MEDICAL PROPERTIES TRUST INC
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
MPT$1.82+0.6%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-09.
0000950170-24-094888
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0000950170-24-125623
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 197 previous paragraphs and 196 current paragraphs.
117 unchanged; 56 reworded; 21 added; 22 removed; 2 previous and 2 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
our ability to remain in compliance with our financial covenants under our debt facilities and obtain additional debt covenant relief under our Credit Facility;
Current report
Interest and other income – down approximately $20.0 million from the prior year due to the following:
Current report
Real estate depreciation and amortization during the third quarter of 2024 increased to $204.9 million from $77.8 million in 2023 due to approximately $137 million of additional amortization expense recorded in the 2024 third quarter 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.
Current report
General and administrative expenses decreased to $36.6 million for the 2024 third quarter, compared to $38.1 million for the 2023 third quarter. For the 2024 period, general and administrative expenses included $14.4 million of stock compensation expenses, of which $7 million related to certain 2024 stock grants with cash-settled features that are marked to fair value quarterly.
Current report
In the 2024 third quarter, 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).
Current report
Earnings (Loss) from Equity Interests
Current report
Debt Refinancing and Unutilized Financing (Costs) Benefit
Current report
Nine Months Ended September 30, 2024 Compared to September 30, 2023
Current report
Interest and other income – down $85.3 million from the prior year due to the following:
Current report
General and administrative expenses decreased to $105.3 million for the first nine months of 2024, compared to $115.4 million for the same period of 2023. For the 2024 period, general and administrative expenses included $30.6 million of stock compensation expense, of which $9 million related to certain 2024 stock grants with cash-settled features that are marked to fair value quarterly.
Current report
Earnings (Loss) from Equity Interests
Current report
Debt Refinancing and Unutilized Financing (Costs) Benefit
Current report
Subsequent to September 30, 2024, we recovered cash related to our Norwood property that exceeded our recovery receivables (as discussed in Note 3 to the condensed consolidated financial statements) and sold three facilities for approximately $45 million. In addition, we funded a quarterly cash dividend of $48 million on October 10, 2024, which was declared by our Board of Directors on August 22, 2024. Finally, on November 8, 2024, Astrana Health entered into a binding agreement to purchase the majority of PHP Holdings for approximately $745 million and the assumption of certain liabilities. After satisfaction of certain obligations, we expect to receive approximately $200 million in total proceeds. We expect to receive the majority of these proceeds in the first half of 2025, while a $50 million payment is expected by 2027.
Current report
Debt Amendments and Covenant Compliance
Current report
sold three properties to Prime resulting in proceeds of $100 million;
Current report
d)
Current report
e)
Current report
funded approximately $195 million to Steward, including its temporary participation in its syndicated four-year asset-backed credit facility and loans for general working capital purposes; and
Current report
f)
Current report
retired approximately £40 million of our 2.550% Senior Unsecured Notes due 2023.
Current report
completing the binding sale of PHP Holdings to Astrana Health, from which we expect to receive approximately $150 million in the first half of 2025 with the remaining $50 million to be received by 2027;
Removed paragraphs (22)
Previous report
the risk that Steward's bankruptcy prevents us from being able to recover deferred rent or our other investments in Steward and its affiliates at full value, within a reasonable time period or at all, and the risk that we may not be able to find replacement operators that we deem adequate for the facilities currently leased to Steward on our desired timeline;
Previous report
Significant Tenant Update
Previous report
Steward Health Care System
Previous report
Through June 30, 2024, affiliates of Steward leased 28 of our facilities across five different markets under a master lease, along with eight properties pursuant to a separate master lease agreement that are part of the Massachusetts partnership with Macquarie Asset Management ("Macquarie"). In addition to the master leases, we hold working capital and other secured loans, which the working capital loan consists of multiple tranches with varying terms. We also have a loan due from affiliates of Steward that was made in 2021, proceeds of which were used to redeem a similarly sized convertible loan held by Steward's former private equity sponsor. Finally, we hold a 9.9% equity investment in Steward.
Previous report
Operational and Liquidity Challenges
Previous report
As disclosed in our Annual Report on Form 10-K for the year ending December 31, 2023, Steward delayed until early October 2023 paying a portion of its September 2023 rent and paid less than 30% of its required $70 million of rent and interest obligations (including our share of rent due to the Massachusetts partnership) for the 2023 fourth quarter.
Previous report
According to Steward, its cash flows from operations had been impacted by challenges related to insufficient reimbursement revenue, increased costs and expenses, revenue cycle management, and a backlog of accounts payable. With a single exception, Steward historically paid rent timely until its late payment of a portion of September 2023. Earlier in 2023, Steward’s management had described to us its plans for continued improvements to profitability, improvements to collections of billed revenue, access to working capital liquidity, and sales of certain non-core assets. Based on these initiatives, the reported profitability of Steward's operations at our facilities, our cross-defaulted master lease structure, and the additional security of our overall collateral interests, we believed that Steward would be able to satisfy its rental obligations over the full term of our master leases. However, despite Steward obtaining additional working capital financing and selling its non-core laboratory business in the 2023 fourth quarter, Steward informed us in December 2023 that its cash collection challenges had become more pronounced and coupled with significant changes to vendor payment terms, their liquidity had been negatively impacted. To improve its liquidity position, Steward stated in December 2023 that it would be pursuing several strategic transactions, including the sale or re-tenanting of certain hospital operations and working with a third-party capital partner to divest of its managed care business. In addition, Steward stated it planned to intensify measures to improve cash collections and overall governance, including the establishment of a transformation committee comprised of newly appointed independent directors.
