Medical Properties Trust, Inc. common stock

Good day, and thank you for standing by. Welcome to the Q2 2021 Medical Properties Trust Earnings Conference call. At this time, all participants are in a listen-only mode. After the speaker's 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 zero. I would now like to hand the conference over to your speaker today, Mr. Charles Lambert. Please go ahead.

Thank you. Good morning. Welcome to the Medical Properties Trust conference call to discuss our second quarter 2021 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.medicalpropertytrust.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 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 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 the 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 gap financial measures. Please note that in our press release, Medical Properties Trust has reconciled all non-gap financial measures to the most directly comparable gap 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 Aldack.

Thank you, Charles, and thank all of you for listening in today. By now, most, if not all of you, have seen the reports from the likes of HCA and Tenet and Universal. Their positive reports may have surprised some of the street, but they certainly didn't surprise us. Our tenants are continuing the positive trends with very favorable operating results. But first, let me discuss the growth of MPT. We are very excited to discuss another major push forward in our accretive growth strategy, investing more than $3.6 billion year to date and more than $7 billion since the beginning of 2020. And yet growth for the sake of growth is not consistent with the way we have built NPT. Our deals have always been immediately accretive. Not only did NPT generate growth in FFO per share in excess of 20% last year, but we have grown both NFFO and AFFO per share well in excess of 10% year-over-year in the first half of 2021. This is the strategy we put in place more than 18 years ago, and we have not deviated from it. In the 10-year period ending the first quarter of this year, our normalized FFO per share grew at an annualized rate approaching 9%. Over this same time span, our AFFO per share grew at 6% annually. Now let me turn our attention to the operating results of our tenants. EBITDARM coverage for our same-store acute care hospitals, which make up 72% of our portfolio, increased 31% year over year on a trailing 12-month basis. These numbers include all of the grants received by our tenants. It does not include any Medicare advances. These grants, as you will recall, have essentially reimbursed hospitals for the time period last year that they were shut down at the request of governments around the world. The first quarter 2021 lease coverage was 3.31 times for our acute care sector. This includes the grants that were recognized by the tenants and expensing the extraordinary COVID expenses. The EBITDARM coverage for the acute care sector increased almost 22% quarter over quarter, demonstrating the same type of trajectory that we have seen from previously reported public company filings for hospital operators. Our acute care operators EBITDARM for same store increased by more than $400 million year over year. Our LTAC portion of our portfolio, which only represents 1.5% of the total portfolio, as a group, continued to perform at the top of their historical coverages. The same store, EBITDARM, increased by more than $25 million year over year and generated a trailing 12-month coverage of almost three times and an increase of almost 40 basis points quarter over quarter. The IRF sector also continues to show strong performance. The EBITDARM for the trailing 12 months ending the first quarter of 2021 showed a slight improvement over 2020. The coverage continued to be strong at more than two times, which was a slight increase over the fourth quarter of 2020. We certainly want to continue the policy of not divulging proprietary and nonpublic information on any of our tenants. But I do want to give you some more information on our largest tenants. So in alphabetical order, Circle continues to outperform our expectations on their integration of the BMI portfolio we acquired in January of 2020. Their total portfolio coverage is strongly above two times. Their cash balances are higher today than they were at 12-31-20. You may have also seen that the American-based healthcare company Centene has acquired 100% of the remaining shares of Circle that they did not already own. Earnest continues to generate some of the strongest EBITDARM coverages in its history. The coverages are approaching three times and increased quarter over quarter by more than 30 basis points. Their liquidity also remains very strong. HelpScope continues its upward trajectory in lease coverage with numbers in line with pre-COVID coverages. LifePoint continues its strong operational position with coverages well in excess of pre-COVID numbers. EBITDARM coverages increased quarter over quarter by 40 basis points. Their liquidity position is one of the strongest in the NPT portfolio. Median, one of our strongest performers throughout 2020, continues its steady and strong performance with coverages very near their historical highs. Prime's current EBITDARM coverages are well above their historical highs. Their quarter-over-quarter coverage increased by more than 50 basis points, and the overall coverage is well in excess of our average acute care sector. Prospect has a very strong liquidity position and is generating coverages about 50 basis points above last quarter. Their overall coverage is well above historical highs with NPT. Steward performance tracks right in line with what we're seeing from our other operators. Their quarter-over-quarter coverage showed a more than 60 basis points increase. Their total coverage is also at an all-time high with MPT. Vibrance performance has continued its historical levels with overall coverage well in excess of the average of our other post-acute operators. With the recent announcements of pending acquisitions in the U.S., Our U.S. portion of our total portfolio is expected to be approximately 61%. The acute care sector is projected to be 72%, and our behavioral health, 11%, once we close on the Miami acute care hospitals and the Springstone transaction. We continue to be very bullish on our tenants and their performance, our balance sheet and liquidity management, and our very calculated accretive growth strategy. I will now turn it over to Steve, who will walk you through the details of our financial results. Steve?