Medical Properties Trust(US:MPW)2023-02-23 23:05Financial Data and Key Metrics Changes - The company reported normalized FFO of $0.43 for Q4 2022 and $1.82 per diluted share for the full year 2022, aligning with prior expectations [32] - The 2023 guidance for normalized FFO is projected to be between $1.50 and $1.65, reflecting a decrease from the annualized run rate of about $1.71 for Q4 2022 [23][32] Business Line Data and Key Metrics Changes - The company acquired approximately $230 million of additional properties in December 2022, enhancing the Priory portfolio [17] - The California facilities are generating a coverage of 1.2 times on a trailing 12-month basis as of the end of Q3 2022 [18] Market Data and Key Metrics Changes - Operators are experiencing low to mid-single-digit comparable revenue increases, which, along with improving volumes and expanding reimbursement programs, are expected to generate an attractive 2023 for the company's tenants [16] - The managed care business owned by Prospect is valued at around $1 billion based on third-party offers and negotiations [168] Company Strategy and Development Direction - The company plans to fully exit non-California Prospect investments and reallocate that capital to new investments [22] - The company continues to explore new markets across NAFTA and Asia while maintaining a strong pipeline in existing markets like the United States, Europe, and South America [39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the industry, noting that staffing costs have improved significantly going into 2023, with contract labor costs down approximately 33% [184] - The company expects to recover most or all of its original investment in Prospect, including any deferred rent, due to the value of the managed care business and the sale of Connecticut hospitals [186] Other Important Information - The company has made accounting adjustments to recognize an impairment related to the Pennsylvania facilities, acknowledging that proceeds may be less than the original investment [190] - The company announced the retirement of co-founder Emmett McLean effective September 1, 2023 [188] Q&A Session Summary Question: What is the total dollar investment in the four Eastern PA hospitals? - The Pennsylvania hospitals have an aggregate gross investment of about $420 million before impairment [51] Question: Did Prospect pay any rent in January and February? - No, Prospect did not pay their full rent in January and February [85] Question: What is the expected cash flow from the Prospect relationship this year? - The company expects to collect most of the California rent and six months of Connecticut rent, assuming the Connecticut sale closes [136] Question: What are the potential outcomes regarding Prospect? - The worst-case scenario assumes no rent or interest from Prospect, while the more likely outcome includes recognition of most California and Connecticut rent [24] Question: What is the company's strategy regarding the managed care business? - The company believes it has sufficient collateral to recover its investment in Prospect, including deferred rent, based on the value of the managed care business [186]