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What changed in MEDICAL PROPERTIES TRUST INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of MEDICAL PROPERTIES TRUST INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+277 added−426 removedSource: 10-K (2025-03-03) vs 10-K (2023-12-31)

Top changes in MEDICAL PROPERTIES TRUST INC's 2024 10-K

277 paragraphs added · 426 removed · 186 edited across 7 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

89 edited+25 added−198 removed197 unchanged
Biggest changeCompetition for healthcare facilities may adversely affect our ability to acquire or develop healthcare facilities and the prices we pay for those facilities. If we are unable to acquire or develop facilities or if we pay too much for facilities, our revenue, earnings growth, and financial return could be materially adversely affected.
Biggest changeIf we are unable to acquire or develop facilities or if we pay too much for facilities, our revenue, earnings growth, and financial return could be materially adversely affected. Certain of our facilities, or facilities we may acquire or develop in the future, will face competition from other nearby facilities that provide services comparable to those offered at our facilities.
There can be no assurance that we would be able to find another tenant in a timely fashion, or at all, or that, if another tenant were found, we would be able to enter into a new lease on favorable terms.
There can be no assurance that we would be able to find another tenant in a timely fashion, or at all, or that, if another tenant were found, we would be able to enter into a new lease on favorable terms.
In addition, if such taxes increase on properties in which we have an equity investment in the tenant, our return on investment maybe negatively affected. As the owner and lessor of real estate, we are subject to risks under environmental laws, the cost of compliance with which and any violation of which could materially adversely affect us.
In addition, if such taxes increase on properties in which we have an equity investment in the tenant, our return on investment maybe negatively affected. 32 As the owner and lessor of real estate, we are subject to risks under environmental laws, the cost of compliance with which and any violation of which could materially adversely affect us.
Thus, the non-renewal or extension of leases may adversely affect our results of operations, financial condition, and our ability to service our debt and make distributions to our stockholders. This risk is even greater for those properties under master leases (like Steward, Circle, and Prospect) because several properties have the same lease ending dates.
Thus, the non-renewal or extension of leases may adversely affect our results of operations, financial condition, and our ability to service our debt and make distributions to our stockholders. This risk is even greater for those properties under master leases (like Circle and Prospect) because several properties have the same lease ending dates.
Similarly, these changes could have a material impact on our tenants’/borrowers’ reported financial condition or results of operations or could affect our tenants’ preferences regarding leasing real estate. TAX RISKS Loss of our tax status as a REIT would have significant adverse consequences to us and the value of our common stock.
Similarly, these changes could have a material impact on our tenants’/borrowers’ reported financial condition or results of operations or could affect our tenants’ preferences regarding leasing real estate. 37 TAX RISKS Loss of our tax status as a REIT would have significant adverse consequences to us and the value of our common stock.
Failure to comply with these laws could subject us to civil and criminal penalties that could materially and 25 adversely affect our results of operations, the value of our international investments, and our ability to service our debt and make distributions to our stockholders. We and our tenants have exposure to contingent rent escalators, which could impact profitability.
Failure to comply with these laws could subject us to civil and criminal penalties that could materially and adversely affect our results of operations, the value of our international investments, and our ability to service our debt and make distributions to our stockholders. We and our tenants have exposure to contingent rent escalators, which could impact profitability.
In order to meet these tests, we may be required to forego attractive business or investment opportunities. If certain sale-leaseback transactions are not characterized by the Internal Revenue Service (“IRS”) or similar tax authorities internationally as “true leases,” we may be subject to adverse tax consequences.
In order to meet these tests, we may be required to forego attractive business or investment opportunities. 38 If certain sale-leaseback transactions are not characterized by the Internal Revenue Service (“IRS”) or similar tax authorities internationally as “true leases,” we may be subject to adverse tax consequences.
We compete with other healthcare REITs, healthcare providers, healthcare lenders, real estate partnerships, banks, insurance companies, private equity firms, and other investors that pursue a variety of investments, which may include investments in our 26 tenants. We have historically developed strong, long-term relationships with many of our tenants.
We compete with other healthcare REITs, healthcare providers, healthcare lenders, real estate partnerships, banks, insurance companies, private equity firms, and other investors that pursue a variety of investments, which may include investments in our tenants. We have historically developed strong, long-term relationships with many of our tenants.
