MPW narrows Q3 loss; assets $14,924,195 vs. debt $9,616,176
Medical Properties Trust (MPW) reported a narrower quarterly loss and modest revenue growth. For Q3 2025, total revenues were $237,522 (thousand), up from $225,827 (thousand) a year ago. Net loss attributable to common stockholders was $77,730 (thousand), or $0.13 per share, compared with a $801,163 (thousand) loss a year earlier. Impairment charges remained, at $81,761 (thousand) this quarter versus $607,922 (thousand) last year, while interest expense rose to $132,395 (thousand).
Year‑to‑date, revenues were $701,680 (thousand) and net loss was $294,362 (thousand), both improved versus 2024. The balance sheet shows total assets of $14,924,195 (thousand) and debt of $9,616,176 (thousand). Cash and cash equivalents were $396,577 (thousand). Operating cash flow for the nine months was $70,703 (thousand). The company declared a dividend of $0.08 per share in the quarter. Shares outstanding were 601,136 (thousand) at September 30, 2025; Medical Properties Trust, Inc. reported 601.5 million shares outstanding as of November 4, 2025.
Positive
- None.
Negative
- None.
Insights
Loss narrows on lower impairments; leverage remains elevated.
MPW posted Q3 revenues of
On the balance sheet, debt was
Key items to watch from the disclosed data include impairment trends, interest expense run rate, and liquidity (cash of
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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☒ (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, 2025, 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, 2025 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, 2025
Table of Contents
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Page |
PART I — FINANCIAL INFORMATION |
3 |
Item 1 Financial Statements |
3 |
Medical Properties Trust, Inc. and Subsidiaries |
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Condensed Consolidated Balance Sheets at September 30, 2025 and December 31, 2024 |
3 |
Condensed Consolidated Statements of Net Income for the Three and Nine Months Ended September 30, 2025 and 2024 |
4 |
Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2025 and 2024 |
5 |
Condensed Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2025 and 2024 |
6 |
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 |
8 |
MPT Operating Partnership, L.P. and Subsidiaries |
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Condensed Consolidated Balance Sheets at September 30, 2025 and December 31, 2024 |
9 |
Condensed Consolidated Statements of Net Income for the Three and Nine Months Ended September 30, 2025 and 2024 |
10 |
Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2025 and 2024 |
11 |
Condensed Consolidated Statements of Capital for the Three and Nine Months Ended September 30, 2025 and 2024 |
12 |
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 |
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 |
35 |
Item 3 Quantitative and Qualitative Disclosures about Market Risk |
47 |
Item 4 Controls and Procedures |
48 |
PART II — OTHER INFORMATION |
49 |
Item 1 Legal Proceedings |
49 |
Item 1A Risk Factors |
49 |
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds |
49 |
Item 3 Defaults Upon Senior Securities |
49 |
Item 4 Mine Safety Disclosures |
49 |
Item 5 Other Information |
49 |
Item 6 Exhibits |
50 |
SIGNATURE |
51 |
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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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Real estate held for sale |
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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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( |
) |
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( |
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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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( |
) |
Accumulated other comprehensive income (loss) |
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( |
) |
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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) |
2025 |
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2024 |
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2025 |
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2024 |
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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 (expense) income |
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(Loss) gain 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 (loss) from equity interests |
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( |
) |
|||
Debt refinancing and unutilized financing costs |
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( |
) |
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( |
) |
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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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( |
) |
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( |
) |
Total other expense |
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( |
) |
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( |
) |
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( |
) |
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( |
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Loss before income tax |
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( |
) |
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( |
) |
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( |
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( |
) |
Income tax expense |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
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||||
Net loss |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Net income attributable to non-controlling interests |
|
( |
) |
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( |
) |
|
|
( |
) |
|
|
( |
) |
Net loss attributable to MPT common stockholders |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
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||||
Earnings per common share — basic and diluted |
|
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||||
Net loss attributable to MPT common stockholders |
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
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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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||||
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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 Loss
(Unaudited)
|
|
For the Three Months |
|
|
For the Nine Months |
|
||||||||||
(In thousands) |
|
2025 |
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2024 |
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2025 |
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|
2024 |
|
||||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Other comprehensive income (loss): |
|
|
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|
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|
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|
||||
Unrealized loss on interest rate hedges, net of tax |
|
|
— |
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( |
) |
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|
( |
) |
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( |
) |
Reclassification of interest rate swap gain from AOCI to |
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— |
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( |
) |
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— |
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|
( |
) |
Foreign currency translation (loss) gain |
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|
( |
) |
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|||
Total comprehensive loss |
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|
( |
) |
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( |
) |
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|
( |
) |
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|
( |
) |
Comprehensive income attributable to non-controlling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Comprehensive loss attributable to MPT common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
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 |
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|||||||||
Balance at December 31, 2024 |
|
|
— |
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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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|||||
Net (loss) 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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( |
) |
|
Unrealized loss on interest rate hedges, |
|
|
— |
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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 gain |
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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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||
Stock vesting and amortization of |
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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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|||
Stock vesting - satisfaction of tax |
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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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( |
) |
Distributions to non-controlling interests |
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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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|
( |
) |
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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|
( |
) |
Balance at March 31, 2025 |
|
|
— |
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|
$ |
— |
|
|
|
|
|
$ |
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|
$ |
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|
$ |
( |
) |
|
$ |
( |
) |
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$ |
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|
$ |
|
|||||
Net (loss) 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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|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, |
|
|
— |
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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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( |
) |
|
|
— |
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|
|
( |
) |
Foreign currency translation gain |
|
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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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||
Offering costs |
|
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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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|
( |
) |
Stock vesting and amortization of |
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— |
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— |
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— |
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— |
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— |
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||||
Stock vesting - satisfaction of tax |
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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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( |
) |
Distributions to non-controlling interests |
|
|
— |
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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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|
( |
) |
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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— |
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( |
) |
Balance at June 30, 2025 |
|
|
— |
|
|
$ |
— |
|
|
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|
|
$ |
|
|
$ |
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|
$ |
( |
) |
|
$ |
|
|
$ |
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|
$ |
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||||||
Net (loss) 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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( |
) |
|
Foreign currency translation loss |
|
|
— |
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|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Offering costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Stock vesting and amortization of |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock vesting - satisfaction of tax |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at September 30, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
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, 2023 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Net (loss) income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock vesting and amortization of |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Stock vesting - satisfaction of tax |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends declared adjustment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Balance at March 31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Net (loss) income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Reclassification of interest rate swap gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock vesting and amortization of |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock vesting - satisfaction of tax |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at June 30, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Net (loss) income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Reclassification of interest rate hedges gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Stock vesting and amortization of |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock vesting - satisfaction of tax |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at September 30, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
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 |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(In thousands) |
|
|||||
Operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net 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 |
|
|
|
|
|
|
||
Equity interest real estate impairment |
|
|
|
|
|
|
||
Debt refinancing and unutilized financing costs |
|
|
|
|
|
|
||
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 sale and repayment of loans receivable |
|
|
|
|
|
|
||
Investment in loans receivable |
|
|
( |
) |
|
|
( |
) |
Construction in progress and other |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale and return of equity investments |
|
|
|
|
|
|
||
Capital additions and other investments, net |
|
|
( |
) |
|
|
( |
) |
Net cash (used for) provided by 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 |
|
|
( |
) |
|
|
( |
) |
Payment of debt refinancing and deferred financing costs and other financing activities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used for) 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 financing activities: |
|
|
|
|
|
|
||
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 |
|
|
|
|
|
|
||
Real estate held for sale |
|
|
|
|
|
|
||
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 (loss) |
|
|
|
|
|
( |
) |
|
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) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
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 (expense) income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
(Loss) gain on sale of real estate |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Real estate and other impairment charges, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Earnings (loss) from equity interests |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Debt refinancing and unutilized financing costs |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other (including fair value adjustments on securities) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total other expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss before income tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income tax expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income attributable to non-controlling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net loss attributable to MPT Operating Partnership partners |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per unit — basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to MPT Operating Partnership partners |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average units outstanding — basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average units outstanding — diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dividends declared per unit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
See accompanying notes to condensed consolidated financial statements.