Previous report
Separately, we engaged financial and legal advisors in the 2023 fourth quarter to advise us on options to maximize the ultimate recovery of our investments, including the recovery of unpaid rent and interest. To this point and while Steward was working to execute its stated plan, we agreed to fund a $60 million bridge loan (which we funded in January 2024) secured by our existing collateral as well as new second liens on the managed care business of Steward. In addition, we and certain of Steward’s asset backed lenders agreed to a new bridge facility in February 2024 and funded an additional $75 million each to Steward during the 2024 first quarter (of which, up to $60 million advanced by certain of Steward's asset backed lenders could be put to us in 2025 if not previously paid by Steward or through liquidation of Steward's collateral). In addition to these fundings, we agreed to a forbearance agreement in which we consented to the deferral of unpaid rent and interest through December 2023, as well as a limited and tapering deferral of rent in 2024. In the 2024 second quarter, we funded an additional $80 million in secured loans, of which $75 million represented debtor-in-possession financing.
Previous report
Due to Steward's operational and liquidity challenges, we moved to the cash basis of accounting for our leases and loans with Steward effective December 31, 2023. This resulted in the reserving of all unpaid rent and interest receivables at December 31, 2023 and the reversal of previously recognized straight-line rent receivables. In addition, we recorded impairment charges on certain real estate assets and on our 9.9% equity interest. In total, we recorded approximately $714 million of impairment and other charges in 2023.
Previous report
Steward signed a letter of intent for the sale of its managed care business ("Stewardship") in February 2024. However, the sale price of Stewardship was less than what was anticipated in December 2023, and certain regulatory and anti-trust approvals were still needed. These circumstances created a level of uncertainty about the likelihood, valuation, and timing of Steward's realizations of Stewardship. Moreover, as of the end of the first quarter of 2024, Steward had not signed any agreements for possible sales of its operations in or the re-tenanting of our hospital real estate. Meanwhile, Steward’s working capital deficit had continued to increase from December 31, 2023, despite the influx of cash and rent concessions from us and certain of Steward’s asset backed lenders as described earlier, which culminated in Steward's filing for reorganization relief under Chapter 11 protection of the United States Bankruptcy Code in the Southern District of Texas on May 6, 2024.
Previous report
Due to the uncertainty concerning the sale of Stewardship, status of sales of Steward operations or the re-tenanting of our real estate, the ongoing operational and liquidity challenges, and new bankruptcy filing, we recorded approximately $470 million of additional impairment charges in the quarter ending March 31, 2024, that fully reserved for the remaining value of our 9.9% equity investment in Steward and the $362 million loan due from affiliates of Steward along with the accrual for property taxes and other obligations not paid by Steward under its master leases. The equity investment and loan to Steward affiliates were included in “Investments in unconsolidated operating entities” on our condensed consolidated balance sheets and were adjusted after comparing our carrying value of these investments to an updated fair value analysis of the underlying collateral, with assistance from a third-party, independent valuation firm.
Previous report
During the 2024 second quarter and subsequently thereafter, the initial deal to sell Stewardship fell through and it appears likely that the potential value of this business has declined further. In addition, the bid process to re-tenant or sell our real estate has begun. However, no properties have been transitioned at this time. For Massachusetts, we have seen an unexpectedly low value on bids for each of the eight facilities due to a variety of factors, including regulatory matters. Due to this, we recognized additional impairment charges of $490 million in the 2024 second quarter, of which $410 million related to our Macquarie joint venture bringing our equity interest in this joint venture to zero. At June 30, 2024, we have approximately $430 million of non-real estate investments in Steward, consisting of the working capital loan and other secured loans advanced in 2024. In addition, we have approximately $2.3 billion in real estate that is expected to be re-leased or sold as part of the ongoing bankruptcy process. We believe these investments are fully recoverable at this time. However, no assurances can be given that we will not have any additional impairments in future periods.
Previous report
Interest and other income – down $44.0 million from the prior year due to the following:
Previous report
Real estate depreciation and amortization during the second quarter of 2024 decreased to $102.2 million from $364.4 million in 2023 due to accelerating the amortization of lease intangibles as part of the sale of hospital operations by Steward and re-leasing of five Steward Utah facilities to CommonSpirit in May 2023 (approximately $286 million) and the sale of various properties (including the sale of 11 properties related to the Australia Transaction, eight Prime properties in 2024 and 2023, and the Utah Transaction in 2024). This decrease is partially offset by a $34 million increase in amortization expense in the second quarter of 2024 as a result of our change in the estimated useful life of the in-place lease intangible associated with the Steward master leases that we expect will end well before the contractual term due to the ongoing bankruptcy process.
Previous report
General and administrative expenses totaled $35.3 million for the 2024 second quarter, in line with the $35.6 million for the 2023 second quarter. Excluding stock compensation expense (which was favorable in the 2023 second quarter from a change in expected payouts of certain performance awards), general and administrative expenses totaled $26.8 million in the 2024 second quarter, compared to $29.2 million in the same period of the prior year reflecting our ongoing efforts to manage expenses.
Previous report
In the 2024 second quarter, we recognized $137.4 million of real estate and other impairment charges. Of these charges, approximately $100 million were real estate related due to ongoing re-tenanting and potential selling of properties associated with our cash-basis tenants. The remaining approximately $40 million was non-real estate impairment charges, primarily property taxes and other obligations not paid by our cash-basis tenants.
