MEDICAL PROPERTIES TRUST INC

Previous wording

macroeconomic conditions, including due to geopolitical instability (such as ongoing armed conflicts in the Middle East and Ukraine) and the implementation of new and increased tariffs and other 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, persistent inflation and movements in currency exchange rates, and may negatively impact our financial condition and the financial condition of our tenants;

Current wording

macroeconomic conditions, including due to geopolitical instability (such as ongoing armed conflicts in the Middle East and Ukraine) and other 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, persistent inflation and movements in currency exchange rates, and may negatively impact our financial condition and the financial condition of our tenants;

Previous wording

the risk that property sales (including those discussed in Note 12 to the condensed consolidated financial statements), loan repayments, and other capital recycling transactions do not occur as anticipated or at all;

Current wording

the risk that property sales, loan repayments, and other capital recycling transactions do not occur as anticipated or at all;

Previous wording

the risk that the timing, outcome, and terms of Prospect's causes of action, that is collateral for DIP and other fundings that remain outstanding, will not be consistent with those anticipated by the Company;

Current wording

the risk that the timing, outcome, and terms of Prospect's causes of action, which serve as collateral for DIP and other fundings that remain outstanding, will not be consistent with those anticipated by the Company;

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, including the rent ramp up provisions in the leases of former Steward and Prospect-operated facilities;

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 lease of former Prospect-operated facilities;

Previous wording

staffing trends, including ratios, turnover metrics, recruitment and retention strategies at corporate and individual facility levels;

Current wording

staffing trends, including use of contract labor, ratios, turnover metrics, recruitment and retention strategies at corporate and individual facility levels;

Previous wording

Refer to our 2025 Annual Report for a discussion of our critical accounting policies, which include investments in real estate, purchase price allocation, loans, credit losses, losses from rent and interest receivables, investments accounted for under the fair value option election, and our accounting policy on consolidation. During the six months ended June 30, 2026, there were no material changes to these policies and estimates.

Current wording

Refer to our 2025 Annual Report for a discussion of our critical accounting policies, which include investments in real estate, purchase price allocation, loans, credit losses, losses from rent and interest receivables, investments accounted for under the fair value option election, and our accounting policy on consolidation. During the nine months ended September 30, 2026, there were no material changes to these policies and estimates.

Previous wording

At June 30, 2026, our portfolio consisted of 373 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):

Current wording

At September 30, 2026, our portfolio consisted of 365 properties leased or loaned to 52 operators, and all of our investments are located in the U.S., Europe, and South America. Our total assets are made up of the following (dollars in thousands):

Previous wording

Net loss for the three months ended June 30, 2026 was ($2.6) million, or ($0.01) per share, compared to a net loss of ($98.4) million, or ($0.16) per share, for the three months ended June 30, 2025. This improvement quarter over quarter is primarily driven by an $18.9 million increase in revenue, as discussed in detail below, and a $129 million unfavorable fair value adjustment to our investment in PHP Holdings in the second quarter of 2025, partially offset by more impairment charges, higher interest expense and general and administrative expense, along with lower earnings from equity interests in 2026 compared to 2025. Normalized FFO, after adjusting for certain items (as more fully described in the section titled "Reconciliation of Non-GAAP Financial Measures" in Item 2 of this Quarterly Report on Form 10-Q), was $92.2 million for the 2026 second quarter, or $0.15 per diluted share, as compared to $81.4 million, or $0.14 per diluted share, for the 2025 second quarter.

Current wording

Net income for the three months ended September 30, 2026 was $201.6 million, or $0.34 per diluted share, compared to a net loss of ($77.7) million, or ($0.13) per diluted share, for the three months ended September 30, 2025. This improvement quarter over quarter is primarily driven by gains from asset sales and debt refinancing activities in 2026 along with less impairment charges than 2025. Normalized FFO, after adjusting for certain items (as more fully described in the section titled "Reconciliation of Non-GAAP Financial Measures" in Item 2 of this Quarterly Report on Form 10-Q), was $63.8 million for the 2026 third quarter, or $0.11 per diluted share, as compared to $77.2 million, or $0.13 per diluted share, for the 2025 third quarter. This decrease is primarily related to higher interest expense quarter over quarter, partially offset by an increase in revenue.

