MEDICAL PROPERTIES TRUST INC

1. Organ ization

Medical Properties Trust, Inc., a Maryland corporation, was formed on August 27, 2003, under the Maryland General Corporation Law for the purpose of engaging in the business of investing in, owning, and leasing healthcare real estate. Our operating partnership subsidiary, MPT Operating Partnership, L.P. (the "Operating Partnership"), through which we conduct substantially all of our operations, was formed in September 2003. At present, we own, directly and indirectly, all of the partnership interests in the Operating Partnership and have elected to report our required disclosures and those of the Operating Partnership on a combined basis, except where material differences exist.

We operate as a real estate investment trust ("REIT"). Accordingly, we are generally not subject to United States ("U.S.") federal income tax on our REIT taxable income, provided that we continue to qualify as a REIT and our distributions to our stockholders equal or exceed such taxable income. Similarly, the majority of our real estate operations in the United Kingdom ("U.K.") operate as a REIT and generally are subject only to a withholding tax on earnings upon distribution out of the U.K. REIT. Certain non-real estate activities we undertake in the U.S. are conducted by entities which we elected to be treated as taxable REIT subsidiaries ("TRS"). Our TRS entities are subject to both U.S. federal and state income taxes. For our properties located outside the U.S. (excluding those assets that are in the U.K. REIT), we are subject to the local income taxes of the jurisdictions where our properties reside and/or legal entities are domiciled; however, we do not expect to incur additional taxes, of a significant nature, in the U.S. from foreign-based income as the majority of such income flows through our REIT.

Our primary business strategy is to acquire and develop healthcare facilities and lease the facilities to healthcare operating companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. The majority of our leased assets are owned 100%; however, we do own some leased assets through joint ventures with other partners that share our view that healthcare facilities are part of the infrastructure of any community, which we refer to as investments in unconsolidated real estate joint ventures. We also may make mortgage loans to healthcare operators collateralized by their real estate. In addition, we may make noncontrolling investments in our tenants (which we refer to as investments in unconsolidated operating entities), from time-to-time, typically in conjunction with larger real estate transactions with the tenant, which may enhance our overall return and provide for certain minority rights and protections.

Our business model facilitates acquisitions and recapitalizations, and allows operators of healthcare facilities to unlock the value of their real estate to fund facility improvements, technology upgrades, and other investments in operations. At September 30, 2026, we have investments in 365 facilities in 30 states in the U.S., inseven countries in Europe, andone country in South America. Our properties consist of general acute care hospitals, behavioral health facilities, post acute care facilities (including inpatient physical rehabilitation facilities and long-term acute care hospitals), and freestanding ER/urgent care facilities.

2. Summary of Significant Accounting Policies

Unaudited Interim Condensed Consolidated Financial Statements: The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information, including rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. Operating results for the three and nine months ended September 30, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The condensed consolidated balance sheet at December 31, 2025 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements.

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We believe the estimates and assumptions underlying our condensed consolidated financial statements are reasonable and supportable based on the information available as of September 30, 2026 (particularly as it relates to our assessments of the recoverability of our real estate, the ability of our tenants/borrowers to make lease/loan payments in accordance with their respective agreements, the fair value of our equity and loan investments, and the adequacy of our credit loss reserves on loans and financing receivables).

For information about significant accounting policies and how actual results could differ from estimates, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025 ("2025 Annual Report"). There have been no material changes to these significant accounting policies.

Reclassifications

Certain amounts in the condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation.

Variable Interest Entities

At September 30, 2026, we had loans and/or equity investments in certain variable interest entities ("VIEs"), including our international joint venture, Healthcare Systems of America ("HSA"), and NOR Healthcare Systems ("NOR"). We have determined that we were not the primary beneficiary of these VIEs. The carrying value and classification of the related assets and maximum exposure to loss as a result of our involvement with these VIEs at September 30, 2026 are presented below (in thousands):

(1)

Carrying amount only reflects the net book value of our loan or equity investment in the VIE.

(2)

Our maximum loss exposure related to loans with VIEs represents our current aggregate carrying value of the loan plus accrued interest and any other related assets (such as rent receivables), less any liabilities. Our maximum loss exposure related to our equity investments in VIEs represents the current carrying values of such investments plus any other related assets (such as rent receivables), less any liabilities.

For the VIE types above, we do not consolidate the VIEs because we do not have the ability to control the activities (such as the day-to-day healthcare operations of our borrowers or investees) that most significantly impact the VIE's economic performance. As of September 30, 2026, we were not required to provide financial support through a liquidity arrangement or otherwise to our unconsolidated VIEs, including circumstances in which they could be exposed to further losses (e.g. cash shortfalls).

Recent Accounting Developments

Disaggregation of Income Statement Expenses

In November 2024, FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03") to improve the disclosures about a public company's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. FASB further clarified the effective date in January 2025 with the issuance of ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. We are currently evaluating the potential impact of the adoption of this standard on our consolidated financial statements.