10
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
|
|
For the Three Months |
|
|
For the Nine Months |
|
||||||||||
(In thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized loss on interest rate hedges, net of tax |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Reclassification of interest rate swap gain from AOCI to |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation (loss) gain |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Total comprehensive loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Comprehensive income attributable to non-controlling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Comprehensive 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 |
|
|
Non- |
|
|
|
|
|||||||||||||
(In thousands, except per unit amounts) |
|
Units |
|
|
Unit |
|
|
Units |
|
|
Unit |
|
|
Comprehensive |
|
|
Controlling |
|
|
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 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
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 |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
(77,450 |
) |
|
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 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
12
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Capital
(Unaudited)
|
|
General |
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
||||||||||
|
|
Partner |
|
|
Limited Partners |
|
|
Other |
|
|
Non- |
|
|
|
|
|||||||||||||
(In thousands, except per unit amounts) |
|
Units |
|
|
Unit |
|
|
Units |
|
|
Unit |
|
|
Comprehensive |
|
|
Controlling |
|
|
Total |
|
|||||||
Balance at December 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Net (loss) income |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared adjustment |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Balance at March 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
Net (loss) income |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Reclassification of interest rate swap gain to earnings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared ($ |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
Net (loss) income |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Reclassification of interest rate hedge gain to earnings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
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 September 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
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 |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(In thousands) |
|
|||||
Operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net 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 |
|
|
|
|
|
|
||
Equity interest real estate impairment |
|
|
|
|
|
|
||
Debt refinancing and unutilized financing costs |
|
|
|
|
|
|
||
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 sale and repayment of loans receivable |
|
|
|
|
|
|
||
Investment in loans receivable |
|
|
( |
) |
|
|
( |
) |
Construction in progress and other |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale and return of equity investments |
|
|
|
|
|
|
||
Capital additions and other investments, net |
|
|
( |
) |
|
|
( |
) |
Net cash (used for) provided by 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 |
|
|
( |
) |
|
|
( |
) |
Payment of debt refinancing and deferred financing costs and other financing activities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used for) 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 financing activities: |
|
|
|
|
|
|
||
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 that 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, 2025, 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, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. The condensed consolidated balance sheet at December 31, 2024 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, 2025, (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, 2024. 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, 2025, we had loans and/or equity investments in certain variable interest entities ("VIEs"), which may also be tenants of our facilities. 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, 2025, 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 short falls).
Recent Accounting Developments
Income Taxes
In December 2023, the Financial Standards Accounting Board ("FASB") issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09") which focuses on income tax disclosures regarding effective tax rates and cash income taxes paid. This standard requires public entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit disaggregated by domestic and foreign, and (3) provide additional information for certain reconciling items at or above a quantitative threshold of
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
16
beginning after December 15, 2027. We are currently evaluating the potential impact of the adoption of this standard on our consolidated financial statements.
3. Real Estate and Other Activities
New Investments
We acquired or invested in the following net assets (in thousands):
|
|
For the Nine Months |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
|
|
|
|
|
||
Land and land improvements |
|
$ |
|
|
$ |
|
||
Buildings and other |
|
|
|
|
|
|
||
Investments in unconsolidated real estate joint ventures |
|
|
|
|
|
|
||
Liabilities assumed |
|
|
|
|
|
( |
) |
|
Total net assets acquired |
|
$ |
|
|
$ |
|
||
2025 Activity
In April 2025, we invested approximately CHF
Medical Network real estate joint venture, proceeds of which, along with fundings from our joint venture partner, were used to facilitate the acquisition of a general acute care facility.
In 2025, we funded approximately $
2024 Activity
On April 12, 2024, we sold our interests in
Development and Capital Addition Activities
See table below for a status summary of our current development and capital addition projects (in thousands):
Property |
|
Commitment |
|
|
Costs |
|
|
Cost Remaining |
|
|||
IMED Hospitales ("IMED") (Spain) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
IMED (Spain) |
|
|
|
|
|
|
|
|
|
|||
Healthcare Systems of America (Florida) |
|
|
|
|
|
|
|
|
|
|||
Lifepoint Behavioral (Arizona) |
|
|
|
|
|
|
|
|
|
|||
Other (Various) |
|
|
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
$ |
|
|||
17
We have
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 $
2024 Activity
During the first quarter of 2024, we completed construction and began recording rental income on a $
Disposals
2025 Activity
During the first nine months of 2025, we completed the sale of
2024 Activity
During the first nine months of 2024, we had the following disposal activities:
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
18
Index ("CPI") (or similar indices outside the U.S.) and/or fixed minimum annual rent escalations. Many of our domestic leases contain purchase options with pricing set at various terms but in no case less than our total initial investment. Our leases typically require the tenant to handle and bear most of the costs associated with our properties including repair/maintenance, property taxes, and insurance.
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, 2025, we account for all of these leases as operating leases, except where GAAP requires alternative classification, including leases on certain Ernest Health, Inc. ("Ernest") and Prospect Medical Holdings, Inc. ("Prospect") facilities that are accounted for as 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, 2025, our vacant properties represented less than
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 current and former tenants.
Steward
As discussed in previous filings, Steward filed for Chapter 11 bankruptcy on May 6, 2024 with the United States Bankruptcy Court for the Southern District of Texas. On September 11, 2024, the bankruptcy court entered an interim order, subsequently made final on September 18, 2024, approving a global settlement between Steward, its lenders, the unsecured creditors committee, and the Company. The order provided for the following: a) termination of our master lease with Steward; b) the release of claims against
In regard to our real estate partnership with Macquarie that owned and leased eight properties in Massachusetts to Steward, the bankruptcy court approved the termination of the master lease with Steward during the 2024 third quarter. We and Macquarie entered into an agreement with the mortgage lender of the joint venture to transition the eight properties to them along with cash proceeds of approximately $
Due to the events discussed above and in previous filings, we recorded various impairment and negative fair value charges during 2024, including approximately $
With this global settlement and termination of the joint venture master lease, our relationship with Steward effectively ended.
Steward Rent Collections
Despite the bankruptcy, we received and recorded rent and interest revenue from Steward of $
19
venture was approximately $
Re-tenanting Activity
Subsequent to the release of claims on the
As of September 30, 2025, we have provided approximately $
The remaining
Prospect
As discussed in previous filings, Prospect’s operating losses in multiple East Coast markets, including Pennsylvania and Rhode Island (a state in which we have no investment), adversely impacted Prospect’s overall liquidity. Prospect filed for Chapter 11 bankruptcy on January 11, 2025 with the United States Bankruptcy Court for the Northern District of Texas. Prospect’s bankruptcy filing constituted a default under the terms of our master leases and loan agreements with Prospect, and imposed a stay on our ability to exercise contractual rights with respect to these defaults. The bankruptcy filing barred us from collecting pre-bankruptcy debts from Prospect unless we received an order permitting us to do so from the bankruptcy court. The bankruptcy court has the power to approve and direct the sale of Prospect’s property free and clear of any associated mortgages and loans, whether or not there are sufficient net proceeds to repay them, in whole or in part. For that reason, we may recover none or substantially less than the full value of our claims.
