Michael G. Stewart - Executive Vice President and General Counsel Edward K. Aldag Jr. - Chairman, President and Chief Executive Officer Steven Hamner - Executive Vice President and Chief Financial Officer.

Mike Louis - J.P. Morgan Jerry Doctrow - Stifel Nicolaus Karin Ford - KeyBanc Capital Partners

Welcome to the Medical Properties Trust third quarter earnings conference call. My name is Bill and I'll be your conference coordinator for today. At this time all participants are in a listen-only mode. We will be facilitating a question and answer session toward the end of today's conference. (Operator Instructions). As a reminder today's conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Mr. Mike Stewart, Executive Vice President and General Counsel. Please proceed. Michael G. Stewart: Good morning. Welcome to the Medical Properties Trust conference call to discuss our third quarter financial results. With me today are Edward K. Aldag Jr., Chairman, President and Chief Executive Officer of the company and Steven Hamner, Executive Vice President and Chief Financial Officer. Our press release was distributed this morning and has been furnished on Form 8-K with the SEC. If you did not receive a copy, it is available on our website at www.medicalpropertiestrust.com in the Investor Relations section. Additionally, we are 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 maybe considered forward-looking statements within the meeting 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 a 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 measure, in accordance with Reg G requirements. You can also refer to our website at www.medicalpropertiestrust.com for the most directly comparable financial measures and related reconciliation. I will now turn the call over to our Chief Executive Officer, Ed Aldag. Edward K. Aldag, Jr.: Thank you, Mike And thank you all of you for participating in today's Medical Properties Trust 2009 Third Quarter Earnings call. We continued to be very pleased with the performance of our portfolio. Repositioning of several properties and the shape the company is in including from liquidity in organizational standpoint to have significant growth in 2010 and beyond. : Despite these trying time and other industries have seen drastic decreases in operating results and another REITs have seen declines in their occupancy levels of their commercial real-estate office buildings, apartments in the like. Our portfolio of hospitals have continued to see increases in utilization, net revenue and most importantly EBITDA. When comparing third quarter 2008 to third quarter 2009 our acute care hospitals improved from almost 5.5 times coverage to more than 6.5 times coverage. When comparing third quarter 2009 to second quarter 2009 despite the fact that the third quarter in any year is almost always the slowest quarter due to the doctor and patient vacations. The increase was even better, a 23% increase in coverage from quarter-to-quarter. Looking specifically within the hospital sector by a portfolio. Prime, my largest operator continues to outperform. Their coverage year-over-year increased 48% and quarter-over-quarter increased 30%. Community Health Systems another large hospital operator of ours released their corporate wide results earlier this last week. They too continue to show good results. We have three facilities leased to them and all across defaulted with a parent guarantee. CHS announced a 7.2% increase in admissions year-over-year with net revenue increasing 12.1% and EBITDA increasing 8.3%. Health Management Associates, another one of our tenants also released their corporate wide results last week. They showed an increase in net revenue year-over-year of 5.8%, admissions of 5.4% and EBITDA increasing 14%. All of the other hospitals, which represents single hospital leased to private operators had an average 6.3 times EBITDA coverage. This includes the lowest performer, Monroe Hospital essentially at break-even to our highest performer at 15.25 times. Next to Monroe, the lowest coverage here is approximately three times. Acute Care Hospitals represent about 75% of our total portfolio and we are very pleased that they continue to outperform everyone's expectations. The average EBITDA release coverage of more than 6.5 times have spread throughout this entire sector of our portfolio. Our LTACH sector of our portfolio was flat for the third quarter year-over-year. The total EBITDA coverage for the LTACH was approximately 1.6 times. At our Rehab Hospital Sector, the portfolio increased 27% year-over-year to just over three times coverage. This equates to a 7% increase quarter-to-quarter. All but one of one of our rehab hospitals are guaranteed by HealthSouth. HealthSouth which reported earnings on Tuesday, reported 153% increase in income from continuing operations. One other Rehab Hospital operated by Post Acute Care had EBITDA release coverage well in excess of 5 times. The only disappointment in the quarter is that we have not yet resolved the non-performing asset, River Oaks and Houston. Just to remind you, we've separated this into two distinct campuses, the north campus River Oaks and the south campus Sharpstown. The expenses we incurred for these two campuses were more than we had hoped. : You will recall, that we have expected to realize a $20 plus million participation from Shasta. When we announced this structure last year, we were not sure of the timing of the payment of that 20 plus million and most analysts thus ignored it in their models. While we are still not sure of the exact timing, we do want to report that Prime has done an outstanding job of managing Shasta and the property is generating EBITDA release coverage this quarter in excess of seven times. Due to this, we have recognized some of that 20 million this quarter and expect to receive more meaningful amounts in 2010. Bucks County is turning into a real success story. The new tenant has invested approximately $4 million of their own dollars into renovations and new equipment. They began performing surgeries in September and are currently scheduling cases three days a week. They plan on having more than 60 positions rotating their [surgeries] through the facility by January. We expect that we will begin making acquisitions again in 2010. The pipeline is strong and the projects are strong. We are excited about the prospects for good growth levels next year both in our existing portfolio and new acquisitions. By the time when other companies are having to deal with falling rental rates and higher vacancies, Medical Properties Trust is delighted to once again be able to report medically strong operating results for our portfolio. Our portfolio was strong and we are well positioned for further growth in 2010. At this time, I'd like to ask Steve to go over specifics of our financial performance for the quarter.

