Medical Properties Trust, Inc. common stock

Good morning, everyone, and welcome to the Q4 2024 Medical Properties Trust Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, we'll signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your touchtone telephones. To draw your questions, you may press star and two. Please note that today's 60-minute event is being recorded. At this time, I'd like to turn the conference call over to Charles Lambert, Senior Vice President. Please go ahead.

Thank you and good morning. Welcome to the Medical Properties Trust conference call to discuss our fourth quarter and full year 2024 financial results. With me today are Edward K. Aldag, Jr., Chairman, President, and Chief Executive Officer of the company. Stephen Hamner, Executive Vice President and Chief Financial Officer, Kevin Hanna, Senior Vice President Controller and Chief Accounting Officer, Rosa Hooper, Senior Vice President of Operations and Secretary, and Jason Fry, Managing Director, Asset Management and Underwriting. 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 MedicalPropertiesTrust.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 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 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 refer to our website, 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 thanks to all of you for joining us this morning on our fourth quarter 2024 earnings call. I'm pleased to be joined again today by Steve, Kevin, Rosa, and Jason. Before you hear from the rest of the team, I'll spend a few minutes covering a few important recent strategic updates. We entered 2024 with a plan to execute $2 billion in liquidity transactions. We significantly outperformed that target by executing approximately $3 billion in liquidity transactions during the year, sales that repeatedly provided third-party validation of our real estate underwriting. In early 2025, we were able to further strengthen our liquidity, issuing more than $2.5 billion of seven-year secured bonds at a blended coupon of $7.88. With this successful offering, we now have more than enough liquidity to cover all upcoming debt maturities through 2026. Taken together, these actions clearly showcase the resilience of our business model and demonstrate that our diverse global portfolio of hospital real estate remains very attractive to both real estate investors and operators. Last quarter, we discussed Prospect Medical Group's liquidity challenges primarily resulting from stalled sales process across various East Coast markets. In January, Prospect commenced Chapter 11 bankruptcy proceedings, citing a confluence of factors leading up to this decision, ranging from the impacts of COVID-19 and labor cost inflation to reimbursement challenges to pension obligations. This has been a very different process from Stewart's bankruptcy since the beginning. We've been working collaboratively with all other stakeholders, including quickly engaging with prospects' advisors to reach a consensual resolution of various issues. In a short time, we reached a global settlement agreement that will allow Prospect to more effectively market and sell its hospitals, along with the related real estate, and avoid the delays, uncertainty, and cost of a prolonged litigation. The proceeds from these asset sales will be allocated primarily to MPT and Prospect's other creditors. We've also agreed to provide $25 million in funding to supplement the new outside debtor in possession funding that Prospect obtained at the outset of the bankruptcy process. While this agreement remains subject to court approval, with this settlement in place, all parties should be moving forward with the same objectives and we believe this restructuring process will position us for enhanced recoveries. NPT has more than a 20-year track record of successfully deploying capital into critically healthcare structures. A cornerstone to our underwriting process is to ensure that each facility is needed in their community, functioning like an infrastructure asset. Over the years, NVT has bought over 500 hospitals during our history, and virtually all of those hospitals remain hospitals to this day. There is no better validation of our underwriting than the fact that we buy hospitals and the facilities stay open, providing essential healthcare services to their respective communities. While 2024 was a challenging year in many respects, We are proud of our ability to remain relentlessly focused on delivering on our objectives. As a result of our team's extraordinary efforts throughout the year, we now have a stronger balance sheet and a more diverse operator mix. Global healthcare expenditures continue to grow, hospital buildings are expensive, and one thing that's clear, as hospitals need access to affordable capital to continue to innovate and serve patients in their communities. As such, we believe our business model is more important than ever. In recent days, there has been very much focus in Washington on budget savings that may be possible through changes to Medicaid. We actually applaud and encourage this. First, and I make this point only because we have a number of new investors who may not be fully familiar with our business model. MPT gets zero revenue from Medicaid. Certainly some of our lessees do, but even that is a relatively small portion of total net revenue, and moreover, it's not very profitable, so it contributes little to our tenants' EBITDARM results. An enormous amount of the cost to the government of Medicaid goes to programs that have nothing to do with hospitals and other true medical costs. And we believe that savings from potential Medicaid restructuring may be directed into actually providing acute health care to beneficiaries. We are entering 2025 with a great deal of confidence in our ability to continue to execute our strategy. The vast majority of our portfolio continues to generate predictable rent payments, and as we said last quarter, assuming no additional changes to our portfolio and inclusive of our share of real estate joint ventures, we expect total annualized cash rent of more than $1 billion once our new tenants are fully ramped. With our debt maturities covered through 2026, The road is clear for the rebound to take shape. The future is bright for NPT, and we look forward to the year ahead. With that, I'll turn it over to Rosa.