Previous report
(Loss) Earnings from Equity Interests
Previous report
Six Months Ended June 30, 2024 Compared to June 30, 2023
Previous report
Interest and other income – down $65.3 million from the prior year due to the following:
Previous report
General and administrative expenses totaled $68.7 million for the first six months of 2024, compared to $77.3 million for the first six months of 2023. Excluding stock compensation expense, general and administrative expenses totaled $52.5 million in the first half of 2024, compared to $59.1 million in the prior year reflecting our ongoing efforts to manage expenses.
Previous report
(Loss) Earnings from Equity Interests
Previous report
our Board of Directors declared a quarterly cash dividend of $0.15 per common share on April 12, 2024, that was paid on May 1, 2024, totaling approximately $90 million;
Reworded paragraphs (56)
Previous wording
the risk that property sales, loan repayments, and other capital recycling transactions do not occur as anticipated or at all, including the transaction described in Note 9 to the condensed consolidated financial statements;
Current wording
the risk that property sales, loan repayments, and other capital recycling transactions do not occur as anticipated or at all, including the transactions described in Note 9 and Note 10 to the condensed consolidated financial statements;
Previous wording
the risk that the expected sale of three Connecticut hospitals currently leased to Prospect does not occur on the agreed upon terms or at all, and that we are otherwise unable to monetize our investment in Prospect at full value within a reasonable time period or at all;
Current wording
the risk that the expected sale of three Connecticut hospitals currently leased to Prospect does not occur on the agreed upon terms or at all, and that we are otherwise unable to monetize our investment in PHP at current value within a reasonable time period or at all;
Previous wording
physical real estate due diligence, typically including property condition and Phase 1 environmental assessments, along with annual property inspections thereafter.
Current wording
physical real estate due diligence, typically including property condition and Phase 1 environmental assessments, along with routine property inspections thereafter.
Previous wording
Refer to our 2023 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 six months ended June 30, 2024, there were no material changes to these policies.
Current wording
Refer to our 2023 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, 2024, there were no material changes to these policies.
Previous wording
At June 30, 2024, our portfolio consisted of 435 properties leased or loaned to 53 operators, of which three are under development. We manage our business as a single business segment.
Current wording
At September 30, 2024, our portfolio consisted of 402 properties leased or loaned to 55 operators, of which four are under development. We manage our business as a single business segment.
Previous wording
Net loss for the three months ended June 30, 2024, was ($320.6) million, or ($0.54) per share compared to net loss of ($42.0) million, or ($0.07) per diluted share, for the three months ended June 30, 2023. This decrease in net income is primarily driven by the $410 million impairment of real estate in our Massachusetts-based partnership with Macquarie as further described in Note 3 to the condensed consolidated financial statements and included in our "(Loss) earnings from equity interests" line of our condensed consolidated financial statements of net income, the approximate $160 million unfavorable fair value adjustment to our investment in PHP Holdings included in our "Other (including fair value adjustments on securities)" line of our condensed consolidated statements of net income, and $137.4 million of real estate impairment and other charges in the second quarter of 2024, partially offset by approximately $385 million of gains as a result of the Utah Transaction and the sale of five Prime properties, both discussed further in Note 3. In the 2023 second quarter, we did have more real estate and amortization expense compared to 2024, but that was partially offset by a $158 million tax benefit from entering into the U.K. REIT regime in 2023. Normalized funds from operations (“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 $139.4 million for the 2024 second quarter, or $0.23 per diluted share, as compared to $285.3 million, or $0.48 per diluted share, for the 2023 second quarter. This 51% decrease in Normalized FFO is primarily due to lower revenues from Steward moving to the cash basis of accounting on December 31, 2023, and lower revenues as a result of various disposals in 2023 and 2024.
Current wording
Net loss for the three months ended September 30, 2024, was ($801.2) million, or ($1.34) per share compared to net income of $116.7 million, or $0.19 per diluted share, for the three months ended September 30, 2023. This decrease in net income is primarily driven by the approximate $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, the approximate $134 million unfavorable fair value adjustment to our investment in PHP Holdings, $137 million of accelerated amortization of in-place lease intangibles, and lower revenues from Steward and Prospect along with property sales, partially offset by approximately $90 million of gains as a result of the Dignity Health and UCHealth sales, both discussed further in Note 3 to the condensed consolidated financial statements. Normalized funds from operations (“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 $93.9 million for the 2024 third quarter, or $0.16 per diluted share, as compared to $225.5 million, or $0.38 per diluted share, for the 2023 third quarter. This 58% decrease in Normalized FFO is primarily due to lower revenues from Steward moving to the cash basis of accounting on December 31, 2023, and lower revenues as a result of various disposals in 2023 and 2024.
Previous wording
Our total revenues for the 2024 second quarter are down $70.8 million, or 21%, over the same period in the prior year. This decrease is made up of the following:
Current wording
Our total revenues for the 2024 third quarter are down $80.7 million, or 26%, over the same period in the prior year. This decrease is made up of the following:
Previous wording
Operating lease revenue (includes rent billed and straight-line rent) – up $14.0 million over the prior year, of which approximately $95 million is related to straight-line rent write-offs in the 2023 second quarter as a result of the Steward and CommonSpirit transaction described in Note 3 to the condensed consolidated financial statements; approximately $3.5 million is from incremental revenue from acquisitions in 2023, capital additions, and the commencement of rent on two development properties in 2024; $0.6 million of favorable foreign currency fluctuations; and approximately $5 million from increases in CPI above the contractual minimum escalations in our leases. These increases are partially offset by approximately $48 million of less revenue from our operators on a cash basis in the second quarter of 2024 as compared to the prior year. The majority of this decline is due to Steward (who moved to cash basis starting December 31, 2023) as we recognized $61 million of rent revenue in the 2023 second quarter (excluding revenue on Utah properties now leased to CommonSpirit), while receiving and recording only $19 million of rent revenue in the second quarter of 2024.