Previous wording

Our total revenues for the 2026 second quarter increased $18.9 million, or 7.9%, over the same period in the prior year. This increase is made up of the following:

Current wording

Our total revenues for the 2026 third quarter increased $12.6 million, or 5.3%, over the same period in the prior year. This increase is made up of the following:

Previous wording

Operating lease revenue (includes rent billed and straight-line rent) – up $19.2 million from the same period in the prior year, primarily due to $16.4 million more of lease revenue earned from the retenanting of the former Steward and Prospect-operated facilities, approximately $4.4 million of additional cash received from acquisitions in 2025 and 2026, an increase of $2.1 million due to increases in CPI above the contractual minimum escalations in our leases, $0.9 million of favorable foreign currency fluctuations, and $1.1 million from the completion of capital additions and development projects in 2025 and 2026. These increases were offset by approximately $5.5 million lower revenues from property sales in 2025 and 2026.

Current wording

Operating lease revenue (includes rent billed and straight-line rent) – up $13.6 million from the same period in the prior year, primarily due to $16.4 million more of lease revenue earned from the retenanting of the former Steward and Prospect-operated facilities, approximately $6.0 million of additional cash received from acquisitions in 2025 and 2026, an increase of $2.0 million due to increases in CPI above the contractual minimum escalations in our leases, and $1.0 million from the completion of capital additions and development projects in 2025 and 2026. These increases were partially offset by approximately $7.0 million lower revenues from property sales in 2025 and 2026 (including $1.1 million impact from the two Idaho properties sold in mid-September 2026), approximately $2.2 million lower non-cash revenues from the Scion/Lifepoint Transaction discussed in Note 3 to the condensed consolidated financial statements and as discussed in the 2026 second quarter Form 10-Q, and unfavorable foreign currency fluctuations.

Previous wording

Other income – down $0.7 million from the prior year as we had less direct reimbursements from tenants for ground leases, property taxes, and insurance.

Current wording

Other income – up $0.4 million from the prior year as we had more direct reimbursements from tenants for ground leases, property taxes, and insurance.

Previous wording

We currently have several tenants on the cash basis from a revenue recognition perspective, which can result in variability of our lease revenue quarter-to-quarter.

Current wording

We currently have several tenants on the cash basis from a revenue recognition perspective, which can result in variability of our lease and interest revenue quarter-to-quarter such as was the case with the non-payment of rent from HSA for September 2026.

Previous wording

Real estate depreciation and amortization during the second quarter of 2026 increased to $69.5 million from $66.7 million in 2025. This increase is primarily due to the six California properties, leased to NOR, that were reclassified as operating leases in December 2025, along with net acquisition and disposal activity since the second quarter of 2025 (as disclosed previously).

Current wording

Real estate depreciation and amortization during the third quarter of 2026 increased to $70.3 million from $67.0 million in 2025. This increase is primarily due to the six California properties, leased to NOR, that were reclassified as operating leases in December 2025, along with net acquisition and disposal activity since the third quarter of 2025 (as disclosed previously).

Previous wording

Property-related expenses totaled $11.2 million and $10.9 million for the quarters ended June 30, 2026 and 2025, respectively. Of the property-related expenses in the second quarter of 2026 and 2025, approximately $4.4 million and $5.1 million, respectively, represent costs that were reimbursed by our tenants and included in the "Interest and other income" line of the condensed consolidated statements of net income. The remaining non-reimbursed property expenses are higher quarter over quarter primarily due to ongoing expenses (such as property taxes, insurance, maintenance, etc.) incurred at our vacant facilities.

