MEDICAL PROPERTIES TRUST INC

Previous wording

macroeconomic conditions, including due to geopolitical instability and global trade disruptions, which may lead to a disruption of or lack of access to the capital markets, disruptions and instability in the banking and financial services industries, rising inflation and movements in currency exchange rates, and may negatively impact the financial condition of our tenants;

Current wording

macroeconomic conditions, including due to geopolitical instability, including the current U.S. government shutdown, and global trade disruptions, which may lead to a disruption of or lack of access to the capital markets, disruptions and instability in the banking and financial services industries, rising inflation and movements in currency exchange rates, and may negatively impact the financial condition of our tenants;

Previous wording

the ability of our tenants, operators, and borrowers (including those of our joint ventures) to satisfy their obligations under their respective contractual arrangements with us;

Current wording

the ability of our tenants, operators, and borrowers (including those of our joint ventures) to satisfy their obligations under their respective contractual arrangements with us, including the rent ramp up provisions in the leases of former Steward-operated 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 six months ended June 30, 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 nine months ended September 30, 2025, there were no material changes to these policies.

Previous 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):

Current wording

At September 30, 2025, our portfolio consisted of 388 properties leased or loaned to 51 operators, and all of our investments are located in the U.S., Europe, and South America. Our total assets are made up of the following (dollars in thousands):

Previous wording

Net loss for the three months ended June 30, 2025, was ($98.4) million, or ($0.16) per share compared to a net loss of ($320.6) million, or ($0.54) per share, for the three months ended June 30, 2024. This decrease in net loss is primarily driven by the $410 million impairment of real estate in our Massachusetts-based partnership with Macquarie in the second quarter of 2024 that is included in our "Earnings (loss) from equity interests" line of our condensed consolidated 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 in the second quarter of 2024 (compared to a $129 million unfavorable fair value adjustment in the second quarter of 2025), and $136 million more of real estate impairment and other charges in the second quarter of 2024 compared to the same period of 2025, partially offset by approximately $380 million more gains on sales of real estate in the 2024 second quarter compared to the 2025 second 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 $81.4 million for the 2025 second quarter, or $0.14 per diluted share, as compared to $139.4 million, or $0.23 per diluted share, for the 2024 second quarter. 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.

Current wording

Net loss for the three months ended September 30, 2025, was ($77.7) million, or ($0.13) per share compared to a net loss of ($801.2) million, or ($1.34) per share, for the three months ended September 30, 2024. This decrease in net loss is primarily driven by (i) approximately $608 million of impairment charges primarily related to the global settlement reached with Steward and its lenders as described in Note 3 to the condensed consolidated financial statements, (ii) approximately $134 million unfavorable fair value adjustment to our investment in PHP Holdings, and (iii) approximately $137 million of accelerated amortization of in-place lease intangibles, all in the third quarter of 2024. These decreases were partially offset by approximately $100 million of additional gains on sales of real estate in the third quarter of 2024 compared to the 2025 third quarter. Normalized FFO, after adjusting for certain items (as more fully described in the section titled “Reconciliation of Non-GAAP Financial Measures” in Item 2 of this Quarterly Report on Form 10-Q), was $77.2 million for the 2025 third quarter, or $0.13 per diluted share, as compared to $93.9 million, or $0.16 per diluted share, for the 2024 third quarter. This 17.7% decrease in Normalized FFO is primarily due to higher interest expense from our recent refinancing activities.

Previous 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:

Current wording

Our total revenues for the 2025 third quarter increased $11.7 million, or 5%, over the same period in the prior year. This increase is made up of the following:

Previous wording

Operating lease revenue (includes rent billed and straight-line rent) – down $4.6 million from the prior year, primarily due to $19 million from rent collected from Steward in the 2024 second quarter (none in the 2025 second quarter) and $11.4 million of lower revenues from property sales in 2024 and early 2025. These decreases were partially offset by $15 million of operating lease revenue earned from the retenanting of the former Steward-operated facilities, more cash received from other cash basis tenants, an increase of $3 million due to increases in CPI above the contractual minimum escalations in our leases, $5.7 million of favorable foreign currency fluctuations, and $0.1 million from the completion of capital additions and development projects in 2024 and 2025.