Current wording
Operating lease revenue (includes rent billed and straight-line rent) – down $44.5 million from the prior year due to approximately $59 million of less revenue from our operators on a cash basis in the third quarter of 2024 as compared to the prior year. The majority of this decline is due to Steward (who moved to cash basis starting December 31, 2023, and executed the global settlement in the third quarter of 2024 described in Note 3 to the condensed consolidated financial statements) as we recognized $60 million of rent revenue in the 2023 third quarter, while receiving and recording approximately $10 million of rent revenue in the third quarter of 2024. Operating lease revenues in the 2024 third quarter further declined by approximately $47 million due to disposals and other leasing transactions in 2023 and 2024 (including $29 million from the Utah Transaction described in Note 3 to the condensed consolidated financial statements).
Previous wording
Income from financing leases – down $40.8 million primarily due to receiving cash of approximately $18 million for rent revenue from Prospect (cash basis tenant) in the second quarter of 2024, whereas we recorded $55.3 million of rent for this tenant in the 2023 second quarter as part of the Prospect Transaction as described in Note 3 to the condensed consolidated financial statements. In addition, financing lease income was lower due to a $3.8 million decrease from the disposal of three Prime financing leases in the third quarter of 2023. These decreases were partially offset by a $0.5 million from the increase in CPI above the lease contractual minimum escalations.
Current wording
Income from financing leases – down $16.3 million primarily due to not receiving any cash for rent revenue from Prospect (cash basis tenant) in the third quarter of 2024, whereas we recorded $16.5 million of rent for this tenant in the 2023 third quarter as part of the Prospect Transaction as described in Note 3 to the condensed consolidated financial statements. These decreases were partially offset by $0.2 million from the increase in CPI above the lease contractual minimum escalations.
Previous wording
3 to the condensed consolidated financial statements. These decreases are partially offset by approximately $2 million of interest income from the Prime mortgage loan we received in the second quarter of 2024 as a result of the Prime disposal (further described in Note 3 to the condensed consolidated financial statements), $1 million of higher income from annual escalations due to increases in CPI, and $1.2 million of favorable foreign currency fluctuations.
Current wording
Interest from loans – down $19.2 million, primarily due to a $17 million decrease in interest income related to Steward and the international joint venture with moving to cash basis on December 31, 2023, and an approximate $4 million decrease from loan payoffs. These decreases are partially offset by $1.6 million of interest income from the Prime mortgage loan we received in the second quarter of 2024 as a result of the Prime disposal (further described in Note 3 to the condensed consolidated financial statements including the repayment of this loan on August 29, 2024) and $0.4 million of favorable foreign currency fluctuations.
Previous wording
Other income – down $16.2 million from the prior year as we had less direct reimbursements from our cash basis tenants for ground leases, property taxes, and insurance.
Current wording
Other income – down $0.8 million from the prior year as we had less direct reimbursements from our cash basis tenants for ground leases, property taxes, and insurance.
Previous wording
Interest expense for the quarters ended June 30, 2024 and 2023 totaled $101.4 million and $104.5 million, respectively. This decrease is primarily related to debt principal repayments including paying off the Australian term loan facility in the 2023 second quarter (A$730 million) and the second quarter of 2024 (A$470 million), the 2.550% Senior Unsecured Notes in December 2023, and the British pound sterling secured term loan due 2024 in the 2024 second quarter and paying down a portion of the British pound sterling term loan due 2025 in the second quarter of 2024. The decrease was partially offset by additional interest from our British pound sterling secured term loan due 2034 that closed in May 2024. Overall, our weighted-average interest rate was 4.1% for the quarter ended June 30, 2024, compared to 3.9% for the same period in 2023, as general interest rates have trended higher post the 2023 second quarter and our specific rates have increased due to a credit rating adjustment in March 2023.
Current wording
Interest expense for the quarters ended September 30, 2024 and 2023 totaled $106.2 million and $106.7 million, respectively. This decrease is primarily related to debt principal repayments including paying off the Australian term loan facility in the second quarter of 2024 (A$470 million), the 2.550% Senior Unsecured Notes in December 2023, and the British pound sterling secured term loan due 2024 in the 2024 second quarter and paying down a portion of our revolver and British pound sterling term loan due 2025 in 2024. The decrease was offset by additional interest from our British pound sterling secured term loan due 2034 that closed in May 2024 and higher overall interest rates. Overall, our weighted-average interest rate was 4.3% for the quarter ended September 30, 2024, compared to 4.0% for the same period in 2023, as our specific rates have increased due to a credit rating adjustment in March 2023 and our Credit Facility amendment on August 6, 2024.
Previous wording
Property-related expenses totaled $7.7 million and $24.7 million for the quarters ended June 30, 2024 and 2023, respectively. Of the property expenses in the second quarter of 2024 and 2023, approximately $4.9 million and $21.1 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.
Current wording
Property-related expenses totaled $5.0 million and $6.5 million for the quarters ended September 30, 2024 and 2023, respectively. Of the property expenses in the third quarter of 2024 and 2023, approximately $2.6 million and $3.3 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.
Previous wording
During the three months ended June 30, 2024, the gain on sale of real estate primarily relates to the sale of five Prime facilities and a 75% interest in five Utah facilities as part of the Utah Transaction as more fully described in Note 3 to the condensed consolidated financial statements.
Current wording
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.
Previous wording
Loss from equity interests was $(401.8) million for the quarter ended June 30, 2024, below the $12.2 million of earnings for the same period in 2023, 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 as further described in Note 3 to the condensed consolidated financial statements.
