Medical Properties Trust swings to $202M Q3 profit
Nine-month revenue and operating cash flow were higher than a year earlier, and the declared quarterly dividend was $0.09 per common share.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Medical Properties Trust (MPT) reported third-quarter revenue of $250.1 million, compared with $237.5 million in 2025, and net income attributable to MPT common stockholders of $201.6 million, versus a $77.7 million loss. Earnings per share were $0.34, compared with a loss of $0.13. The quarter included a $157.8 million gain on real estate sales and a $69.5 million debt refinancing and unutilized financing benefit; real estate and other impairment charges, net, were $23.9 million, versus $81.8 million.
For the first nine months of 2026, revenue was $761.5 million versus $701.7 million, and net income attributable to MPT common stockholders was $231.8 million versus a $294.4 million loss. Net cash provided by operating activities was $89.3 million, compared with $70.7 million. MPT declared dividends of $0.09 per common share for the quarter, compared with $0.08 in 2025. At September 30, 2026, debt, net was $9.260 billion, compared with $9.698 billion at December 31, 2025; cash and cash equivalents were $599.3 million, compared with $540.9 million.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Major pointThird-quarter net income attributable to common stockholders was $201.6 million, versus a $77.7 million loss.
- Moderate pointThird-quarter revenue was $250.1 million, versus $237.5 million in 2025.
- Moderate pointNine-month operating cash flow was $89.3 million, compared with $70.7 million.
- Minor pointQuarterly dividends declared per common share were $0.09, compared with $0.08 in 2025.
Negative
- None.
Filing Explained
The third-quarter 10-Q reports first-nine-month 2026 cash flows: operations provided
Key Figures
Key Terms
straight-line rent financial
investment in financing leases financial
real estate and other impairment charges financial
non-controlling interests financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue did MPT report for the third quarter of 2026?
What was MPT's net income in the third quarter of 2026?
How much cash did MPT receive from real estate sales in the first nine months of 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
For the quarterly period ended
OR
For the transition period from to
Commission file number
Commission file number
(Exact Name of Registrant as Specified in Its Charter)
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(State or other jurisdiction of incorporation or organization) |
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(I. R. S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
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☒ (Medical Properties Trust, Inc. only) |
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Accelerated filer |
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☐ |
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☒ (MPT Operating Partnership, L.P. only) |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of November 4, 2026, Medical Properties Trust, Inc. had
EXPLANATORY NOTE
This report combines the Quarterly Reports on Form 10-Q for the three and nine months ended September 30, 2026 of Medical Properties Trust, Inc., a Maryland corporation, and MPT Operating Partnership, L.P., a Delaware limited partnership, through which Medical Properties Trust, Inc. conducts substantially all of its operations. Unless otherwise indicated or unless the context requires otherwise, all references in this report to "we," "us," "our," "Medical Properties," "MPT," or the "Company" refer to Medical Properties Trust, Inc. together with its consolidated subsidiaries, including MPT Operating Partnership, L.P. Unless otherwise indicated or unless the context requires otherwise, all references to "operating partnership" refer to MPT Operating Partnership, L.P. together with its consolidated subsidiaries.
MEDICAL PROPERTIES TRUST, INC. AND MPT OPERATING PARTNERSHIP, L.P.
AND SUBSIDIARIES
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED September 30, 2026
Table of Contents
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Page |
PART I — FINANCIAL INFORMATION |
3 |
Item 1 Financial Statements |
3 |
Medical Properties Trust, Inc. and Subsidiaries |
|
Condensed Consolidated Balance Sheets at September 30, 2026 and December 31, 2025 |
3 |
Condensed Consolidated Statements of Net Income for the Three and Nine Months Ended September 30, 2026 and 2025 |
4 |
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2026 and 2025 |
5 |
Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2026 and 2025 |
6 |
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2026 and 2025 |
8 |
MPT Operating Partnership, L.P. and Subsidiaries |
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Condensed Consolidated Balance Sheets at September 30, 2026 and December 31, 2025 |
9 |
Condensed Consolidated Statements of Net Income for the Three and Nine Months Ended September 30, 2026 and 2025 |
10 |
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2026 and 2025 |
11 |
Condensed Consolidated Statements of Capital for the Three and Nine Months Ended September 30, 2026 and 2025 |
12 |
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2026 and 2025 |
14 |
Medical Properties Trust, Inc. and MPT Operating Partnership, L.P. and Subsidiaries |
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Notes to Condensed Consolidated Financial Statements |
15 |
Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations |
32 |
Item 3 Quantitative and Qualitative Disclosures about Market Risk |
44 |
Item 4 Controls and Procedures |
45 |
PART II — OTHER INFORMATION |
46 |
Item 1 Legal Proceedings |
46 |
Item 1A Risk Factors |
46 |
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds |
46 |
Item 3 Defaults Upon Senior Securities |
47 |
Item 4 Mine Safety Disclosures |
47 |
Item 5 Other Information |
47 |
Item 6 Exhibits |
48 |
SIGNATURE |
49 |
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2
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
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September 30, |
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December 31, |
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(In thousands, except per share amounts) |
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(Unaudited) |
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(Note 2) |
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Assets |
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Real estate assets |
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Land, buildings and improvements, intangible lease assets, and other |
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$ |
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$ |
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Investment in financing leases |
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Mortgage loans |
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Gross investment in real estate assets |
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Accumulated depreciation and amortization |
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Net investment in real estate assets |
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Cash and cash equivalents |
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Interest and rent receivables |
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Straight-line rent receivables |
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Investments in unconsolidated real estate joint ventures |
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Investments in unconsolidated operating entities |
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Other loans |
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Other assets |
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Total Assets |
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$ |
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$ |
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Liabilities and Equity |
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Liabilities |
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Debt, net |
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$ |
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$ |
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Accounts payable and accrued expenses |
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Deferred revenue |
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Obligations to tenants and other lease liabilities |
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Total Liabilities |
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Equity |
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Preferred stock, $ |
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— |
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— |
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Common stock, $ |
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Additional paid-in capital |
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Retained deficit |
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( |
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( |
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Accumulated other comprehensive income |
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Total Medical Properties Trust, Inc. stockholders’ equity |
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Non-controlling interests |
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Total Equity |
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Total Liabilities and Equity |
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$ |
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$ |
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See accompanying notes to condensed consolidated financial statements.
3
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Net Income
(Unaudited)
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For the Three Months |
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For the Nine Months |
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(In thousands, except per share amounts) |
2026 |
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2025 |
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2026 |
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2025 |
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Revenues |
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Rent billed |
$ |
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$ |
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$ |
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$ |
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Straight-line rent |
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Income from financing leases |
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Interest and other income |
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Total revenues |
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Expenses |
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Interest |
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Real estate depreciation and amortization |
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Property-related |
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General and administrative |
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Total expenses |
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Other income (expense) |
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Gain (loss) on sale of real estate |
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( |
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Real estate and other impairment charges, net |
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( |
) |
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( |
) |
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( |
) |
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( |
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Earnings from equity interests |
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Debt refinancing and unutilized financing benefit (costs) |
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( |
) |
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( |
) |
||
Other (including fair value adjustments on securities) |
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( |
) |
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( |
) |
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Total other income (expense) |
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( |
) |
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( |
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Income (loss) before income tax |
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( |
) |
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( |
) |
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Income tax (expense) benefit |
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( |
) |
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( |
) |
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( |
) |
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Net income (loss) |
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( |
) |
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( |
) |
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Net income attributable to non-controlling interests |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Net income (loss) attributable to MPT common stockholders |
$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
||
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Earnings per common share — basic and diluted |
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||||
Net income (loss) attributable to MPT common stockholders |
$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
||
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Weighted average shares outstanding — basic |
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Weighted average shares outstanding — diluted |
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Dividends declared per common share |
$ |
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$ |
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$ |
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$ |
|
||||
See accompanying notes to condensed consolidated financial statements.
4
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
|
|
For the Three Months |
|
|
For the Nine Months |
|
||||||||||
(In thousands) |
|
2026 |
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2025 |
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2026 |
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2025 |
|
||||
Net income (loss) |
|
$ |
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$ |
( |
) |
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$ |
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$ |
( |
) |
||
Other comprehensive income (loss): |
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Unrealized loss on interest rate hedges, net of tax |
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( |
) |
|||
Foreign currency translation (loss) gain |
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( |
) |
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( |
) |
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( |
) |
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Total comprehensive income (loss) |
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( |
) |
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( |
) |
||
Comprehensive income attributable to non-controlling interests |
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( |
) |
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( |
) |
|
|
( |
) |
|
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( |
) |
Comprehensive income (loss) attributable to MPT common stockholders |
|
$ |
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|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
See accompanying notes to condensed consolidated financial statements.
5
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Equity
(Unaudited)
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Preferred |
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Common |
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(In thousands, except per share amounts) |
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Shares |
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Par |
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Shares |
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Par |
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Additional |
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Retained |
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Accumulated |
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Non- |
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Total |
|
|||||||||
Balance at December 31, 2025 |
|
|
— |
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|
$ |
— |
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|
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|
|
$ |
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|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net income |
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|
— |
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|
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— |
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|
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— |
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|
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— |
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|
|
— |
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|
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|
— |
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|
|||
Foreign currency translation loss |
|
|
— |
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|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Offering costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock vesting and amortization of |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
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|
|
— |
|
|
|
— |
|
|
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|
||||
Stock vesting - satisfaction of tax |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2026 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net (loss) income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Foreign currency translation gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Offering costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Repurchase of common stock |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock vesting and amortization of |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock vesting - satisfaction of tax |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends declared ($ |
|
|
— |
|
|
|
— |
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|
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— |
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|
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— |
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|
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— |
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( |
) |
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— |
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— |
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( |
) |
Balance at June 30, 2026 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Foreign currency translation loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Offering costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock vesting and amortization of |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock vesting - satisfaction of tax |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at September 30, 2026 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
6
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Equity
(Unaudited)
|
|
Preferred |
|
|
Common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
(In thousands, except per share amounts) |
|
Shares |
|
|
Par |
|
|
Shares |
|
|
Par |
|
|
Additional |
|
|
Retained |
|
|
Accumulated |
|
|
Non- |
|
|
Total |
|
|||||||||
Balance at December 31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Net (loss) income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Stock vesting and amortization of |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock vesting - satisfaction of tax |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Net (loss) income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Offering costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock vesting and amortization of |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Stock vesting - satisfaction of tax |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at June 30, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net (loss) income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Foreign currency translation loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Offering costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock vesting and amortization of |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock vesting - satisfaction of tax |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at September 30, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
See accompanying notes to condensed consolidated financial statements.