Current wording

Operating lease revenue (includes rent billed and straight-line rent) – up $11.1 million from the prior year, primarily due to $11 million more of lease revenue earned from the retenanting of the former Steward-operated facilities, approximately $6 million of additional cash received from other cash-basis tenants, an increase of $2.5 million due to increases in CPI above the contractual minimum escalations in our leases, $5 million of favorable foreign currency fluctuations, and $0.6 million from the completion of capital additions and development projects in 2024 and 2025. These increases were offset by approximately $10 million from rent collected from Steward in the 2024 third quarter (none in the 2025 third quarter) and approximately $3.6 million lower revenues from property sales in 2024 and 2025.

Previous 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.

Current wording

Income from financing leases – up $0.1 million primarily due to the increase in CPI above the lease contractual minimum escalations.

Previous wording

Interest from loans – down $4.1 million, primarily due to an approximate $2 million decrease from loan payoffs and approximately $4 million less interest received from cash basis tenants in the second quarter of 2025 compared to the same period of 2024, partially offset by approximately $2 million of additional revenue from the funding of new loans.

Current wording

Interest from loans – up $0.8 million, primarily due to approximately $1.2 million of additional revenue from the funding of new loans.

Previous 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.

Current wording

Other income – down $0.3 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, 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.

Current wording

Interest expense for the quarters ended September 30, 2025 and 2024 totaled $132.4 million and $106.2 million, respectively. This increase is primarily related to higher interest from our February 2025 debt refinancing activities (see Note 4 to the condensed consolidated financial statements for further details), partially offset by lower interest expense from the decrease in average borrowings on our Credit Facility in the third quarter of 2025, compared to the same period of 2024 and the payoff of our £493 million British pound sterling term loan in the first quarter of 2025. Overall, our weighted-average interest rate was 5.4% for the quarter ended September 30, 2025, compared to 4.3% for the same period in 2024.

Previous 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.

Current wording

Property-related expenses totaled $9.0 million and $5.0 million for the quarters ended September 30, 2025 and 2024, respectively. Of the property expenses in the third quarter of 2025 and 2024, approximately $2.3 million and $2.6 million, respectively, represents costs that were reimbursed by our tenants and included in the “Interest and other income” line of the condensed consolidated statements of net income. Net of reimbursement, our property-related expenses are higher than prior year as we have additional vacant properties following the Steward bankruptcy. We are in various stages of re-tenanting or selling our vacant properties, which make up less than 1% of our total assets.

Previous 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.

Current wording

General and administrative expenses were $37.7 million for the 2025 third quarter, compared to $36.6 million for the 2024 third quarter. The increase quarter-over-quarter is due to higher travel and professional fees, partially offset by lower share-based compensation expenses. Share-based compensation expense was $12.3 million for the third quarter of 2025, compared to $14.4 million in the 2024 third quarter, primarily due to the decrease in fair value of the 2024 performance awards that contain a cash-settlement feature and are marked to fair value quarterly, partially offset by additional expense from stock awards granted in 2025.

Previous 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.

Current wording

During the three months ended September 30, 2025, the loss on sale of real estate was ($9.1) million primarily related to the sale of two facilities. During the three months ended September 30, 2024, the gain on sale of real estate of $91.8 million primarily relates to the sale of eight Dignity Health facilities and 11 UCHealth facilities as more fully described in Note 3 to the condensed consolidated financial statements.

Previous wording

In the 2025 second quarter, we recognized $1.4 million of real estate and other impairment charges, primarily associated with our three hospitals in Colombia and non-real estate impairment charges, primarily property taxes and other obligations not paid by our cash-basis tenants. These charges were partially offset by an impairment recovery on our Prospect facilities as more fully described in Note 3 to the condensed consolidated financial statements. In the same period of 2024, 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 potentially 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.

