MEDICAL PROPERTIES TRUST INC

Previous wording

the risk that the outcome and terms of the bankruptcy restructurings of affiliates of Prospect will not be consistent with those we anticipate and the risk that we are unable to recover the value of our real estate and other investments in the Prospect portfolio (including our investment in PHP Holdings) as a result of the bankruptcy restructuring, within a reasonable timeframe or at all;

Current wording

the risk that the outcome and terms of the bankruptcy restructurings of affiliates of Prospect will not be consistent with those we anticipate and the risk that we are unable to recover the value of our real estate and other investments in the Prospect portfolio as a result of the bankruptcy restructuring, within a reasonable timeframe or at all;

Previous wording

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 wording

our ability to remain in compliance with our financial covenants under our debt facilities;

Previous wording

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 three months ended March 31, 2025, there were no material changes to these policies.

Current wording

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 six months ended June 30, 2025, there were no material changes to these policies.

Previous wording

At March 31, 2025, our portfolio consisted of 393 properties leased or loaned to 53 operators, of which three are under development. At March 31, 2025, 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):

Current wording

At June 30, 2025, our portfolio consisted of 392 properties leased or loaned to 53 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):

Previous wording

Our total revenues for the 2025 first quarter are down $47.5 million, or 18%, over the same period in the prior year. This decrease is made up of the following:

Current wording

Our total revenues for the 2025 second quarter are down $26.2 million, or 10%, over the same period in the prior year. This decrease is made up of the following:

Previous wording

Income from financing leases – down $6.5 million primarily due to not receiving any cash for rent revenue from Prospect (cash basis tenant) in the first quarter of 2025, whereas we received and recorded $6.6 million of rent for this tenant in the

Current wording

Income from financing leases – down $17.7 million primarily due to not receiving any cash for rent revenue from Prospect (cash basis tenant) in the second quarter of 2025, whereas we received and recorded approximately $18 million of rent for this tenant in the 2024 second quarter. This decrease was partially offset by $0.1 million from the increase in CPI above the lease contractual minimum escalations.

Previous wording

Interest expense for the quarters ended March 31, 2025 and 2024 totaled $115.8 million and $108.7 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 revolving credit facility in the first quarter 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 4.9% for the quarter ended March 31, 2025, compared to 4.2% for the same period in 2024.

Current wording

Interest expense for the quarters ended June 30, 2025 and 2024 totaled $129.7 million and $101.4 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 second quarter 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 5.3% for the quarter ended June 30, 2025, compared to 4.1% for the same period in 2024.

Previous wording

Real estate depreciation and amortization during the first quarter of 2025 decreased to $64.6 million from $75.6 million in 2024. This decrease is primarily due to the sale of various properties in 2024 and early 2025.

Current wording

Real estate depreciation and amortization during the second quarter of 2025 decreased to $66.7 million from $102.2 million in 2024. This decrease is primarily related to the $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 ended well before the contractual term due to the bankruptcy process. The remaining decrease is due to the sale of various properties in 2024 and early 2025, partially offset by fluctuation in foreign currency.

Previous wording

Property-related expenses totaled $7.0 million and $4.8 million for the quarters ended March 31, 2025 and 2024, respectively. Of the property expenses in the first quarter of 2025 and 2024, approximately $1.9 million and $2.3 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. Net of reimbursement, our property-related expenses are higher than prior year due to having three 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.

Current wording

Property-related expenses totaled $10.9 million and $7.7 million for the quarters ended June 30, 2025 and 2024, respectively. Of the property expenses in the second quarter of 2025 and 2024, approximately $5.1 million and $4.9 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 three 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.

Previous wording

General and administrative expenses increased to $41.9 million for the 2025 first quarter, compared to $33.3 million for the 2024 first quarter. Share-based compensation expense was $17.7 million for the first three months of 2025, compared to $7.6 million in 2024, primarily due to the increase in fair value of the 2024 performance awards that contain a cash-settlement feature and are marked to fair value quarterly. None of the 2024 performance shares have vested and will not begin to vest until our stock price reaches $7.00 per share for 20 consecutive days. Excluding share-based compensation expense, general and administrative expenses in the 2025 first quarter were slightly lower than the prior year.