If the market price of our common stock declines significantly, you may be unable to sell your shares at or above your purchase price. In addition, such a share price decline could impair our ability to raise future capital through a sale of additional equity securities.
If the market price of our common stock declines significantly, you may be unable to sell your shares at or above 29 your purchase price. In addition, such a share price decline could impair our ability to raise future capital through a sale of additional equity securities.
Our failure to manage our growth effectively may adversely impact our financial condition and cash flows, which could negatively affect our ability to service our debt and make distributions to our stockholders. Our growth could also increase our capital requirements, which may require us to issue potentially dilutive equity securities and/or incur additional debt.
Our failure to manage our growth effectively may adversely impact our financial condition and cash flows, which could negatively affect our ability to service our debt and make distributions to our stockholders. Our 25 growth could also increase our capital requirements, which may require us to issue potentially dilutive equity securities and/or incur additional debt.
However, even these hedging arrangements involve risk, including the risk that counterparties may fail to honor their obligations, that these arrangements may not be effective in reducing our exposure to interest rate changes, and that these arrangements may result in higher interest rates than we would otherwise have (in the case of our interest rate swaps).
However, these hedging arrangements involve risk, including the risk that counterparties may fail to honor their obligations, that these arrangements may not be effective in reducing our exposure to interest rate changes, and that these arrangements may result in higher interest rates than we would otherwise have (in the case of our interest rate swaps).
In addition, competing healthcare facilities located in the areas served by our facilities may provide healthcare services that are not available at our facilities. From time-to-time, referral sources, including physicians and managed care organizations, may change the healthcare facilities to which they refer patients.
In addition, competing healthcare facilities located in the areas served by our facilities may provide healthcare services that are not available at our facilities. From time-to-time, referral sources, including physicians and managed care organizations, may change the healthcare facilities to which they 26 refer patients.
We may be subject to risks in connection with our acquisition of healthcare real estate, including: • we may have no previous business experience with the tenants at the facilities acquired, and we may face difficulties in working with them; 30 • underperformance of the acquired facilities due to various factors, including unfavorable terms and conditions of any acquired lease agreements, disruptions caused by the management of our tenants, or changes in economic conditions; • diversion of our management’s attention away from other business concerns; • exposure to any undisclosed or unknown potential liabilities (including environmental liabilities) relating to the acquired facilities (or entities acquired in a share deal); and • potential underinsured losses on the acquired facilities.
We may be subject to risks in connection with our acquisition of healthcare real estate, including: • we may have no previous business experience with the tenants at the facilities acquired, and we may face difficulties in working with them; • underperformance of the acquired facilities due to various factors, including unfavorable terms and conditions of any acquired lease agreements, disruptions caused by the management of our tenants, or changes in economic conditions; • diversion of our management’s attention away from other business concerns; 31 • exposure to any undisclosed or unknown potential liabilities (including environmental liabilities) relating to the acquired facilities (or entities acquired in a share deal); and • potential underinsured losses on the acquired facilities.
See Item 7 of this Annual Report on Form 10-K for further information on our current debt maturities. Covenants in our debt instruments limit our operational flexibility, and a breach of these covenants could materially affect our financial condition and results of operations.
See Item 7 of this Annual Report on Form 10-K for further information on our debt maturities. Covenants in our debt instruments limit our operational flexibility, and a breach of these covenants could materially affect our financial condition and results of operations.
Although not a comprehensive list, some possible factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include: • actual or anticipated variations in our quarterly operating results or distributions; • changes in our earnings estimates, or publications of research, news, or other reports about us or the real estate industry; • changes in market valuations of similar companies; • changes in the market value of our facilities; • adverse market reaction to any increased indebtedness we incur in the future; • additions or departures of key management personnel; • actions by institutional stockholders; • an oversupply of, or a reduction in demand for, general acute care hospitals, behavioral health facilities, IRFs, LTACHs, or freestanding ER/urgent care facilities; • speculation in the press or investment community; • short-selling activity; • the financial performance and health of our tenants; and • general market and economic conditions, including inflation and rising interest rates.
