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Medical Properties Trust Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 10, 2012 09:49PM
Medical Properties Trust Inc. (MPW) filed Quarterly Report for the period ended 2012-03-31. Medical Pptys has a market cap of $1.27 billion; its shares were traded at around $9.25 with a P/E ratio of 13 and P/S ratio of 8.8. The dividend yield of Medical Pptys stocks is 8.5%.
Highlight of Business Operations:Refer to our 2011 Annual Report on Form 10-K, as amended, for a discussion of our critical accounting policies, which include revenue recognition, investment in real estate, purchase price allocation, loans, losses from rent receivables, stock-based compensation, exchangeable senior notes, and our accounting policy on consolidation. During the three months ended March 31, 2012, there were no material changes to these policies, except we began using direct finance lease (DFL) accounting with the acquisition and lease of the real estate of Ernest. Under DFL accounting, future minimum lease payments are recorded as a receivable. Unearned income, which represents the net investment in the DFL less the sum of minimum lease payments receivable and the estimated residual values of the leased properties, is deferred and amortized to income over the lease term to provide a constant yield when collectability of the lease payments is reasonably assured. Investments in DFLs are presented net of unamortized and unearned income. DFLs are placed on non-accrual status when management determines that the collectability of contractual amounts is not reasonably assured. While on non-accrual status, DFLs are accounted for on a cash basis, in which income is recognized only upon receipt of cash.
Base rents for the 2012 first quarter increased 17.9% versus the prior year as a result of the additional rent generated from annual escalation provisions in our leases and $4 million of incremental revenue from properties acquired in 2011. Income from direct financing leases is solely related to the Ernest Transaction. Interest from loans is higher than the prior year due to the $2 million and $0.5 million of additional interest related to the Ernest and Hoboken loans, respectively.
Stocks Discussed: MPW,