Current wording

General and administrative expenses decreased to $26.2 million for the 2025 second quarter, compared to $35.3 million for the 2024 second quarter. Share-based compensation expense was $0.8 million for the second quarter of 2025, compared to $8.5 million in the 2024 second 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 the 2025 stock awards granted in the quarter.

Previous wording

During the three months ended March 31, 2025, the gain on sale of real estate of $8.1 million relates to the sale of two facilities and an ancillary facility as described in Note 3 to the condensed consolidated financial statements. During the three months ended March 31, 2024, we disposed of three facilities and two ancillary facilities resulting in a net loss of $1.4 million.

Current wording

During the three months ended June 30, 2025, the gain on sale of real estate of $5.2 million relates to the sale of one facility. 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.

Previous wording

Earnings from equity interests was $14.0 million for the quarter ended March 31, 2025, compared to $10.5 million for the same period in 2024. This increase is primarily from our share of income in the Utah partnership that was formed in the 2024 second quarter, which included a $6 million positive fair value adjustment primarily related to its interest rate swap, (as further described in Note 3 to the condensed consolidated financial statements).

Current wording

Earnings from equity interests was $25.3 million for the quarter ended June 30, 2025, compared to a loss of $(401.8) 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 and our share of income in the Utah partnership that was formed in the 2024 second quarter, which included a $15 million positive fair value adjustment in the second 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).

Previous wording

For our unconsolidated real estate joint venture that leases more than 70 healthcare facilities to MEDIAN, we, along with our joint venture partner, are finalizing a refinancing of the €655 million secured debt that is coming due on June 30, 2025. Although terms are not final, it is possible that the joint venture could see an increase in interest expense following this refinancing, which would result in lower earnings from equity interests once the refinancing closes.

Current wording

On June 17, 2025, we, along with our joint venture partner, finalized a refinancing of the €655 million secured debt that was due on June 30, 2025, as more fully described in Note 3 to the condensed consolidated financial statements. The refinancing will result in an increase in interest expense for the joint venture, which will impact our earnings from equity interests.

Previous wording

With certain investments accounted for at fair value, such as our investment in PHP Holdings, we may have positive or negative fair value adjustments from quarter-to-quarter.

Current wording

With certain investments accounted for at fair value, we may have positive or negative fair value adjustments from quarter-to-quarter.

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 $436 million should be reflected against certain of our international and domestic net deferred tax assets at March 31, 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.

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 $473 million should be reflected against certain of our international and domestic net deferred tax assets at June 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.

Previous wording

Net loss for the three months ended March 31, 2025, was ($118.3) million, or ($0.20) per share compared to net loss of ($875.6) million, or ($1.46) per diluted share, for the three months ended March 31, 2024. This decrease in net loss is primarily driven by the $693 million of impairment charges in the first quarter of 2024 related to Steward and the international joint venture and an approximate $201 million unfavorable fair value adjustment to our investment in PHP Holdings in the first quarter of 2024, as compared to $76 million of impairment charges primarily related to Prospect and certain of our Colombia assets along with $30 million of unfavorable fair value adjustments primarily related to our investments in PHP Holdings and Aevis in the 2025 first quarter. See Note 3 to the condensed consolidated financial statements for further details. 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 $81.1 million for the 2025 first quarter, or $0.14 per diluted share, as compared to $141.8 million, or $0.24 per diluted share, for the 2024 first quarter. This 43% decrease in Normalized FFO is primarily due to lower revenues as a result of various disposals in 2024 and 2025 and higher interest expense from our recent refinancing activities.

