 

 

 

 

 

 

 

11,804

 

Stock vesting - satisfaction of tax
   withholdings

 

 

 

 

 

 

 

 

(1,179

)

 

 

(1

)

 

 

(27,918

)

 

 

 

 

 

 

 

 

 

 

 

(27,919

)

Acquisition of non-controlling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

929

 

 

 

929

 

Distributions to non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(772

)

 

 

(772

)

Dividends declared ($0.29 per
   common share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(174,018

)

 

 

 

 

 

 

 

 

(174,018

)

Balance at March 31, 2022

 

 

 

 

$

 

 

 

598,676

 

 

$

599

 

 

$

8,547,892

 

 

$

369,972

 

 

$

(5,010

)

 

$

5,906

 

 

$

8,919,359

 

 

 

 

Preferred

 

 

Common

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per share amounts)

 

Shares

 

 

Par
Value

 

 

Shares

 

 

Par
Value

 

 

Additional
Paid-in
Capital

 

 

Retained
Earnings
(Deficit)

 

 

Accumulated
Other
Comprehensive
Loss

 

 

Non-
Controlling
Interests

 

 

Total
Equity

 

Balance at December 31, 2020

 

 

 

 

$

 

 

 

541,353

 

 

$

541

 

 

$

7,460,726

 

 

$

(71,411

)

 

$

(51,324

)

 

$

5,325

 

 

$

7,343,857

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

163,783

 

 

 

 

 

 

97

 

 

 

163,880

 

Unrealized gain on interest rate swaps,
   net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,504

 

 

 

 

 

 

15,504

 

Foreign currency translation loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(30,900

)

 

 

 

 

 

(30,900

)

Stock vesting and amortization of
   stock-based compensation

 

 

 

 

 

 

 

 

1,741

 

 

 

2

 

 

 

12,262

 

 

 

 

 

 

 

 

 

 

 

 

12,264

 

Distributions to non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(193

)

 

 

(193

)

Proceeds from offering (net of
   offering costs)

 

 

 

 

 

 

 

 

39,949

 

 

 

40

 

 

 

779,201

 

 

 

 

 

 

 

 

 

 

 

 

779,241

 

Dividends declared ($0.28 per
   common share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(163,443

)

 

 

 

 

 

 

 

 

(163,443

)

Balance at March 31, 2021

 

 

 

 

$

 

 

 

583,043

 

 

$

583

 

 

$

8,252,189

 

 

$

(71,071

)

 

$

(66,720

)

 

$

5,229

 

 

$

8,120,210

 

 

 

See accompanying notes to condensed consolidated financial statements.

6


 

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

 

For the Three Months
Ended March 31,

 

 

 

2022

 

 

2021

 

 

 

(In thousands)

 

Operating activities

 

 

 

 

 

 

Net income

 

$

631,947

 

 

$

163,880

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

88,760

 

 

 

78,606

 

Amortization of deferred financing costs and debt discount

 

 

5,285

 

 

 

3,817

 

Straight-line rent revenue and other

 

 

(75,385

)

 

 

(65,333

)

Share-based compensation

 

 

11,804

 

 

 

12,264

 

Gain on sale of real estate and other, net

 

 

(451,638

)

 

 

(989

)

Straight-line rent and other write-off (recovery)

 

 

2,604

 

 

 

(5,238

)

Debt refinancing and unutilized financing costs

 

 

8,816

 

 

 

2,269

 

Other adjustments

 

 

(1,040

)

 

 

(2,923

)

Changes in:

 

 

 

 

 

 

Interest and rent receivables

 

 

(12,431

)

 

 

13,396

 

Other assets

 

 

(41

)

 

 

(652

)

Accounts payable and accrued expenses

 

 

(21,648

)

 

 

5,062

 

Deferred revenue

 

 

(7,646

)

 

 

(15,429

)

Net cash provided by operating activities

 

 

179,387

 

 

 

188,730

 

Investing activities

 

 

 

 

 

 

Cash paid for acquisitions and other related investments

 

 

(724,795

)

 

 

(1,778,417

)

Net proceeds from sale of real estate

 

 

1,711,608

 

 

 

10,905

 

Principal received on loans receivable

 

 

6,355

 

 

 

40,937

 

Investment in loans receivable

 

 

(10,414

)

 

 

(23,935

)

Construction in progress and other

 

 

(36,115

)

 

 

(9,774

)

Proceeds from sale and return of equity investment

 

 

 

 

 

11,000

 

Capital additions and other investments, net

 

 

(67,605

)

 

 

(32,276

)

Net cash provided by (used for) investing activities

 

 

879,034

 

 

 

(1,781,560

)

Financing activities

 

 

 

 

 

 

Proceeds from term debt, net of discount