Current wording

Property-related expenses totaled $11.4 million and $9.0 million for the quarters ended September 30, 2026 and 2025, respectively. Of the property-related expenses in the third quarter of 2026 and 2025, approximately $2.7 million and $2.3 million, respectively, represent costs that were reimbursed by our tenants and included in the "Interest and other income" line of the condensed consolidated statements of net income. The remaining non-reimbursed property expenses are higher quarter over quarter primarily due to ongoing expenses (such as property taxes, insurance, maintenance, etc.) incurred at our vacant facilities.

Previous wording

General and administrative expenses were $34.8 million for the 2026 second quarter, compared to $26.2 million for the 2025 second quarter. Of these amounts, share-based compensation expense was $4.9 million for the second quarter of 2026, compared to $0.8 million in the 2025 second quarter, primarily due to less benefit in the 2026 period from the change in fair value of the performance awards that contain a cash-settlement feature and are marked to fair value quarterly, along with additional expense from new stock awards granted in 2025 and the 2026 first quarter.

Current wording

General and administrative expenses were $29.0 million for the 2026 third quarter, compared to $37.7 million for the 2025 third quarter. Of these amounts, share-based compensation expense was $0.4 million for the third quarter of 2026, compared to $12.3 million in the 2025 third quarter, primarily due to the decrease in fair value of the 2024 and 2025 performance awards that contain a cash-settlement feature and are marked to fair value quarterly.

Previous wording

Excluding share-based compensation, general and administrative expenses for the 2026 second quarter were higher than the prior year due to non-cash depreciation and other costs associated with our completed headquarters facility in Birmingham, Alabama and higher travel expenses.

Current wording

Excluding share-based compensation, general and administrative expenses for the 2026 third quarter were higher than the prior year due to non-cash depreciation and other costs associated with our completed headquarters facility in Birmingham, Alabama.

Previous wording

During the three months ended June 30, 2026, the gain on sale of real estate of $6.5 million primarily relates to the Scion/Lifepoint Transaction as described in Note 3 to the condensed consolidated financial statements. 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.

Current wording

During the three months ended September 30, 2026, the gain on sale of real estate of $157.8 million primarily relates to the disposal of two Idaho properties to affiliates of Intermountain Health as described in Note 3 to the condensed consolidated financial statements. During the three months ended September 30, 2025, the loss on sale of real estate was ($9.1) million primarily related to the sale of two facilities.

Previous wording

In the 2026 second quarter, we recognized $16.8 million of real estate and other impairment charges, of which $15.2 million was recorded to further impair our working capital loans to Insight and Tenor. The remaining charges in the quarter consisted of a negative fair value adjustment on our investments in three hospitals in Colombia, along with non-real estate impairment charges for property taxes and other obligations not paid by our cash-basis tenants. In the same period of 2025, we recognized $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 in the 2025 second quarter were partially offset by an impairment recovery on our Prospect facilities. See Note 3 to the condensed consolidated financial statements for further details of these charges.

Current wording

In the 2026 third quarter, we recognized $23.9 million of real estate and other impairment charges, primarily related to a negative fair value adjustment on our investments in three hospitals in Colombia as a result of the major earthquake that occurred in Colombia in August 2026, along with non-real estate impairment charges for property taxes and other obligations not paid by our cash-basis tenants. In the same period of 2025, we recognized $81.8 million of real estate and other impairment charges, primarily associated with our Prospect investments and non-real estate impairment charges for property taxes and other obligations not paid by our cash-basis tenants.

Previous wording

Earnings from equity interests was $11.4 million for the quarter ended June 30, 2026, compared to earnings of $25.3 million for the same period in 2025. Our share of income in the Utah partnership included a $1.6 million positive fair value adjustment in the second quarter of 2026, primarily related to its interest rate swap; while, the 2025 second quarter included a $15 million favorable fair value adjustment in real estate.

Current wording

Earnings from equity interests were $7.0 million for the quarter ended September 30, 2026, compared to earnings of $34.4 million for the same period in 2025. Our share of income in the Utah partnership of approximately $5.4 million for the 2026 third quarter included a $2.2 million positive fair value adjustment, primarily related to its interest rate swap; while, the 2025 third quarter included a $12.8 million favorable fair value adjustment in real estate. As discussed in Note 3 to the condensed consolidated financial statements, the properties underlying the Utah partnership were sold in the 2026 third quarter and the partnership was effectively terminated.