7
MEDICAL PROPERTIES TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
For the Nine Months |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
|
|
(In thousands) |
|
|||||
Operating activities |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization of deferred financing costs and debt discount |
|
|
|
|
|
|
||
Straight-line rent revenue from operating and finance leases |
|
|
( |
) |
|
|
( |
) |
Stock-based compensation |
|
|
|
|
|
|
||
Gain on sale of real estate |
|
|
( |
) |
|
|
( |
) |
Real estate and other impairment charges, net |
|
|
|
|
|
|
||
Debt refinancing and unutilized financing (benefit) costs |
|
|
( |
) |
|
|
|
|
Earnings from equity and other interests |
|
|
( |
) |
|
|
( |
) |
Distributions of earnings from equity and other interests |
|
|
|
|
|
|
||
Tax rate changes and other |
|
|
( |
) |
|
|
|
|
Non-cash fair value adjustments |
|
|
( |
) |
|
|
|
|
Other adjustments |
|
|
( |
) |
|
|
( |
) |
Changes in: |
|
|
|
|
|
|
||
Interest and rent receivables |
|
|
|
|
|
|
||
Other assets |
|
|
( |
) |
|
|
|
|
Accounts payable and accrued expenses |
|
|
( |
) |
|
|
( |
) |
Deferred revenue |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
||
Investing activities |
|
|
|
|
|
|
||
Cash paid for acquisitions and other related investments |
|
|
( |
) |
|
|
( |
) |
Net proceeds from sale of real estate |
|
|
|
|
|
|
||
Proceeds received from repayment of loans receivable |
|
|
|
|
|
|
||
Investment in loans receivable |
|
|
( |
) |
|
|
( |
) |
Construction in progress and other |
|
|
( |
) |
|
|
( |
) |
Sale and return of equity investment |
|
|
|
|
|
|
||
Capital additions and other investments, net |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used for) investing activities |
|
|
|
|
|
( |
) |
|
Financing activities |
|
|
|
|
|
|
||
Proceeds from term debt |
|
|
|
|
|
|
||
Payments of term debt |
|
|
( |
) |
|
|
( |
) |
Revolving credit facility, net |
|
|
( |
) |
|
|
|
|
Dividends paid |
|
|
( |
) |
|
|
( |
) |
Lease deposits and other obligations to tenants |
|
|
|
|
|
|
||
Offering costs |
|
|
( |
) |
|
|
( |
) |
Stock vesting - satisfaction of tax withholdings |
|
|
( |
) |
|
|
( |
) |
Repurchase of common stock |
|
|
( |
) |
|
|
|
|
Payment of debt refinancing and deferred financing costs and other financing activities |
|
|
( |
) |
|
|
( |
) |
Net cash (used for) provided by financing activities |
|
|
( |
) |
|
|
|
|
Increase in cash, cash equivalents, and restricted cash for period |
|
|
|
|
|
|
||
Effect of exchange rate changes |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash at beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
|
|
$ |
|
||
Interest paid |
|
$ |
|
|
$ |
|
||
Supplemental schedule of non-cash investing activities: |
|
|
|
|
|
|
||
Real estate and other assets provided in property exchange |
|
$ |
|
|
$ |
|
||
Real estate acquired in property exchange |
|
|
|
|
|
|
||
Supplemental schedule of non-cash financing activities: |
|
|
|
|
|
|
||
Term debt issued in note exchange |
|
$ |
|
|
$ |
|
||
Term debt retired in note exchange |
|
|
|
|
|
|
||
Dividends declared, unpaid |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash are comprised of the following: |
|
|
|
|
|
|
||
Beginning of period: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash, included in Other assets |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
End of period: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash, included in Other assets |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
See accompanying notes to condensed consolidated financial statements.
8
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
|
|
September 30, |
|
|
December 31, |
|
||
(In thousands) |
|
(Unaudited) |
|
|
(Note 2) |
|
||
Assets |
|
|
|
|
|
|
||
Real estate assets |
|
|
|
|
|
|
||
Land, buildings and improvements, intangible lease assets, and other |
|
$ |
|
|
$ |
|
||
Investment in financing leases |
|
|
|
|
|
|
||
Mortgage loans |
|
|
|
|
|
|
||
Gross investment in real estate assets |
|
|
|
|
|
|
||
Accumulated depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
Net investment in real estate assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
|
|
|
|
||
Interest and rent receivables |
|
|
|
|
|
|
||
Straight-line rent receivables |
|
|
|
|
|
|
||
Investments in unconsolidated real estate joint ventures |
|
|
|
|
|
|
||
Investments in unconsolidated operating entities |
|
|
|
|
|
|
||
Other loans |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
Total Assets |
|
$ |
|
|
$ |
|
||
Liabilities and Capital |
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
||
Debt, net |
|
$ |
|
|
$ |
|
||
Accounts payable and accrued expenses |
|
|
|
|
|
|
||
Deferred revenue |
|
|
|
|
|
|
||
Obligations to tenants and other lease liabilities |
|
|
|
|
|
|
||
Payable due to Medical Properties Trust, Inc. |
|
|
|
|
|
|
||
Total Liabilities |
|
|
|
|
|
|
||
Capital |
|
|
|
|
|
|
||
General Partner — issued and outstanding — |
|
|
|
|
|
|
||
Limited Partners — issued and outstanding — |
|
|
|
|
|
|
||
Accumulated other comprehensive income |
|
|
|
|
|
|
||
Total MPT Operating Partnership, L.P. capital |
|
|
|
|
|
|
||
Non-controlling interests |
|
|
|
|
|
|
||
Total Capital |
|
|
|
|
|
|
||
Total Liabilities and Capital |
|
$ |
|
|
$ |
|
||
See accompanying notes to condensed consolidated financial statements.
9
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Net Income
(Unaudited)
|
|
For the Three Months |
|
|
For the Nine Months |
|
||||||||||
(In thousands, except per unit amounts) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rent billed |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Straight-line rent |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income from financing leases |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and other income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Real estate depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Property-related |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain (loss) on sale of real estate |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Real estate and other impairment charges, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Earnings from equity interests |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt refinancing and unutilized financing benefit (costs) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Other (including fair value adjustments on securities) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Total other income (expense) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) before income tax |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Income tax (expense) benefit |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Net income attributable to non-controlling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income (loss) attributable to MPT Operating Partnership partners |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per unit — basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to MPT Operating Partnership partners |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average units outstanding — basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average units outstanding — diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Distributions declared per unit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
See accompanying notes to condensed consolidated financial statements.
10
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
|
|
For the Three Months |
|
|
For the Nine Months |
|
||||||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized loss on interest rate hedges, net of tax |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Foreign currency translation (loss) gain |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Total comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Comprehensive income attributable to non-controlling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Comprehensive income (loss) attributable to MPT Operating |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
See accompanying notes to condensed consolidated financial statements.
11
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Capital
(Unaudited)
|
|
General |
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
||||||||||
|
|
Partner |
|
|
Limited Partners |
|
|
Other |
|
|
|
|
|
|
|
|||||||||||||
(In thousands, except per unit amounts) |
|
Units |
|
|
Unit |
|
|
Units |
|
|
Unit |
|
|
Comprehensive |
|
|
Non- |
|
|
Total |
|
|||||||
Balance at December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Net income |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Foreign currency translation loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Offering costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared ($ |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Net (loss) income |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Foreign currency translation gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Offering costs |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Repurchase of units |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared ($ |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at June 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Net income |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Foreign currency translation loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Offering costs |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared ($ |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
12
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Capital
(Unaudited)
|
|
General |
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
||||||||||
|
|
Partner |
|
|
Limited Partners |
|
|
Other |
|
|
|
|
|
|
|
|||||||||||||
(In thousands, except per unit amounts) |
|
Units |
|
|
Unit |
|
|
Units |
|
|
Unit |
|
|
Comprehensive |
|
|
Non- |
|
|
Total |
|
|||||||
Balance at December 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
Net (loss) income |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared ($ |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
Net (loss) income |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Offering costs |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared ($ |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Net (loss) income |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Foreign currency translation loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Offering costs |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared ($ |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at September 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
See accompanying notes to condensed consolidated financial statements.
13
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
For the Nine Months |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
|
|
(In thousands) |
|
|||||
Operating activities |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization of deferred financing costs and debt discount |
|
|
|
|
|
|
||
Straight-line rent revenue from operating and finance leases |
|
|
( |
) |
|
|
( |
) |
Unit-based compensation |
|
|
|
|
|
|
||
Gain on sale of real estate |
|
|
( |
) |
|
|
( |
) |
Real estate and other impairment charges, net |
|
|
|
|
|
|
||
Debt refinancing and unutilized financing (benefit) costs |
|
|
( |
) |
|
|
|
|
Earnings from equity and other interests |
|
|
( |
) |
|
|
( |
) |
Distributions of earnings from equity and other interests |
|
|
|
|
|
|
||
Tax rate changes and other |
|
|
( |
) |
|
|
|
|
Non-cash fair value adjustments |
|
|
( |
) |
|
|
|
|
Other adjustments |
|
|
( |
) |
|
|
( |
) |
Changes in: |
|
|
|
|
|
|
||
Interest and rent receivables |
|
|
|
|
|
|
||
Other assets |
|
|
( |
) |
|
|
|
|
Accounts payable and accrued expenses |
|
|
( |
) |
|
|
( |
) |
Deferred revenue |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
||
Investing activities |
|
|
|
|
|
|
||
Cash paid for acquisitions and other related investments |
|
|
( |
) |
|
|
( |
) |
Net proceeds from sale of real estate |
|
|
|
|
|
|
||
Proceeds received from repayment of loans receivable |
|
|
|
|
|
|
||
Investment in loans receivable |
|
|
( |
) |
|
|
( |
) |
Construction in progress and other |
|
|
( |
) |
|
|
( |
) |
Sale and return of equity investment |
|
|
|
|
|
|
||
Capital additions and other investments, net |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used for) investing activities |
|
|
|
|
|
( |
) |
|
Financing activities |
|
|
|
|
|
|
||
Proceeds from term debt |
|
|
|
|
|
|
||
Payments of term debt |
|
|
( |
) |
|
|
( |
) |
Revolving credit facility, net |
|
|
( |
) |
|
|
|
|
Distributions paid |
|
|
( |
) |
|
|
( |
) |
Lease deposits and other obligations to tenants |
|
|
|
|
|
|
||
Offering costs |
|
|
( |
) |
|
|
( |
) |
Unit vesting - satisfaction of tax withholdings |
|
|
( |
) |
|
|
( |
) |
Repurchase of units |
|
|
( |
) |
|
|
|
|
Payment of debt refinancing and deferred financing costs and other financing activities |
|
|
( |
) |
|
|
( |
) |
Net cash (used for) provided by financing activities |
|
|
( |
) |
|
|
|
|
Increase in cash, cash equivalents, and restricted cash for period |
|
|
|
|
|
|
||
Effect of exchange rate changes |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash at beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
|
|
$ |
|
||
Interest paid |
|
$ |
|
|
$ |
|
||
Supplemental schedule of non-cash investing activities: |
|
|
|
|
|
|
||
Real estate and other assets provided in property exchange |
|
$ |
|
|
$ |
|
||
Real estate acquired in property exchange |
|
|
|
|
|
|
||
Supplemental schedule of non-cash financing activities: |
|
|
|
|
|
|
||
Term debt issued in note exchange |
|
$ |
|
|
$ |
|
||
Term debt retired in note exchange |
|
|
|
|
|
|
||
Distributions declared, unpaid |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash are comprised of the following: |
|
|
|
|
|
|
||
Beginning of period: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash, included in Other assets |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
End of period: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash, included in Other assets |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
See accompanying notes to condensed consolidated financial statements.
14
MEDICAL PROPERTIES TRUST, INC. AND MPT OPERATING PARTNERSHIP, L.P.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Organization
Medical Properties Trust, Inc., a Maryland corporation, was formed on August 27, 2003, under the Maryland General Corporation Law for the purpose of engaging in the business of investing in, owning, and leasing healthcare real estate. Our operating partnership subsidiary, MPT Operating Partnership, L.P. (the "Operating Partnership"), through which we conduct substantially all of our operations, was formed in September 2003. At present, we own, directly and indirectly, all of the partnership interests in the Operating Partnership and have elected to report our required disclosures and those of the Operating Partnership on a combined basis, except where material differences exist.
We operate as a real estate investment trust ("REIT"). Accordingly, we are generally not subject to United States ("U.S.") federal income tax on our REIT taxable income, provided that we continue to qualify as a REIT and our distributions to our stockholders equal or exceed such taxable income. Similarly, the majority of our real estate operations in the United Kingdom ("U.K.") operate as a REIT and generally are subject only to a withholding tax on earnings upon distribution out of the U.K. REIT. Certain non-real estate activities we undertake in the U.S. are conducted by entities which we elected to be treated as taxable REIT subsidiaries ("TRS"). Our TRS entities are subject to both U.S. federal and state income taxes. For our properties located outside the U.S. (excluding those assets that are in the U.K. REIT), we are subject to the local income taxes of the jurisdictions where our properties reside and/or legal entities are domiciled; however, we do not expect to incur additional taxes, of a significant nature, in the U.S. from foreign-based income as the majority of such income flows through our REIT.