3. Real Estate and Other Activities

New Investments

We acquired or invested in the following net assets (in thousands):

On June 1, 2026, we completed a transaction with ScionHealth ("Scion"), Lifepoint Health, Inc. ("Lifepoint"), and Lifepoint Behavioral Health ("Lifepoint Behavioral") (the "Scion/Lifepoint Transaction"), as further described in this same Note 3 under the "Other Leasing Activities" subheading. As part of the transaction, we acquiredone property in Kentucky valued at $165.5 million as part of a property exchange described below under the"Disposals" subheading of this Note 3. The property is leased to Lifepoint pursuant to a long-term master lease with annual inflation-based escalators.

During the first quarter of 2026, we closed on the acquisition ofone property in Germany for approximately €23 million (along with real estate transfer tax) leased to Median Kliniken S.à r.l ("MEDIAN") pursuant to a long-term lease with annual inflation-based escalators.

In April 2025, we invested approximately CHF 50 million (CHF 25 million of which was a short-term loan and repaid in the 2026 third quarter) in the Swiss Medical Network real estate joint venture (also known as Infracore), proceeds of which, along with fundings from our joint venture partner, were used to facilitate the acquisition of a general acute care facility.

In 2025, we funded approximately $47 million to Steward Health Care System's ("Steward") secured lender to obtain control over certain real estate assets.

Development and Capital Addition Activities

See table below for a status summary of our current development and capital addition projects (in thousands):

(1)

Includes major projects currently in process for which we will earn additional revenue once the projects are completed.

We havetwo other development projects ongoing in Texas (Texarkana development) and Massachusetts (Norwood redevelopment). These are not highlighted above; however, we have completed construction to the stage where the buildings are "weathered in" and environmentally secure so as to physically protect our investment while we actively market the hospitals for sale or lease. As of September 30, 2026, we estimate that the cost of additional construction that we believe will be more efficient if completed in the near-term (such as electing to accelerate completion of a parking structure and elevators at Norwood) approximates between $5 million and $8 million.

During the third quarter of 2026, we completed construction and began recording rental income on a $45 million facility in Alicante, Spain. This newly built facility is leased to IMED.

During the first quarter of 2026, we completed construction and began recording rental income on a $10.7 million capital addition project at an Avondale, Arizona facility leased to Lifepoint Behavioral.

During the third quarter of 2025, we completed construction and began recording rental income on two projects totaling approximately $36 million, one of which is leased to Lifepoint Behavioral and the other to Surgery Partners.

During the first quarter of 2025, we completed construction and began recording rental income on a $10.5 million capital addition project at a Gilbert, Arizona facility leased to Lifepoint Behavioral.

Disposals

On September 16, 2026, we completed the sale oftwo facilities in Idaho to affiliates of Intermountain Health for gross proceeds to us of $371 million. This transaction resulted in a net gain of approximately $159 million.

On June 1, 2026, we completed the Scion/Lifepoint Transaction as further described in this same Note 3 under the "Other Leasing Activities" subheading. As part of the transaction, we completed a property exchange, which resulted in the transfer ofthree facilities back to Scion in exchange for the Kentucky property noted previously in this same Note 3 under the "New Investments" subheading. The transaction, which included the satisfaction of the lease incentive from the 2025 transaction with the tenant, resulted in a net gain of approximately $6.8 million.

During the first nine months of 2026, we also completed the sale offive facilities for total proceeds of approximately $31 million, of which $12 million was received in advance of the sale in the first quarter of 2025, resulting in a loss of approximately $1 million.

During the first nine months of 2025, we completed the sale offive facilities (including two former Steward-operated facilities that were being leased to College Health) and an ancillary facility for aggregate proceeds of approximately $100 million, resulting in a net gain of approximately $4 million.

Leasing Operations (Lessor)

We acquire and develop healthcare facilities and lease the facilities to healthcare operating companies. The initial fixed lease terms of these infrastructure-type assets are typically at least 15 years, and most include renewal options at the election of our tenants, generally infive-year increments. Over 99% of our leases provide annual rent escalations based on increases in the Consumer Price Index ("CPI") (or similar indices outside the U.S.) and/or fixed minimum annual rent escalations. Many of our domestic leases contain purchase options with pricing set at various terms but in no case less than our total initial investment. Our leases typically require the tenant to handle and bear most of the costs associated with our properties including repair/maintenance, property taxes, and insurance.

For all of our properties subject to lease, we are the legal owner of the property and the tenant's right to use and possess such property is guided by the terms of a lease. At September 30, 2026, we account for all of these leases as operating leases, except where GAAP requires alternative classification, including leases on certain Ernest Health, Inc. ("Ernest") facilities that are accounted for as either direct financing or other financing type leases. The components of our total investment in financing leases consisted of the following (in thousands):

Other Leasing Activities

At September 30, 2026, our vacant properties (with a net book value of approximately 4% of our total assets), including two developments (see "Development and Capital Addition Activities" above), are in various stages of being re-tenanted or sold.