Thank you, Ed and good morning everyone. I'll present the highlights of our financial results for the third quarter and then we'll open the call up for questions. For the third quarter of 2009, we reported normalized funds from operations or FFO of approximately $16.4 million or $0.21 per diluted share. Adjusted FFO for the third quarter was about $16 million or $0.20 per diluted share. Included in these calculations are $0.03 per share of non-routine expenses that we have historically excluded from the FFO estimates that we have previously provided. So, our third quarter FFO of $0.24 per share absent the non-routine expenses was on the high-end of our guidance range of $0.89 to $0.93 per share annualized. I'll briefly describe these non-routine expenses, although I think most listeners are well aware of them and have made adjustments to their models for them. As I have mentioned, we've incurred property level operating expenses related to our former HPA properties of approximately $1.2 million and about 200,000 more dollars related to our Bucks County property, for an aggregate per share effect of about $0.02. As we pointed out in our last call, we are no longer responsible for the property operating expenses of Bucks County. As of September 30, we elected to begin recognizing rental income from our health tracks properties, these are our wellness centers. On the cash basis, and accordingly have reserved approximately $600,000 or slightly less than a penny per share or previously approved rental income. For the foreseeable future, we expect to continue to receive cash payments of partial rent equivalent to about one half of the contractual amount due. If this remains in accurate assumption, we will recognize on an annual basis, approximately $1 million less than our lease terms require. During the quarter, we incurred approximately $736,000 or about a penny per share in legal expense related to the Houston town and country litigation. Trial of this matter is said to begin on November 16th, with the hearing of numerous motions and challenges and jury selection is scheduled to begin on January 4, 2010. We expect a full trial would take us long as four months and result in additional legal cost as much as $2 million although it is possible that legal cost could exceed that. We also point out as we have in the past that FFO includes non-cash interest expense of approximately $500,000, related to the adoption in early 2009 of new accounting for convertible debt. This change has no effect on cash flow and has been considered in our most recent estimate of annualized FFO. Based in on the existing portfolio, we continue to expect to generate annualized FFO of between $0.89 and $0.93 per share. And will take just a minute to go over some of the more important assumption to net estimate. Today, our diluted shares outstanding are approximately 78.7 million. We continue to assume no revenue from the River Oaks and Sharpstown campuses in Houston. We also assume no significant changes in our debt balances and the current LIBOR reference of about 25 basis points. That’s the 30-day rate and we pay an average rate of approximately 175 to 200 points over that rate on our variable rate debt. Further assumptions include quarterly G&A expenses similar to what we incurred in the first three quarters of this year on an annualized basis. The estimate does not include any property level expenses or litigation cost write-offs of straight-line rent or other non-routine or unplanned transactions. As we've stated previously this estimate will change perhaps materially with market interest rates change, assets are sold or acquired. The Sharpstown or River Oaks properties are sold or leased, other operating expenses vary, existing leases do not perform in accordance with their terms, or we materially alter our capital components. We made no changes to our capital components during the quarter so as of December 30th we had approximately $566 million in borrowings. That included fixed rate debt of $344 million with a weighted average rate of approximately 7.4% and variable rate debt of $222 million with a weighted average rate today of approximately 2.3%. As of September 30, we had about $13.1 million in cash and approximately $68 million available under our revolving credit facilities. Again similar to the last several quarters, we have no meaningful maturities until November 2010 at which time a $30 million term loan is due. Also one of our revolvers is scheduled to mature in November 2010 however we may extend that through November 2011 for a nominal fee. That facility currently has a balance of approximately $96 million. We have unfunded commitments to complete certain expansion and refurbishment projects within our existing portfolio that totaled approximately $8.8 million. We have no commitments to acquire or develop any new facilities. Considering this and the capital resources and commitments that we've already described we believe, we have more than enough liquidity for the near-term with the plans that we've laid out on our previous calls regarding even further enhancements to our liquidity. We are confident that we will have attractive alternatives over the next two years to satisfy our debt maturities prior to that time. This includes more than $300 million in unencumbered assets that will become available by November 2010 when we repay the $30 million term loan. This concludes our prepared remarks for the day. I'll now turn the call back over to the operator to queue your questions. 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.

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 up 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 becoming more expensive than you thought?

Yes.

