Medical Properties Trust Inc Q4 2021 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Omotayo Tejamude Okusanya - CrTdit Suisse AG, Research Division - Analyst : Congrats on the solid results. Two quick ones from me. First of all, Ed and as well as Steve, you did talk about labor quite a bit and kind of the increasing risk of rising labor on some of your hospital tenants. Could you give a sense of some of the things they're doing to combat at and what potentially the impact could be on rent coverage as we kind of look into 2022?

Question: Omotayo Tejamude Okusanya - CrTdit Suisse AG, Research Division - Analyst : Got you. That's helpful. And then the second question is around Prime. Again, a much smaller part of your portfolio now, but they do constitute most of your lease maturities in '22. I know there's probably a bunch of purchase options behind some of those leases as well. Could you just kind of talk about how that's shaping up, possibility of them exercising their purchase options? And how we should think about that as we're modeling in '22 as well?

Question: Omotayo Tejamude Okusanya - CrTdit Suisse AG, Research Division - Analyst : So you think either they try to purchase them for the $350 million or they renew the leases.

Question: Omotayo Tejamude Okusanya - CrTdit Suisse AG, Research Division - Analyst : But just again, given the cost of capital has been improving of late though, I mean would you expect them to renew at current rents? Because again, like you said, that's a very high yield.

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Ed, can you provide some color on how the company is thinking about new development? I know that in the press release, just announced a pretty big one with Steward. I know HCA just announced that they plan on building 5 new hospitals. I mean is this a bigger trend in the hospital space just going forward? And if so, will someone like HCA prefer to do that themselves? Or is this something that MPW can help out with?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. Great. And then talking about, I guess, some of your funding strategies, I mean maybe there's a little bit deleveraging included in guidance, and obviously, you need to fund future investments. I know there was a talk of a second joint venture. I mean is that something that the company is considering now? Or are you willing to issue equity kind of at these prices? I guess how do you weigh the differences between those 2 options?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. Great. And Steve, would you consider like a forward equity offering kind of prefund some of your investments that you'll likely do in 2022? Has that kind come across your desk yet? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 03, 2022 / 4:00PM, MPW.N - Q4 2021 Medical Properties Trust Inc Earnings Call

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. Great. And then just last one for me. On the CPI rent bumps, thanks for the disclosure on the increase. I guess what was the CPI increase? Am I correct to say that most of those will occur in 1Q '22? And is that fully reflected in guidance? Or does the guidance just reflect the minimum escalators?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : I just want to follow up on the behavioral investments. And we're looking at growing in the behavioral, I guess, mainly with the Priory investment in the U.K. I mean is that country and the behavioral product big enough for MPW to partner with another operator? Or will most of your investments and focus is to kind of grow it as Priory?