MEDICAL PROPERTIES TRUST INC [MPW] Filings

10-Q 1 mpw-10q_20210930.htm 10-Q mpw-10q_20210930.htm

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 September 30, 2021

☐	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

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. ☐

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 1, 2021, Medical Properties Trust, Inc. had 596.3 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 and nine months ended September 30, 2021 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 September 30, 2021

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 September 30, 2021 and December 31, 2020	3
Condensed Consolidated Statements of Net Income for the Three and Nine Months Ended September 30, 2021 and 2020	4
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2021 and 2020	5
Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2021 and 2020	6
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020	8
MPT Operating Partnership, L.P. and Subsidiaries
Condensed Consolidated Balance Sheets at September 30, 2021 and December 31, 2020	9
Condensed Consolidated Statements of Net Income for the Three and Nine Months Ended September 30, 2021 and 2020	10
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2021 and 2020	11
Condensed Consolidated Statements of Capital for the Three and Nine Months Ended September 30, 2021 and 2020	12
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020	14
Medical Properties Trust, Inc. and MPT Operating Partnership, L.P.
Notes to Condensed Consolidated Financial Statements	15
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3 Quantitative and Qualitative Disclosures about Market Risk	40
Item 4 Controls and Procedures	41
PART II — OTHER INFORMATION	42
Item 1 Legal Proceedings	42
Item 1A Risk Factors	42
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3 Defaults Upon Senior Securities	42
Item 4 Mine Safety Disclosures	42
Item 5 Other Information	42
Item 6 Exhibits	43
SIGNATURE	44

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

	September 30, 2021			December 31, 2020
(In thousands, except per share amounts)	(Unaudited)			(Note 2)
Assets
Real estate assets
Land, buildings and improvements, intangible lease assets, and other	$	13,244,403		$	12,078,927
Investment in financing leases		2,042,585			2,010,922
Real estate held for sale		1,096,475			—
Mortgage loans		200,285			248,080
Gross investment in real estate assets		16,583,748			14,337,929
Accumulated depreciation and amortization		(936,289	)		(833,529	)
Net investment in real estate assets		15,647,459			13,504,400
Cash and cash equivalents		349,652			549,884
Interest and rent receivables		64,622			46,208
Straight-line rent receivables		661,429			490,462
Equity investments		1,170,171			1,123,623
Other loans		1,502,677			858,368
Other assets		315,977			256,069
Total Assets	$	19,711,987		$	16,829,014
Liabilities and Equity
Liabilities
Debt, net	$	10,581,023		$	8,865,458
Accounts payable and accrued expenses		595,003			438,750
Deferred revenue		19,739			36,177
Obligations to tenants and other lease liabilities		157,488			144,772
Total Liabilities		11,353,253			9,485,157
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 — 596,145 shares at September 30, 2021 and 541,419 shares at December 31, 2020		596			541
Additional paid-in capital		8,541,092			7,461,503
Distributions in excess of net income		(117,733	)		(71,411	)
Accumulated other comprehensive loss		(69,843	)		(51,324	)
Treasury shares, at cost		(777	)		(777	)
Total Medical Properties Trust, Inc. stockholders’ equity		8,353,335			7,338,532
Non-controlling interests		5,399			5,325
Total Equity		8,358,734			7,343,857
Total Liabilities and Equity	$	19,711,987		$	16,829,014

See accompanying notes to condensed consolidated financial statements.

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Net Income

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(In thousands, except per share amounts)	2021			2020			2021			2020
Revenues
Rent billed	$	242,211		$	192,953		$	672,425		$	538,277
Straight-line rent		64,637			51,125			174,975			103,697
Income from financing leases		50,667			52,544			151,898			157,469
Interest and other income		33,264			32,836			136,038			115,989
Total revenues		390,779			329,458			1,135,336			915,432
Expenses
Interest		94,132			82,263			273,409			243,538
Real estate depreciation and amortization		85,039			69,665			237,050			192,049
Property-related		7,128			5,897			31,265			19,178
General and administrative		36,694			31,718			107,312			97,121
Total expenses		222,993			189,543			649,036			551,886
Other income (expense)
Gain (loss) on sale of real estate		9,294			(927	)		8,896			(2,703	)
Real estate impairment charges		—			—			—			(19,006	)
Earnings from equity interests		7,193			5,893			21,633			15,263
Debt refinancing and unutilized financing costs		—			—			(2,339	)		(611	)
Other (including mark-to-market adjustments on equity securities)		(2,276	)		2,461			4,747			(9,499	)
Total other income (expense)		14,211			7,427			32,937			(16,556	)