Current wording
Earnings from equity interests was $21.6 million for the quarter ended September 30, 2024 compared to the $11.3 million of earnings for the same period in 2023. This increase is primarily from our share of income in the Utah partnership that was formed in the 2024 second quarter, which included a $13.5 million positive fair value adjustment primarily related to the underlying real estate, (as further described in Note 3 to the condensed consolidated financial statements), partially offset by not recording any income in the third quarter of 2024 related to our Massachusetts-based partnership with Macquarie.
Previous wording
Debt refinancing and unutilized financing costs were $3.0 million for the first six months of 2024. These costs 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, both of which are described in more detail in Note 4 to the condensed consolidated financial statements. These costs were $0.8 million for the same period of 2023, as a result of the prepayment on the A$1.2 billion Australian term loan.
Current wording
Debt refinancing and unutilized financing costs were $0.7 million for the third quarter of 2024. These costs 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. We recognized a benefit for the same period of 2023, as a result of the purchase of £40 million of our 2.550% Senior Unsecured Notes due 2023 at a discounted price.
Previous wording
Other expense for the second quarter of 2024 was $167.7 million, compared to $10.5 million in the prior year. For 2024, we recognized an approximate $160 million unfavorable non-cash fair value adjustment to our investment in PHP Holdings. The remaining expense in the 2024 second quarter included approximately $11.7 million of legal and other professional expenses associated with, among other things, responding to certain defamatory statements published by certain parties, including those who are defendants to a lawsuit we filed on March 30, 2023, partially offset by a favorable fair value adjustment to our Aevis investment. For 2023, we incurred $2.5 million of expenses associated with responding to defamatory statements previously mentioned, and approximately $8 million of unfavorable non-cash fair value adjustments on our investment in Aevis and other investments marked to fair value during the second quarter of 2023.
Current wording
Other expense for the third quarter of 2024 was $169.8 million, compared to income of $41.1 million in the prior year. For the third quarter of 2024, we recognized unfavorable non-cash fair value adjustments to our investment in PHP Holdings and Aevis of approximately $140 million. The 2024 third quarter also included approximately $29 million of legal and other professional expenses associated with the Steward bankruptcy, responding to certain defamatory statements published by certain parties, including those who are defendants to a lawsuit we filed on March 30, 2023, among other things. For the third quarter of 2023, we recognized an approximate $30 million favorable non-cash fair value adjustment on our investment in PHP Holdings and a CHF 20 million (approximately $22 million) unrealized gain on our equity investment in Swiss Medical Network, partially offset by $2.8 million of expenses associated with responding to defamatory statements previously mentioned.
Previous wording
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 $14.6 million income tax expense for the three months ended June 30, 2024 is primarily based on the income generated by our investments in the U.K. and Germany, and included 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. In comparison, we had a $148.3 million income tax benefit in the second quarter of 2023 primarily based on the $158 million benefit received by entering the U.K. REIT regime.
Current wording
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 $9.0 million income tax expense for the three months ended September 30, 2024 is primarily based on the income generated by our investments in the U.K. and Germany and slightly less than the $10.1 million income tax expense in the third quarter of 2023.
Previous wording
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 $253 million should be reflected against certain of our international and domestic net deferred tax assets at June 30, 2024. 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.
Current wording
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 $386 million should be reflected against certain of our international and domestic net deferred tax assets at September 30, 2024. 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.
Previous wording
Net loss for the six months ended June 30, 2024, was ($1.2) billion, or ($1.99) per share compared to a net loss of ($9.2) million, or ($0.02) per diluted share, for the six months ended June 30, 2023. This decrease in net income is primarily driven by the $693 million of impairment charges and negative fair value adjustments in the first quarter of 2024 primarily related to Steward and the international joint venture and $137.4 million of charges in the 2024 second quarter (all included in "Real estate and other impairment charges, net" line of the condensed consolidated statements of net income). In addition, we had an approximate $360 million unfavorable fair value adjustment to our investment in PHP Holdings in the first six months of 2024 and reflected in "Other (including fair value adjustments on securities), and the $410 million of impairment charges related to our Massachusetts-based partnership in the second quarter of 2024 reflected in "(Loss) earnings from equity interests" line of the condensed consolidated statements of net income, all further described in Note 3 to the condensed consolidated financial statements. These decreases were partially offset by $383 million of gains on real estate sales in the first six months of 2024. Normalized funds from operations (“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 $281.2 million for the first half of 2024, or $0.47 per diluted share, as compared to $507.5 million, or $0.85 per diluted share, for the same period of 2023. This 45% decrease in Normalized FFO is primarily due to lower revenues from Steward moving to the cash basis of accounting on December 31, 2023, higher interest expense, and lower revenues as a result of various disposals in 2023 and 2024.
Current wording
Net loss for the nine months ended September 30, 2024, was ($2.0) billion, or ($3.33) per share compared to net income of $107.5 million, or $0.18 per diluted share, for the nine months ended September 30, 2023. This decrease in net income is primarily driven by the approximate $1.8 billion of impairment charges and negative fair value adjustments related to Steward and the international joint venture as further described in Note 3 to the condensed consolidated financial statements. 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 along with lower revenues from Steward and property sales. These decreases were partially offset by approximately $475 million of gains on real estate sales in the first nine months of 2024. Normalized funds from operations (“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 $375.0 million for the first nine months of 2024, or $0.62 per diluted share, as compared to $733.0 million, or $1.22 per diluted share, for the same period of 2023. This 49% decrease in Normalized FFO is primarily due to lower revenues from Steward moving to the cash basis of accounting on December 31, 2023, and as a result of various disposals in 2023 and 2024.