Current wording

In the 2025 third quarter, we recognized $81.8 million of real estate and other impairment charges, primarily associated with our Prospect investments and non-real estate impairment charges for property taxes and other obligations not paid by our cash-basis tenants. In the same period of 2024, we recognized $607.9 million of real estate and other impairment charges. Of these charges, approximately $425 million consisted of the impairment of working capital loans and other secured loans advanced to Steward, and $180 million was related to real estate, including the Space Coast facilities and certain excess properties previously leased to Steward (as more fully described in Note 3 to the condensed consolidated financial statements).

Previous 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).

Current wording

Earnings from equity interests was $34.4 million for the quarter ended September 30, 2025, compared to earnings of $21.6 million for the same period in 2024. This increase is primarily due to our share of income in the MEDIAN joint venture from a deferred income tax benefit recognized in the third quarter of 2025 related to the lowering of German tax rates. Our share of income in the Utah partnership included a $12.8 million positive fair value adjustment in the third quarter of 2025, primarily related to a favorable fair value adjustment on its investments in real estate (as further described in Note 3 to the condensed consolidated financial statements), compared to $13.5 million in the same period last year.

Previous wording

Other expense for the second quarter of 2025 was $124.4 million, compared to expense of $167.7 million in the prior year. For the 2025 second quarter, we recognized approximately $125 million in unfavorable non-cash fair value adjustments from our investments marked to fair value, primarily due to an approximate $129 million unfavorable adjustment to our investment in PHP Holdings, partially offset by a favorable adjustment of approximately $4 million related to our investment in Aevis. For the 2024 second quarter, we recognized an approximate $160 million unfavorable 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.

Current wording

Other expense for the third quarter of 2025 was $1.5 million, compared to expense of $169.8 million in the prior year. For the 2024 third quarter, we recognized approximately $140 million in unfavorable adjustments to our investment in PHP Holdings and Aevis. The remaining expense in the 2024 third quarter included approximately $29 million of legal and other professional expenses associated with, among other things, responding to certain defamatory statements published by certain parties.

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 $9.8 million income tax expense for the three months ended June 30, 2025, is primarily based on the income generated by our investments in the U.K. and Germany and is less than the $14.6 million income tax expense in the second quarter 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.

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 $10.9 million income tax expense for the three months ended September 30, 2025, is primarily based on the income generated by our investments in the U.K. and Germany and is higher than the $9.0 million income tax expense in the third quarter of 2024 due to various matters including the impact from the lowering of German tax rates (in future years) on certain deferred tax asset positions on our non-joint venture German entities.

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 $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.

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 $486 million should be reflected against certain of our international and domestic net deferred tax assets at September 30, 2025. In the future, if we determine that it is more likely than not that we will realize our net deferred tax assets, we will reverse the applicable portion of the valuation allowance, recognize an income tax benefit in the period in which such determination is made, and potentially incur higher income tax expense in future periods as income is earned.

Previous 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.

Current wording

Net loss for the nine months ended September 30, 2025, was ($294.4) million, or ($0.49) per share compared to a net loss of ($2.0) billion, or ($3.33) per share, for the nine months ended September 30, 2024. This decrease in net loss was primarily driven by the $1.4 billion of impairment charges and negative fair value adjustments in 2024 primarily related to Steward and the international joint venture (all included in "Real estate and other impairment charges, net" line of the condensed consolidated statements of net income), whereas, we incurred only $81.8 million in the first nine months of 2025, primarily related to Prospect. In addition, we had an approximate $498 million unfavorable fair value adjustment to our investment in PHP Holdings in the first nine months of 2024 (compared to $147 million in the same period of 2025) as reflected in "Other (including fair value adjustments on securities)" line of the condensed consolidated statements of net income, and the $410 million of impairment charges related to our Massachusetts-based partnership in the second quarter of 2024 reflected in "Earnings (loss) from equity interests" line of the condensed consolidated statements of net income. Normalized FFO, after adjusting for certain items (as more fully described in the section titled “Reconciliation of Non-GAAP Financial Measures” in Item 2 of this Quarterly Report on Form 10-Q), was $239.7 million for the first nine months of 2025, or $0.40 per diluted share, as compared to $375.0 million, or $0.62 per diluted share, for the same period of 2024. This 36% decrease in Normalized FFO is primarily due to lower revenues as a result of various disposals in 2024 and 2025, along with less cash revenue received from Steward and Prospect, and higher interest expense from our recent refinancing activities.