Your next question comes from Jerry Doctrow - Stifel Nicolaus. Jerry Doctrow - Stifel Nicolaus: I guess staying with River Oaks for minutes. So we expect operating expenses to 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, and the sense, I had was that 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? Edward K. Aldag Jr.: You're right. It's hard to predict with exact certainty and you never know. I think that for planning purposes, first quarter, something happening on half of it in the first quarter of next year would be good planning. Jerry Doctrow - Stifel Nicolaus: G&A, I think was fell this quarter. I think Steve, you provided sort of guidance if I understood, they would run about the average for the first three quarters. I was just curious what happen this quarter and did I understand you right in terms of the way we should project to go forward?

You did understand, I think taking the average of the first three quarters is probably going to be most accurate assumption. And Jerry it's really just a matter of, we're still relatively small so normal variances in different line items including D&O insurance and professional fees and annual meeting and proxy costs and so forth. It can make a couple of hundred thousand or more dollar difference from quarter-to-quarter which is why I think the best way to do is just take the average of the three quarters we've reported so far. Jerry Doctrow - Stifel Nicolaus: And then the, I guess debt I mean you talked about it obviously you're not under the gun near term in terms of maturities but November 2010 is not that far away. So are you thinking about, I think before you've talked about other options one was secured debt obviously that you need to get the term loans sort of paid off. I guess I wanted to just get a little bit more sense or little more color on what the options are particularly if you're starting to making investments again then you need additional amounts of capital. So how would you be approaching the capital markets, what's your sense about cost that kind of thing? Edward K. Aldag Jr.: Well, I mean I'm happy to share with you kind of the indications that we are getting from the investment banks in particular. The market is as I'm sure much more open than it was six months ago and much more affordable. We are considering any number of a range of alternatives including unsecured and secured high yeild debt restructuring the bank debt, new convertible issues and a couple of others. Generally whereas six to nine months ago, we would have been looking at double-digits up around a 12 coupon on most of that. That's comes down substantially to where we'd be looking at probably a non-handle and that's really where we are today having made no commitments, but continue to evaluate those alternatives. At the same time, and on a similar parallel track evaluating acquisition alternatives and the idea of course is to maximize the efficiency of restructuring the balance sheet at the same time, we're able to make accretive acquisitions. And so, those two parallel tracks continue to move, but there is nothing in the immediate future I don't believe. Jerry Doctrow - Stifel Nicolaus: I guess just maybe a little more color on your thinking about health reform. And also, particularly just in California any issues with Medicaid stuff given the big exposure you've gotten in that state in their generally crumby budget situation? Edward K. Aldag Jr.: Well, Jerry despite how close Congress tells us we are to a package, no one knows exactly what that's going to look like now, too many versions of it. However, one thing throughout all of the versions that we believe is that the hospitals will do fairly well in healthcare reform. We still feel as we've stated over the last year that from our operator standpoint, it will be neutral to slightly negative. So, we believe it will have very little effect on our operators and thus no effect on Medical Properties Trust. From a indication in California, that we talk with Prime constantly about the potential changes to Medico and Medicare and the other changes to, there is other programs. And Prime believes that they will do very well under all of the proposed changes out there right now.

Your next question comes from Karin Ford - KeyBanc Capital Partners. Karin Ford - KeyBanc Capital Partners: Just back to property operating expenses, you said $2 million is a good run rate from here on. And that’s fully now due to just River Oaks and Sharpstown?

No, I think $2 million may be a little high. In that $2 million plus line item that you are looking at, that includes $600,000 of health tracks reserve. So I think a better run rate is probably in the $1 million to $1.2 million on a quarterly basis for River Oaks and the HPA properties. Karin Ford - KeyBanc Capital Partners: And I know we've talked about this in the past that those expenses aren't in your guidance. Given that they've now, those expenses have been in your reports now for a few quarters, do you think it may make sense to start including real estate operating expenses in your guidance?

Well, we give our guidance the way we do. So the analysts and investors can make their own assumptions about that. With that said, we think at least half of that River Oaks situation will be resolved by the first quarter of '10. There is no assurance of that. So, I would think we will continue to give as much information as we can about the expectations on those expenses and that allows everybody to make their own assumptions. Karin Ford - KeyBanc Capital Partners: Which half of River Oaks is more likely to close in 1Q, is it the sale portion or the lease portion? Edward K. Aldag Jr.: We are just not prepared to go over that at this point. Karin Ford - KeyBanc Capital Partners: Can you give a general sense for cap rates today?

It's awfully hard because it's a fairly wide spread of cap rates, literally running from probably slightly around 9 all the way up to 11 depending on the particular property and the strength of the operator and the history of the particular property, it's a wider spread that I think we've ever had before. : Karin Ford - KeyBanc Capital Partners: And you're seeing more deals come across your desk today?

Yes, our pipeline today is better than it's ever been.

That will conclude our Q&A session for today. Let's turn the callback over to our speakers for any closing remarks, gentleman? Edward Aldag, Jr.: Thanks all of you again for participating and your interest and again as always if you have any further questions after the call please feel free to call Charles Lambert, Steven Hamner or myself. Thank you very much.

Thank you very much sir and thank you ladies and gentlemen for your participation in today's conference call. This concludes your presentation for today and you may now disconnect. Have a good day.