Previous wording
A comparison of revenues for the six months ended June 30, 2024 and 2023 is as follows (dollar amounts in thousands):
Current wording
A comparison of revenues for the nine months ended September 30, 2024 and 2023 is as follows (dollar amounts in thousands):
Previous wording
Our total revenues for the first six months of 2024 are down $149.7 million, or 22%, over the same period in the prior year. This decrease is made up of the following:
Current wording
Our total revenues for the first nine months of 2024 are down $230.5 million, or 23%, over the same period in the prior year. This decrease is made up of the following:
Previous wording
Operating lease revenue (includes rent billed and straight-line rent) – down $46.8 million over the prior year, of which approximately $105 million is due to less revenue from our operators on a cash basis in the first half of 2024 as compared to the prior year. The majority of this decline is due to Steward as we recognized $121 million of rent revenue in the 2023 first half (excluding revenue on Utah properties now leased to CommonSpirit), while receiving and recording approximately $30 million of rent revenue in the first half of 2024.
Current wording
Operating lease revenue (includes rent billed and straight-line rent) – down $91.3 million from the prior year, primarily due to approximately $164 million of less revenue from our operators on a cash basis in the first nine months of 2024 as compared to the prior year. The majority of this decline is due to Steward as we recognized $181 million of rent revenue in the first nine months of 2023, while receiving and recording approximately $40 million of rent revenue in the first nine months of 2024.
Previous wording
Operating lease revenues in the first six months of 2024 further declined by approximately $60 million due to disposals and other leasing transactions in 2023 and 2024 (including $29 million from the Utah Transaction described in Note 3 to the condensed consolidated financial statements). These decreases are partially offset by approximately $95 million more straight-line rent write-offs in the first half of 2023 compared to the same period of 2024 (related to the Steward and CommonSpirit transaction in 2023 described in Note 3 to the condensed consolidated financial statements); approximately $9 million in incremental revenue from acquisitions in 2023, capital additions, and the commencement of rent on two development properties in 2024; $3.9 million of favorable foreign currency fluctuations; and approximately $10 million from increases in CPI above the contractual minimum escalations in our leases.
Current wording
Operating lease revenues in the first nine months of 2024 further declined by approximately $107 million due to disposals and other leasing transactions in 2023 and 2024 (including approximately $60 million from the Utah Transaction described in Note 3 to the condensed consolidated financial statements). These decreases are partially offset by approximately $145 million more straight-line rent write-offs in the first nine months of 2023 compared to the same period of 2024 (related to the Steward and CommonSpirit transaction in 2023 described in Note 3 to the condensed consolidated financial statements); approximately $11 million in incremental revenue from acquisitions in 2023, capital additions, and the commencement of rent on two development properties in 2024; approximately $7 million of favorable foreign currency fluctuations; and approximately $16 million from increases in CPI above the contractual minimum escalations in our leases.
Previous wording
Income from financing leases – down $37.6 million primarily due to receiving cash of approximately $25 million for rent revenue from Prospect (cash basis tenant) in the first six months of 2024, whereas we recorded $55 million of rent for this tenant in the first six months of 2023. In addition, financing lease income was lower due to a $7.7 million decrease from the disposal of three Prime financing leases in the third quarter of 2023. These decreases were partially offset by a $1 million from the increase in CPI above the lease contractual minimum escalations.
Current wording
Income from financing leases – down $53.9 million primarily due to receiving cash of approximately $25 million for rent revenue from Prospect (cash basis tenant) in the first nine months of 2024, whereas we recorded $72 million of rent for this tenant in the first nine months of 2023. In addition, financing lease income was lower due to an approximate $8 million decrease from the disposal of three Prime financing leases in the third quarter of 2023. These decreases were partially offset by approximately $1 million from the increase in CPI above the lease contractual minimum escalations.
Previous wording
Interest from loans – down $27.8 million, primarily due to a $16.3 million decrease in interest income related to Steward and the international joint venture with moving to cash basis on December 31, 2023, and an approximate $4.6 million decrease from loan payoffs (including $3.5 million from the sale of our interest in the Priory syndicated term loan in the first quarter of 2024). We also recorded $9.6 million more in the second quarter of 2023 compared to the same period of 2024 as a result of the Prospect Transaction as described in Note 3 to the condensed consolidated financial statements. These decreases are partially offset by approximately $2 million of interest income from the Prime mortgage loan we received in the second quarter of 2024 as a result of the Prime disposal (further described in Note 3 to the condensed consolidated financial statements), $0.1 million of higher income from annual escalations due to increases in CPI, and $0.4 million of favorable foreign currency fluctuations.
Current wording
Interest from loans – down $66.5 million, primarily due to an approximate $49 million decrease in interest income related to Steward and the international joint venture with the move to cash basis on December 31, 2023 and the Steward global settlement in the third quarter of 2024, and an approximate $14 million decrease from loan payoffs and reserves (including $9.1 million from the sale of our interest in the Priory syndicated term loan in the first quarter of 2024). We also recorded approximately $9.5 million more interest revenue in the first nine months of 2023 compared to the same period of 2024 as a result of the Prospect Transaction as described in Note 3 to the condensed consolidated financial statements. These decreases are partially offset by approximately $4 million of interest income from the Prime mortgage loan we received as a result of the
Previous wording
Other income – down $18.1 million from the prior year as we had less direct reimbursements from our cash basis tenants for ground leases, property taxes, and insurance.
Current wording
Other income – down $18.8 million from the prior year as we had less direct reimbursements from our cash basis tenants for ground leases, property taxes, and insurance.