Previous wording

We typically incur income tax expense related to U.S. federal and state income taxes on our TRS entities, as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S. The $10.1 million income tax expense for the three months ended June 30, 2026 is primarily based on the income generated by our investments in the U.K. and Germany and is in line with the $9.8 million income tax expense in the second quarter of 2025.

Current wording

We typically incur income tax expense related to U.S. federal and state income taxes on our TRS entities, as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S. The $10.0 million income tax expense for the three months ended September 30, 2026 is primarily based on the income generated by our investments in the U.K. and Germany, and is in line with the $10.9 million income tax expense in the third quarter of 2025, which was $1 million higher due to a change in German tax rates - see Note 5 to the condensed consolidated financial statements for further details.

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 $541 million should be reflected against certain of our international and domestic net deferred tax assets at June 30, 2026. In the future, if we determine that it is more likely than not that we will realize our net deferred tax assets, we will reverse the applicable portion of the valuation allowance, recognize an income tax benefit in the period in which such determination is made, and potentially incur higher income tax expense in future periods as income is earned.

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 $558 million should be reflected against certain of our international and domestic net deferred tax assets at September 30, 2026. In the future, if we determine that it is more likely than not that we will realize our net deferred tax assets, we will reverse the applicable portion of the valuation allowance, recognize an income tax benefit in the period in which such determination is made, and potentially incur higher income tax expense in future periods as income is earned.

Previous wording

Net income for the six months ended June 30, 2026, was $30.2 million, or $0.05 per share compared to a net loss of ($216.6) million, or ($0.36) per share, for the six months ended June 30, 2025. This increase in net income is primarily driven by (i) a $47.2 million increase in revenue as discussed in detail below, (ii) an approximately $43 million one-time tax benefit in the first quarter of 2026 from moving seven additional U.K. entities into our U.K. REIT as described in Note 5 to the condensed consolidated financial statements, (iii) $77.5 million of impairment charges primarily related to Prospect and certain of our Colombia assets along with $156 million of unfavorable fair value adjustments primarily related to our investments in PHP Holdings and Aevis in the first half of 2025, as compared to $36 million of impairment charges and $6 million of unfavorable non-cash fair value adjustments in the same period of 2026. The increase in net income was partially offset by higher interest expense and depreciation expense period over period. 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 $174.5 million for the first six months of 2026, or $0.29 per diluted share, as compared to $162.5 million, or $0.27 per diluted share, for the same period of 2025.

Current wording

Net income for the nine months ended September 30, 2026, was $231.8 million, or $0.39 per diluted share compared to a net loss of ($294.4) million, or ($0.49) per diluted share, for the nine months ended September 30, 2025. This increase in net income is primarily driven by (i) an approximately $43 million one-time tax benefit in the first quarter of 2026 from moving seven additional U.K. entities into our U.K. REIT as described in Note 5 to the condensed consolidated financial statements, (ii) $266.6 million of less impairment charges and negative fair value adjustments primarily related to Prospect, (iii) $159 million in more gains on asset sales in 2026, and (iv) approximately $70 million of more gains from debt refinancing activities. Normalized FFO, after adjusting for certain items (as more fully described in the section titled "Reconciliation of Non-GAAP Financial Measures" in Item 2 of this Quarterly Report on Form 10-Q), was $238.3 million for the first nine months of 2026, or $0.40 per diluted share, as compared to $239.7 million, or $0.40 per diluted share, for the same period of 2025.