Our tenants’ financial performance and resulting ability to satisfy their lease and loan obligations to us are material to our financial results and our ability to service our debt and make distributions to our stockholders. Our tenants operate in the healthcare industry, which is highly regulated, and changes in regulation (or delays in enacting regulation) may temporarily impact our tenants’ operations until they are able to make the appropriate adjustments to their business. In addition, our tenants may experience operational challenges from time-to-time as a result of many factors, including those external to them, such as cybersecurity attacks, public health crises, economic issues resulting in high inflation and spikes in labor costs, extreme or severe weather and climate-related events, and adverse market and political conditions. We monitor our tenants' operating results and the potential impact from these challenges. We may elect to provide support to our tenants from time-to-time in the form of short-term rent abatements or rent deferrals to be paid back in full, or in the form of temporary loans. See below for an update on some of our tenants.

Priory Group

Effective July 1, 2026, we agreed to a lease amendment that included a cash rent reduction of approximately £11 million annually to Priory due to the decline in referrals over the past year or so by the National Health Service in the U.K. for the treatment of inpatient mental health services. This lease amendment also added a variable rent component to recapture some or all of the rent reduction if Priory were to reach certain revenue hurdles. We have also effectively extended the lease term by an additionalten years, and made certain other amendments to our lease and security agreements. This lease will continue to be classified as an operating lease and no material change is expected from a total revenue perspective.

Scion/Lifepoint Transaction

On June 1, 2026, we completed the Scion/Lifepoint Transaction which included (i) our acquisition of a new property from Lifepoint (as previously described in this same Note 3 under the "New Investments" subheading) in exchange forthree Scion properties (as previously described in this same Note 3 under the "Disposals" subheading), (ii) the transition of hospital operations oftwo of our other facilities from Scion to Lifepoint, and (iii) the execution of a combined single master lease covering properties leased to Lifepoint and Lifepoint Behavioral. The new master lease has a lease term ending in 2045, annual cash rents approximating 99% of such rents prior to this transaction, and includes lease escalator provisions. The master lease is guaranteed by Lima Holdco, LLC and Springstone Health Opco, LLC, the parent companies of the individual lessees.

Prospect

In August 2019, we invested in a portfolio of 14 acute care hospitals in three states (California, Pennsylvania, and Connecticut) operated by and master leased to or mortgaged by Prospect Medical Holdings, Inc. ("Prospect") for a combined investment of approximately $1.6 billion.

On May 23, 2023, Prospect completed a recapitalization plan, which included receiving $375 million in new financing from several lenders. Along with this new capital from third-party lenders, we agreed to the following restructuring of our then $1.7 billion investment including: a) maintaining the master lease covering six California hospitals without any changes in rental rates or escalator provisions, b) transitioning the Pennsylvania properties back to Prospect in return for a $150 million first lien mortgage, c) providing up to $75 million in a loan secured by a first lien on Prospect's accounts receivable and certain other assets, and d) obtaining a non-controlling ownership interest in PHP Holdings in exchange for unpaid rent and interest, among other things.

Prospect filed for Chapter 11 bankruptcy on January 11, 2025 with the United States Bankruptcy Court for the Northern District of Texas. On March 20, 2025, the bankruptcy court approved a global settlement (including a recovery waterfall) between us, Prospect, and other stakeholders. Due to the bankruptcy, we recorded more than $400 millionof impairment charges and negative fair value adjustments associated with our investments in Prospect in the 2024 fourth quarter, resulting in a full reserve of the asset-backed loan and our Pennsylvania mortgage loan, along with a decrease in the value in our Connecticut properties. No charge was recorded on our California properties.

In 2025 and in accordance with the global settlement and the estimated recovery waterfall, we recorded approximately $140 million of additional impairment charges (including $65 million of impairment charges in the 2025 third quarter). In determining the majority of the 2025 impairment charges, we compared the carrying value of our investments to our estimate of expected proceeds (net of any possible future cash outlays) to be received under the bankruptcy court approved recovery waterfall, factoring in an estimated recovery of Prospect assets (including our real estate assets) and applying the priority of claims associated with the bankruptcy. In estimating the fair value of the California, Pennsylvania, and certain Connecticut real estate, we, along with assistance from a third-party independent valuation firm, used a combination of cost, market, and income approaches using Level 3 inputs. The cost approach used comparable sales to value the land and cost manuals to value the improvements. The value derived from the market approach was based on sales prices of similar properties. For the income approach, we divided the expected operating income from the property by an estimated market capitalization rate (ranging from 8.25% to 8.5%). For the 2025 third quarter, we estimated the fair value of the Pennsylvania and Connecticut real estate based on received bids for these properties.

In 2025 and through the first quarter of 2026, all the Connecticut and Pennsylvania properties (along with our investment in PHP Holdings discussed below) were sold, and Prospect's bankruptcy plan was deemed effective.