Current wording

Net loss for the six months ended June 30, 2025, was ($216.6) million, or ($0.36) per share compared to a net loss of ($1.2) billion, or ($1.99) per share, for the six months ended June 30, 2024. This decrease in net loss is primarily driven by the $830.5 million 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 $77.5 million in the first six months of 2025. 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 (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 $162.5 million for the first six months of 2025, or $0.27 per diluted share, as compared to $281.2 million, or $0.47 per diluted share, for the same period of 2024. This 42% decrease in Normalized FFO is primarily due to lower revenues as a result of various disposals in 2024 and 2025 and higher interest expense from our recent refinancing activities.

Previous wording

Operating lease revenue (includes rent billed and straight-line rent) – down $38.7 million from the prior year, primarily due to property sales in 2024 and early 2025, resulting in a loss of operating lease revenue in the first quarter of 2025 compared to the same period of 2024 of $46 million, as well as approximately $1 million of unfavorable foreign currency fluctuations. These decreases were partially offset by an increase of $4.8 million due to increases in CPI above the contractual minimum escalations in our leases, $2.3 million additional revenue from a combination of higher revenue earned on the former Steward facilities and more cash received from a cash basis tenant in the first quarter of 2025 compared to the first quarter of 2024, and a $0.9 million increase due to the completion of capital addition and development projects, including the commencement of rent on two development properties in 2024 and one in the 2025 first quarter.

Current wording

Operating lease revenue (includes rent billed and straight-line rent) – down $43.3 million from the same period in the prior year, primarily due to property sales in 2024 and early 2025, resulting in a loss of operating lease revenue in the first half of 2025 compared to the same period of 2024 of approximately $57 million and $30 million from rent collected from Steward in the first six months of 2024 (none in the same period of 2025). This decrease was partially offset by $25 million of operating lease revenue earned from the retenanting of the former Steward-operated facilities, an increase of $8 million due to increases in CPI above the contractual minimum escalations in our leases, $4.8 million of favorable foreign currency fluctuations, more cash received from other cash basis tenants, and a $0.9 million increase due to the completion of capital addition and development projects, including the commencement of rent on two development properties in 2024 and one in the 2025 first quarter.

Previous wording

Interest from loans – down $1.9 million, primarily due to an approximate $1.3 million decrease from the sale of our interest in the Priory syndicated term loan in the first quarter of 2024), $0.7 million less interest received from cash basis tenants in the first quarter of 2025 compared to the same period of 2024, and $0.1 million of unfavorable foreign currency fluctuations.

Current wording

Interest from loans – down $6.0 million from the same period in the prior year, primarily due to an approximate $3.5 million decrease from the sale of our interest in the Priory syndicated term loan in the first quarter of 2024 and other loan payoffs and approximately $5 million less interest received from cash basis tenants in the first half of 2025 compared to the same period of 2024, partially offset by approximately $2 million of additional revenue from the funding of new loans.

Previous wording

Other income – down $0.4 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 $0.2 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

In the 2025 first quarter, we recognized $76.1 million of real estate and other impairment charges, primarily associated with our investments in Prospect and three hospitals in Colombia. In the 2024 first quarter, we recognized $693 million of non-real estate impairment charges and negative fair value adjustments associated with our investments in Steward and the international joint venture. See Note 3 to the condensed consolidated financial statements for further details of these charges.

Current wording

In the first half of 2025, we recognized $77.5 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 $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. 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, along with ongoing property taxes and other obligations not paid by our cash-basis tenants.

Previous wording

Debt refinancing and unutilized financing costs were $3.8 million for the first quarter 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.

Current wording

Debt refinancing and unutilized financing costs were $3.6 million for the first half 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 $3.0 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.