Previous wording

A comparison of revenues for the six months ended June 30, 2026 and 2025 is as follows (dollar amounts in thousands):

Current wording

A comparison of revenues for the nine months ended September 30, 2026 and 2025 is as follows (dollar amounts in thousands):

Previous wording

Our total revenues for the first six months of 2026 are up $47.2 million, or 10.2%, over the same period in the prior year. This increase is made up of the following:

Current wording

Our total revenues for the first nine months of 2026 are up $59.8 million, or 8.5%, over the same period in the prior year. This increase is made up of the following:

Previous wording

Operating lease revenue (includes billed rent and straight-line rent) – up $45.6 million from the same period in the prior year, primarily due to $31.9 million more of lease revenue earned from the retenanting of the former Steward and Prospect-operated facilities, approximately $6.9 million of additional cash received from acquisitions in 2025 and 2026, an increase of $3.8 million due to increases in CPI above the contractual minimum escalations in our leases, $8.4 million of favorable foreign currency fluctuations, and $2.2 million from the completion of capital additions and development projects in 2025 and 2026. These increases were partially offset by approximately $7.4 million lower revenues from property sales in 2025 and 2026.

Current wording

Operating lease revenue (includes billed rent and straight-line rent) – up $59.1 million from the same period in the prior year, primarily due to $48.3 million more of lease revenue earned from the retenanting of the former Steward and Prospect-operated facilities, approximately $12.9 million of additional rent revenue from acquisitions in 2025 and 2026, an increase of $5.8 million due to increases in CPI above the contractual minimum escalations in our leases, $8.2 million of favorable foreign currency fluctuations, and $3.2 million from the completion of capital additions and development projects in 2025 and 2026. These increases were partially offset by approximately $14.4 million lower revenues from property sales in 2025 and 2026 and approximately $2.9 million lower non-cash revenues from the Scion/Lifepoint Transaction discussed in Note 3 to the condensed consolidated financial statements.

Previous wording

Income from financing leases – up $0.3 million from the same period in the prior year primarily due to the increase in CPI above the lease contractual minimum escalations.

Current wording

Income from financing leases – up $0.5 million from the same period in the prior year primarily due to the increase in CPI above the lease contractual minimum escalations.

Previous wording

Interest and other income – up approximately $1.3 million from the same period in the prior year due to the following:

Current wording

Interest and other income – up approximately $0.2 million from the same period in the prior year due to the following:

Previous wording

Interest from loans – up $2.1 million from the same period in the prior year, primarily due to additional revenue from new loans between periods, and to a lesser extent, from the escalation of interest rates between periods.

Current wording

Interest from loans – up $0.5 million from the same period in the prior year, primarily due to additional revenue from new loans between periods and from the escalation of interest rates between periods, partially offset by loan payoffs and less cash revenue from cash basis operators.

Previous wording

Other income – down $0.8 million from the prior year, as we had less direct reimbursements from our cash basis tenants for ground leases, property taxes, and insurance.

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 six months ended June 30, 2026 and 2025 totaled $268.6 million and $245.5 million, respectively. This increase is primarily related to a full six months of interest in 2026 related to our February 2025 debt refinancing activities (see Note 4 to the condensed consolidated financial statements for further details) and from the increase in average borrowings on our Credit Facility in the first half of 2026, compared to the same period of 2025. Overall, our weighted-average interest rate was 5.3% for the six months ended June 30, 2026, compared to 5.1% for the same period in 2025.

Current wording

Interest expense for the nine months ended September 30, 2026 and 2025 totaled $421.7 million and $377.9 million, respectively. This increase is primarily related to the August 10, 2026 debt refinancing transaction as discussed in Note 4 to the condensed consolidated financial statements and a full nine months of interest in 2026 related to our February 2025 debt refinancing activities. Overall, our weighted-average interest rate was 5.5% for the nine months ended September 30, 2026, compared to 5.2% for the same period in 2025.

Previous wording

Real estate depreciation and amortization for the first six months of 2026 increased to $139.2 million from $131.3 million for the same period of the prior year. This increase is primarily due to the six California properties, leased to NOR, that were reclassified as operating leases in December 2025, along with capital addition activity and net acquisition and disposal activity during 2025 (as disclosed in previous filings) and the first half of 2026 as more fully described in Note 3 to the condensed consolidated financial statements.