Our primary business strategy is to acquire and develop healthcare facilities and lease the facilities to healthcare operating companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. The majority of our leased assets are owned
Our business model facilitates acquisitions and recapitalizations, and allows operators of healthcare facilities to unlock the value of their real estate to fund facility improvements, technology upgrades, and other investments in operations. At September 30, 2026, we have investments in
2. Summary of Significant Accounting Policies
Unaudited Interim Condensed Consolidated Financial Statements: The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information, including rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. Operating results for the three and nine months ended September 30, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The condensed consolidated balance sheet at December 31, 2025 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements.
The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We believe the estimates and assumptions underlying our condensed consolidated financial statements are reasonable and supportable based on the information available as of September 30, 2026 (particularly as it relates to our assessments of the recoverability of our real estate, the ability of our tenants/borrowers to make lease/loan payments in accordance with their respective
15
agreements, the fair value of our equity and loan investments, and the adequacy of our credit loss reserves on loans and financing receivables).
For information about significant accounting policies and how actual results could differ from estimates, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Annual Report"). There have been no material changes to these significant accounting policies.
Reclassifications
Certain amounts in the condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation.
Variable Interest Entities
At September 30, 2026, we had loans and/or equity investments in certain variable interest entities ("VIEs"), including our international joint venture, Healthcare Systems of America ("HSA"), and NOR Healthcare Systems ("NOR"). We have determined that we were not the primary beneficiary of these VIEs.
VIE Type |
|
Carrying |
|
|
Asset Type |
|
Maximum Loss |
|
||
Loans, net and equity investments |
|
$ |
|
|
Investments in Unconsolidated |
|
$ |
|
||
Loans, net |
|
|
|
|
Mortgage and other loans |
|
|
|
||
For the VIE types above, we do not consolidate the VIEs because we do not have the ability to control the activities (such as the day-to-day healthcare operations of our borrowers or investees) that most significantly impact the VIE's economic performance. As of September 30, 2026, we were not required to provide financial support through a liquidity arrangement or otherwise to our unconsolidated VIEs, including circumstances in which they could be exposed to further losses (e.g. cash shortfalls).
Recent Accounting Developments
Disaggregation of Income Statement Expenses
In November 2024, FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03") to improve the disclosures about a public company's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. FASB further clarified the effective date in January 2025 with the issuance of ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. We are currently evaluating the potential impact of the adoption of this standard on our consolidated financial statements.
16
3. Real Estate and Other Activities
New Investments
We acquired or invested in the following net assets (in thousands):
|
|
For the Nine Months |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Land and land improvements |
|
$ |
|
|
$ |
|
||
Buildings and other |
|
|
|
|
|
|
||
Intangible lease assets — subject to amortization |
|
|
|
|
|
|
||
Investments in unconsolidated real estate joint ventures |
|
|
|
|
|
|
||
Total net assets acquired |
|
$ |
|
|
$ |
|
||
2026 Activity
On June 1, 2026, we completed a transaction with ScionHealth ("Scion"), Lifepoint Health, Inc. ("Lifepoint"), and Lifepoint Behavioral Health ("Lifepoint Behavioral") (the "Scion/Lifepoint Transaction"), as further described in this same Note 3 under the "Other Leasing Activities" subheading. As part of the transaction, we acquired
During the first quarter of 2026, we closed on the acquisition of
2025 Activity
In April 2025, we invested approximately CHF
In 2025, we funded approximately $
Development and Capital Addition Activities
See table below for a status summary of our current development and capital addition projects (in thousands):
Property |
|
Capital |
|
|
Costs |
|
|
Cost Remaining |
|
|||
NOR (California) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
HSA (Florida) |
|
|
|
|
|
|
|
|
|
|||
IMED Hospitales ("IMED") (Spain) |
|
|
|
|
|
|
|
|
|
|||
HSA (Louisiana) |
|
|
|
|
|
|
|
|
|
|||
Ernest Health (South Carolina) |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
We have
17
2026 Activity
During the third quarter of 2026, we completed construction and began recording rental income on a $
During the first quarter of 2026, we completed construction and began recording rental income on a $
2025 Activity
During the third quarter of 2025, we completed construction and began recording rental income on two projects totaling approximately $
During the first quarter of 2025, we completed construction and began recording rental income on a $
Disposals
2026 Activity
On September 16, 2026, we completed the sale of
On June 1, 2026, we completed the Scion/Lifepoint Transaction as further described in this same Note 3 under the "Other Leasing Activities" subheading. As part of the transaction, we completed a property exchange, which resulted in the transfer of
During the first nine months of 2026, we also completed the sale of
2025 Activity
During the first nine months of 2025, we completed the sale of
Leasing Operations (Lessor)
We acquire and develop healthcare facilities and lease the facilities to healthcare operating companies. The initial fixed lease terms of these infrastructure-type assets are typically at least
For all of our properties subject to lease, we are the legal owner of the property and the tenant's right to use and possess such property is guided by the terms of a lease. At September 30, 2026, we account for all of these leases as operating leases, except where GAAP requires alternative classification, including leases on certain Ernest Health, Inc. ("Ernest") facilities that are accounted for as
18
either direct financing or other financing type leases.
|
|
As of September 30, |
|
|
As of December 31, |
|
||
Minimum lease payments receivable |
|
$ |
|
|
$ |
|
||
Estimated unguaranteed residual values |
|
|
|
|
|
|
||
Less: Unearned income and allowance for credit loss |
|
|
( |
) |
|
|
( |
) |
Net investment in direct financing leases |
|
|
|
|
|
|
||
Other financing leases (net of allowance for credit loss) |
|
|
|
|
|
|
||
Total investment in financing leases |
|
$ |
|
|
$ |
|
||
Other Leasing Activities
At September 30, 2026, our vacant properties (with a net book value of approximately
Our tenants’ financial performance and resulting ability to satisfy their lease and loan obligations to us are material to our financial results and our ability to service our debt and make distributions to our stockholders. Our tenants operate in the healthcare industry, which is highly regulated, and changes in regulation (or delays in enacting regulation) may temporarily impact our tenants’ operations until they are able to make the appropriate adjustments to their business. In addition, our tenants may experience operational challenges from time-to-time as a result of many factors, including those external to them, such as cybersecurity attacks, public health crises, economic issues resulting in high inflation and spikes in labor costs, extreme or severe weather and climate-related events, and adverse market and political conditions. We monitor our tenants' operating results and the potential impact from these challenges. We may elect to provide support to our tenants from time-to-time in the form of short-term rent abatements or rent deferrals to be paid back in full, or in the form of temporary loans. See below for an update on some of our tenants.
Priory Group
Effective July 1, 2026, we agreed to a lease amendment that included a cash rent reduction of approximately £
Scion/Lifepoint Transaction
On June 1, 2026, we completed the Scion/Lifepoint Transaction which included (i) our acquisition of a new property from Lifepoint (as previously described in this same Note 3 under the "New Investments" subheading) in exchange for
Prospect
In August 2019, we invested in a portfolio of
On May 23, 2023, Prospect completed a recapitalization plan, which included receiving $
Prospect filed for Chapter 11 bankruptcy on January 11, 2025 with the United States Bankruptcy Court for the Northern District of Texas. On March 20, 2025, the bankruptcy court approved a global settlement (including a recovery waterfall) between us, Prospect, and other stakeholders. Due to the bankruptcy, we recorded more than $
19
value adjustments associated with our investments in Prospect in the 2024 fourth quarter, resulting in a full reserve of the asset-backed loan and our Pennsylvania mortgage loan, along with a decrease in the value in our Connecticut properties. No charge was recorded on our California properties.
In 2025 and in accordance with the global settlement and the estimated recovery waterfall, we recorded approximately $
In 2025 and through the first quarter of 2026, all the Connecticut and Pennsylvania properties (along with our investment in PHP Holdings discussed below) were sold, and Prospect's bankruptcy plan was deemed effective.
During the first nine months of 2026, we received approximately $
Re-tenanting Activity
In December 2025, we re-leased the six California properties to NOR as a result of their successful bid to acquire the hospital operations. Terms of the lease include an initial annualized rent almost identical to the previous rent amount due from Prospect in 2025, annual inflation-based escalators starting in the 2027 first quarter, and an initial fixed term of
PHP Investment
In regard to our investment in PHP Holdings, we accounted for this investment using the fair value option method. In the first nine months of 2025, we recorded an approximate $
Other Re-tenanting Activity
As discussed in previous filings, we entered into agreements in September 2024 with
As of September 30, 2026, we have approximately $
20
Investments in Unconsolidated Entities
Investments in Unconsolidated Real Estate Joint Ventures
Our primary business strategy is to acquire real estate and lease to providers of healthcare services. Typically, we directly own
The following is a summary of our investments in unconsolidated real estate joint ventures by primary operator (amounts in thousands):
Operator |
|
Current |
As of September 30, |
|
|
As of December 31, |
|
||
MEDIAN |
|
$ |
|
|
$ |
|
|||
Swiss Medical Network (Infracore) |
|
|
|
|
|
|
|||
Policlinico di Monza |
|
|
|
|
|
|
|||
HM Hospitales |
|
|
|
|
|
|
|||
CommonSpirit (Utah partnership) |
|
|
|
|
|
|
|||
Total |
|
|
$ |
|
|
$ |
|
||
The Utah partnership applied specialized accounting and reporting for investment companies under Topic 946, which measures the underlying investments at fair value. For the three months ended September 30, 2026 and 2025, our share of the Utah partnership's favorable fair value adjustments was approximately $
On July 9, 2026, Infracore SA ("Infracore"), a Swiss hospital real estate company in which we hold a non-controlling ownership interest, completed an initial public offering and listing of its shares on the SIX Swiss Exchange under the ticker symbol "INFRAC." In connection with the offering, Infracore issued approximately
In July 2026, Infracore completed the acquisition of a new general acute care facility for approximately CHF
For our MEDIAN unconsolidated real estate joint venture, we, along with our joint venture partner, closed on a €
Investments in Unconsolidated Operating Entities
Our investments in unconsolidated operating entities are noncontrolling investments that are typically made in conjunction with larger real estate transactions in which the operators are vetted as part of our overall underwriting process. In many cases, we would not be able to acquire the larger real estate portfolio without such investments in operators. These investments also offer the opportunity to enhance our overall return and provide for certain minority rights and protections.
21
The following is a summary of our investments in unconsolidated operating entities (amounts in thousands):
Operator |
|
As of September 30, |
|
|
As of December 31, |
|
||
Swiss Medical Network |
|
$ |
|
|
$ |
|
||
Aevis Victoria SA ("Aevis") |
|
|
|
|
|
|
||
Priory Group ("Priory") |
|
|
|
|
|
|
||
Aspris Children's Services ("Aspris") |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Credit Loss Reserves
We apply a forward-looking "expected loss" model to our financing receivables, including financing leases and loans, based on historical credit losses of similar instruments.
The following table summarizes the activity in our credit loss reserves (in thousands):
|
|
For the Three Months |
|
|
|||||
|
|
2026 |
|
|
2025 |
|
|
||
Balance at beginning of the period |
|
$ |
|
|
$ |
|
|
||
Provision for credit loss, net (1) |
|
|
|
|
|
|
|
||
Expected credit loss reserve written off or related to financial |
|
|
|
|
|
|
|
||
Balance at end of the period |
|
$ |
|
|
$ |
|
|
||
|
|
For the Nine Months |
|
|
|||||
|
|
2026 |
|
|
2025 |
|
|
||
Balance at beginning of the year |
|
$ |
|
|
$ |
|
|
||
Provision for credit loss, net (1) |
|
|
|
|
|
|
|
||
Expected credit loss reserve written off or related to financial |
|
|
( |
) |
|
|
|
|
|
Balance at end of the period |
|
$ |
|
|
$ |
|
|
||
22
Concentrations of Credit Risk
We monitor concentration risk in several ways due to the nature of our real estate assets that are vital to the communities in which they are located and given our history of being able to replace inefficient operators of our facilities, if needed, with more effective operators.