During the first nine months of 2026, we received approximately $62 million from these asset sales and collection of Connecticut accounts receivable that serve as collateral for our remaining investment, while funding the $64 million bankruptcy court approved funding commitment, as disclosed in our 2025 Annual Report. At September 30, 2026, our remaining investment in Prospect is approximately $64 million. We believe this total investment is fully recoverable from the collection of remaining Connecticut accounts receivable and proceeds from litigation and other causes of action, the ultimate outcome and timing of which are uncertain.

Re-tenanting Activity

In December 2025, we re-leased the six California properties to NOR as a result of their successful bid to acquire the hospital operations. Terms of the lease include an initial annualized rent almost identical to the previous rent amount due from Prospect in 2025, annual inflation-based escalators starting in the 2027 first quarter, and an initial fixed term of 15 years. All rent was deferred for the firstsix months (or until mid-June 2026), and 50% of rent is to be deferred until mid-December 2026, after which the aggregate deferred rent will be paid over the remaining lease term. Although current on its rent obligations to-date, we are accounting for rent revenue associated with the NOR lease on the cash basis and recognized $6 million in the 2026 third quarter. We have committed to fund approximately $24 million for a new emergency department at one facility and up to $60 million in seismic improvements that may be required by California regulators over the next four years, both of which will increase the lease base and result in additional rent.

PHP Investment

In regard to our investment in PHP Holdings, we accounted for this investment using the fair value option method. In the first nine months of 2025, we recorded an approximate $147 million negative fair value adjustment (none in the 2025 third quarter). The adjustment in 2025 was made based on changes to the purchase agreement between PHP Holdings and Astrana Health and updates to PHP Holdings' working capital position. On July 1, 2025, we received $2.3 million from the sale of PHP Holdings to Astrana Health.

Other Re-tenanting Activity

As discussed in previous filings, we entered into agreements in September 2024 withsix operators (HSA, Honor Health, Insight Health ("Insight"), Quorum, College Health, and Tenor Health ("Tenor")) to lease 18 of the 23 former Steward-operated facilities. Since then, we have sold and/or terminated the lease on six of the facilities. These leases included a cash rent ramp up period resulting in $26.4 million of cash rent received in the first nine months of 2025 ($12 million in the 2025 third quarter), compared to $76.4 million in the first nine months of 2026 ($22 million in the 2026 third quarter). As of mid-September 2026, the rent ramp up period has ended across all of these leases. As of September 30, 2026, all rents from these operators have been received, except for cash-basis operators Insight/Tenor who represent less than 1% of our annual revenues and HSA’s September rent of approximately $10 million.

As of September 30, 2026, we have approximately $175 million, net in working capital and other loans related to these operators that were initially advanced to assist in the takeover of these operations and the transition of certain services (such as revenue cycle management). These loans are generally secured by accounts receivables and/or other assets (including personal property). For HSA, we have advanced approximately $150 million in working capital loans through September 2026, including a net $12 million in the 2026 third quarter, as HSA continues to face revenue cycle management issues. In addition, approximately $9 million of working capital loans have been repaid from the other operators through September 30, 2026. For the working capital loans to Insight/Tenor, we have recorded charges of $30 million in the first nine months of 2026 ($3 million in the 2026 third quarter), which impaired these loans to equal the fair value of the underlying collateral.

Investments in Unconsolidated Entities

Investments in Unconsolidated Real Estate Joint Ventures

Our primary business strategy is to acquire real estate and lease to providers of healthcare services. Typically, we directly own 100% of such investments. However, from time-to-time, we will co-invest with other investors that share a similar view that hospital real estate is a necessary infrastructure-type asset in communities. In these types of investments, we will own undivided interests of less than 100% of the real estate through unconsolidated real estate joint ventures. The underlying real estate and leases in these unconsolidated real estate joint ventures are generally structured similarly and carry a similar risk profile to the rest of our real estate portfolio.

The following is a summary of our investments in unconsolidated real estate joint ventures by primary operator (amounts in thousands):

The Utah partnership applied specialized accounting and reporting for investment companies under Topic 946, which measures the underlying investments at fair value. For the three months ended September 30, 2026 and 2025, our share of the Utah partnership's favorable fair value adjustments was approximately $2.2 million and $13.0 million, respectively, while, for the nine months ended September 30, 2026 and 2025, our share was approximately $11.0 million and $34.0 million, respectively. On August 12, 2026, thefive properties in the Utah partnership were sold and the partnership was effectively terminated, which generated approximately $174 million and resulted in a small gain. Since inception of the partnership, we have recognized gains in fair value (pursuant to Topic 946) aggregating approximately $73.8 million.

On July 9, 2026, Infracore SA ("Infracore"), a Swiss hospital real estate company in which we hold a non-controlling ownership interest, completed an initial public offering and listing of its shares on the SIX Swiss Exchange under the ticker symbol "INFRAC."In connection with the offering, Infracore issued approximately 3.7 million new shares at CHF 54 per share and received approximately CHF 200 million in gross proceeds. We sold approximately 0.7 million of our Infracore shares as part of the offering, realizing a small gain before transaction costs, which resulted in total gross proceeds of approximately CHF 38 million and reduced our ownership interest in Infracore from 70% to approximately 48.5%. In the 2026 third quarter, we also received another CHF 74 million from Infracore related to the repayment of an outstanding shareholder loan and payment of the 2023 and 2025 dividends.