Current wording

Real estate depreciation and amortization for the first nine months of 2026 increased to $209.5 million from $198.3 million for the same period of the prior year. This increase is primarily due to the six California properties, leased to NOR, that were reclassified as operating leases in December 2025, along with capital addition activity and net acquisition and disposal activity during 2025 (as disclosed in previous filings) and the first nine months of 2026 as more fully described in Note 3 to the condensed consolidated financial statements.

Previous wording

Property-related expenses totaled $21.1 million and $17.9 million for the six months ended June 30, 2026 and 2025, respectively. Of the property-related expenses in the first half of 2026 and 2025, approximately $6.3 million and $7.1 million, respectively, represents costs that were reimbursed by our tenants and included in the "Interest and other income" line on our condensed consolidated statements of net income. The remaining non-reimbursed property expenses are higher period-over-period, primarily due to ongoing expenses (such as property taxes, insurance, maintenance, etc.) incurred at our vacant facilities.

Current wording

Property-related expenses totaled $32.5 million and $26.9 million for the nine months ended September 30, 2026 and 2025, respectively. Of the property-related expenses in the first nine months of 2026 and 2025, approximately $9.0 million and $9.3 million, respectively, represent costs that were reimbursed by our tenants and included in the "Interest and other income" line on our condensed consolidated statements of net income. The remaining non-reimbursed property expenses are higher period-over-period, primarily due to ongoing expenses (such as property taxes, insurance, maintenance, etc.) incurred at our vacant facilities.

Previous wording

General and administrative expenses were $67.0 million for the first half of 2026, compared to $68.1 million for the same period of 2025. Of these amounts, share-based compensation expense was $5.4 million for the first six months of 2026, compared to $18.5 million for the same period of 2025, primarily due to more benefit in the 2026 period from the change in fair value of the 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 and the 2026 first quarter.

Current wording

General and administrative expenses were $96.0 million for the first nine months of 2026, compared to $105.8 million for the same period of 2025. Of these amounts, share-based compensation expense was $5.8 million for the first nine months of 2026, compared to $30.9 million for the same period of 2025, primarily due to the decrease in fair value of the 2024 and 2025 performance awards that contain a cash-settlement feature and are marked to fair value quarterly.

Previous wording

Excluding share-based compensation, general and administrative expenses for the first six months of 2026 were higher than the prior year due to non-cash depreciation and other costs associated with our completed headquarters facility in Birmingham, Alabama and higher travel expenses.

Current wording

Excluding share-based compensation, general and administrative expenses for the first nine months of 2026 were higher than the prior year due to non-cash depreciation and other costs associated with our completed headquarters facility in Birmingham, Alabama and higher travel expenses.

Previous wording

During the six months ended June 30, 2026, the gain on sale of real estate of $5.7 million relates to the Scion/Lifepoint Transaction and the sale of five facilities as described in Note 3 to the condensed consolidated financial statements. 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.

Current wording

During the nine months ended September 30, 2026, the gain on sale of real estate of $163.4 million primarily relates to the sale of two facilities in Idaho to affiliates of Intermountain Health, the Scion/Lifepoint Transaction, and the sale of five other facilities. During the nine months ended September 30, 2025, the gain on sale of real estate of $4.2 million relates to the sale of five facilities. See Note 3 to the condensed consolidated financial statements for further details.

Previous wording

In the first half of 2026, we recognized $35.8 million of real estate and other impairment charges, primarily associated with our working capital loans to Insight and Tenor and, to a lesser extent, the transition of three vacant properties back to the ground lessor and negative fair value adjustments on our investments in three hospitals in Colombia, along with non-real estate impairment charges for property taxes and other obligations not paid by our cash-basis tenants. In the same period of 2025, we recognized $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.

Current wording

In the first nine months of 2026, we recognized $59.7 million of real estate and other impairment charges, primarily associated with our working capital loans to Insight and Tenor, negative fair value adjustments on our investments in three hospitals in Colombia, and non-real estate impairment charges for property taxes and other obligations not paid by our cash-basis tenants. In the same period of 2025, we recognized $159.3 million of real estate and other impairment charges, primarily associated with our investments in Prospect and three hospitals in Colombia, as well as ongoing property taxes and other obligations not paid by our cash-basis tenants.