Income before income tax		181,997			147,342			519,237			346,990
Income tax expense		(10,602	)		(15,985	)		(69,141	)		(24,824	)

Net income		171,395			131,357			450,096			322,166
Net income attributable to non-controlling interests		(258	)		(251	)		(611	)		(600	)
Net income attributable to MPT common stockholders	$	171,137		$	131,106		$	449,485		$	321,566

Earnings per common share — basic and diluted
Net income attributable to MPT common stockholders	$	0.29		$	0.25		$	0.76		$	0.61

Weighted average shares outstanding — basic		595,119			531,095			586,291			526,651
Weighted average shares outstanding — diluted		597,320			532,436			587,971			527,832

Dividends declared per common share	$	0.28		$	0.27		$	0.84		$	0.81

See accompanying notes to condensed consolidated financial statements.

MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(In thousands)	2021			2020			2021			2020
Net income	$	171,395		$	131,357		$	450,096		$	322,166
Other comprehensive income:
Unrealized gain (loss) on interest rate swaps, net of tax		8,847			(2,624	)		28,558			(35,635	)
Foreign currency translation (loss) gain		(25,191	)		19,983			(47,077	)		2,886
Total comprehensive income		155,051			148,716			431,577			289,417
Comprehensive income attributable to non-controlling interests		(258	)		(251	)		(611	)		(600	)
Comprehensive income attributable to MPT common stockholders	$	154,793		$	148,465		$	430,966		$	288,817

See accompanying notes to condensed consolidated financial statements.

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		Distributions in Excess of Net Income			Accumulated Other Comprehensive Loss			Treasury Shares			Non- Controlling Interests			Total Equity
Balance at December 31, 2020		—	$	—		541,419	$	541	$	7,461,503	$	(71,411	)	$	(51,324	)	$	(777	)	$	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		—	$	—		583,109	$	583	$	8,252,966	$	(71,071	)	$	(66,720	)	$	(777	)	$	5,229		$	8,120,210
Net income		—		—		—		—		—		114,565			—			—			256			114,821
Unrealized gain on interest rate swaps, net of tax		—		—		—		—		—		—			4,207			—			—			4,207
Foreign currency translation gain		—		—		—		—		—		—			9,014			—			—			9,014
Stock vesting and amortization of stock-based compensation		—

MEDICAL PROPERTIES TRUST INC [MPW] Filings
10-Q	[2021-11-09]
10-Q	[2021-08-09]
10-Q	[2021-05-10]
10-K	[2021-03-01]
10-Q	[2020-11-09]
10-Q	[2020-08-07]
10-Q	[2020-05-11]
10-K	[2020-02-27]
10-Q	[2019-11-12]
10-Q	[2019-08-09]
10-Q	[2019-05-10]
10-K	[2019-03-01]
10-Q	[2018-11-09]
10-Q	[2018-08-09]
10-Q	[2018-05-10]
10-K	[2018-03-01]
10-Q	[2017-11-09]
10-Q	[2017-08-09]
10-Q	[2017-05-10]
10-K	[2017-03-01]
10-Q	[2016-11-09]
10-Q	[2016-08-09]
10-Q	[2016-05-10]
10-K	[2016-02-29]
10-Q	[2015-11-09]
10-Q	[2015-08-10]
10-Q	[2015-05-11]
10-K	[2015-03-02]
10-Q	[2014-11-10]
10-Q	[2014-08-11]
10-Q	[2014-05-12]
10-K	[2014-03-03]
10-Q	[2013-11-08]
10-Q	[2013-08-09]
10-Q	[2013-05-10]
10-K	[2013-02-22]
10-Q	[2012-11-09]
10-Q	[2012-08-09]
10-Q	[2012-05-10]
10-K	[2012-02-29]