Medical Properties Trust, Inc. common stock

Ladies and gentlemen, thank you for standing by, and welcome to the Q4 2020 Medical Properties Trust Earnings, Inc. Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Charles Lambert, Vice President. Please go ahead, sir.

Good morning. Welcome to the Medical Properties Trust conference call to discuss our fourth quarter and calendar year 2020 financial results. With me today are Edward K. Aldag, Jr., Chairman, President, and Chief Executive Officer of the company, and Stephen Hamner, Executive Vice President and Chief Financial Officer. Our press release was distributed this morning and furnished on Form 8K with the Securities and Exchange Commission. If you did not receive a copy, it is available on our website, at www.medicalpropertystrust.com in the investor relations section. Additionally, we're hosting a live webcast of today's call, which you can access in that same section. During the course of this call, we will make projections and certain other statements that may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause our financial results and future events to differ materially from those expressed in or underlying such forward-looking statements. We refer you to the company's reports filed with the Securities and Exchange Commission for a discussion of the factors that could cause the company's actual results or future events to differ materially from those expressed in this call. The information being provided today is as of this date only and except as required by federal securities laws. The company does not undertake a duty to update any such information. In addition, during the course of the conference call, we will describe certain non-GAAP financial measures which should be considered in addition to and not in lieu of comparable GAAP financial measures. Please note that in our press release, Medical Properties Trust has reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Reg G requirements. You can also refer to our website at www.medicalpropertystrust.com for the most directly comparable financial measures and related reconciliations. I will now turn the call over to our Chief Executive Officer, Ed Aldag.

Thank you, Charles, and good morning to all of you listening in today to our 2020 recap and insight into what 2021 will look like for NPT. 2020 will be a year that we will all remember for the rest of our lives. For those of us at NPT, it will be remembered not only for the pandemic, but how well NPT was positioned to continue our outperformance. We outperformed our peers in almost every measurable financial metric. But what makes me the proudest about that is the fact that the business plan and the groundwork we put in place for the last almost 20 years was absolutely validated and reinforced during the pandemic. I also want to take this opportunity to congratulate the NPT workforce for the incredible job they did adjusting to the virtual offices and the new norms created by the virus. They did all of this without missing a beat. I also want to thank the tens of thousands of frontline workers in all of the hundreds of NPT hospitals for literally putting their lives on the line to keep healthcare available to people all around the world. NPT hospitals proved essential and extraordinary in nine countries on four continents, truly our proudest moment to date. And while the year had untold numbers of challenges, I want to take just a moment to reflect on the remarkable accomplishments of our healthcare systems and providers worldwide. Just like we knew they were all capable of, our operators adjusted their operations on a moment's notice. They reconfigured their beds, added PPE, ventilators, and learned how to treat a new world disease. Our operators are world-class. They moved quickly and amazingly to treat their populations with COVID-19 while not ignoring their non-COVID patients. I cannot say enough to express my gratitude to each and every one of them for the job they did. At MBT, we were able to continue our remarkable growth. We were able to close on almost $3.6 billion in transactions throughout 2020. We began 2020 with the announcement of our approximate $2 billion acquisition of BMI in the UK. We entered South America for the first time with our Columbia transaction. We expanded our ownership of Infracore, the real estate owner of Swiss Medical Network, the second largest private operator in Switzerland. We acquired new and valuable hospital assets with established partners such as Prime Healthcare, Circle, and Median, and we grew our earnest portfolio via several new IRF developments throughout the U.S. We also established new relationships with operators, including the NHS in the UK and Cura Health, a US operator of inpatient rehabilitation hospitals. And just like last year, we began 2021 with a major announcement of an approximate £800 million investment to acquire a portfolio of real estate at Priory Group, the leading behavioral health provider in the UK. This acquisition further expands our investment in behavioral health, an area of healthcare that we believe has a tremendous underserved need throughout the world, and also offers NPT a major platform for future growth. We were able to improve our concentration metrics with the Priory acquisition. Now with a total of 50 operators, our largest tenant represents 22% of our portfolio, and most importantly, No single property represents more than 2.8% of our overall portfolio. Remember, every single hospital serves a distinct local market. Healthcare is truly a local business. Regardless of parent ownership, the most important diversity measure is at the single property level. Our hospitals performed very well in 2020 despite hospitals across the world. being essentially shut down for two to three months. Let me take a moment to walk you through some amazing statistics. As we did last quarter, we want to be very transparent about our coverage ratios. So, our first will provide you with EBITDARM coverages for the trailing 12 months, Q3 2020, with all grants, but still not including any Medicare advances that have been received by our operators to date. I will then give you those same ratios without any grants. Remember that we added four properties, three international IRFs and one acute care to our same-store reporting, and we removed four acute care properties. Inclusive of the $706 million in grants through the CARES Act fund received to date, our same-store portfolio EBITDARM coverage for all sectors for the trailing 12 months ending Q3 2020 was 3.13 times. This represents an 18.4 percent increase year-over-year. Same-store acute care EBIDARM coverage was 3.51 times, which represents a 20 percent increase year-over-year. LTCH EBIDARM coverage was 2.39 times, which represents an almost 50 percent increase year-over-year. IRF EBITDARM coverage was 2.21 times, which represented a 6.6% increase year over year. Now, those same ratios, excluding any grants and remembering all hospitals were essentially shut down for two to three months. Our same store portfolio EBITDARM coverage for all sectors for the trailing 12 months ending Q3 2020 declined to 2.02 times. Again, these coverages did not include any CARES Act and did include the two to three months that these hospital operators were essentially shut down. Same story, acute care EBITDARM coverage was approximately two times, which represented a 32% decrease. LTCH EBITDARM coverage approximately 2.07 times, which represented an almost 30% increase year over year. And the IRF coverage was 2.1, which represented a 1.4% increase year over year. So you see that even without any CARES Act grants whatsoever, our operators were still very well covered. And furthermore, without any grants, comparing the third quarter 2020 to the third quarter 2019, All of the operations are very close to or better than they were in 2019. Excluding any grants or advances, the total same-store portfolio EBITDARM coverage was off just 6% from 2019 levels for the third quarter. As I previously mentioned, and Steve will report on in more detail, we have already had a great start to 2021. We continue to work on strong opportunities both in the U.S. and abroad. We expect 2021 to be another successful year for MPT. MPT has the strongest portfolio of hospitals in the world. Our operators are at the very top of the class in their regions. We remain committed to quality accretive investments and look forward to seeing MPT continue its role as the leading provider of capital to hospitals worldwide. Steve?