Previous wording

A comparison of revenues for the six months ended June 30, 2025 and 2024 is as follows (dollar amounts in thousands):

Current wording

A comparison of revenues for the nine months ended September 30, 2025 and 2024 is as follows (dollar amounts in thousands):

Previous wording

Our total revenues for the first six months of 2025 are down $73.7 million, or 14%, 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 2025 decreased $62 million, or 8%, 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 $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.

Current wording

Operating lease revenue (includes rent billed and straight-line rent) – down $32.3 million from the same period in the prior year, primarily due to property sales in 2024 and 2025, resulting in a loss of operating lease revenue in the first nine months of 2025 compared to the same period of 2024 of approximately $61 million and $40 million from rent collected from Steward in the first nine months of 2024 (none in the same period of 2025). This decrease was partially offset by $36 million of operating lease revenue earned from the retenanting of the former Steward-operated facilities, an increase of $11 million due to increases in CPI above the contractual minimum escalations in our leases, $9.8 million of favorable foreign currency fluctuations, approximately $8 million more cash received from other cash-basis tenants, and a $1 million increase due to the completion of capital addition and development projects, including the commencement of rent on two development properties in 2024 and three in 2025.

Previous wording

Income from financing leases – down $24.2 million from the same period in the prior year primarily due to not receiving any cash for rent revenue from Prospect (cash basis tenant) in the first half of 2025, whereas we received and recorded $25 million of rent from Prospect in the first six months of 2024. This decrease was partially offset by $0.3 million from the increase in CPI above the lease contractual minimum escalations.

Current wording

Income from financing leases – down $24.1 million from the same period in the prior year primarily due to not receiving any cash for rent revenue from Prospect (cash-basis tenant) in the first nine months of 2025, whereas we received and recorded $25 million of rent from Prospect in the first nine months of 2024. This decrease was partially offset by $1 million from the increase in CPI above the lease contractual minimum escalations.

Previous 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.

Current wording

Interest from loans – down $5.2 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 nine months of 2025 compared to the same period of 2024, partially offset by approximately $3.2 million of additional revenue from the funding of new loans.

Previous wording

Other income – up $0.2 million from the prior year as we had more direct reimbursements from our cash basis tenants for ground leases, property taxes, and insurance.

Current wording

Other income – down $0.5 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, 2025 and 2024 totaled $245.5 million and $210.1 million, respectively. This increase is primarily related to higher interest from our February 2025 debt refinancing activities (see Note 4 to the condensed consolidated financial statements for further details), partially offset by lower interest expense from the decrease in average borrowings on our Credit Facility in the first half 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 5.1% for the six months ended June 30, 2025, compared to 4.1% for the same period in 2024.

Current wording

Interest expense for the nine months ended September 30, 2025 and 2024 totaled $377.9 million and $316.4 million, respectively. This increase is primarily related to higher interest from our February 2025 debt refinancing activities (see Note 4 to the condensed consolidated financial statements for further details), partially offset by lower interest expense from the decrease in average borrowings on our Credit Facility in the first nine months of 2025, compared to the same period of 2024, along with the payoff of our £493 million British pound sterling term loan in the first quarter of 2025. Overall, our weighted-average interest rate was 5.2% for the nine months ended September 30, 2025, compared to 4.3% for the same period in 2024.