Previous wording
Interest expense for the six months ended June 30, 2024 and 2023 totaled $210.1 million and $202.1 million, respectively. This increase is primarily related to an increase in borrowings on our revolving credit facility on average during the comparable periods that carried higher interest rates (as variable rate debt) compared to the lower fixed interest rates of debt that was repaid in 2023, including the A$730 million Australian term loan facility paid off in the 2023 second quarter and the 2.550% Senior Unsecured Notes paid off in December 2023. We closed on a new British pound sterling secured term loan in May 2024 that also partially contributed to higher interest expense period over period. Overall, our weighted-average interest rate was 4.1% for the six months ended June 30, 2024, compared to 3.8% for the same period in 2023, as general interest rates have trended higher post the 2023 second quarter and our specific rates have increased due to a credit rating adjustment in March 2023.
Current wording
Interest expense for the nine months ended September 30, 2024 and 2023 totaled $316.4 million and $308.8 million, respectively. This increase is primarily related to an increase in borrowings on our revolving credit facility on average during the comparable periods that carried higher interest rates (as variable rate debt) compared to the lower fixed interest rates of debt that was repaid in 2023, including the A$730 million Australian term loan facility paid off in the 2023 second quarter and the 2.550% Senior Unsecured Notes paid off in December 2023. We closed on a new British pound sterling secured term loan in May 2024 that also partially contributed to higher interest expense period over period. Overall, our weighted-average interest rate was 4.3% for the nine months ended September 30, 2024, compared to 3.9% for the same period in 2023, as our specific rates have increased due to a credit rating adjustment in March 2023 and our Credit Facility amendment on August 6, 2024.
Previous wording
Real estate depreciation and amortization during the first half of 2024 decreased to $177.8 million from $448.3 million in 2023 due to accelerating the amortization of lease intangibles as part of the sale of hospital operations by Steward and re-leasing of five Steward Utah facilities to CommonSpirit in May 2023 (approximately $286 million) and the sale of various properties (including the sale of 11 properties related to the Australia Transaction, eight Prime properties in 2024 and 2023, and the Utah Transaction in 2024). This decrease is partially offset by a $34 million increase in amortization expense in the second quarter of 2024 as a result of our change in the estimated useful life of the in-place lease intangible associated with the Steward master leases that we expect will end well before the contractual term due to the ongoing bankruptcy process.
Current wording
Real estate depreciation and amortization during the first nine months of 2024 decreased to $382.7 million from $526.1 million in 2023 due to accelerating the amortization of lease intangibles as part of the sale of hospital operations by Steward and re-leasing of five Steward Utah facilities to CommonSpirit in May 2023 (approximately $286 million) and the sale of various properties in 2024 and 2023. This decrease is partially offset by approximately $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.
Previous wording
Property-related expenses totaled $12.5 million and $31.8 million for the six months ended June 30, 2024 and 2023, respectively. Of the property expenses in the first half of 2024 and 2023, approximately $7.2 million and $25.3 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.
Current wording
Property-related expenses totaled $17.5 million and $38.3 million for the nine months ended September 30, 2024 and 2023, respectively. Of the property expenses in the first nine months of 2024 and 2023, approximately $9.8 million and $28.6 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.
Previous wording
During the six months ended June 30, 2024, the gain on sale of real estate primarily related to the disposal of five Prime facilities and a 75% interest in five Utah facilities as part of the Utah Transaction as more fully described in Note 3 to the condensed consolidated financial statements.
Current wording
During the nine months ended September 30, 2024, the gain on sale of real estate of $475.2 million primarily related to the disposal of five Prime facilities, a 75% interest in five Utah facilities as part of the Utah Transaction, and the sale of eight Dignity Health facilities and 11 UCHealth facilities as more fully described in Note 3 to the condensed consolidated financial statements.
Previous wording
In the first six months of 2024, we recognized $830.5 million 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. Of these charges, approximately $100 million were real estate related due to ongoing re-tenanting and potentially selling of properties associated with our cash-basis tenants. The remaining $730 million recognized in the first six months of 2024 represents non-real estate impairment charges and unfavorable fair value adjustments associated with our equity and loan investments in Steward and the international joint venture as further described in Note 3 to the condensed consolidated financial statements, along with ongoing property taxes and other obligations not paid by our cash-basis tenants. In the first six months of 2023, we recorded an $89.5 million net impairment charge, of which $79 million related to the Australia Transaction and $11 million was a non-cash impairment charge on the three Prime properties as more fully described in Note 3 to the condensed consolidated financial statements.
Current wording
In the first nine months 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. In the first nine months of 2023, we recorded a $93.3 million net impairment charge, of which $82 million related to the Australia Transaction and $11 million was a non-cash impairment charge on the three Prime properties as more fully described in Note 3 to the condensed consolidated financial statements.
Previous wording
Loss from equity interests was ($391.2) million for the six months ended June 30, 2024, compared to $23.6 million of earnings for the same period in 2023, 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 as further described in Note 3 to the condensed consolidated financial statements.
Current wording
Loss from equity interests was ($369.6) million for the nine months ended September 30, 2024, compared to $34.8 million of earnings for the same period in 2023, 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 as further described in Note 3 to the condensed consolidated financial statements. This was partially offset by our share of income on our new Utah partnership as a result of the Utah Transaction in the second quarter of 2024.
Previous wording
Debt refinancing and unutilized financing costs were $3.0 million for the second quarter of 2024. These costs 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, both of which are described in more detail in Note 4 to the condensed consolidated financial statements. These costs were $0.8 million for the same period of 2023, as a result of the prepayment on the A$1.2 billion Australian term loan.