On March 20, 2025, the bankruptcy court approved a global settlement (including a recovery waterfall) between us, Prospect, and other stakeholders.
Our investments in Prospect include leased real estate assets in California and Connecticut (which we account for as other financing type leases), a mortgage loan secured by hospital real estate operated by Prospect in Pennsylvania, and a $
Due to the events discussed above, we recorded more than $
20
Prospect's bankruptcy proceedings are continuing, and the ultimate outcome of such proceedings is uncertain. At this time, we are unable to predict the timing of any of the foregoing matters or the timing for a resolution of the Prospect bankruptcy proceeding. We cannot assure you that we will be able to recover or preserve the remaining approximately $
Possible Additional Funding
On August 4, 2025, the bankruptcy court approved, among other things, an interim order for up to $
Re-tenanting Activity
We have agreed in principle to a lease agreement with NOR Healthcare Systems Corporation ("NOR") as a result of their successful bid to acquire the operations of the Prospect-operated California facilities. Terms of the lease include an initial annualized rent almost identical to the previous rent amount due from Prospect in 2025 and annual inflation-based escalators, starting in the 2027 first quarter. All rent is to be deferred for
Prospect Rent Collections
Starting January 1, 2023, we began accounting for our leases and loans to Prospect on a cash basis. We received and recorded approximately $
PHP Investment
In regard to our investment in PHP Holdings, we accounted for this investment using the fair value option method. Each quarter, we marked such investment to fair value as more fully described in Note 8 to the condensed consolidated financial statements. In the first nine months of 2025, we recorded an approximate $
International Joint Venture
As discussed in previous filings, we placed our loan to the international joint venture on the cash basis of accounting in 2023, as we determined that it was no longer probable that the borrower would pay its future interest in full. This loan, accounted for under the fair value option method, was collateralized by the equity of Steward held by an investor in both Steward and the international joint venture. Consistent with the discussion above on Steward, we recorded a $
Other Tenant Matters
In the 2023 third quarter, we moved to cash basis of accounting for a tenant that comprised approximately
We received and recorded approximately $
21
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 operator (amounts in thousands):
Operator |
|
Ownership Percentage |
As of September 30, |
|
|
As of December 31, |
|
||
Swiss Medical Network |
|
$ |
|
|
$ |
|
|||
Median Kliniken S.á.r.l ("MEDIAN") |
|
|
|
|
|
|
|||
CommonSpirit (Utah partnership) |
|
|
|
|
|
|
|||
Policlinico di Monza |
|
|
|
|
|
|
|||
HM Hospitales |
|
|
|
|
|
|
|||
Total |
|
|
$ |
|
|
$ |
|
||
The Utah partnership applies specialized accounting and reporting for investment companies under Topic 946, which measures the underlying investments at fair value. For the three and nine months ended September 30, 2025, our share of the Utah partnership's income included a favorable fair value adjustment of approximately $
For our unconsolidated real estate joint venture that leases more than
joint venture partner, finalized a refinancing of the €
On October 31, 2025, we received approximately $
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.
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") |
|
|
|
|
|
|
||
PHP Holdings |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
22
For our investments marked to fair value (including our investments in PHP Holdings, Aevis and the international joint venture), we recorded approximately $
In the first quarter of 2024, we sold our interest in the Priory syndicated term loan for £
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 |
|
|
|||||
|
|
2025 |
|
|
2024 |
|
|
||
Balance at beginning of the period |
|
$ |
|
|
$ |
|
|
||
Provision for credit loss, net (1) |
|
|
|
|
|
|
|
||
Expected credit loss reserve written off or related to financial |
|
|
|
|
|
( |
) |
(2) |
|
Balance at end of the period |
|
$ |
|
|
$ |
|
|
||
|
|
For the Nine Months |
|
|
|||||
|
|
2025 |
|
|
2024 |
|
|
||
Balance at beginning of the year |
|
$ |
|
|
$ |
|
|
||
Provision for credit loss, net (1) |
|
|
|
|
|
|
|
||
Expected credit loss reserve written off or related to financial |
|
|
|
|
|
( |
) |
(2) |
|
Balance at end of the period |
|
$ |
|
|
$ |
|
|
||
23
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, 2025 |
|
|
As of December 31, 2024 |
|
||||||||||
Operators |
|
Total Assets (1) |
|
|
Percentage of |
|
|
Total Assets (1) |
|
|
Percentage of |
|
||||
Circle Health Ltd ("Circle") |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Priory |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Healthcare Systems of America |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Swiss Medical Network |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Lifepoint Behavioral |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other operators |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other assets |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Total Assets by U.S. State and Country (1)
|
|
As of September 30, 2025 |
|
|
As of December 31, 2024 |
|
||||||||||
U.S. States and Other Countries |
|
Total Assets |
|
|
Percentage of |
|
|
Total Assets |
|
|
Percentage of |
|
||||
Texas |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
California |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Florida |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Ohio |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Arizona |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
All other states |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other domestic assets |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total U.S. |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
United Kingdom |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Switzerland |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Germany |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Spain |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
All other countries |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other international assets |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total international |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Grand total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Total Assets by Facility Type (1)
|
|
As of September 30, 2025 |
|
|
As of December 31, 2024 |
|
||||||||||
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 |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
24
On an individual property basis, our largest investment in any single property was less than
On a revenue basis, concentration in 2025 compared to the same periods of 2024 is as follows:
Total Revenues by Geographic Location
|
|
For the Three Months Ended September 30, |
|
|||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||
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, |
|
|||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||
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, 2025 and 2024:
|
|
For the Three Months Ended September 30, |
|
|||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||
Operators |
|
Total Revenues |
|
|
Percentage of |
|
|
Total Revenues |
|
|
Percentage of |
|
||||
Circle |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Priory |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other operators |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
|
|
For the Nine Months Ended September 30, |
|
|||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||
Operators |
|
Total Revenues |
|
|
Percentage of |
|
|
Total Revenues |
|
|
Percentage of |
|
||||
Circle |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Priory |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other operators |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
25
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 term loan due 2025(B) |
|
|
|
|
|
|
||
British pound sterling secured term loan due 2034(B) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
||
Debt issue costs and discount, net |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
||
As of September 30, 2025, 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):
2025 |
|
$ |
|
|
|
2026 |
|
|
|
(1) |
|
2027 |
|
|
|
|
|
2028 |
|
|
|
|
|
2029 |
|
|
|
|
|
Thereafter |
|
|
|
|
|
Total |
|
$ |
|
|
Credit Facility
We have a multi-currency denominated revolver and a $
On February 13, 2025 and concurrent with the closing of the Senior Secured Notes due 2032 discussed below, we amended the Credit Facility to among other things: (i) provide for the facility to be secured and guaranteed ratably with the senior notes issued concurrently, (ii) provide notice that we plan to exercise both of our maturity extension options such that the maturity of the revolving portion would move from June 30, 2026 to June 30, 2027, the same maturity date as our term loan facility (subject to the satisfaction of other conditions), (iii) reset the interest rate to the Secured Overnight Financing Rate ("SOFR") plus
26
total indebtedness to total asset value to conform to corresponding definitions in our existing unsecured indentures and the secured notes issued concurrently and set the covenant level at
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
2024 Activity
Australian Term Loan Facility
On April 18, 2024, we paid off and terminated the remainder of the A$
British Pound Sterling Secured Term Loan due 2034
On May 24, 2024, we completed a secured loan facility with a consortium of institutional investors that provides for a term loan in aggregate principal amount of approximately £
Other Activity
During the nine months ended September 30, 2024, we used proceeds from asset sales and debt refinancings to pay down the British Pound Sterling Term Loan due
Debt Refinancing and Unutilized Financing Costs
2025 Activity
In the first nine months of 2025, we incurred $
27
2024 Activity
In the first nine months of 2024, 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, secured leverage ratio, unsecured leverage ratio, and unsecured interest coverage ratio.