Previous wording

Other expense for the first quarter of 2025 was $45.2 million, compared to expense of $229.3 million in the prior year. For 2025, we recognized approximately $30 million in unfavorable non-cash fair value adjustments from our investments marked to fair value, primarily due to an approximate $18 million unfavorable adjustment to our investment in PHP Holdings and approximately $12 million related to our investment in Aevis. For 2024, we recognized approximately $216 million in unfavorable non-cash fair value adjustments from our investments marked to fair value, primarily due to an approximate $201 million unfavorable adjustment to our investment in PHP Holdings. In the 2024 first quarter, we recognized a $7.8 million economic loss from the sale of our interest in the Priory syndicated term loan.

Current wording

Other expense for the first six months of 2025 was $169.6 million, compared to expense of $397.0 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 million related to our investment in Aevis. For the first six months of 2024, we recognized an approximate $360 million unfavorable adjustment to our investment in PHP Holdings. The remaining expense in the first half of 2024 included 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.

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 $9.4 million income tax expense for the three months ended March 31, 2025, is primarily based on the income generated by our investments in the U.K. and Germany and slightly less than the $10.9 million income tax expense in the first quarter of 2024.

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 $19.2 million income tax expense for the six months ended June 30, 2025, is primarily based on the income generated by our investments in the U.K. and Germany and less than the $25.5 million income tax expense in the first half 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.

Previous wording

The following table presents a reconciliation of net loss attributable to MPT common stockholders to FFO and Normalized FFO for the three months ended March 31, 2025 and 2024 (in thousands except per share data):

Current 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, 2025 and 2024 (in thousands except per share data):

Previous wording

Total share-based compensation expense is $17.7 million for the quarter ended March 31, 2025 (including certain awards that are to be settled in cash). Cash-settled awards are typically recorded in accordance with GAAP at fair value and measured at each balance sheet date until settlement. The resulting fluctuations, which are primarily driven by changes in our stock price rather than operational performance, can introduce significant volatility in our earnings. To enhance comparability and provide a more stable view of performance over time, normalized FFO reflects a $9.5 million adjustment this quarter to arrive at total share-based compensation expense using grant date fair value for all awards (including cash-settled awards) of $8.1 million.

Current wording

Total share-based compensation expense is $0.9 million and $18.5 million for the three and six months ended June 30, 2025, respectively, (including certain awards that are to be settled in cash). Cash-settled awards are recorded in accordance with GAAP at fair value and measured at each balance sheet date until settlement. The resulting fluctuations, which are primarily driven by changes in our stock price rather than operational performance, can introduce significant volatility in our earnings. To enhance comparability and provide a more stable view of performance over time, normalized FFO reflects a $(9.5) million and less than $(0.1) million adjustment in the three and six months ended June 30, 2025, respectively, to arrive at total share-based compensation expense using grant date fair value for all awards (including cash-settled awards) of $10.4 million and $18.5 million for the three and six months ended June 30, 2025.

Previous wording

During the first three months of 2025, we generated approximately $0.4 million of cash flows from operating activities, which were lower than previous quarters due to approximately $40 million less cash rent received due to property sales in 2024 and early 2025, approximately $16 million less cash rent and interest received from tenants accounted for on a cash basis, and approximately $15 million of property taxes and other property related payments related to the global settlement with Steward. We used these operating cash flows, proceeds from our revolving credit facility, and proceeds from asset sales to fund our dividends and other investing activities. During the 2025 first quarter, 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 revolving 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 revolving credit facility by approximately $800 million.

Current wording

During the first six months of 2025, we generated approximately $52 million of cash flows from operating activities, which were lower than the first six months of 2024 primarily due to approximately $50 million of less cash rent received due to property sales in 2024 and the first half of 2025 and approximately $45 million less cash rent and interest received from tenants accounted for on a cash basis, partially offset by a $35 million decrease in interest paid for the first six months of 2025 compared to the same period of 2024. 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 half 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.

Previous wording

As a result of our Quarterly Report on Form 10-Q for the period ended March 31, 2024, not being filed timely, we are currently ineligible to file a new shelf registration statement on Form S-3 for sales of securities, including under an ATM program. However, we will regain such eligibility on June 1, 2025.