Total Assets by Operator
|
|
As of September 30, 2026 |
|
|
As of December 31, 2025 |
|
||||||||||
Operators |
|
Total Assets (1) |
|
|
Percentage of |
|
|
Total Assets (1) |
|
|
Percentage of |
|
||||
Circle Health Ltd ("Circle") |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
HSA |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Priory |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Lifepoint Behavioral Health |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Lifepoint Health |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other operators |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other assets |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Total Assets by U.S. State and Country (1)
|
|
As of September 30, 2026 |
|
|
As of December 31, 2025 |
|
||||||||||
U.S. States and Other Countries |
|
Total Assets |
|
|
Percentage of |
|
|
Total Assets |
|
|
Percentage of |
|
||||
Texas |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
California |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Florida |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Arizona |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Ohio |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
All other states |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other domestic assets |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total U.S. |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
United Kingdom |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Germany |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Switzerland |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Spain |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
All other countries |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other international assets |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total international |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Grand total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Total Assets by Facility Type (1)
|
|
As of September 30, 2026 |
|
|
As of December 31, 2025 |
|
||||||||||
Facility Types |
|
Total Assets |
|
|
Percentage of |
|
|
Total Assets |
|
|
Percentage of |
|
||||
General acute care hospitals |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Behavioral health facilities |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Post acute care facilities |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Freestanding ER/urgent care facilities |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other assets |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
23
On an individual property basis, our largest investment in any single property was less than
On a revenue basis, concentration in 2026 compared to the same periods of 2025 is as follows:
Total Revenues by Geographic Location
|
|
For the Three Months Ended September 30, |
|
|||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||
Geographic Location |
|
Total Revenues |
|
|
Percentage of |
|
|
Total Revenues |
|
|
Percentage of |
|
||||
Total U.S. |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
United Kingdom |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
All other countries |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Grand total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Total Revenues by Facility Type
|
|
For the Three Months Ended September 30, |
|
|||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||
Facility Types |
|
Total Revenues |
|
|
Percentage of |
|
|
Total Revenues |
|
|
Percentage of |
|
||||
General acute care hospitals |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Behavioral health facilities |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Post acute care facilities |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Freestanding ER/urgent care facilities |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
The following shows those tenants that represented 10% or more of our total revenues for the three and nine months ended September 30, 2026 and 2025:
|
|
For the Three Months Ended September 30, |
|
|||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||
Operators |
|
Total Revenues |
|
|
Percentage of |
|
|
Total Revenues |
|
|
Percentage of |
|
||||
Circle |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Priory |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other operators |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
|
|
For the Nine Months Ended September 30, |
|
|||||||||||||
|
|
2026 |
|
|
2025 |
|
||||||||||
Operators |
|
Total Revenues |
|
|
Percentage of |
|
|
Total Revenues |
|
|
Percentage of |
|
||||
Circle |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Priory |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other operators |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
24
4. Debt
The following is a summary of debt (dollar amounts in thousands):
|
|
As of September 30, |
|
|
As of December 31, |
|
||
Secured revolving credit facility(A) |
|
$ |
|
|
$ |
|
||
Secured term loan |
|
|
|
|
|
|
||
British pound sterling secured term loan due 2034(B) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
— |
|
||
|
|
$ |
|
|
$ |
|
||
Debt issue costs, premium, and discount, net |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
||
As of September 30, 2026, principal payments due on our debt (which exclude the effects of any discounts, premiums, or debt issue costs recorded) are as follows (amounts in thousands):
2026 |
|
$ |
|
(1) |
|
2027 |
|
|
|
(1) |
|
2028 |
|
|
|
|
|
2029 |
|
|
|
|
|
2030 |
|
|
|
|
|
Thereafter |
|
|
|
|
|
Total |
|
$ |
|
|
Credit Facility
We have a multi-currency denominated revolver and a $
On February 13, 2025 and concurrent with the closing of our private notes offering discussed below, we further amended the Credit Facility and (i) removed the Modified Covenant Period and any restrictions related thereto from the existing Credit Facility, (ii) permanently removed financial covenants regarding minimum consolidated tangible net worth, maximum unsecured indebtedness to unencumbered asset value and minimum unsecured net operating income to unsecured interest expense, (iii) amended certain definitions used in the financial covenant regarding maximum total indebtedness to total asset value to conform to corresponding definitions in our existing unsecured indentures and the secured notes issued in February 2025 and set the covenant level at
25
the secured notes issued in February 2025, (vi) set the maximum secured leverage ratio at
On June 30, 2026, we formally extended the revolving portion of our Credit Facility to December 30, 2026. We can extend the facility another six months to June 30, 2027, subject to the satisfaction of certain conditions with the primary condition of not being in default at the time of the extension option date – and believe we will meet all conditions to do so.
2026 Activity
Senior Secured Notes due 2032 (2026)
On August 10, 2026, we completed a privately negotiated issuance of $
2025 Activity
British Pound Sterling Term Loan due 2025
On January 15, 2025, we paid off the remaining £
Senior Secured Notes due 2032
On February 13, 2025, we closed on a private offering that consisted of $
We used the net proceeds from the notes to fund the early redemption of our
Debt Refinancing and Unutilized Financing Benefit (Costs)
2026 Activity
In the first nine months of 2026, we recorded an approximate $
2025 Activity
In the first nine months of 2025, we incurred $
Covenants and Restrictions
Our debt facilities impose certain restrictions on us, including restrictions on our ability to: incur debts; create or incur liens; provide guarantees in respect of obligations of any other entity; make redemptions and repurchases of our capital stock; prepay, redeem, or repurchase debt; engage in mergers or consolidations; enter into affiliated transactions; dispose of real estate or other assets; and change our business. In addition, the credit agreements governing the Credit Facility limit the amount of dividends we can pay as a percentage of normalized adjusted funds from operations ("NAFFO"), as defined in the agreements, on a rolling four quarter basis to
In addition to these restrictions, the Credit Facility contains customary financial and operating covenants, including covenants relating to our total leverage ratio, fixed charge coverage ratio, and secured leverage ratio.
26
In addition to the covenants and restrictions discussed above, our Credit Facility contains customary events of default, including among others, nonpayment of principal or interest, material inaccuracy of representations, and failure to comply with our covenants. If an event of default occurs and is continuing under the Credit Facility, the entire outstanding balance may become immediately due and payable. At September 30, 2026, we were in compliance with all financial and operating covenants.
5. Income Taxes
2026 Activity
In the 2026 first quarter, we moved
2025 Activity
In the 2025 third quarter, we incurred approximately $
6. Common Stock
On October 28, 2025, the Board of Directors of the Company authorized a stock repurchase program (the "Stock Repurchase Program") for up to $
On August 11, 2025, we entered into an at-the-market equity offering program (the "ATM Program"), which provides for the sale, from time to time, of up to $
7. Stock Awards
During the second quarter of 2026, our shareholders approved the Second Amended and Restated 2019 Equity Incentive Plan (the "Equity Incentive Plan"), which authorizes the issuance of common stock options, restricted stock, restricted stock units, deferred stock units, stock appreciation rights, performance units, and awards of interests in our Operating Partnership. Our Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors. Among other things, the 2026 amendment increased the number of shares of common stock registered and reserved for stock awards by
8. Fair Value of Financial Instruments
We have various assets and liabilities that are considered financial instruments. We estimate that the carrying value of cash and cash equivalents and accounts payable and accrued expenses approximate their fair values. We estimate the fair value of our interest and rent receivables using Level 2 inputs such as discounting the estimated future cash flows using the current rates at which similar receivables would be made to others with similar credit ratings and for the same remaining maturities. The fair value of our mortgage loans and other loans is estimated by using Level 2 inputs such as discounting the estimated future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. We determine the fair value of our senior notes using Level 2 inputs such as quotes from securities dealers and market makers. We estimate the fair value of our revolving credit facility and term loans using Level 2 inputs based on the present value of future payments, discounted at a rate which we consider appropriate for such debt.
Fair value estimates are made at a specific point in time, are subjective in nature, and involve uncertainties and matters of significant judgment. Settlement of such fair value amounts may not be a prudent management decision.
27
The following table summarizes fair value estimates for our financial instruments (in thousands):
|
|
As of September 30, 2026 |
|
|
As of December 31, 2025 |
|
||||||||||
Asset (Liability) |
|
Book |
|
|
Fair |
|
|
Book |
|
|
Fair |
|
||||
Interest and rent receivables |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Loans(1) |
|
|
|
(2) |
|
|
|
|
|
(2) |
|
|
||||
Debt, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Items Measured at Fair Value on a Recurring Basis
Our equity investment and related loan to the international joint venture and our loan investment in the real estate of
At September 30, 2026 and December 31, 2025, the amounts recorded under the fair value option method were as follows (in thousands):
|
|
As of September 30, 2026 |
|
|
As of December 31, 2025 |
|
|
|
||||||||||
Asset (Liability) |
|
Fair Value |
|
|
Original |
|
|
Fair Value |
|
|
Original |
|
|
Asset Type Classification |
||||
Mortgage loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Mortgage loans |
||||
Equity investment and other loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in unconsolidated operating entities/Other loans |
||||
Our loans to the international joint venture and its subsidiaries are recorded at fair value by discounting the estimated future contractual cash flows using a credit-adjusted rate of return, which is derived from market rates of return on similar loans with similar credit quality and remaining maturity. Our equity investment in the international joint venture is recorded at fair value by using a market approach, which requires significant estimates of our investee, such as projected revenue, expenses, and working capital, and appropriate consideration of the underlying risk profile of the forecasted assumptions associated with the investee. We classify our valuations of this investment as Level 3, as we use certain unobservable inputs to the valuation methodology that are significant to the fair value measurement, and the valuations require management judgment due to the absence of quoted market prices.
In addition to investments for which we elected the fair value option, we have other investments from time to time (including our investment in Aevis) that are measured at fair value on a recurring basis.
In the first nine months of 2026, we recorded a net unfavorable adjustment to the investments accounted for at fair value on a recurring basis of approximately $
28
Items Measured at Fair Value on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, we have assets and liabilities that are measured, from time-to-time, at fair value on a nonrecurring basis, such as for impairment purposes of our real estate, financial instruments, and for certain equity investments without a readily determinable fair value.
Impairment of Real Estate and Non-Real Estate Investments
See the Prospect subheading under "Leasing Operations (Lessor)" in Note 3 for a discussion around the use of fair value and related assumptions in the impairment of our real estate investments. In addition, see “Leasing Operations (Lessor)” in Note 3 for a discussion of loan impairments involving Insight and Tenor.
9. Earnings Per Share/Unit
Medical Properties Trust, Inc.
Our earnings per share were calculated based on the following (in thousands):
|
|
For the Three Months |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
Non-controlling interests’ share in net income |
|
|
( |
) |
|
|
( |
) |
Participating securities’ share in earnings |
|
|
( |
) |
|
|
( |
) |
Net income (loss), less participating securities’ share in earnings |
|
$ |
|
|
$ |
( |
) |
|
Denominator: |
|
|
|
|
|
|
||
Basic weighted-average common shares |
|
|
|
|
|
|
||
Dilutive potential common shares(1) |
|
|
|
|
|
|
||
Diluted weighted-average common shares |
|
|
|
|
|
|
||
|
|
For the Nine Months |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
Non-controlling interests’ share in net income |
|
|
( |
) |
|
|
( |
) |
Participating securities’ share in earnings |
|
|
( |
) |
|
|
( |
) |
Net income (loss), less participating securities’ share in earnings |
|
$ |
|
|
$ |
( |
) |
|
Denominator: |
|
|
|
|
|
|
||
Basic weighted-average common shares |
|
|
|
|
|
|
||
Dilutive potential common shares(1) |
|
|
|
|
|
|
||
Diluted weighted-average common shares |
|
|
|
|
|
|
||
29
MPT Operating Partnership, L.P.