In July 2026, Infracore completed the acquisition of a new general acute care facility for approximately CHF 110 million funded with proceeds from a mortgage loan and cash on hand. The facility will be leased to See-Spital and represents Infracore’s first sale-and-leaseback with a public hospital.

For our MEDIAN unconsolidated real estate joint venture, we, along with our joint venture partner, closed on a €702.5 million non-recourse,10-year nonamortizing secured debt facility on June 17, 2025. The debt carries a 5.1% fixed interest rate, and the majority of the proceeds were used to fund the repayment of the prior €655 million secured loan that carried a lower interest rate.

Investments in Unconsolidated Operating Entities

Our investments in unconsolidated operating entities are noncontrolling investments that are typically made in conjunction with larger real estate transactions in which the operators are vetted as part of our overall underwriting process. In many cases, we would not be able to acquire the larger real estate portfolio without such investments in operators. These investments also offer the opportunity to enhance our overall return and provide for certain minority rights and protections.

The following is a summary of our investments in unconsolidated operating entities (amounts in thousands):

Credit Loss Reserves

We apply a forward-looking "expected loss" model to our financing receivables, including financing leases and loans, based on historical credit losses of similar instruments.

The following table summarizes the activity in our credit loss reserves (in thousands):

(1)

The amount in 2026 is primarily related to loans to Tenor and Insight, whereas, the amount in 2025 is primarily related to Prospect. See "Leasing Operations (Lessor)" in this Note 3 for further discussion.

(2)

The amount in 2026 is primarily related to write-offs of previously reserved Prospect mortgages and other financing leases. See "Leasing Operations (Lessor)" in this Note 3 for further discussion.

Concentrations of Credit Risk

We monitor concentration risk in several ways due to the nature of our real estate assets that are vital to the communities in which they are located and given our history of being able to replace inefficient operators of our facilities, if needed, with more effective operators. See below for our concentration details (dollars in thousands):

Total Assets by Operator

(1)

Total assets by operator are generally comprised of real estate assets, mortgage loans, investments in unconsolidated real estate joint ventures, investments in unconsolidated operating entities, and other loans.

Total Assets by U.S. State and Country (1)

Total Assets by Facility Type (1)

(1)

For geographic and facility type concentration metrics in the tables above, we allocate our investments in unconsolidated operating entities pro rata based on the gross book value of the real estate. Such pro rata allocations are subject to change from period to period.

On an individual property basis, our largest investment in any single property was less than 2% of our total assets as of September 30, 2026.

On a revenue basis, concentration in 2026 compared to the same periods of 2025 is as follows:

Total Revenues by Geographic Location

Total Revenues by Facility Type

The following shows those tenants that represented 10% or more of our total revenues for the three and nine months ended September 30, 2026 and 2025:

4. Debt

The following is a summary of debt (dollar amounts in thousands):

(A)

Includes€100 million and €100 million of Euro-denominated borrowings and CHF - million and CHF 52 million of Swiss franc-denominated borrowings that reflect the applicable exchange rates at September 30, 2026 and December 31, 2025, respectively.

(B)

Non-U.S. dollar denominated debt reflects the exchange rates at September 30, 2026 and December 31, 2025.

As of September 30, 2026, principal payments due on our debt (which exclude the effects of any discounts, premiums, or debt issue costs recorded) are as follows (amounts in thousands):

(1)

Approximately $1.2 billion of debt is scheduled to mature through October 2027. This includes the balance of the revolving portion of our Credit Facility of approximately $383 million, the term loan portion of our Credit Facility, and our 5.000% Senior Unsecured Notes due 2027. Management expects to address these near-term maturities through a combination of available cash on hand, a new multi-year credit facility, additional secured debt issuances, and potential asset sales, which management believes will provide sufficient liquidity to meet the obligations associated with these maturities. See "Credit Facility" subheading below for updates on these maturities and Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion around our refinancing plans.

Credit Facility

We have a multi-currency denominated revolver and a $200 million term loan that make up our Credit Facility (the "Credit Facility"). The maximum borrowings under the revolving portion of the Credit Facility is $1.28 billion.

On February 13, 2025 and concurrent with the closing of our private notes offering discussed below, we further amended the Credit Facility and (i) removed the Modified Covenant Period and any restrictions related thereto from the existing Credit Facility, (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 in February 2025 and set the covenant level at 60%, (iv) reset the interest rate to SOFR plus 225 basis points, (v) provided for the loans thereunder to be secured and guaranteed ratably with thesecured notes issued in February 2025, (vi) set the maximum secured leverage ratio at 40%, and (vii) 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 1.30:1.00.