Current wording

As a result of our Quarterly Report on Form 10-Q for the period ending March 31, 2024 not being filed timely, we were ineligible to file a new shelf registration statement on Form S-3 for sales of securities until June 1, 2025. However, on June 2, 2025, we filed a new shelf registration statement giving us the ability, once again, to raise capital in the public markets, if we choose to do so.

Previous wording

On February 13, 2025 and concurrent with the closing of our secured notes offering discussed above, we further amended the Credit Facility and (i) removed certain restrictions imposed by the August 2024 amendment, which included additional mandatory prepayments and a restriction on cash dividends to $0.08 per share per fiscal quarter, (ii) permanently removed financial covenants regarding minimum consolidated tangible net worth, maximum unsecured indebtedness to unencumbered asset value and minimum unsecured net operating income to unsecured interest expense, (iii) amended certain definitions used in the financial covenant regarding maximum total indebtedness to total asset value to conform to corresponding definitions in our existing unsecured indentures and the secured notes issued concurrently and set the covenant level at 60%, (iv) provided notice that we plan to exercise both of our maturity extension options such that the maturity of the revolving portion of our Credit Facility would move to the same maturity date as our unsecured term loan facility of June 30, 2027 (subject to the satisfaction of the other conditions), (v) reset the interest rate to SOFR plus 225 basis points (which had previously been moved to SOFR plus 300 basis points in August 2024), (vi) provided for the loans thereunder to be secured and guaranteed ratably with the newly issued secured notes, (vii) set the maximum secured leverage ratio at 40%, and (viii) added mandatory prepayments of senior debt or addition of 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).

Current wording

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 other 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 addition of 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).

Previous wording

During the first three months of 2024, we generated approximately $74.3 million of cash flows from operating activities, primarily consisting of rent and interest from mortgage and other loans. In addition, we received approximately $133 million during the quarter from sales of our interest in the syndicated Priory term loan, the remaining minority equity interest in Lifepoint Behavioral, and certain real estate properties. We used our operating cash flows, asset sale proceeds, and cash on-hand and borrowings under our revolving credit facility to fund our dividends of $92.8 million and certain investing activities.

Current 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, pay down portions 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.

Previous wording

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.

Current wording

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 (which we expect such distributions to be at least $25 million in the second half of 2025) are typically enough to cover our short-term liquidity requirements.

Previous wording

After the February 2025 refinancing transactions mentioned above, we have no debt maturities coming due in the next twelve months. In addition, we have liquidity of $1.3 billion (including cash on hand and availability under our $1.28 billion revolving credit facility) at May 7, 2025. 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.

Current wording

At August 5, 2025, we have no debt maturities 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 $1.2 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, including any additional loan advances to the debtor as part of the ongoing Prospect bankruptcy, as discussed earlier.

Previous wording

Our long-term liquidity requirements generally consist of the same requirements described above under “Short-term Liquidity Requirements” along with the acquisition of real estate and the funding of debt maturities coming due after the next twelve months. At this time, we do not expect any material acquisitions of real estate in the foreseeable future.

Current wording

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.

Previous wording

As described previously, our monthly rent and interest receipts and distributions from our joint venture arrangements along with our current liquidity of approximately $1.3 billion at May 7, 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:

Current wording

As described previously, our monthly rent and interest receipts and distributions from our joint venture arrangements along with our current liquidity of approximately $1.2 billion at August 5, 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:

Previous wording

reducing our dividend (or moving to a stock dividend), while still complying with REIT requirements and credit facility covenants;

Current wording

reducing our dividend (or switching to a stock dividend), while still complying with REIT requirements and credit facility covenants;

Previous wording

entering into new secured loans on real estate;

Current wording

entering into additional secured loans on real estate;

Previous wording

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 may negatively impact the timing, value, and/or our ability to sell certain Prospect assets, such as the three Connecticut facilities and PHP Holdings.

Current wording

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.