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, 2025, we were in compliance with all financial and operating covenants.
5. Income Taxes
2025 Activity
In the 2025 third quarter, we incurred approximately $
2024 Activity
In connection with closing the secured term loan facility in the U.K. on May 24, 2024, we realized a gain, for U.K. tax purposes, on the interest rate swap associated with the internal restructuring of the British pound sterling term loan due 2025. This gain resulted in a tax expense of approximately $
6. Common Stock
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 2022, we amended the 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, and we have reserved
28
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 are estimated by using Level 2 inputs such as discounting the estimated future cash flows using the current rates 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.
The following table summarizes fair value estimates for our financial instruments (in thousands):
|
|
As of September 30, 2025 |
|
|
As of December 31, 2024 |
|
||||||||||
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, our loan investment in the real estate of
At September 30, 2025 and December 31, 2024, the amounts recorded under the fair value option method were as follows (in thousands):
|
|
As of September 30, 2025 |
|
|
As of December 31, 2024 |
|
|
|
||||||||||
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 and our investment in PHP Holdings (as of December 31, 2024 only) are recorded at fair value by using a market approach (for our equity investment in the international joint venture) and a market approach based on the agreed upon price in the transaction (for our investment in PHP Holdings), which requires significant estimates of our investee, such as projected revenue, expenses, and working capital, and appropriate consideration
29
of the underlying risk profile of the forecasted assumptions associated with the investee. We classify our valuations of these investments 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. For the market approach model used for our investment in PHP Holdings (as of December 31, 2024 only), our unobservable inputs included purchase price adjustments related to expected balance sheet values at the time of the transaction close, and an adjustment for a marketability discount ("DLOM") of
The sale of our investment in PHP Holdings closed on July 1, 2025, and we received cash proceeds of $
In the first nine months of 2025, we recorded a net unfavorable adjustment to the investments accounted for under the fair value option method of approximately $
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 and Fair Value Adjustments of Non-Real Estate Investments
Prior to the global settlement in September 2024 (as described in Note 3 to the condensed consolidated financial statements) in which our claims were released, our non-real estate investments in Steward and related affiliates included our
Impairment of Real Estate Investments
2025 Activity
See the Prospect subheading under "Leasing Operations (Lessor)" in Note 3 to the condensed consolidated financial statements for a discussion around the use of fair value and related assumptions in the impairment of our real estate investments.
30
2024 Activity
In the 2024 third quarter, we recognized a real estate impairment charge of approximately $
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 |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Non-controlling interests’ share in net income |
|
|
( |
) |
|
|
( |
) |
Participating securities’ share in earnings |
|
|
( |
) |
|
|
( |
) |
Net 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 |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Non-controlling interests’ share in net income |
|
|
( |
) |
|
|
( |
) |
Participating securities’ share in earnings |
|
|
( |
) |
|
|
( |
) |
Net loss, less participating securities’ share in earnings |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator: |
|
|
|
|
|
|
||
Basic weighted-average common shares |
|
|
|
|
|
|
||
Dilutive potential common shares(1) |
|
|
|
|
|
|
||
Diluted weighted-average common shares |
|
|
|
|
|
|
||
31
MPT Operating Partnership, L.P.
Our earnings per unit were calculated based on the following (in thousands):
|
|
For the Three Months |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Non-controlling interests’ share in net income |
|
|
( |
) |
|
|
( |
) |
Participating securities’ share in earnings |
|
|
( |
) |
|
|
( |
) |
Net loss, less participating securities’ share in earnings |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator: |
|
|
|
|
|
|
||
Basic weighted-average units |
|
|
|
|
|
|
||
Dilutive potential units(1) |
|
|
|
|
|
|
||
Diluted weighted-average units |
|
|
|
|
|
|
||
|
|
For the Nine Months |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Non-controlling interests’ share in net income |
|
|
( |
) |
|
|
( |
) |
Participating securities’ share in earnings |
|
|
( |
) |
|
|
( |
) |
Net 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 Note 3, upon completion of the transfers to the new operators and satisfaction of certain other conditions, in addition to approval by relevant state and local regulators, 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 have established an approximate $
We are party to various lawsuits as described below:
Securities and Derivative Litigation
On April 13, 2023, we and certain of our executives were named as defendants in a putative federal securities class action lawsuit alleging false and/or misleading statements and/or omissions resulted in artificially inflated prices for our common stock, filed by a purported stockholder in the United States District Court for the Northern District of Alabama (Case No. 2:23-cv-00486). The complaint seeks class certification on behalf of purchasers of our common stock between July 15, 2019 and February 22, 2023 and unspecified damages including interest and an award of reasonable costs and expenses. This class action complaint was amended on September 22, 2023 and alleges that we made material misstatements or omissions relating to the financial health of certain of our tenants. On September 26, 2024, the Court dismissed the amended complaint with prejudice, and the plaintiff thereafter moved the Court to alter its judgment. On August 14, 2025, the Court denied the plaintiff's motion and dismissed the amended complaint with prejudice.
32
Members of our Board of Directors were also named as defendants in two related shareholder derivative lawsuits filed by purported stockholders in the United States District Court for the Northern District of Alabama on October 19, 2023 (Case No. 2:23- cv-01415) and December 7, 2023 (Case No. 2:23-cv-01667). The Company was named as a nominal defendant in both complaints. These shareholder derivative complaints both make allegations similar to those made in the Alabama securities lawsuit described above relating to purported material misstatements or omissions relating to the financial health of certain of our tenants. These derivative actions were consolidated and stayed pending further developments in the Alabama securities lawsuit and remain stayed at this time. 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 District of Maryland on February 16, 2024 (Case No. 1:24-cv-00471), June 28, 2024 (Case No. 1:24-cv-01899), and July 26, 2024 (Case No. 1 24-cv-02173). The Company was named as a nominal defendant. These shareholder derivative complaints make allegations similar to those made in the Alabama securities and derivative lawsuits described above relating to purported material misstatements or omissions relating to the financial health of certain of our tenants. Defendants were not required to respond to these complaints pending further developments in the Alabama securities lawsuit and no response date has been set at this time.
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 alleges 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.
Members of our Board of Directors were also named as defendants in two 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) and March 1, 2024 (Case No. 1:24-cv-01589). The Company was named as a nominal defendant in both complaints. These shareholder derivative complaints both 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. The two cases have been consolidated and 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. This action has been stayed pending further developments in the New York securities action described above.
