Medical Properties Trust, Inc. Q3 2009 Earnings Call Transcript

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2009-11-05 11:24:05.0

Tags: Rent, Lease, J.P. Morgan Chase & Co., Call Transcript, Earnings, Medical Properties Trust Inc., Healthcare, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from Mike Louis - J.P. Morgan.

Mike Louis - J.P. Morgan

I wanted to ask about the profit purchase based on shares, I believe you said in your comments that you started to receive some of the $20 million. I'm wondering how much that was and if you give a little bit more detail there.

Steven Hamner

We started to recognize the $20 million Mike in the way we are treating that to cover the structure, the lease is as straight-line rent. We've actually been accruing the straight rent since the commitment of that lease, but reserving fully forward until we had the evidence that let us to believe that we're actually going to collect in accordance with the lease.

And we've reached that hurdle as I'd said the hospital is doing very, very well and so we have recognized the straight line rent for 2009 that we had previously reserved for.

That amounted to a little over a million dollars and that would be our expectation going forward under the current arrangement would be about a million two in recognition of additional rent per year.

The cash collections we actually expect will be more than that and we are unable to predict exactly when the cash will be paid to us. But it will be, we believe in the early years of this lease rather than across the whole ten years of the lease.

Mike Louis - J.P. Morgan

Just one more question about the property operating expenses, it looks like they went off sequentially despite taking the Bucks County lease, signing the Bucks County lease, and taking that out of that line.

Was that all due to River Oaks and Sharpstown coming more expensive than you thought?

Steven Hamner

Yes.

Operator

Your next question comes from Jerry Doctrow - Stifel Nicolaus.

Jerry Doctrow - Stifel Nicolaus

I guess staying with your roads for minutes. So we expect operating expenses is kind of stay about that level, bounce around?

Edward K. Aldag Jr.

They should stay at that level, Jerry.

Jerry Doctrow - Stifel Nicolaus

And then, obviously we've been talking about this one for a few quarters now, in the sense, I had this sale was closed, I guess I understand that these things, you are never exactly predictable.

But in terms of something at this year versus first half of next year, just any additional color on how we should be thinking about that?

 

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