On June 30, 2026, we formally extended the revolving portion of our Credit Facility to December 30, 2026. We can extend the facility another six months to June 30, 2027, subject to the satisfaction of certain conditions with the primary condition of not being in default at the time of the extension option date – and believe we will meet all conditions to do so.

Senior Secured Notes due 2032 (2026)

On August 10, 2026, we completed a privately negotiated issuance of $2.4 billion in new secured notes. These new notes carry a 9.25% fixed coupon rate and mature in February 2032. Interest on the notes is payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2026. Approximately $1.0 billion of proceeds from these new notes, in the form of cash, were used to pay off our 0.993% Senior Unsecured Notes due 2026 in full and to redeem approximately 27% of our 5.000% Senior Unsecured Notes due 2027. The remaining proceeds were in the form of a notes exchange, which retired a portion of our existing 2027, 2028, 2029, 2030, and 2031 senior unsecured notes, capturing a net discount of approximately $123 million. We recognized $70 million as a gain in the quarter with the remainder to be recognized through interest expense over the term of the new notes.

British Pound Sterling Term Loan due 2025

On January 15, 2025, we paid off the remaining £493 million balance of our British pound sterling term loan due 2025. With this payoff, we also terminated the sterling-denominated term loan interest rate swap.

Senior Secured Notes due 2032

On February 13, 2025, we closed on a private offering that consisted of $1.5 billion aggregate principal amount of senior secured notes due 2032 and €1.0 billion aggregate principal amount of senior secured notes due 2032.

We used the net proceeds from the notes to fund 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. We used the remaining net proceeds to pay down the revolving portion of our Credit Facility.

In the first nine months of 2026, we recorded an approximate $70 million gain as a result of the August 10, 2026 debt refinancing transaction.

In the first nine months of 2025, we incurred $3.6 million of debt refinancing and unutilized financing costs. 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.

Covenants and Restrictions

Our debt facilities impose certain restrictions on us, including restrictions on our ability to: incur debts; create or incur liens; provide guarantees in respect of obligations of any other entity; make redemptions and repurchases of our capital stock; prepay, redeem, or repurchase debt; engage in mergers or consolidations; enter into affiliated transactions; dispose of real estate or other assets; and change our business. In addition, the credit agreements governing the Credit Facility limit the amount of dividends we can pay as a percentage of normalized adjusted funds from operations ("NAFFO"), as defined in the agreements, on a rolling four quarter basis to 95% of NAFFO. The indentures governing our senior unsecured notes also limit the amount of dividends we can pay based on the sum of 95% of NAFFO, proceeds of equity issuances, and certain other net cash proceeds. Finally, our senior notes require us to maintain total unencumbered assets (as defined in the related indenture) of not less than 150% of our unsecured indebtedness.

In addition to these restrictions, the Credit Facility contains customary financial and operating covenants, including covenants relating to our total leverage ratio, fixed charge coverage ratio, and secured leverage ratio.

In addition to the covenants and restrictions discussed above, our Credit Facility contains customary events of default, including among others, nonpayment of principal or interest, material inaccuracy of representations, and failure to comply with our covenants. If an event of default occurs and is continuing under the Credit Facility, the entire outstanding balance may become immediately due and payable. At September 30, 2026, we were in compliance with all financial and operating covenants.

5. Income Taxes

In the 2026 first quarter, we moved seven additional U.K. property holding legal entities into our U.K. REIT that was formed on July 1, 2023. With this move, we adjusted the deferred tax liabilities associated with these entities, resulting in a one-time tax benefit of approximately $43 million 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.

In the 2025 third quarter, we incurred approximately $1 million of higher tax expense on our German entities due to various matters including the impact from the lowering of German tax rates (in future years) on certain deferred tax asset positions.

6. Common Stock

On October 28, 2025, the Board of Directors of the Company authorized a stock repurchase program (the "Stock Repurchase Program") for up to $150 million of common stock, par value $0.001 per share. Under the Stock Repurchase Program, we may repurchase shares of our common stock from time to time in the open market or in privately negotiated transactions. In the first nine months of 2026, we repurchased 1.3 million shares for a total of $6.1 million. Subsequent to quarter-end, we repurchased an additional 8.6 million shares for a total of $18.7 million.

On August 11, 2025, we entered into an at-the-market equity offering program (the "ATM Program"), which provides for the sale, from time to time, of up to $500 million of our common stock with a commission rate up to 2%. As of September 30, 2026, we havenot sold any shares under this ATM Program.