We believe these claims are without merit and intend to defend 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
33
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.
12. Subsequent Events
On October 22, 2025, we committed to the acquisition of
On October 28, 2025, the Board of Directors approved a stock repurchase program for up to $
34
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 Form 10-Q and the consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2024.
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 transactions (including the use of proceeds thereof), expected returns on investments and financial performance, expected trends and performance across our various markets, and expected outcomes from Prospect's bankruptcy process. 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 or events to be materially different from those expressed or implied by such forward-looking statements, including, but not limited to, the risks described in our Annual Report on Form 10-K and as updated in our quarterly reports on Form 10-Q for future periods, and current reports on Form 8-K as we file them with the SEC under the Exchange Act. Such factors include, among others, the following:
35
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:
36
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
Refer to our 2024 Annual Report on Form 10-K 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, 2025, there were no material changes to these policies.
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.
37
At September 30, 2025, our portfolio consisted of 388 properties leased or loaned to 51 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 |
|
$ |
12,820,619 |
|
|
|
85.9 |
% |
|
$ |
12,471,543 |
|
|
|
87.2 |
% |
Accumulated real estate depreciation and amortization |
|
|
(1,633,531 |
) |
|
|
(10.9 |
)% |
|
|
(1,422,948 |
) |
|
|
(10.0 |
)% |
Net investment in real estate assets |
|
|
11,187,088 |
|
|
|
75.0 |
% |
|
|
11,048,595 |
|
|
|
77.2 |
% |
Cash and cash equivalents |
|
|
396,577 |
|
|
|
2.7 |
% |
|
|
332,335 |
|
|
|
2.3 |
% |
Investments in unconsolidated real estate joint ventures |
|
|
1,379,600 |
|
|
|
9.2 |
% |
|
|
1,156,397 |
|
|
|
8.1 |
% |
Investments in unconsolidated operating entities |
|
|
319,192 |
|
|
|
2.1 |
% |
|
|
439,578 |
|
|
|
3.1 |
% |
Other |
|
|
1,641,738 |
|
|
|
11.0 |
% |
|
|
1,317,689 |
|
|
|
9.3 |
% |
Total assets |
|
$ |
14,924,195 |
|
|
|
100.0 |
% |
|
$ |
14,294,594 |
|
|
|
100.0 |
% |
Results of Operations
Three Months Ended September 30, 2025 Compared to September 30, 2024
Net loss for the three months ended September 30, 2025, was ($77.7) million, or ($0.13) per share compared to a net loss of ($801.2) million, or ($1.34) per share, for the three months ended September 30, 2024. This decrease in net loss is primarily driven by (i) approximately $608 million of impairment charges primarily related to the global settlement reached with Steward and its lenders as described in Note 3 to the condensed consolidated financial statements, (ii) approximately $134 million unfavorable fair value adjustment to our investment in PHP Holdings, and (iii) approximately $137 million of accelerated amortization of in-place lease intangibles, all in the third quarter of 2024. These decreases were partially offset by approximately $100 million of additional gains on sales of real estate in the third quarter of 2024 compared to the 2025 third quarter. 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 $77.2 million for the 2025 third quarter, or $0.13 per diluted share, as compared to $93.9 million, or $0.16 per diluted share, for the 2024 third quarter. This 17.7% decrease in Normalized FFO is primarily due to higher interest expense from our recent refinancing activities.
Revenues
A comparison of revenues for the three months ended September 30, 2025 and 2024 is as follows (dollar amounts in thousands):
|
|
2025 |
|
|
% of |
|
|
2024 |
|
|
% of |
|
|
Year over |
|
|||||
Rent billed |
|
$ |
181,001 |
|
|
|
76.2 |
% |
|
$ |
169,721 |
|
|
|
75.2 |
% |
|
|
6.6 |
% |
Straight-line rent |
|
|
36,405 |
|
|
|
15.3 |
% |
|
|
36,602 |
|
|
|
16.2 |
% |
|
|
(0.5 |
)% |
Income from financing leases |
|
|
9,944 |
|
|
|
4.2 |
% |
|
|
9,798 |
|
|
|
4.3 |
% |
|
|
1.5 |
% |
Interest and other income |
|
|
10,172 |
|
|
|
4.3 |
% |
|
|
9,706 |
|
|
|
4.3 |
% |
|
|
4.8 |
% |
Total revenues |
|
$ |
237,522 |
|
|
|
100.0 |
% |
|
$ |
225,827 |
|
|
|
100.0 |
% |
|
|
5.2 |
% |
Our total revenues for the 2025 third quarter increased $11.7 million, or 5%, over the same period in the prior year. This increase is made up of the following:
38
We currently have several tenants on the cash basis from a revenue recognition perspective, which can result in variability of our lease revenue. For example, one of our tenants, Healthcare Systems of America, paid their September rent of approximately $4 million on October 1, 2025, which will be recorded in the 2025 fourth quarter.
Interest Expense
Interest expense for the quarters ended September 30, 2025 and 2024 totaled $132.4 million and $106.2 million, respectively. This increase is primarily related to higher interest from our February 2025 debt refinancing activities (see Note 4 to the condensed consolidated financial statements for further details), partially offset by lower interest expense from the decrease in average borrowings on our Credit Facility in the third quarter of 2025, compared to the same period of 2024 and the payoff of our £493 million British pound sterling term loan in the first quarter of 2025. Overall, our weighted-average interest rate was 5.4% for the quarter ended September 30, 2025, compared to 4.3% for the same period in 2024.
Real Estate Depreciation and Amortization
Real estate depreciation and amortization during the third quarter of 2025 decreased to $67.0 million from $204.9 million in 2024. This decrease is primarily related to the $137 million of additional amortization expense recorded in the third quarter of 2024 to fully amortize the intangibles associated with two terminated master leases, including the Steward master lease that was terminated effective September 11, 2024 as part of the global settlement discussed in Note 3 to the condensed consolidated financial statements.
Property-related
Property-related expenses totaled $9.0 million and $5.0 million for the quarters ended September 30, 2025 and 2024, respectively. Of the property expenses in the third quarter of 2025 and 2024, approximately $2.3 million and $2.6 million, respectively, represents costs that were reimbursed by our tenants and included in the “Interest and other income” line of the condensed consolidated statements of net income. Net of reimbursement, our property-related expenses are higher than prior year as we have additional vacant properties following the Steward bankruptcy. We are in various stages of re-tenanting or selling our vacant properties, which make up less than 1% of our total assets.
General and Administrative
General and administrative expenses were $37.7 million for the 2025 third quarter, compared to $36.6 million for the 2024 third quarter. The increase quarter-over-quarter is due to higher travel and professional fees, partially offset by lower share-based compensation expenses. Share-based compensation expense was $12.3 million for the third quarter of 2025, compared to $14.4 million in the 2024 third quarter, primarily due to the decrease in fair value of the 2024 performance awards that contain a cash-settlement feature and are marked to fair value quarterly, partially offset by additional expense from stock awards granted in 2025.
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, 2025, 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.
Gain (Loss) on Sale of Real Estate
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. During the three months ended September 30, 2024, the gain on sale of real estate of $91.8 million primarily relates to the sale of eight Dignity Health facilities and 11 UCHealth facilities as more fully described in Note 3 to the condensed consolidated financial statements.