Our earnings per unit were calculated based on the following (in thousands):
|
|
For the Three Months |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
Non-controlling interests’ share in net income |
|
|
( |
) |
|
|
( |
) |
Participating securities’ share in earnings |
|
|
( |
) |
|
|
( |
) |
Net income (loss), less participating securities’ share in earnings |
|
$ |
|
|
$ |
( |
) |
|
Denominator: |
|
|
|
|
|
|
||
Basic weighted-average units |
|
|
|
|
|
|
||
Dilutive potential units(1) |
|
|
|
|
|
|
||
Diluted weighted-average units |
|
|
|
|
|
|
||
|
|
For the Nine Months |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
Non-controlling interests’ share in net income |
|
|
( |
) |
|
|
( |
) |
Participating securities’ share in earnings |
|
|
( |
) |
|
|
( |
) |
Net income (loss), less participating securities’ share in earnings |
|
$ |
|
|
$ |
( |
) |
|
Denominator: |
|
|
|
|
|
|
||
Basic weighted-average units |
|
|
|
|
|
|
||
Dilutive potential units(1) |
|
|
|
|
|
|
||
Diluted weighted-average units |
|
|
|
|
|
|
||
10. Contingencies
As part of the global settlement with Steward discussed in previous filings, we and Steward agreed, subject to specified exceptions, to the mutual release of claims against each other. In connection with the global settlement and reciprocal release of claims, we established a reserve for certain potential obligations due to third parties associated with properties formerly leased to Steward, which is approximately $
We are, or were, party to various lawsuits as described below:
Securities and Derivative Litigation
On September 29, 2023, we and certain of our executives were named as defendants in a putative federal securities class action lawsuit filed by a purported stockholder in the United States District Court for the Southern District of New York (Case No. 1:23-cv- 08597). The complaint seeks class certification on behalf of purchasers of our common stock between May 23, 2023 and August 17, 2023 and alleges false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect. This class action complaint was amended on October 30, 2024 and alleged that we made material misstatements or omissions in connection with certain transactions involving Prospect. Defendants filed a motion to dismiss the amended complaint on January 14, 2025. That motion has been fully briefed and is currently pending before the Court.
30
Members of our Board of Directors were also named as defendants in three related shareholder derivative lawsuits filed by purported stockholders in the United States District Court for the Southern District of New York on December 18, 2023 (Case No. 1:23-cv- 10934), March 1, 2024 (Case No. 1:24-cv-01589), and August 14, 2026 (Case No. 1:26-cv-06976). The Company was named as a nominal defendant in each complaint. These shareholder derivative complaints all make allegations similar to those made in the New York securities lawsuit described above relating to purported false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect. Cases 1:23-cv-10934 and 1:24-cv-01589 have been consolidated, and all three cases have been stayed pending further developments in the New York securities lawsuit described above. On February 21, 2024, members of our Board of Directors were named as defendants in a shareholder derivative lawsuit filed by a purported stockholder in the United States District Court for the District of Maryland (Case No. 1:24-cv-00527). The Company was named as a nominal defendant. This shareholder derivative complaint makes allegations similar to those made in the New York securities and derivative lawsuits described above relating to purported false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect. On June 16, 2026, plaintiff in this action filed a notice of voluntary dismissal and the case has now been dismissed without prejudice.
We believe these claims are without merit and intend to continue defending the remaining open cases vigorously. We have not recorded a liability related to the lawsuits above because, at this time, we are unable to determine whether an unfavorable outcome is probable or to estimate reasonably possible losses.
From time-to-time, we are a party to other legal proceedings, claims, or regulatory inquiries and investigations arising out of, or incidental to, our business. While we are unable to predict with certainty the outcome of any particular matter, in the opinion of management, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect our financial position, results of operations, or cash flows.
11. Segment Disclosures
We manage our business and report financial results as
Our primary business strategy and source of revenue is from the acquisition and development of healthcare facilities that are leased to healthcare operating companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. The majority of our leased assets are owned
The CODM evaluates performance and makes resource and operating decisions for the business on a consolidated basis using consolidated net income from our consolidated statements of net income as our primary GAAP profit measure supplemented by consolidated funds from operations ("FFO"). We use net income and FFO to monitor expected versus actual results to assess performance. The measure of segment assets is total assets as reported on our consolidated balance sheets.
31
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the consolidated financial condition and consolidated results of operations are presented on a combined basis for Medical Properties Trust, Inc. and MPT Operating Partnership, L.P. as there are no material differences between these two entities. Such discussion and analysis should be read together with the condensed consolidated financial statements and notes thereto contained in this Quarterly Report on Form 10-Q and the consolidated financial statements and notes thereto contained in our 2025 Annual Report.
Forward-Looking Statements.
This Quarterly Report on Form 10-Q contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements can generally be identified by the use of forward-looking words such as "may", "will", "would", "could", "expect", "intend", "plan", "estimate", "target", "anticipate", "believe", "objectives", "outlook", "guidance", or other similar words, and include statements regarding our strategies, objectives, asset sales and other liquidity and debt repayment transactions (including the use of proceeds thereof), expected returns on investments and financial performance, and expected trends and performance across our various markets. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results or future performance, achievements or transactions to be materially different from those expressed or implied by such forward-looking statements, including, but not limited to, the risks described in our 2025 Annual Report and as updated in our Quarterly Reports on Form 10-Q for future periods, and on our Current Reports on Form 8-K filed with the SEC. Such factors include, among others, the following:
32
Key Factors that May Affect Our Operations
Our revenue is derived from rents we earn pursuant to the lease agreements with our tenants, from interest income from loans to our tenants and other facility owners, and from profits or equity interests in certain of our tenants’ operations. Our tenants operate in the healthcare industry, generally providing medical, surgical, rehabilitative, and behavioral health care to patients. The capacity of our tenants to pay our rents and interest is dependent upon their ability to conduct their operations at profitable levels. We believe that the business environment of the industry segments in which our tenants operate is generally positive for efficient operators. However, our tenants’ operations are subject to economic, regulatory, market, and other conditions that may affect their profitability, which could impact our results. Accordingly, we monitor certain key performance indicators that we believe provide us with early indications of conditions that could affect the level of risk in our portfolio.
Key factors that we may consider in underwriting prospective deals and in our ongoing monitoring of our tenants’ (and guarantors’) performance, as well as the condition of our properties, include, but are not limited to, the following:
33
Certain business factors, in addition to those described above that may directly affect our tenants and borrowers, will likely materially influence our future results of operations. These factors include:
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Refer to our 2025 Annual Report for a discussion of our critical accounting policies, which include investments in real estate, purchase price allocation, loans, credit losses, losses from rent and interest receivables, investments accounted for under the fair value option election, and our accounting policy on consolidation. During the nine months ended September 30, 2026, there were no material changes to these policies and estimates.
Overview
We are a self-advised REIT focused on investing in and owning net-leased healthcare facilities across the U.S. and selectively in foreign jurisdictions. Medical Properties Trust, Inc. was incorporated under Maryland law on August 27, 2003, and MPT Operating Partnership, L.P. was formed under Delaware law on September 10, 2003. We conduct substantially all of our business through MPT Operating Partnership, L.P. We acquire and develop healthcare facilities and lease the facilities to healthcare operating companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. The majority of our leased assets are owned 100%; however, we do own some leased assets through joint ventures with other partners that share our view that healthcare facilities are part of the infrastructure of any community, which we refer to as investments in unconsolidated real estate joint ventures. We also make mortgage loans to healthcare operators collateralized by their real estate assets. In addition, we may make loans to certain of our operators through our TRS, the proceeds of which are typically used for working capital and other purposes. From time-to-time, we may make noncontrolling investments in our tenants, which we refer to as investments in unconsolidated operating entities. These investments are typically made in conjunction with larger real estate transactions with the tenant that give us a right to share in such tenant’s profits and losses, and provide for certain minority rights and protections. Our business model facilitates acquisitions and recapitalizations, and allows operators of healthcare facilities to serve their communities by unlocking the value of their real estate assets to fund facility improvements, technology upgrades, and other investments in operations.
34
At September 30, 2026, our portfolio consisted of 365 properties leased or loaned to 52 operators, and all of our investments are located in the U.S., Europe, and South America. Our total assets are made up of the following (dollars in thousands):
|
|
As of |
|
|
% of |
|
|
As of |
|
|
% of |
|
||||
Real estate assets - at cost |
|
$ |
12,437,160 |
|
|
|
86.4 |
% |
|
$ |
12,751,022 |
|
|
|
85.0 |
% |
Accumulated real estate depreciation and amortization |
|
|
(1,768,594 |
) |
|
|
(12.3 |
)% |
|
|
(1,663,056 |
) |
|
|
(11.1 |
)% |
Net investment in real estate assets |
|
|
10,668,566 |
|
|
|
74.1 |
% |
|
|
11,087,966 |
|
|
|
73.9 |
% |
Cash and cash equivalents |
|
|
599,282 |
|
|
|
4.2 |
% |
|
|
540,859 |
|
|
|
3.6 |
% |
Investments in unconsolidated real estate joint ventures |
|
|
1,045,475 |
|
|
|
7.3 |
% |
|
|
1,399,777 |
|
|
|
9.3 |
% |
Investments in unconsolidated operating entities |
|
|
320,740 |
|
|
|
2.2 |
% |
|
|
322,179 |
|
|
|
2.2 |
% |
Other |
|
|
1,759,633 |
|
|
|
12.2 |
% |
|
|
1,650,994 |
|
|
|
11.0 |
% |
Total assets |
|
$ |
14,393,696 |
|
|
|
100.0 |
% |
|
$ |
15,001,775 |
|
|
|
100.0 |
% |
Results of Operations
Three Months Ended September 30, 2026 Compared to September 30, 2025
Net income for the three months ended September 30, 2026 was $201.6 million, or $0.34 per diluted share, compared to a net loss of ($77.7) million, or ($0.13) per diluted share, for the three months ended September 30, 2025. This improvement quarter over quarter is primarily driven by gains from asset sales and debt refinancing activities in 2026 along with less impairment charges than 2025. Normalized FFO, after adjusting for certain items (as more fully described in the section titled "Reconciliation of Non-GAAP Financial Measures" in Item 2 of this Quarterly Report on Form 10-Q), was $63.8 million for the 2026 third quarter, or $0.11 per diluted share, as compared to $77.2 million, or $0.13 per diluted share, for the 2025 third quarter. This decrease is primarily related to higher interest expense quarter over quarter, partially offset by an increase in revenue.
Revenues
A comparison of revenues for the three months ended September 30, 2026 and 2025 is as follows (dollar amounts in thousands):
|
|
2026 |
|
|
% of |
|
|
2025 |
|
|
% of |
|
|
Year over |
|
|||||
Rent billed |
|
$ |
195,305 |
|
|
|
78.1 |
% |
|
$ |
181,001 |
|
|
|
76.2 |
% |
|
|
7.9 |
% |
Straight-line rent |
|
|
35,699 |
|
|
|
14.3 |
% |
|
|
36,405 |
|
|
|
15.3 |
% |
|
|
(1.9 |
)% |
Income from financing leases |
|
|
10,099 |
|
|
|
4.0 |
% |
|
|
9,944 |
|
|
|
4.2 |
% |
|
|
1.6 |
% |
Interest and other income |
|
|
9,037 |
|
|
|
3.6 |
% |
|
|
10,172 |
|
|
|
4.3 |
% |
|
|
(11.2 |
)% |
Total revenues |
|
$ |
250,140 |
|
|
|
100.0 |
% |
|
$ |
237,522 |
|
|
|
100.0 |
% |
|
|
5.3 |
% |
Our total revenues for the 2026 third quarter increased $12.6 million, or 5.3%, over the same period in the prior year. This increase is made up of the following:
35
We currently have several tenants on the cash basis from a revenue recognition perspective, which can result in variability of our lease and interest revenue quarter-to-quarter such as was the case with the non-payment of rent from HSA for September 2026.