Previous wording

Real estate depreciation and amortization for the first six months of 2025 decreased to $131.3 million from $177.8 million for the same period of the prior year. This decrease is primarily due to 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 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 fluctuations in foreign currency.

Current wording

Real estate depreciation and amortization for the first nine months of 2025 decreased to $198.3 million from $382.7 million for the same period of the prior year. This decrease is primarily due to $170 million of additional amortization expense recorded in 2024 primarily to fully amortize the intangibles associated with two master leases, including the Steward master lease that was terminated effective September 11, 2024. The remaining decrease is due to the sale of various properties in 2024 and 2025.

Previous wording

Property-related expenses totaled $17.9 million and $12.5 million for the six months ended June 30, 2025 and 2024, respectively. Of the property expenses in the first half of 2025 and 2024, approximately $7.1 million and $7.2 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 $26.9 million and $17.5 million for the nine months ended September 30, 2025 and 2024, respectively. Of the property expenses in the first nine months of 2025 and 2024, approximately $9.3 million and $9.8 million, respectively, represents costs that were reimbursed by our tenants and included in the “Interest and other income” line on our condensed consolidated statements of net income. Net of reimbursement, our property-related expenses are higher than prior year due to having additional vacant properties post Steward bankruptcy. We are in various stages of re-tenanting or selling our vacant properties, which make up less than 1% of our total assets.

Previous wording

General and administrative expenses were $68.1 million for the first half of 2025, compared to $68.7 million for the same period of 2024. Share-based compensation expense was $18.5 million for the first six months of 2025, compared to $16.2 million for the same period of 2024, primarily due to the 2025 stock awards granted in the second quarter.

Current wording

General and administrative expenses were $105.8 million for the first nine months of 2025, compared to $105.3 million for the same period of 2024. Share-based compensation expense was $30.9 million for the first nine months of 2025, compared to $30.6 million for the same period of 2024.

Previous wording

During the six months ended June 30, 2025, the gain on sale of real estate of $13.3 million relates to the sale of three facilities. During the six months ended June 30, 2024, the gain on sale of real estate of $383 million 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 nine months ended September 30, 2025, the net gain on sale of real estate of $4.2 million primarily relates to the sale of five facilities as more fully described in Note 3 to the condensed consolidated financial statements. During the nine months ended September 30, 2024, the gain on sale of real estate of $475.2 million primarily related to the sale of five Prime facilities, a 75% interest in five Utah facilities as part of the Utah Transaction, and the sale of eight Dignity Health and 11 UCHealth facilities, each as more fully described in Note 3 to the condensed consolidated financial statements.

Previous 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.

Current wording

In the first nine months of 2025, we recognized $159.3 million of real estate and other impairment charges, primarily associated with our investments in Prospect and three hospitals in Colombia, as well as ongoing property taxes and other obligations not paid by our cash-basis tenants. In the same period of 2024, we recognized $1.4 billion of real estate and other impairment charges and fair value adjustments, primarily associated with our investments in Steward and the international joint venture as further described in Note 3 to the condensed consolidated financial statements.

Previous wording

Earnings from equity interests was $39.3 million for the six months ended June 30, 2025, compared to a loss of $(391.2) 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 $21 million positive fair value adjustment in the first half of 2025, primarily related to its interest rate swap and an unrealized gain on investments in real estate.

Current wording

Earnings from equity interests was $73.7 million for the nine months ended September 30, 2025, compared to a loss of ($369.6) million for the same period in 2024. This increase is primarily due to the $410 million charge in the second quarter of 2024 associated with the real estate impairment in our Massachusetts-based partnership with Macquarie. In addition, our share of income increased year-over-year in the Utah partnership that was formed in the 2024 second quarter by approximately $27.0 million, as prior year only included three months of activity versus a full nine months in 2025 plus the nine months ended September 30, 2025 included approximately $34 million of positive fair value adjustments (primarily real estate related) compared to $13.5 million in 2024. Finally, our share of income in the MEDIAN joint venture increased by approximately $8.8 million primarily driven by the deferred tax benefit disclosed previously in Note 3 to the condensed consolidated financial statements.