7. Stock Awards

During the second quarter of 2026, our shareholders approved the Second Amended and Restated 2019 Equity Incentive Plan (the "Equity Incentive Plan"), which authorizes the issuance of common stock options, restricted stock, restricted stock units, deferred stock units, stock appreciation rights, performance units, and awards of interests in our Operating Partnership. Our Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors. Among other things, the 2026 amendment increased the number of shares of common stock registered and reserved for stock awards by 12 million to 40.9 million. As of September 30, 2026,14.3 million shares remain available for future stock awards. Share-based compensation expense totaled $5.8 million and $30.9 million for thenine months ended September 30, 2026 and 2025, respectively. Of this expense, a benefit of $14.0 million and an expense of $10.6 million for the nine months ended September 30, 2026 and 2025, respectively, are from performance award grants that contain cash-settlement features and are marked to fair value quarterly. None of the cash-settled performance awards have been earned or vested at September 30, 2026, and will not begin to earn/vest until, for 20 consecutive days, our stock price reaches $7.00 for the 2024 performance award and our total shareholder return reaches 20% (based on the April 15, 2025 grant date) for our 2025 performance award.

8. Fair Value of Financial Instruments

We have various assets and liabilities that are considered financial instruments. We estimate that the carrying value of cash and cash equivalents and accounts payable and accrued expenses approximate their fair values. We estimate the fair value of our interest and rent receivables using Level 2 inputs such as discounting the estimated future cash flows using the current rates at which similar receivables would be made to others with similar credit ratings and for the same remaining maturities. The fair value of our mortgage loans and other loans is estimated by using Level 2 inputs such as discounting the estimated future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. We determine the fair value of our senior notes using Level 2 inputs such as quotes from securities dealers and market makers. We estimate the fair value of our revolving credit facility and term loans using Level 2 inputs based on the present value of future payments, discounted at a rate which we consider appropriate for such debt.

Fair value estimates are made at a specific point in time, are subjective in nature, and involve uncertainties and matters of significant judgment. Settlement of such fair value amounts may not be a prudent management decision.

The following table summarizes fair value estimates for our financial instruments (in thousands):

(1)

Excludes the acquisition loan made in May 2020 related to our investment in the international joint venture, along with the related subsequent investment in the real estate ofthree hospitals in Colombia, as these assets are accounted for under the fair value option method, as noted below.

(2)

Includes $7.5 million and $7.5 million of mortgage loans, $345.6 million and $388.9 million of loans (including a shareholder loan) included in investments in unconsolidated real estate joint ventures, $43.1 million and $45.4 million of loans that are part of our investments in unconsolidated operating entities, and $283.0 million and $182.4 million of other loans at September 30, 2026 and December 31, 2025, respectively.

Items Measured at Fair Value on a Recurring Basis

Our equity investment and related loan to the international joint venture and our loan investment in the real estate ofthree hospitals operated by subsidiaries of the international joint venture in Colombia are measured at fair value on a recurring basis as we elected to account for these investments using the fair value option at the point of initial investment. We elected to account for these investments at fair value due to the size of the investments and because we believed this method was more reflective of current values.

At September 30, 2026 and December 31, 2025, the amounts recorded under the fair value option method were as follows (in thousands):

Our loans to the international joint venture and its subsidiaries are recorded at fair value by discounting the estimated future contractual cash flows using a credit-adjusted rate of return, which is derived from market rates of return on similar loans with similar credit quality and remaining maturity. Our equity investment in the international joint venture is recorded at fair value by using a market approach, which requires significant estimates of our investee, such as projected revenue, expenses, and working capital, and appropriate consideration of the underlying risk profile of the forecasted assumptions associated with the investee. We classify our valuations of this investment as Level 3, as we use certain unobservable inputs to the valuation methodology that are significant to the fair value measurement, and the valuations require management judgment due to the absence of quoted market prices.

In addition to investments for which we elected the fair value option, we have other investments from time to time (including our investment in Aevis) that are measured at fair value on a recurring basis.

In the first nine months of 2026, we recorded a net unfavorable adjustment to the investments accounted for at fair value on a recurring basis of approximately $1 million, consisting of an approximately $12 million unfavorable adjustment on our investment inthree hospitals in Colombia (included in the “Real estate and other impairment charges, net” line item of the condensed consolidated statements of net income), which is reflective of the expected impact of delayed cash receipts from the major earthquake the country suffered in August 2026, offset by a favorable adjustment of approximately $11 million related to our investment in Aevis. In the first nine months of 2025, we recorded a net unfavorable adjustment to the investments accounted for at fair value on a recurring basis of approximately $167 million, primarily related to our investment inthree hospitals in Colombia and our investment in PHP Holdings as further discussed in Note 3 to the condensed consolidated financial statements.

Items Measured at Fair Value on a Nonrecurring Basis

In addition to items that are measured at fair value on a recurring basis, we have assets and liabilities that are measured, from time-to-time, at fair value on a nonrecurring basis, such as for impairment purposes of our real estate, financial instruments, and for certain equity investments without a readily determinable fair value.

Impairment of Real Estate and Non-Real Estate Investments

See the Prospect subheading under "Leasing Operations (Lessor)" in Note 3 for a discussion around the use of fair value and related assumptions in the impairment of our real estate investments. In addition, see “Leasing Operations (Lessor)” in Note 3 for a discussion of loan impairments involving Insight and Tenor.

9. Earnings Per Share/Unit

Medical Properties Trust, Inc.