Previous wording

Earnings from equity interests was $27.1 million for the six months ended June 30, 2026, compared to $39.3 million for the same period in 2025. Our share of income in the Utah partnership included $9 million of positive fair value adjustments in the first six months of 2026, primarily related to a fair value increase in real estate and interest rate swap, compared to a $21 million positive fair value adjustment in the first half of 2025.

Current wording

Earnings from equity interests was $34.1 million for the nine months ended September 30, 2026, compared to $73.7 million for the same period in 2025. Our share of income in the Utah partnership included $11.2 million of positive fair value adjustments in the first nine months of 2026, primarily related to a fair value increase in real estate and interest rate swap, compared to a $34 million positive fair value adjustment in the first nine months of 2025.

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 - see Note 4 to the condensed consolidated financial statements for further discussion.

Current wording

For the first nine months of 2026, we recognized a $70 million gain from the redemption of certain unsecured notes below par as part of the August 2026 debt refinancing. For the first three quarters of 2025, we incurred ($3.6) million of expense primarily as a result of the early redemption of our 3.325% Senior Unsecured Notes due 2025, 2.500% Senior Unsecured Notes due 2026, and 5.250% Senior Unsecured Notes due 2026 - see Note 4 to the condensed consolidated financial statements for further discussion.

Previous wording

Other expense for the first six months of 2026 was $4.4 million, compared to expense of $169.6 million in the same period of the prior year. For 2026, we recognized approximately $6 million in unfavorable non-cash fair value adjustments from our investments marked to fair value, primarily due to an approximate $5 million unfavorable adjustment to our investment in Aevis. For 2025, we recognized approximately $156 million in unfavorable non-cash fair value adjustments from our investments marked to fair value, primarily due to an approximate $147 million unfavorable adjustment to our investment in PHP Holdings and approximately $8 million related to our investment in Aevis.

Current wording

Other income for the first nine months of 2026 was $11.0 million, compared to expense of ($171.1) million in the same period of the prior year. For 2026, we recognized approximately $11 million in favorable non-cash fair value adjustments from our investment in Aevis. For 2025, we recognized approximately $156 million in unfavorable non-cash fair value adjustments from our investments marked to fair value, primarily due to an approximate $147 million unfavorable adjustment to our investment in PHP Holdings and approximately $8 million related to our investment in Aevis.

Previous wording

We typically incur income tax expense related to U.S. federal and state income taxes on our TRS entities, as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S. The $22.7 million income tax benefit for the six months ended June 30, 2026, is largely due to moving seven additional U.K. property holding legal entities into our U.K. REIT that was formed on July 1, 2023. As part of this move, we adjusted the deferred tax liabilities associated with these entities, which resulted in an approximate $43 million one-time tax benefit in the first quarter of 2026. Going forward, these U.K. entities (like the others in the U.K. REIT) will be subject only to a withholding tax on earnings upon distribution out of the U.K. REIT. Excluding this one-time benefit, income tax expense for the first six months of 2026 was in line with the $19.2 million income tax expense in the first half of 2025.

Current wording

We typically incur income tax expense related to U.S. federal and state income taxes on our TRS entities, as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S. The $12.7 million income tax benefit for the nine months ended September 30, 2026, is largely due to moving seven additional U.K. property holding legal entities into our U.K. REIT that was formed on July 1, 2023. As part of this move, we adjusted the deferred tax liabilities associated with these entities, which resulted in an approximate $43 million one-time tax benefit in the first quarter of 2026. Going forward, these U.K. entities (like the others in the U.K. REIT) will be subject only to a withholding tax on earnings upon distribution out of the U.K. REIT. Excluding this one-time benefit, income tax expense for the first nine months of 2026 was in line with the $30.1 million income tax expense in the first nine months of 2025.