Previous 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.

Current wording

Debt refinancing and unutilized financing costs were $3.6 million for the first nine months of 2025. These costs were incurred primarily as a result of the early redemption of our 3.325% Senior Unsecured Notes due 2025, 2.500% Senior Unsecured Notes due 2026, and 5.250% Senior Unsecured Notes due 2026. For the same period of 2024, these costs were $3.7 million and were incurred as a result of the reduction in revolving commitments under our Credit Facility and partial paydown of our British pound sterling term loan due 2025.

Previous 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.

Current wording

Other expense for the first nine months of 2025 was $171.1 million, compared to expense of $566.8 million in the same period of the prior year. For 2025, we recognized approximately $156 million in unfavorable non-cash fair value adjustments from our investments marked to fair value, primarily due to an approximate $147 million unfavorable adjustment to our investment in PHP Holdings and approximately $8.3 million related to our investment in Aevis. For the first nine months of 2024, we recognized an approximate $498 million unfavorable adjustment to our investment in PHP Holdings. The remaining expense in the first nine months of 2024 included a $7.8 million economic loss from the sale of our interest in the Priory syndicated term loan and approximately $46.5 million of legal and other professional expenses associated with, among other things, responding to certain defamatory statements published by certain parties.

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 $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.

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 $30.1 million income tax expense for the nine months ended September 30, 2025, is primarily based on the income generated by our investments in the U.K. and Germany and less than the $34.5 million income tax expense in the first nine months of 2024 due to a $5 million additional tax expense in the second quarter of 2024 as a result of the gain on the interest rate swap associated with the internal restructuring of the British pound sterling term loan due 2025.

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 $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.

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 $486 million should be reflected against certain of our international and domestic net deferred tax assets at September 30, 2025. In the future, if we determine that it is more likely than not that we will realize our net deferred tax assets, we will reverse the applicable portion of the valuation allowance, recognize an income tax benefit in the period in which such determination is made, and potentially incur higher income tax expense in future periods as income is earned.

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, 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 nine months ended September 30, 2025 and 2024 (in thousands except per share data):

Previous 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.

Current wording

Total share-based compensation expense is $12.3 million and $30.9 million for the three and nine months ended September 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 $3.5 million and $3.4 million favorable adjustment in the three and nine months ended September 30, 2025, respectively, to arrive at total share-based compensation expense using grant date fair value for all awards (including cash-settled awards) of $8.9 million and $27.4 million for the three and nine months ended September 30, 2025.

Previous 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.

Current wording

During the first nine months of 2025, we generated approximately $70 million of cash flows from operating activities, which were lower than the first nine months of 2024 primarily due to approximately $55 million of less cash rent received due to property sales in 2024 and 2025, approximately $43 million less cash rent and interest received from tenants accounted for on a cash basis, and an approximate $43 million increase in interest paid for the first nine months of 2025 compared to the same period of 2024, partially offset by increases in cash received due to inflation based escalators in our leases and less cash paid for litigation, bankruptcy, and other costs. We used these operating cash flows, proceeds from our Credit Facility, and proceeds from asset sales to fund our dividends and other investing activities. During the first nine months of 2025, we repaid the remaining outstanding balance of the British pound sterling term loan due 2025 of £493 million, with a combination of cash on hand and available capacity under our Credit Facility. We also completed a private offering of $1.5 billion in aggregate principal amount of senior secured notes due 2032 and €1.0 billion aggregate principal amount of senior secured notes due 2032. The net proceeds from the offering were approximately $2.5 billion after deducting discounts, commissions, and other offering related expenses. We used the net proceeds from the offering to fund the redemption of our 3.325% Senior Unsecured Notes due 2025, 2.500% Senior Unsecured Notes due 2026, and 5.250% Senior Unsecured Notes due 2026, with the remainder of net proceeds used to paydown our Credit Facility by approximately $800 million.