39
Real Estate and Other Impairment Charges, Net
In the 2025 third quarter, 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. In the same period of 2024, we recognized $607.9 million of real estate and other impairment charges. Of these charges, approximately $425 million consisted of the impairment of working capital loans and other secured loans advanced to Steward, and $180 million was related to real estate, including the Space Coast facilities and certain excess properties previously leased to Steward (as more fully described in Note 3 to the condensed consolidated financial statements).
Earnings (Loss) from Equity Interests
Earnings from equity interests was $34.4 million for the quarter ended September 30, 2025, compared to earnings of $21.6 million for the same period in 2024. This increase is primarily due to our share of income in the MEDIAN joint venture from a deferred income tax benefit recognized in the third quarter of 2025 related to the lowering of German tax rates. Our share of income in the Utah partnership included a $12.8 million positive fair value adjustment in the third quarter of 2025, primarily related to a favorable fair value adjustment on its investments in real estate (as further described in Note 3 to the condensed consolidated financial statements), compared to $13.5 million in the same period last year.
Other (Including Fair Value Adjustments on Securities)
Other expense for the third quarter of 2025 was $1.5 million, compared to expense of $169.8 million in the prior year. For the 2024 third quarter, we recognized approximately $140 million in unfavorable adjustments to our investment in PHP Holdings and Aevis. The remaining expense in the 2024 third quarter included approximately $29 million of legal and other professional expenses associated with, among other things, responding to certain defamatory statements published by certain parties.
With certain investments accounted for at fair value, we may have positive or negative fair value adjustments from quarter-to-quarter.
Income Tax Expense
Income tax expense includes 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 $10.9 million income tax expense for the three months ended September 30, 2025, is primarily based on the income generated by our investments in the U.K. and Germany and is higher than the $9.0 million income tax expense in the third quarter of 2024 due to various matters including the impact from the lowering of German tax rates (in future years) on certain deferred tax asset positions on our non-joint venture German entities.
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 $486 million should be reflected against certain of our international and domestic net deferred tax assets at September 30, 2025. 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.
40
Nine Months Ended September 30, 2025 Compared to September 30, 2024
Net loss for the nine months ended September 30, 2025, was ($294.4) million, or ($0.49) per share compared to a net loss of ($2.0) billion, or ($3.33) per share, for the nine months ended September 30, 2024. This decrease in net loss was primarily driven by the $1.4 billion of impairment charges and negative fair value adjustments in 2024 primarily related to Steward and the international joint venture (all included in "Real estate and other impairment charges, net" line of the condensed consolidated statements of net income), whereas, we incurred only $81.8 million in the first nine months of 2025, primarily related to Prospect. In addition, we had an approximate $498 million unfavorable fair value adjustment to our investment in PHP Holdings in the first nine months of 2024 (compared to $147 million in the same period of 2025) as reflected in "Other (including fair value adjustments on securities)" line of the condensed consolidated statements of net income, and the $410 million of impairment charges related to our Massachusetts-based partnership in the second quarter of 2024 reflected in "Earnings (loss) from equity interests" line of the condensed consolidated statements of net income. 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 $239.7 million for the first nine months of 2025, or $0.40 per diluted share, as compared to $375.0 million, or $0.62 per diluted share, for the same period of 2024. This 36% decrease in Normalized FFO is primarily due to lower revenues as a result of various disposals in 2024 and 2025, along with less cash revenue received from Steward and Prospect, and higher interest expense from our recent refinancing activities.
Revenues
A comparison of revenues for the nine months ended September 30, 2025 and 2024 is as follows (dollar amounts in thousands):
|
|
2025 |
|
|
% of |
|
|
2024 |
|
|
% of |
|
|
Year over |
|
|||||
Rent billed |
|
$ |
524,051 |
|
|
|
74.7 |
% |
|
$ |
552,784 |
|
|
|
72.4 |
% |
|
|
(5.2 |
)% |
Straight-line rent |
|
|
116,197 |
|
|
|
16.6 |
% |
|
|
119,719 |
|
|
|
15.7 |
% |
|
|
(2.9 |
)% |
Income from financing leases |
|
|
29,772 |
|
|
|
4.2 |
% |
|
|
53,832 |
|
|
|
7.0 |
% |
|
|
(44.7 |
)% |
Interest and other income |
|
|
31,660 |
|
|
|
4.5 |
% |
|
|
37,368 |
|
|
|
4.9 |
% |
|
|
(15.3 |
)% |
Total revenues |
|
$ |
701,680 |
|
|
|
100.0 |
% |
|
$ |
763,703 |
|
|
|
100.0 |
% |
|
|
(8.1 |
)% |
Our total revenues for the first nine months of 2025 decreased $62 million, or 8%, over the same period in the prior year. This decrease is made up of the following:
41
Interest Expense
Interest expense for the nine months ended September 30, 2025 and 2024 totaled $377.9 million and $316.4 million, respectively. This increase is primarily related to higher interest from our February 2025 debt refinancing activities (see Note 4 to the condensed consolidated financial statements for further details), partially offset by lower interest expense from the decrease in average borrowings on our Credit Facility in the first nine months of 2025, compared to the same period of 2024, along with the payoff of our £493 million British pound sterling term loan in the first quarter of 2025. Overall, our weighted-average interest rate was 5.2% for the nine months ended September 30, 2025, compared to 4.3% for the same period in 2024.
Real Estate Depreciation and Amortization
Real estate depreciation and amortization for the first nine months of 2025 decreased to $198.3 million from $382.7 million for the same period of the prior year. This decrease is primarily due to $170 million of additional amortization expense recorded in 2024 primarily to fully amortize the intangibles associated with two master leases, including the Steward master lease that was terminated effective September 11, 2024. The remaining decrease is due to the sale of various properties in 2024 and 2025.
Property-related
Property-related expenses totaled $26.9 million and $17.5 million for the nine months ended September 30, 2025 and 2024, respectively. Of the property expenses in the first nine months of 2025 and 2024, approximately $9.3 million and $9.8 million, respectively, represents costs that were reimbursed by our tenants and included in the “Interest and other income” line on our condensed consolidated statements of net income. Net of reimbursement, our property-related expenses are higher than prior year due to having additional vacant properties post Steward bankruptcy. We are in various stages of re-tenanting or selling our vacant properties, which make up less than 1% of our total assets.
General and Administrative
General and administrative expenses were $105.8 million for the first nine months of 2025, compared to $105.3 million for the same period of 2024. Share-based compensation expense was $30.9 million for the first nine months of 2025, compared to $30.6 million for the same period of 2024.
Gain on Sale of Real Estate
During the nine months ended September 30, 2025, the net gain on sale of real estate of $4.2 million primarily relates to the sale of five facilities as more fully described in Note 3 to the condensed consolidated financial statements. During the nine months ended September 30, 2024, the gain on sale of real estate of $475.2 million primarily related to the sale of five Prime facilities, a 75% interest in five Utah facilities as part of the Utah Transaction, and the sale of eight Dignity Health and 11 UCHealth facilities, each as more fully described in Note 3 to the condensed consolidated financial statements.
Real Estate and Other Impairment Charges, Net
In the first nine months 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. In the same period of 2024, we recognized $1.4 billion of real estate and other impairment charges and fair value adjustments, primarily associated with our investments in Steward and the international joint venture as further described in Note 3 to the condensed consolidated financial statements.