Interest Expense
Interest expense for the quarters ended September 30, 2026 and 2025 totaled $153.1 million and $132.4 million, respectively. This increase is primarily related to the August 10, 2026 debt refinancing transaction, whereby we redeemed debt with lower interest rates with the new 9.25% secured notes - see Note 4 to the condensed consolidated financial statements for further details. Overall weighted-average interest rate was 6.1% for the quarter ended September 30, 2026, compared to 5.4% for the same period in 2025.
Real Estate Depreciation and Amortization
Real estate depreciation and amortization during the third quarter of 2026 increased to $70.3 million from $67.0 million in 2025. This increase is primarily due to the six California properties, leased to NOR, that were reclassified as operating leases in December 2025, along with net acquisition and disposal activity since the third quarter of 2025 (as disclosed previously).
Property-related
Property-related expenses totaled $11.4 million and $9.0 million for the quarters ended September 30, 2026 and 2025, respectively. Of the property-related expenses in the third quarter of 2026 and 2025, approximately $2.7 million and $2.3 million, respectively, represent costs that were reimbursed by our tenants and included in the "Interest and other income" line of the condensed consolidated statements of net income. The remaining non-reimbursed property expenses are higher quarter over quarter primarily due to ongoing expenses (such as property taxes, insurance, maintenance, etc.) incurred at our vacant facilities.
General and Administrative
General and administrative expenses were $29.0 million for the 2026 third quarter, compared to $37.7 million for the 2025 third quarter. Of these amounts, share-based compensation expense was $0.4 million for the third quarter of 2026, compared to $12.3 million in the 2025 third quarter, primarily due to the decrease in fair value of the 2024 and 2025 performance awards that contain a cash-settlement feature and are marked to fair value quarterly.
With certain performance awards granted in 2025 and 2024 having cash-settlement features, we expect there will be volatility in our stock compensation expense quarter-to-quarter. As of September 30, 2026, none of the 2025 or 2024 performance shares have been earned/vested and will not begin to earn/vest until, for 20 consecutive days, our total shareholder return reaches 20% (based on the April 15, 2025 grant date) for the 2025 performance award and our stock price reaches $7.00 per share for the 2024 performance award.
Excluding share-based compensation, general and administrative expenses for the 2026 third quarter were higher than the prior year due to non-cash depreciation and other costs associated with our completed headquarters facility in Birmingham, Alabama.
Gain (Loss) on Sale of Real Estate
During the three months ended September 30, 2026, the gain on sale of real estate of $157.8 million primarily relates to the disposal of two Idaho properties to affiliates of Intermountain Health as described in Note 3 to the condensed consolidated financial statements. During the three months ended September 30, 2025, the loss on sale of real estate was ($9.1) million primarily related to the sale of two facilities.
36
Real Estate and Other Impairment Charges, Net
In the 2026 third quarter, we recognized $23.9 million of real estate and other impairment charges, primarily related to a negative fair value adjustment on our investments in three hospitals in Colombia as a result of the major earthquake that occurred in Colombia in August 2026, along with non-real estate impairment charges for property taxes and other obligations not paid by our cash-basis tenants. In the same period of 2025, we recognized $81.8 million of real estate and other impairment charges, primarily associated with our Prospect investments and non-real estate impairment charges for property taxes and other obligations not paid by our cash-basis tenants.
Earnings from Equity Interests
Earnings from equity interests were $7.0 million for the quarter ended September 30, 2026, compared to earnings of $34.4 million for the same period in 2025. Our share of income in the Utah partnership of approximately $5.4 million for the 2026 third quarter included a $2.2 million positive fair value adjustment, primarily related to its interest rate swap; while, the 2025 third quarter included a $12.8 million favorable fair value adjustment in real estate. As discussed in Note 3 to the condensed consolidated financial statements, the properties underlying the Utah partnership were sold in the 2026 third quarter and the partnership was effectively terminated.
The remaining change from 2025 to 2026 primarily relates to a deferred tax benefit recognized in the 2025 third quarter in our MEDIAN joint venture from the lowering of German tax rates.
Debt Refinancing and Unutilized Financing Benefit (Costs)
For the 2026 third quarter, we recognized a $70 million gain from the redemption of certain unsecured notes below par as part of the August 2026 debt refinancing. See Note 4 to the condensed consolidated financial statements for further details.
Other (Including Fair Value Adjustments on Securities)
Other income for the third quarter of 2026 was $15.4 million, compared to other expense of ($1.5) million in the prior year period, primarily due to the change in fair value of our investment in Aevis.
With certain investments accounted for at fair value, we may have positive or negative fair value adjustments from quarter-to-quarter.
Income Tax (Expense) Benefit
We typically incur income tax expense related to U.S. federal and state income taxes on our TRS entities, as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S. The $10.0 million income tax expense for the three months ended September 30, 2026 is primarily based on the income generated by our investments in the U.K. and Germany, and is in line with the $10.9 million income tax expense in the third quarter of 2025, which was $1 million higher due to a change in German tax rates - see Note 5 to the condensed consolidated financial statements for further details.
We utilize the asset and liability method of accounting for income taxes. Deferred tax assets are recorded to the extent we believe these assets will more likely than not be realized. In making such determination, all available positive and negative evidence is considered, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. Based upon our review of all positive and negative evidence, including our three-year cumulative pre-tax book loss position in certain entities, we concluded that a valuation allowance of approximately $558 million should be reflected against certain of our international and domestic net deferred tax assets at September 30, 2026. In the future, if we determine that it is more likely than not that we will realize our net deferred tax assets, we will reverse the applicable portion of the valuation allowance, recognize an income tax benefit in the period in which such determination is made, and potentially incur higher income tax expense in future periods as income is earned.
37
Nine Months Ended September 30, 2026 Compared to September 30, 2025
Net income for the nine months ended September 30, 2026, was $231.8 million, or $0.39 per diluted share compared to a net loss of ($294.4) million, or ($0.49) per diluted share, for the nine months ended September 30, 2025. This increase in net income is primarily driven by (i) an approximately $43 million one-time tax benefit in the first quarter of 2026 from moving seven additional U.K. entities into our U.K. REIT as described in Note 5 to the condensed consolidated financial statements, (ii) $266.6 million of less impairment charges and negative fair value adjustments primarily related to Prospect, (iii) $159 million in more gains on asset sales in 2026, and (iv) approximately $70 million of more gains from debt refinancing activities. Normalized FFO, after adjusting for certain items (as more fully described in the section titled "Reconciliation of Non-GAAP Financial Measures" in Item 2 of this Quarterly Report on Form 10-Q), was $238.3 million for the first nine months of 2026, or $0.40 per diluted share, as compared to $239.7 million, or $0.40 per diluted share, for the same period of 2025.
Revenues
A comparison of revenues for the nine months ended September 30, 2026 and 2025 is as follows (dollar amounts in thousands):
|
|
2026 |
|
|
% of |
|
|
2025 |
|
|
% of |
|
|
Year over |
|
|||||
Rent billed |
|
$ |
596,225 |
|
|
|
78.3 |
% |
|
$ |
524,051 |
|
|
|
74.7 |
% |
|
|
13.8 |
% |
Straight-line rent |
|
|
103,203 |
|
|
|
13.6 |
% |
|
|
116,197 |
|
|
|
16.6 |
% |
|
|
(11.2 |
)% |
Income from financing leases |
|
|
30,244 |
|
|
|
4.0 |
% |
|
|
29,772 |
|
|
|
4.2 |
% |
|
|
1.6 |
% |
Interest and other income |
|
|
31,816 |
|
|
|
4.1 |
% |
|
|
31,660 |
|
|
|
4.5 |
% |
|
|
0.5 |
% |
Total revenues |
|
$ |
761,488 |
|
|
|
100.0 |
% |
|
$ |
701,680 |
|
|
|
100.0 |
% |
|
|
8.5 |
% |
Our total revenues for the first nine months of 2026 are up $59.8 million, or 8.5%, over the same period in the prior year. This increase is made up of the following:
Interest Expense
Interest expense for the nine months ended September 30, 2026 and 2025 totaled $421.7 million and $377.9 million, respectively. This increase is primarily related to the August 10, 2026 debt refinancing transaction as discussed in Note 4 to the condensed consolidated financial statements and a full nine months of interest in 2026 related to our February 2025 debt refinancing activities. Overall, our weighted-average interest rate was 5.5% for the nine months ended September 30, 2026, compared to 5.2% for the same period in 2025.
38
Real Estate Depreciation and Amortization
Real estate depreciation and amortization for the first nine months of 2026 increased to $209.5 million from $198.3 million for the same period of the prior year. This increase is primarily due to the six California properties, leased to NOR, that were reclassified as operating leases in December 2025, along with capital addition activity and net acquisition and disposal activity during 2025 (as disclosed in previous filings) and the first nine months of 2026 as more fully described in Note 3 to the condensed consolidated financial statements.
Property-related
Property-related expenses totaled $32.5 million and $26.9 million for the nine months ended September 30, 2026 and 2025, respectively. Of the property-related expenses in the first nine months of 2026 and 2025, approximately $9.0 million and $9.3 million, respectively, represent costs that were reimbursed by our tenants and included in the "Interest and other income" line on our condensed consolidated statements of net income. The remaining non-reimbursed property expenses are higher period-over-period, primarily due to ongoing expenses (such as property taxes, insurance, maintenance, etc.) incurred at our vacant facilities.
General and Administrative
General and administrative expenses were $96.0 million for the first nine months of 2026, compared to $105.8 million for the same period of 2025. Of these amounts, share-based compensation expense was $5.8 million for the first nine months of 2026, compared to $30.9 million for the same period of 2025, primarily due to the decrease in fair value of the 2024 and 2025 performance awards that contain a cash-settlement feature and are marked to fair value quarterly.
With certain performance awards granted in 2025 and 2024 having cash-settlement features, we expect there will be volatility in our stock compensation expense quarter-to-quarter. As of September 30, 2026, none of the 2025 or 2024 performance shares have been earned/vested and will not begin to earn/vest until, for 20 consecutive days, our total shareholder return reaches 20% (based on the April 15, 2025 grant date) for the 2025 performance award and our stock price reaches $7.00 per share for the 2024 performance award.
Excluding share-based compensation, general and administrative expenses for the first nine months of 2026 were higher than the prior year due to non-cash depreciation and other costs associated with our completed headquarters facility in Birmingham, Alabama and higher travel expenses.
Gain on Sale of Real Estate
During the nine months ended September 30, 2026, the gain on sale of real estate of $163.4 million primarily relates to the sale of two facilities in Idaho to affiliates of Intermountain Health, the Scion/Lifepoint Transaction, and the sale of five other facilities. During the nine months ended September 30, 2025, the gain on sale of real estate of $4.2 million relates to the sale of five facilities. See Note 3 to the condensed consolidated financial statements for further details.
Real Estate and Other Impairment Charges, Net
In the first nine months of 2026, we recognized $59.7 million of real estate and other impairment charges, primarily associated with our working capital loans to Insight and Tenor, negative fair value adjustments on our investments in three hospitals in Colombia, and non-real estate impairment charges for property taxes and other obligations not paid by our cash-basis tenants. In the same period of 2025, we recognized $159.3 million of real estate and other impairment charges, primarily associated with our investments in Prospect and three hospitals in Colombia, as well as ongoing property taxes and other obligations not paid by our cash-basis tenants.