Current wording
Debt refinancing and unutilized financing costs were $3.7 million for the first nine months of 2024. These costs 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, both of which are described in more detail in Note 4 to the condensed consolidated financial statements. Our debt refinancing and unutilized financing net benefit for the first nine months of 2023 was a result of a $0.9 million benefit related to the purchase of £40 million of our 2.550% Senior Unsecured Notes due 2023 in the third quarter of 2023 at a discounted price, partially offset by $0.8 million of costs associated with the partial prepayment of our A$1.2 billion Australian term loan in the second quarter of 2023.
Previous wording
Other expense for the first six months of 2024 was $397.0 million, compared to $15.7 million in the prior year. For 2024, we recognized an approximate $360 million unfavorable fair value adjustment to our investment in PHP Holdings. In addition, we incurred a $7.8 million economic loss from the sale of our interest in the Priory syndicated term loan and approximately $17.6 million of legal and other professional expenses associated with, among other things, responding to certain defamatory statements published by certain parties, including those who are defendants to a lawsuit we filed on March 30, 2023. For 2023, we incurred $10.2 million of expenses associated with responding to defamatory statements previously mentioned, along with approximately $4.3 million of unfavorable non-cash fair value adjustments on our investments marked to fair value during the first six months of 2023.
Current wording
Other expense for the first nine months of 2024 was $566.8 million, compared to $25.4 million of income in the prior year. For 2024, we recognized an approximate $498 million unfavorable fair value adjustment to our investment in PHP Holdings. In addition, we incurred 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 the Steward bankruptcy, responding to certain defamatory statements published by certain parties, including those who are defendants to a lawsuit we filed on March 30, 2023, among other things. For 2023, we had an approximate $30 million favorable non-cash fair value adjustment on our investment in PHP Holdings and a CHF 20 million (approximately $22 million) unrealized gain on our equity investment in Swiss Medical Network, partially offset by $13 million of expenses associated with responding to defamatory statements previously mentioned.
Previous wording
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 $25.5 million income tax expense for the six months ended June 30, 2024 is primarily based on the income generated by our investments in the U.K. and Germany, and included $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. In comparison, we had a $144.7 million income tax benefit in the first half of 2023, which includes a $158 million benefit received by entering the U.K. REIT regime and a $5.0 million tax benefit recognized in the first quarter of 2023 related to the expected sale of our Australia facilities.
Current wording
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 $34.5 million income tax expense for the nine months ended September 30, 2024 is primarily based on the income generated by our investments in the U.K. and Germany, and included $5 million of 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. In comparison, we had a $134.7 million income tax benefit in the first nine months of 2023, which included a $158 million benefit by entering the U.K. REIT regime and a $5.0 million tax benefit recognized in the first quarter of 2023 related to the expected sale of our Australia facilities.
Previous wording
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 $253 million should be reflected against certain of our international and domestic net deferred tax assets at June 30, 2024. 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.
Current wording
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 $386 million should be reflected against certain of our international and domestic net deferred tax assets at September 30, 2024. 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.
Previous wording
The following table presents a reconciliation of net loss attributable to MPT common stockholders to FFO and Normalized FFO for the three and six months ended June 30, 2024 and 2023 (in thousands except per share data):
Current wording
The following table presents a reconciliation of net (loss) income attributable to MPT common stockholders to FFO and Normalized FFO for the three and nine months ended September 30, 2024 and 2023 (in thousands except per share data):
Previous wording
During the first six months of 2024, we generated approximately $110 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 $1.5 billion during the first half of 2024 from the Utah Transaction and the sale of five Prime 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 $183 million, approximately $316 million of new loans (including $215 million of advances to Steward, on a secured basis, in order to protect our investments in Steward (see Note 3 to the condensed consolidated financial statements for further discussion)), pay down portions of our revolving credit facility and British pound sterling term loan due 2025, and to pay off our British pound sterling secured term loan due 2024.
Current wording
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 revolving credit facility and British pound sterling term loan due 2025, and to pay off our British pound sterling secured term loan due 2024.
Previous wording
See below for further details of these transactions along with additional liquidity activity in the first half of 2024:
Current wording
See below for further details of these transactions along with additional liquidity activity in the first nine months of 2024:
Showing the first 40 of 56 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The decreases in operating lease revenue discussed above were partially offset by approximately $50 million more straight-line rent write-offs in the 2023 third quarter compared to the same period of 2024; approximately $2 million from incremental revenue from acquisitions in 2023, capital additions, and the commencement of rent on two development properties in 2024; $2.4 million of favorable foreign currency fluctuations; and approximately $6 million from increases in CPI above the contractual minimum escalations in our leases.
Current report — wording carried from elsewhere
Prime disposal (further described in Note 3 to the condensed consolidated financial statements including the repayment on August 29, 2024), $1 million of higher income from annual escalations due to increases in CPI, and approximately $1.5 million of favorable foreign currency fluctuations.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Operating lease revenues in the 2024 second quarter further declined by approximately $43 million due to disposals and other leasing transactions in 2023 and 2024 (including $26 million from the Utah Transaction described in Note 3 to the condensed consolidated financial statements).
Previous report — wording carried elsewhere
Interest from loans – down $47.2 million, primarily due to a $32.6 million decrease in interest income related to Steward and the international joint venture with the move to cash basis on December 31, 2023, and an approximate $9.5 million decrease from loan payoffs (including $5.4 million from the sale of our interest in the Priory syndicated term loan in the first quarter of 2024). We also recorded $9.5 million more in the first half of 2023 compared to the same period of 2024 as a result of the Prospect Transaction as described in Note