Earnings (Loss) from Equity Interests
Earnings from equity interests was $73.7 million for the nine months ended September 30, 2025, compared to a loss of ($369.6) million for the same period in 2024. This increase is primarily due to the $410 million charge in the second quarter of 2024 associated with the real estate impairment in our Massachusetts-based partnership with Macquarie. In addition, our share of income increased year-over-year in the Utah partnership that was formed in the 2024 second quarter by approximately $27.0 million, as prior year only included three months of activity versus a full nine months in 2025 plus the nine months ended September 30, 2025 included approximately $34 million of positive fair value adjustments (primarily real estate related) compared to $13.5 million in 2024. Finally, our share of income in the MEDIAN joint venture increased by approximately $8.8 million primarily driven by the deferred tax benefit disclosed previously in Note 3 to the condensed consolidated financial statements.
42
Debt Refinancing and Unutilized Financing Costs
Debt refinancing and unutilized financing costs were $3.6 million for the first nine months of 2025. These costs were incurred 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. For the same period of 2024, these costs were $3.7 million and were incurred as a result of the reduction in revolving commitments under our Credit Facility and partial paydown of our British pound sterling term loan due 2025.
Other (Including Fair Value Adjustments on Securities)
Other expense for the first nine months of 2025 was $171.1 million, compared to expense of $566.8 million in the same period of the prior year. 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 $8.3 million related to our investment in Aevis. For the first nine months of 2024, we recognized an approximate $498 million unfavorable adjustment to our investment in PHP Holdings. The remaining expense in the first nine months of 2024 included a $7.8 million economic loss from the sale of our interest in the Priory syndicated term loan and approximately $46.5 million of legal and other professional expenses associated with, among other things, responding to certain defamatory statements published by certain parties.
Income Tax Expense
Income tax expense includes 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 $30.1 million income tax expense for the nine months ended September 30, 2025, is primarily based on the income generated by our investments in the U.K. and Germany and less than the $34.5 million income tax expense in the first nine months of 2024 due to a $5 million additional tax expense in the second quarter of 2024 as a result of the gain on the interest rate swap associated with the internal restructuring of the British pound sterling term loan due 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 $486 million should be reflected against certain of our international and domestic net deferred tax assets at September 30, 2025. 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
43
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.
The following table presents a reconciliation of net loss attributable to MPT common stockholders to FFO and Normalized FFO for the three and nine months ended September 30, 2025 and 2024 (in thousands except per share data):
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
||||||||||
|
|
September 30, 2025 |
|
|
September 30, 2024 |
|
|
September 30, 2025 |
|
|
September 30, 2024 |
|
||||
FFO information: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to MPT common stockholders |
|
$ |
(77,730 |
) |
|
$ |
(801,163 |
) |
|
$ |
(294,362 |
) |
|
$ |
(1,997,423 |
) |
Participating securities’ share in earnings |
|
|
(256 |
) |
|
|
(153 |
) |
|
|
(597 |
) |
|
|
(807 |
) |
Net loss, less participating securities’ share in earnings |
|
$ |
(77,986 |
) |
|
$ |
(801,316 |
) |
|
$ |
(294,959 |
) |
|
$ |
(1,998,230 |
) |
Depreciation and amortization |
|
|
82,242 |
|
|
|
218,646 |
|
|
|
240,465 |
|
|
|
430,128 |
|
Loss (gain) on sale of real estate |
|
|
9,115 |
|
|
|
(91,795 |
) |
|
|
(4,156 |
) |
|
|
(475,196 |
) |
Real estate impairment charges |
|
|
78,677 |
|
|
|
179,952 |
|
|
|
126,645 |
|
|
|
679,276 |
|
Funds from operations |
|
$ |
92,048 |
|
|
$ |
(494,513 |
) |
|
$ |
67,995 |
|
|
$ |
(1,364,022 |
) |
Other impairment charges, net |
|
|
6,976 |
|
|
|
427,811 |
|
|
|
40,487 |
|
|
|
1,172,789 |
|
Litigation, bankruptcy and other (recoveries) costs |
|
|
(1,125 |
) |
|
|
28,899 |
|
|
|
11,078 |
|
|
|
46,507 |
|
Share-based compensation (fair value adjustments) (1) |
|
|
3,457 |
|
|
|
— |
|
|
|
3,444 |
|
|
|
— |
|
Non-cash fair value adjustments |
|
|
(12,066 |
) |
|
|
130,949 |
|
|
|
123,370 |
|
|
|
511,472 |
|
Tax rate changes and other |
|
|
(12,091 |
) |
|
|
8 |
|
|
|
(10,970 |
) |
|
|
4,596 |
|
Debt refinancing and unutilized financing costs |
|
|
14 |
|
|
|
713 |
|
|
|
4,273 |
|
|
|
3,677 |
|
Normalized funds from operations |
|
$ |
77,213 |
|
|
$ |
93,867 |
|
|
$ |
239,677 |
|
|
$ |
375,019 |
|
Per diluted share data: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss, less participating securities’ share in earnings |
|
$ |
(0.13 |
) |
|
$ |
(1.34 |
) |
|
$ |
(0.49 |
) |
|
$ |
(3.33 |
) |
Depreciation and amortization |
|
|
0.14 |
|
|
|
0.37 |
|
|
|
0.40 |
|
|
|
0.72 |
|
Loss (gain) on sale of real estate |
|
|
0.01 |
|
|
|
(0.15 |
) |
|
|
(0.01 |
) |
|
|
(0.79 |
) |
Real estate impairment charges |
|
|
0.13 |
|
|
|
0.30 |
|
|
|
0.21 |
|
|
|
1.13 |
|
Funds from operations |
|
$ |
0.15 |
|
|
$ |
(0.82 |
) |
|
$ |
0.11 |
|
|
$ |
(2.27 |
) |
Other impairment charges, net |
|
|
0.01 |
|
|
|
0.71 |
|
|
|
0.06 |
|
|
|
1.94 |
|
Litigation, bankruptcy and other (recoveries) costs |
|
|
— |
|
|
|
0.05 |
|
|
|
0.02 |
|
|
|
0.08 |
|
Share-based compensation (fair value adjustments) (1) |
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
Non-cash fair value adjustments |
|
|
(0.02 |
) |
|
|
0.22 |
|
|
|
0.21 |
|
|
|
0.85 |
|
Tax rate changes and other |
|
|
(0.02 |
) |
|
|
— |
|
|
|
(0.02 |
) |
|
|
0.01 |
|
Debt refinancing and unutilized financing costs |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
0.01 |
|
Normalized funds from operations |
|
$ |
0.13 |
|
|
$ |
0.16 |
|
|
$ |
0.40 |
|
|
$ |
0.62 |
|
LIQUIDITY AND CAPITAL RESOURCES
2025 Cash Flow Activity
During the first nine months of 2025, we generated approximately $70 million of cash flows from operating activities, which were lower than the first nine months of 2024 primarily due to approximately $55 million of less cash rent received due to property
44
sales in 2024 and 2025, approximately $43 million less cash rent and interest received from tenants accounted for on a cash basis, and an approximate $43 million increase in interest paid for the first nine months of 2025 compared to the same period of 2024, partially offset by increases in cash received due to inflation based escalators in our leases and less cash paid for litigation, bankruptcy, and other costs. 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 paydown our Credit Facility by approximately $800 million.