Earnings from Equity Interests
Earnings from equity interests was $34.1 million for the nine months ended September 30, 2026, compared to $73.7 million for the same period in 2025. Our share of income in the Utah partnership included $11.2 million of positive fair value adjustments in the first nine months of 2026, primarily related to a fair value increase in real estate and interest rate swap, compared to a $34 million positive fair value adjustment in the first nine months of 2025.
Our share of income for the MEDIAN joint venture decreased in the first nine months of 2026 compared to 2025 primarily due to the deferred tax benefit recognized in the 2025 third quarter from the reduction in German tax rates.
39
Debt Refinancing and Unutilized Financing Benefit (Costs)
For the first nine months of 2026, we recognized a $70 million gain from the redemption of certain unsecured notes below par as part of the August 2026 debt refinancing. For the first three quarters of 2025, we incurred ($3.6) million of expense primarily as a result of the early redemption of our 3.325% Senior Unsecured Notes due 2025, 2.500% Senior Unsecured Notes due 2026, and 5.250% Senior Unsecured Notes due 2026 - see Note 4 to the condensed consolidated financial statements for further discussion.
Other (Including Fair Value Adjustments on Securities)
Other income for the first nine months of 2026 was $11.0 million, compared to expense of ($171.1) million in the same period of the prior year. For 2026, we recognized approximately $11 million in favorable non-cash fair value adjustments from our investment in Aevis. For 2025, we recognized approximately $156 million in unfavorable non-cash fair value adjustments from our investments marked to fair value, primarily due to an approximate $147 million unfavorable adjustment to our investment in PHP Holdings and approximately $8 million related to our investment in Aevis.
Income Tax (Expense) Benefit
We typically incur income tax expense related to U.S. federal and state income taxes on our TRS entities, as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S. The $12.7 million income tax benefit for the nine months ended September 30, 2026, is largely due to moving seven additional U.K. property holding legal entities into our U.K. REIT that was formed on July 1, 2023. As part of this move, we adjusted the deferred tax liabilities associated with these entities, which resulted in an approximate $43 million one-time tax benefit in the first quarter of 2026. Going forward, these U.K. entities (like the others in the U.K. REIT) will be subject only to a withholding tax on earnings upon distribution out of the U.K. REIT. Excluding this one-time benefit, income tax expense for the first nine months of 2026 was in line with the $30.1 million income tax expense in the first nine months of 2025.
We utilize the asset and liability method of accounting for income taxes. Deferred tax assets are recorded to the extent we believe these assets will more likely than not be realized. In making such determination, all available positive and negative evidence is considered, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. Based upon our review of all positive and negative evidence, including our three-year cumulative pre-tax book loss position in certain entities, we concluded that a valuation allowance of approximately $558 million should be reflected against certain of our international and domestic net deferred tax assets at September 30, 2026. In the future, if we determine that it is more likely than not that we will realize our net deferred tax assets, we will reverse the applicable portion of the valuation allowance, recognize an income tax benefit in the period in which such determination is made, and potentially incur higher income tax expense in future periods as income is earned.
Reconciliation of Non-GAAP Financial Measures
Investors and analysts following the real estate industry utilize funds from operations, or FFO, as a supplemental performance measure. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets, which assumes that the value of real estate diminishes predictably over time. We compute FFO in accordance with the definition provided by the National Association of Real Estate Investment Trusts, or Nareit, which represents net income (loss) (computed in accordance with GAAP), excluding gains (losses) on sales of real estate and impairment charges on real estate assets, plus real estate depreciation and amortization, including amortization related to in-place lease intangibles, and after adjustments for unconsolidated partnerships and joint ventures.
In addition to presenting FFO in accordance with the Nareit definition, we disclose normalized FFO, which adjusts FFO for items that relate to unanticipated or non-core events or activities or accounting changes that, if not noted, would make comparison to prior period results and market expectations less meaningful to investors and analysts.
We believe that the use of FFO, combined with the required GAAP presentations, improves the understanding of our operating results among investors and the use of normalized FFO makes comparisons of our operating results with prior periods and other companies more meaningful. While FFO and normalized FFO are relevant and widely used supplemental measures of operating and financial performance of REITs, they should not be viewed as a substitute measure of our operating performance since the measures do not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs (if any are not paid by our tenants) to maintain the operating performance of our properties, which can be significant economic costs that could materially impact our results of operations. FFO and normalized FFO should not be considered an alternative to net income (loss) (computed in accordance with GAAP) as indicators of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity.
40
The following table presents a reconciliation of net income (loss) attributable to MPT common stockholders to FFO and Normalized FFO for the three and nine months ended September 30, 2026 and 2025 (in thousands except per share data):
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
||||||||||
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
|
September 30, 2026 |
|
|
September 30, 2025 |
|
||||
FFO information: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to MPT common stockholders |
|
$ |
201,583 |
|
|
$ |
(77,730 |
) |
|
$ |
231,815 |
|
|
$ |
(294,362 |
) |
Participating securities’ share in earnings |
|
|
(353 |
) |
|
|
(256 |
) |
|
|
(1,221 |
) |
|
|
(597 |
) |
Net income (loss), less participating securities’ share in earnings |
|
$ |
201,230 |
|
|
$ |
(77,986 |
) |
|
$ |
230,594 |
|
|
$ |
(294,959 |
) |
Depreciation and amortization |
|
|
85,530 |
|
|
|
82,242 |
|
|
|
257,433 |
|
|
|
240,465 |
|
(Gain) loss on sale of real estate |
|
|
(155,452 |
) |
|
|
9,115 |
|
|
|
(159,990 |
) |
|
|
(4,156 |
) |
Real estate impairment charges |
|
|
12,123 |
|
|
|
78,677 |
|
|
|
22,765 |
|
|
|
126,645 |
|
Funds from operations |
|
$ |
143,431 |
|
|
$ |
92,048 |
|
|
$ |
350,802 |
|
|
$ |
67,995 |
|
Other impairment charges, net |
|
|
13,756 |
|
|
|
6,976 |
|
|
|
39,549 |
|
|
|
40,487 |
|
Litigation, bankruptcy and other costs |
|
|
2,413 |
|
|
|
(1,125 |
) |
|
|
5,480 |
|
|
|
11,078 |
|
Share-based compensation (fair value adjustments) (1) |
|
|
(8,075 |
) |
|
|
3,457 |
|
|
|
(21,362 |
) |
|
|
3,444 |
|
Non-cash fair value adjustments |
|
|
(18,206 |
) |
|
|
(12,066 |
) |
|
|
(21,539 |
) |
|
|
123,370 |
|
Tax rate changes and other |
|
|
21 |
|
|
|
(12,091 |
) |
|
|
(45,134 |
) |
|
|
(10,970 |
) |
Debt refinancing and unutilized financing (benefit) costs |
|
|
(69,524 |
) |
|
|
14 |
|
|
|
(69,524 |
) |
|
|
4,273 |
|
Normalized funds from operations |
|
$ |
63,816 |
|
|
$ |
77,213 |
|
|
$ |
238,272 |
|
|
$ |
239,677 |
|
Per diluted share data: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss), less participating securities’ share in earnings |
|
$ |
0.34 |
|
|
$ |
(0.13 |
) |
|
$ |
0.39 |
|
|
$ |
(0.49 |
) |
Depreciation and amortization |
|
|
0.14 |
|
|
|
0.14 |
|
|
|
0.43 |
|
|
|
0.40 |
|
(Gain) loss on sale of real estate |
|
|
(0.26 |
) |
|
|
0.01 |
|
|
|
(0.27 |
) |
|
|
(0.01 |
) |
Real estate impairment charges |
|
|
0.02 |
|
|
|
0.13 |
|
|
|
0.03 |
|
|
|
0.21 |
|
Funds from operations |
|
$ |
0.24 |
|
|
$ |
0.15 |
|
|
$ |
0.58 |
|
|
$ |
0.11 |
|
Other impairment charges, net |
|
|
0.02 |
|
|
|
0.01 |
|
|
|
0.07 |
|
|
|
0.06 |
|
Litigation, bankruptcy and other costs |
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.02 |
|
Share-based compensation (fair value adjustments) (1) |
|
|
(0.01 |
) |
|
|
0.01 |
|
|
|
(0.03 |
) |
|
|
0.01 |
|
Non-cash fair value adjustments |
|
|
(0.03 |
) |
|
|
(0.02 |
) |
|
|
(0.04 |
) |
|
|
0.21 |
|
Tax rate changes and other |
|
|
— |
|
|
|
(0.02 |
) |
|
|
(0.07 |
) |
|
|
(0.02 |
) |
Debt refinancing and unutilized financing (benefit) costs |
|
|
(0.12 |
) |
|
|
— |
|
|
|
(0.12 |
) |
|
|
0.01 |
|
Normalized funds from operations |
|
$ |
0.11 |
|
|
$ |
0.13 |
|
|
$ |
0.40 |
|
|
$ |
0.40 |
|
LIQUIDITY AND CAPITAL RESOURCES
2026 Cash Flow Activity
During the first nine months of 2026, we generated approximately $89 million of cash flows from operating activities, which exceeded the first nine months of 2025 primarily due to more distributions from our real estate joint ventures (two years of dividends received from our Infracore joint venture in 2026 but none in 2025) and additional rent from cash basis tenants, partially offset by more interest paid in 2026 to-date versus 2025.
41
During the first nine months of 2026, our investing and financing activities included:
Debt Covenant Compliance
See Note 4 to the condensed consolidated financial statements for detail of our covenant requirements.
As of November 4, 2026, we are in compliance with all such financial and operating covenants.
2025 Cash Flow Activity
During the first nine months of 2025, we had approximately $70 million of cash flows from operating activities. We used these operating cash flows, proceeds from our Credit Facility, and proceeds from asset sales to fund our dividends and other investing activities. During the first nine months of 2025, we repaid the remaining outstanding balance of the British pound sterling term loan due 2025 of £493 million, with a combination of cash on hand and available capacity under our Credit Facility. We also completed a private offering of $1.5 billion in aggregate principal amount of senior secured notes due 2032 and €1.0 billion aggregate principal amount of senior secured notes due 2032. The net proceeds from the offering were approximately $2.5 billion after deducting discounts, commissions, and other offering related expenses. We used the net proceeds from the offering to fund the redemption of our 3.325% Senior Unsecured Notes due 2025, 2.500% Senior Unsecured Notes due 2026, and 5.250% Senior Unsecured Notes due 2026, with the remainder of net proceeds used to pay down our Credit Facility by approximately $800 million.
Short-term Liquidity Requirements:
Our short-term liquidity requirements typically consist of property-related expenses, general and administrative expenses, dividends in order to comply with REIT requirements, interest payments on our debt, and planned funding commitments on development and capital improvement projects for the next twelve months. Our monthly rent and interest receipts and distributions from our joint venture arrangements are typically enough to cover our short-term liquidity requirements.
42
Over the next twelve months, we expect our monthly rent and interest receipts to increase with our contractually required annual escalations (including within our joint ventures), from the ramp up of cash rents to 100% of contractual rents due from certain tenants, and from the completion of certain development projects. We expect these rent and interest increases (including through distributions from our joint venture arrangements) to help offset the higher interest cost from the recently completed refinancing activities and any additional refinancing activities needed to address debt maturities coming due within the next twelve months; however, no assurances can be given as our expectation is predicated on the timely receipt of rent and interest from our tenants, particularly our cash basis tenants such as HSA.
We have $0.6 billion of cash on-hand as of November 4, 2026 and $1.2 billion of debt coming due within the next twelve months, inclusive of our existing Credit Facility and the remainder of our 5.000% Senior Unsecured Notes due 2027. We have a plan to address this near-term maturity through a combination of:
In addition to our plan above, we have access to our ATM program for the sale of up to $500 million of our common stock, if needed.
