MedEquities Realty Trust, Inc. (NYSE:MRT) Q3 2018 Earnings Conference Call Transcript

Nov 12, 2018 • 08:30 am ET

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MedEquities Realty Trust, Inc. (NYSE:MRT) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day and welcome to the MedEquities Third Quarter Conference Call and Webcast. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Mr. Tripp Sullivan of IR. Please go ahead.

Executive
Tripp Sullivan

Thank you. Good morning. Welcome to the MedEquities Realty Trust conference call to review the company's results for the third quarter 2018. On the call today will be John McRoberts, Chairman and CEO; and Jeff Walraven, EVP and CFO.

Our earnings press release and supplemental package furnished with the SEC on Form 8-K and our Form 10-Q can be found on the IR section of our website. A replay of this call will be available shortly after the conclusion of the call through November 19th, 2018. The numbers to access the replay are provided in the earnings press release. For those, who listen to the replay of this call, we remind you that the remarks made herein are as of today, November 12th, 2018, and will not be updated subsequent to this call.

(Forward-Looking Cautionary Statements)

We will also discuss certain non-GAAP measures, including, but not limited to FFO, AFFO, and adjusted EBITDAre. Definitions of these non-GAAP measures and reconciliations to the comparable GAAP measures are included in our earnings press release, which is available at ir.medequities.com.

I'll now turn the call over to John McRoberts. Please go ahead.

Executive
John McRoberts

Thanks, Tripp. Good morning, everyone, and welcome to the call. We released our earnings, the 10-Q, and supplemental data late Friday and announced the agreement to re-tenant the Texas Ten Portfolio on Saturday. I know many of you were attending the NAREIT conference and are returning home, so I hope you had time to digest our results and disclosures over the weekend.

This morning, I'd like to spend some time on the re-tenanting of the Texas Ten portfolio and its impact on meeting our amended credit facility requirements, which will be specifically addressed by Jeff later in our comments section. Additionally, we will cover the impact of Texas Ten on our guidance for the remainder of 2018, discuss the rest of our portfolio, and the board's decision to delay any action with (ph) dividend, as well as our priorities with the capital we have available.

In our call in August, we indicated that we were prepared to re-tenant or sell all or a portion of the Texas Ten Portfolio. In the weeks since then, we've been extremely focused on those efforts and are pleased to have this re-tenanting agreement announced and look forward to working further with Creative Solutions in healthcare. As part of this process, we've remained in close communication with the current tenant, OnPointe, and anticipate a smooth transition to completion, as targeted for the start of 2019.

Creative Solutions has a long history of success in the State of Texas. The two founders, Gary Blake and Melissa Blake Dean,