In the third quarter of 2025 (and as noted in Note 3 to the condensed consolidated financial statements), the bankruptcy court handling the Prospect bankruptcy approved, among other things, an interim order for additional loan advances to be made by us to the debtor including: a) up to $55 million, which we funded in full in the 2025 third quarter to cover forecasted cash shortfalls by the debtor as it completes the sales of hospital operations and sales/leases of related real estate; b) approximately $25 million for the full repayment of the current senior debtor-in-possession lender, which we funded in the 2025 third quarter; and c) up to $30 million in the form of a backstop facility to cover administrative and priority claims, which remains conditioned on other events occurring including further bankruptcy court approvals. Any funds advanced under the backstop facility will be secured by recoveries, if any, from causes of actions owned by the debtor. Excluding the possible additional $30 million of fundings, we have approximately $100 million of loans outstanding for which we currently expect to recover in excess of from sales of Connecticut properties and Yale proceeds (of which we received $45 million on November 4, 2025), as further described in Note 3 to the condensed consolidated financial statements.
Subsequent to September 30, 2025, we received approximately $23 million in distributions from the Swiss Medical Network joint venture. In addition, we committed to the acquisition of one property in Germany for approximately €23 million to be leased to MEDIAN with closing and funding expected in the 2025 fourth quarter.
Debt Amendments, Restrictions, and Covenant Compliance
On February 13, 2025 and concurrent with the closing of the Senior Secured Notes due 2032 as discussed in Note 4 to the condensed consolidated financial statements, we amended the Credit Facility to among other things: (i) provide for the facility to be secured and guaranteed ratably with the senior notes issued concurrently, (ii) provide notice that we plan to exercise both of our maturity extension options such that the maturity of the revolving portion would move from June 30, 2026 to June 30, 2027, the same maturity date as our term loan facility (subject to the satisfaction of certain conditions), (iii) reset the interest rate to SOFR plus 225 basis points (which had previously been moved to SOFR plus 300 basis points in August 2024), (iv) permanently remove 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, (v) amend 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 concurrently and set the covenant level at 60%, (vi) set the maximum secured leverage ratio at 40%, and (vii) add mandatory prepayments of senior debt or additional collateral in connection with any failure to (x) maintain a 65% maximum ratio of secured first lien debt to the undepreciated real estate value of the secured pool properties or (y) maintain a minimum senior secured debt service coverage ratio of 1.15:1.00 (increasing to 1.30:1.00 in 12 months).
As of November 4, 2025, we are in compliance with all such financial and operating covenants.
2024 Cash Flow Activity
During the first nine months of 2024, we generated approximately $169 million of cash flows from operating activities, primarily consisting of rent and interest from mortgage and other loans. In addition to operating cash flows, we received approximately $1.8 billion during the first nine months of 2024 from the Utah Transaction and the sale of 25 properties (as further discussed in Note 3 to the condensed consolidated financial statements), along with approximately $130 million from the sale of our interest in the syndicated Priory term loan and remaining minority interest in Lifepoint Behavioral. In May 2024, we closed on a new secured term loan, generating proceeds of approximately $800 million. We used our operating cash flows, asset sale proceeds, and term loan proceeds to fund our dividends of $273 million, pay down over $1 billion of our Credit Facility and British pound sterling term loan due 2025, and to pay off our British pound sterling secured term loan due 2024.
See below for further details of these transactions along with additional liquidity activity in the first nine months of 2024:
45
Short-term Liquidity Requirements:
Our short-term liquidity requirements typically consist of 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.
Over the next twelve months, we expect our monthly rent and interest receipts to increase with our contractually required annual escalations, from the ramp up of cash rents from the tenants that last year replaced Steward, and expected rent revenue from the replacement tenant of the Prospect California facilities. We would expect these rent and interest increases to outpace the higher interest cost from the recent refinancings.
At November 4, 2025, we only have the €500 million, 0.993% Senior Unsecured Notes due 2026, coming due in the next twelve months, as we have provided notice of our intent to extend the revolving portion of our Credit Facility to 2027. In addition, we have liquidity of $1.1 billion (including cash on hand and availability under the $1.28 billion revolving portion of our Credit Facility). We believe this liquidity along with the expected cash receipts of rent and interest pursuant to our contractual agreements with our tenants/borrowers is sufficient to 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 liquidity of approximately $1.1 billion at November 4, 2025, are typically enough to cover our short-term liquidity requirements. However, to further improve cash flows and to fund future debt maturities, we may 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. In addition, the Prospect bankruptcy related proceedings discussed previously could result in additional cash outflows as discussed above and/or negatively impact the timing, value, and/or our ability to sell or re-lease certain Prospect assets, which could negatively impact our liquidity.
46
Principal payments due on our debt (which exclude the effects of any discounts, premiums, or debt issue costs recorded) as of November 4, 2025 are as follows (in thousands):
2025 |
|
$ |
— |
|
|
2026 |
|
|
1,008,104 |
|
(1) |
2027 |
|
|
1,600,000 |
|
|
2028 |
|
|
781,260 |
|
|
2029 |
|
|
900,000 |
|
|
Thereafter |
|
|
5,226,054 |
|
|
Total |
|
$ |
9,515,418 |
|
|
Contractual Commitments
We presented our contractual commitments in our 2024 Annual Report on Form 10-K, which factored in our debt refinancing activities in February 2025, and we provided an update to our commitment schedule in our Form 10-Q for the quarter ended June 30, 2025. There have been no further significant changes through November 4, 2025.
Distribution Policy
The table below is a summary of our distributions declared (and paid in cash) during the two year period ended September 30, 2025:
Declaration Date |
|
Record Date |
|
Date of Distribution |
|
Distribution |
|
|
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 |
|
August 22, 2024 |
|
September 9, 2024 |
|
October 10, 2024 |
|
$ |
0.08 |
|
May 30, 2024 |
|
June 10, 2024 |
|
July 9, 2024 |
|
$ |
0.15 |
|
April 12, 2024 |
|
April 22, 2024 |
|
May 1, 2024 |
|
$ |
0.15 |
|
November 9, 2023 |
|
December 7, 2023 |
|
January 11, 2024 |
|
$ |
0.15 |
|
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, commodity prices, 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
47
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, 2025, our outstanding debt totaled $9.8 billion (excluding the effects of any discount or debt issue costs recorded), which consisted of fixed-rate debt of approximately $9.0 billion and variable rate debt of $0.8 billion. If market interest rates increase by 10% on our fixed rate debt, the fair value of our debt at September 30, 2025 would decrease by approximately $228 million. Changes in the fair value of our fixed rate debt will not have any impact on us unless we decided 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 $4.8 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 $4.8 million per year. This assumes that the average amount outstanding under our variable rate debt for a year is $0.8 billion, the balance of such variable rate debt at September 30, 2025.
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 2025 results to-date, a 10% increase or decrease in exchange rates would have impacted our net loss by $5.4 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.
48
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 possible 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 Annual Report on Form 10-K for the year ended December 31, 2024.
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, 2025:
Period |
|
Total number of |
|
|
Average price paid |
|
|
Total number of shares |
|
|
Approximate dollar |
|
||||
July 1, 2025-July 31, 2025 |
|
|
169 |
|
|
$ |
4.35 |
|
|
|
— |
|
|
$ |
— |
|
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
During the three months ended September 30, 2025, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities and Exchange Act)
49
Item 6. Exhibits
Exhibit Number |
|
Description |
|
|
|
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.
50
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 7, 2025
51
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