We believe our plan discussed above and routine cash receipts of rent and interest, along with distributions from our joint ventures, can fund our short-term liquidity requirements.
Long-term Liquidity Requirements:
Our long-term liquidity requirements generally consist of the same requirements described above under "Short-term Liquidity Requirements" along with investments in real estate and the funding of debt maturities coming due after the next twelve months. At this time, we do not expect any material new investments of real estate in the foreseeable future.
As described previously, our monthly rent and interest receipts and distributions from our joint venture arrangements along with our current cash on-hand of approximately $0.6 billion at November 4, 2026, are typically enough to cover our short-term liquidity requirements. However, to further improve cash flows and to fund future debt maturities, including those coming due in the next 12 months discussed above, we will need to look to other sources, which may include one or a combination of the following:
However, there is no assurance that conditions will be favorable for such possible transactions or that our plans will be successful.
43
Principal payments due on our debt (which exclude the effects of any discounts, premiums, or debt issue costs recorded) as of November 4, 2026 are expected to be as follows (in thousands):
2026 |
|
$ |
382,280 |
|
(1) |
2027 |
|
|
865,397 |
|
|
2028 |
|
|
605,531 |
|
|
2029 |
|
|
581,229 |
|
|
2030 |
|
|
394,773 |
|
|
Thereafter |
|
|
6,560,819 |
|
|
Total |
|
$ |
9,390,029 |
|
|
Contractual Commitments
We presented our contractual commitments in our 2025 Annual Report and updated our expectations in the 2026 second quarter Form 10-Q for significant changes through August 10, 2026. There have been no new significant developments since that time. See “Development and Capital Addition Activities” subheading in Note 3 to the condensed consolidated financial statements for a summary of our significant capital commitments.
Distribution Policy
The table below is a summary of our distributions declared (and paid in cash) during the two-year period ended September 30, 2026:
Declaration Date |
|
Record Date |
|
Date of Distribution |
|
Distribution |
|
|
August 13, 2026 |
|
September 10, 2026 |
|
October 8, 2026 |
|
$ |
0.09 |
|
May 28, 2026 |
|
June 18, 2026 |
|
July 16, 2026 |
|
$ |
0.09 |
|
February 12, 2026 |
|
March 12, 2026 |
|
April 9, 2026 |
|
$ |
0.09 |
|
November 17, 2025 |
|
December 11, 2025 |
|
January 8, 2026 |
|
$ |
0.09 |
|
August 14, 2025 |
|
September 11, 2025 |
|
October 9, 2025 |
|
$ |
0.08 |
|
May 29, 2025 |
|
June 18, 2025 |
|
July 17, 2025 |
|
$ |
0.08 |
|
February 13, 2025 |
|
March 10, 2025 |
|
April 10, 2025 |
|
$ |
0.08 |
|
November 21, 2024 |
|
December 12, 2024 |
|
January 9, 2025 |
|
$ |
0.08 |
|
It is our policy to make sufficient distributions to stockholders in order for us to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended, and to efficiently manage corporate income and excise taxes on undistributed income. Although we have only made cash distributions historically, we may consider making stock dividends in the future for liquidity purposes, while still complying with REIT requirements. In addition, our Credit Facility limits the amount of cash dividends we can make. See Note 4 to the condensed consolidated financial statements for further information.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, equity prices, and other market changes that affect market-sensitive instruments. We seek to mitigate the effects of fluctuations in interest rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent possible. We may or may not elect to use financial derivative instruments to hedge interest rate or foreign currency exposure. For interest rate hedging, these decisions are principally based on our policy to match investments with comparable borrowings, but are also based on the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. For foreign currency hedging, these decisions are principally based on how our investments are financed, the long-term nature of our investments, the need to repatriate earnings back to the U.S., and the general trend in foreign currency exchange rates.
In addition, the value of our facilities will be subject to fluctuations based on changes in local and regional economic conditions and changes in the ability of our tenants to generate profits.
Our primary exposure to market risks relates to fluctuations in interest rates and foreign currency. The following analyses present the sensitivity of the market value, earnings, and cash flows of our significant financial instruments to hypothetical changes in
44
interest rates and exchange rates as if these changes had occurred. The hypothetical changes chosen for these analyses reflect our view of changes that are reasonably possible over a one-year period. These forward-looking disclosures are selective in nature and only address the potential impact from these hypothetical changes. They do not include other potential effects which could impact our business as a result of changes in market conditions. In addition, they do not include measures we may take to minimize our exposure such as entering into future interest rate swaps to hedge against interest rate increases on our variable rate debt.
Interest Rate Sensitivity
For fixed rate debt, interest rate changes affect the fair market value but do not impact net income to common stockholders or cash flows. Conversely, for floating rate debt, interest rate changes generally do not affect the fair market value but do impact net income to common stockholders and cash flows, assuming other factors are held constant. At September 30, 2026, our outstanding debt totaled $9.4 billion (excluding the effects of any discount, premium, or debt issue costs recorded), which consisted of fixed-rate debt of approximately $8.8 billion and variable rate debt of $0.6 billion. If market interest rates increase or decrease by 10% on our fixed rate debt, the fair value of our debt at September 30, 2026 would decrease or increase by approximately $290 million. Changes in the fair value of our fixed rate debt will not have any impact on us unless we decide to repurchase the debt in the open market.
If market rates of interest on our variable rate debt increase by 10%, the increase in annual interest expense on our variable rate debt would decrease future earnings and cash flows by $3.5 million per year. If market rates of interest on our variable rate debt decrease by 10%, the decrease in interest expense on our variable rate debt would increase future earnings and cash flows by $3.5 million per year. This assumes that the average amount outstanding under our variable rate debt for a year is $0.6 billion, the balance of such variable rate debt at September 30, 2026.
Foreign Currency Sensitivity
With our investments in the U.K., Germany, Spain, Italy, Portugal, Switzerland, Finland, and Colombia, we are subject to fluctuations in the British pound, euro, Swiss franc, and Colombian peso to U.S. dollar currency exchange rates. Although we generally deem investments in these countries to be of a long-term nature, are typically able to match any non-U.S. dollar borrowings with investments in such currencies, and historically have not needed to repatriate a material amount of earnings back to the U.S., increases or decreases in the value of the respective non-U.S. dollar currencies to U.S. dollar exchange rates may impact our financial condition and/or our results of operations. Based on our 2026 results to-date, a 10% increase or decrease in exchange rates would increase or decrease our net income by $12.0 million.
Item 4. Controls and Procedures.
Medical Properties Trust, Inc. and MPT Operating Partnership, L.P.
We have adopted and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by Rule 13a-15(b), under the Securities Exchange Act of 1934, as amended, we have carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the quarter covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by us in the reports that we file under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.
There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
45
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
We are party to various lawsuits as further described in Note 10 "Contingencies" to the condensed consolidated financial statements. We have not recorded a liability related to these lawsuits because, at this time, we are unable to determine whether an unfavorable outcome is probable or to estimate reasonably possible losses.
In addition to the foregoing, we are currently and have in the past been subject to various legal proceedings and regulatory actions in connection with our business. We believe that the resolution of any current pending legal or regulatory matters will not have a material adverse effect on our business, financial condition, results of operations, or cash flows. Nonetheless, we cannot predict the outcome of these proceedings, as legal and regulatory matters are subject to inherent uncertainties, and there exists the possibility that the ultimate resolution of such matters could have a material adverse effect on our financial condition, cash flows, results of operations, and the trading price of our common stock.
Item 1A. Risk Factors.
There have been no material changes to the Risk Factors as presented in our 2025 Annual Report, other than the following:
Regulatory restrictions on healthcare REITs could adversely affect our business, results of operations, and financial condition.
Certain states have enacted, and other states are considering, laws and regulatory regimes that seek to increase oversight of transactions involving REIT ownership or leasing of healthcare facilities. These measures include, among other things, prohibitions on certain sale-leaseback transactions involving acute care hospitals; restrictions on the issuance of new hospital licenses for facilities leased from REITs; requirements that REIT investments be subject to enhanced transaction review and ongoing financial reporting obligations; and pre-transaction notice and review regimes applicable to certain healthcare transactions, including the sale, transfer, or lease of a material portion of a health care entity’s assets. Covered transactions may be subject to extended regulatory review periods, which could delay, condition, and/or increase the cost and complexity of completing such transactions. In addition, the Commonwealth of Massachusetts has recently passed legislation enabling, under certain conditions, the eminent domain taking of our replacement facility project in Norwood, Massachusetts (see “Development and Capital Addition Activities” subheading in Note 3 to the condensed consolidated financial statements). Although there is no certainty that the Commonwealth will pursue the taking of the Norwood facility, the Commonwealth’s eminent domain laws do require the payment of the fair market value of property as compensation. However, there is no certainty that such fair market value payment will be in line with our expectations, nor that it would be equal to or exceed our current net book value. Regardless of what the Commonwealth offers as compensation, Massachusetts law permits us to accept the compensation that is offered while retaining the right to seek additional compensation through an action filed with the Superior Court.
If these or similar regulatory restrictions are enforced by the different states, they could limit our ability to acquire and lease hospital properties, delay transactions, increase compliance costs, expose us to greater regulatory and legal risk, and adversely affect our business, results of operations, and financial condition.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The table below summarizes repurchases of our common stock made during the quarter ended September 30, 2026:
46
Period |
|
Total number of |
|
|
Average price paid |
|
|
Total number of shares |
|
|
Approximate dollar |
|
||||
July 1, 2026 - July 31, 2026 |
|
|
208 |
|
|
$ |
4.61 |
|
|
|
— |
|
|
$ |
120,430 |
|
August 1, 2026 - August 31, 2026 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
120,430 |
|
September 1, 2026 - September 30, 2026 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
120,430 |
|
Total |
|
|
208 |
|
|
|
|
|
|
— |
|
|
$ |
120,430 |
|
|
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the three months ended September 30, 2026, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)
47
Item 6. Exhibits
Exhibit Number |
|
Description |
|
|
|
4.1 |
|
Indenture, dated as of August 10, 2026, by and among Medical Properties Trust, Inc., MPT Operating Partnership, L.P., MPT Finance Corporation, the subsidiary guarantors party thereto, Wilmington Trust, National Association, as trustee and notes collateral agent (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K of Medical Properties Trust, Inc. and MPT Operating Partnership, L.P. filed with the Securities and Exchange Commission on August 10, 2026) |
|
|
|
31.1* |
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (Medical Properties Trust, Inc.) |
|
|
|
31.2* |
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (Medical Properties Trust, Inc.) |
|
|
|
31.3* |
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (MPT Operating Partnership, L.P.) |
|
|
|
31.4* |
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. (MPT Operating Partnership, L.P.) |
|
|
|
32.1** |
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (Medical Properties Trust, Inc.) |
|
|
|
32.2** |
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (MPT Operating Partnership, L.P.) |
|
|
|
Exhibit 101.INS* |
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
Exhibit 101.SCH* |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
|
|
|
Exhibit 104* |
|
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) |
* Filed herewith.
** Furnished herewith.
48
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.
MEDICAL PROPERTIES TRUST, INC. |
||
|
|
|
By: |
|
/s/ J. Kevin Hanna |
|
|
J. Kevin Hanna |
|
|
Senior Vice President, Controller, Assistant Treasurer, and Chief Accounting Officer (Principal Accounting Officer) |
MPT OPERATING PARTNERSHIP, L.P. |
||
|
|
|
By: |
|
/s/ J. Kevin Hanna |
|
|
J. Kevin Hanna |
|
|
Senior Vice President, Controller, Assistant Treasurer, and Chief Accounting Officer of the sole member of the general partner of MPT Operating Partnership, L.P. (Principal Accounting Officer) |
Date: November 6, 2026
49