Our earnings per share were calculated based on the following (in thousands):

MPT Operating Partnership, L.P.

Our earnings per unit were calculated based on the following (in thousands):

(1)

The above computation of diluted earnings per share/unit does not include 279,746 and 149,937 of potential common shares/units for the three and nine months ended September 30, 2025, respectively, as inclusion of these shares when a loss exists would be antidilutive.

10. Contingencies

As part of the global settlement with Steward discussed in previous filings, we and Steward agreed, subject to specified exceptions, to the mutual release of claims against each other. In connection with the global settlement and reciprocal release of claims, we established a reserve for certain potential obligations due to third parties associated with properties formerly leased to Steward, which is approximately $15 million at September 30, 2026.

We are, or were, party to various lawsuits as described below:

Securities and Derivative Litigation

On September 29, 2023, we and certain of our executives were named as defendants in a putative federal securities class action lawsuit filed by a purported stockholder in the United States District Court for the Southern District of New York (Case No. 1:23-cv- 08597). The complaint seeks class certification on behalf of purchasers of our common stock between May 23, 2023 and August 17, 2023 and alleges false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect. This class action complaint was amended on October 30, 2024 and alleged that we made material misstatements or omissions in connection with certain transactions involving Prospect. Defendants filed a motion to dismiss the amended complaint on January 14, 2025. That motion has been fully briefed and is currently pending before the Court.

Members of our Board of Directors were also named as defendants in three related shareholder derivative lawsuits filed by purported stockholders in the United States District Court for the Southern District of New York on December 18, 2023 (Case No. 1:23-cv- 10934), March 1, 2024 (Case No. 1:24-cv-01589), and August 14, 2026 (Case No. 1:26-cv-06976). The Company was named as a nominal defendant in each complaint. These shareholder derivative complaints all make allegations similar to those made in the New York securities lawsuit described above relating to purported false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect. Cases 1:23-cv-10934 and 1:24-cv-01589 have been consolidated, and all three cases have been stayed pending further developments in the New York securities lawsuit described above. On February 21, 2024, members of our Board of Directors were named as defendants in a shareholder derivative lawsuit filed by a purported stockholder in the United States District Court for the District of Maryland (Case No. 1:24-cv-00527). The Company was named as a nominal defendant. This shareholder derivative complaint makes allegations similar to those made in the New York securities and derivative lawsuits described above relating to purported false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect. On June 16, 2026, plaintiff in this action filed a notice of voluntary dismissal and the case has now been dismissed without prejudice.

We believe these claims are without merit and intend to continue defending the remaining open cases vigorously. We have not recorded a liability related to the lawsuits above because, at this time, we are unable to determine whether an unfavorable outcome is probable or to estimate reasonably possible losses.

From time-to-time, we are a party to other legal proceedings, claims, or regulatory inquiries and investigations arising out of, or incidental to, our business. While we are unable to predict with certainty the outcome of any particular matter, in the opinion of management, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect our financial position, results of operations, or cash flows.

11. Segment Disclosures

We manage our business and report financial results asone business segment. This is consistent with the manner in which our chief operating decision maker ("CODM"), our executive team made up of our Chief Executive Officer and Chief Financial Officer, evaluates performance and makes resource and operating decisions for the business.

Our primary business strategy and source of revenue is from the acquisition and development of healthcare facilities that are leased to healthcare operating companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. The majority of our leased assets are owned 100%; however, we do own some leased assets through joint ventures with other partners. We also may make mortgage loans to healthcare operators collateralized by their real estate. In addition, we may make noncontrolling investments in our tenants, from time-to-time, typically in conjunction with larger real estate transactions with the tenant, which may enhance our overall return and provide for certain minority rights and protections. Although we generate our revenues from these investments in the U.S. and eight other countries across multiple property types, we centrally manage these business activities on a consolidated basis. The accounting policies of our business segment are the same as those described in the summary of significant accounting policies.

The CODM evaluates performance and makes resource and operating decisions for the business on a consolidated basis using consolidated net income from our consolidated statements of net income as our primary GAAP profit measure supplemented by consolidated funds from operations ("FFO"). We use net income and FFO to monitor expected versus actual results to assess performance. The measure of segment assets is total assets as reported on our consolidated balance sheets. We compute FFO in accordance with the definition provided by the National Association of Real Estate Investment Trusts, which represents consolidated net income (loss) (computed in accordance with GAAP), excluding gains (losses) on sales of real estate and impairment charges on real estate assets, plus real estate depreciation and amortization, including amortization related to in-place lease intangibles, and after adjustments for unconsolidated partnerships and joint ventures.

Given FFO excludes real estate related depreciation and amortization expense by definition and due to our typical net lease structure which requires our tenants to bear most of the costs associated with our properties (including property taxes, insurance, etc.), the primary expenses reviewed by the CODM include general and administrative and interest expenses from our consolidated statements of net income. See "Concentrations of Credit Risks" in Note 3 for entity-wide disclosures around major customers, geographic areas, and property types.