Although not a comprehensive list, some possible factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include: • actual or anticipated variations in our quarterly operating results or distributions; • changes in our earnings estimates, or publications of research, news, or other reports about us or the real estate industry; • changes in market valuations of similar companies; • changes in the market value of our facilities; • adverse market reaction to any increased indebtedness we incur in the future; • additions or departures of key management personnel; • actions by institutional stockholders; • an oversupply of, or a reduction in demand for, general acute care hospitals, behavioral health facilities, post acute care facilities, or freestanding ER/urgent care facilities; • speculation in the press or investment community; • short-selling activity; • the financial performance and health of our tenants; and • general market and economic conditions, including inflation and rising interest rates.
However, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, floods, hurricanes, and acts of terrorism, which may be uninsurable or not insurable at a price we or our tenants/borrowers can afford.
However, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, fires, floods, hurricanes, and acts of terrorism, which may be uninsurable or not insurable at a price we or our tenants/borrowers can afford.
Even well-protected information systems remain potentially vulnerable because the techniques used in security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may 35 not be detected.
Even well-protected information systems remain potentially vulnerable because the techniques used in security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not to be detected and, in fact, may not be detected.
If property taxes increase, our tenants may be unable to make the required tax payments, ultimately requiring us to pay the taxes. If we incur these tax liabilities, our ability to service our debt and make expected distributions to our 31 stockholders could be adversely affected.
If property taxes increase, our tenants may be unable to make the required tax payments, ultimately requiring us to pay the taxes. If we incur these tax liabilities, our ability to service our debt and make expected distributions to our stockholders could be adversely affected.
Facilities may lose accreditation for failure to meet such requirements, which in turn may result in the loss of license or certification including under the Medicare and Medicaid programs, as well as inability to participate in certain managed care plans, which require the healthcare provider to be accredited. 33 Finally, healthcare facility reimbursement practices and quality of care issues may result in loss of license or certification, such as engaging in the practice of “upcoding,” whereby services are billed for higher procedure codes, or an event involving poor quality of care, which leads to the serious injury or death of a patient.
Facilities may lose accreditation for failure to meet such requirements, which in turn may result in the loss of license or certification including under the Medicare and Medicaid programs, as well as inability to participate in certain managed care plans, which require the healthcare provider to be accredited. 34 Finally, healthcare facility reimbursement practices and quality of care issues may result in loss of license or certification, such as engaging in the practice of “upcoding,” whereby services are billed for higher procedure codes, or an event involving poor quality of care, which leads to the serious injury or death of a patient.
Our tenants experience operational challenges from time-to-time, and this can be even more of a risk for those tenants that grow (or have grown) via acquisitions in a short time frame, like Steward, Circle, and others.
Our tenants experience operational challenges from time-to-time, and this can be even more of a risk for those tenants that grow (or have grown) via acquisitions in a short time frame, like Circle, and others.
If the market price of our common stock declines significantly, you may be unable to sell your shares at or above your purchase price. 28 We cannot assure you that the market price of our common stock will not fluctuate or decline significantly in the future.
If the market price of our common stock declines significantly, you may be unable to sell your shares at or above your purchase price. We cannot assure you that the market price of our common stock will not fluctuate or decline significantly in the future.
The terms of our unsecured credit facility ("Credit Facility") and the indentures governing our outstanding unsecured senior notes and other debt instruments that we may enter into in the future are subject to customary financial, operational, and reporting covenants.
The terms of our credit facility ("Credit Facility") and the indentures governing our outstanding senior notes and other debt instruments that we may enter into in the future are subject to customary financial, operational, and reporting covenants.
Under applicable rules, transactions such as leases between our TRS and its parent REIT that are not conducted on a 37 market terms basis may be subject to a 100% excise tax.
Under applicable rules, transactions such as leases between our TRS and its parent REIT that are not conducted on a market terms basis may be subject to a 100% excise tax.
Adverse U.S. and global market, economic and political conditions, including dislocations and volatility in the credit markets, rising inflation and interest rates, and general global economic uncertainty, could have a material adverse effect on our business, results of operations, and financial condition as a result of the following potential consequences, among others: • reduced values of our properties may limit our ability to dispose of assets at attractive prices, or at all, or to obtain debt financing secured by our properties and may reduce the availability of unsecured loans; and • our ability to obtain financing on terms and conditions that we find acceptable, or at all, may be limited, which could reduce our ability to pursue acquisition and redevelopment opportunities, refinance existing debt, reduce our returns from our acquisition and redevelopment activities, reduce our ability to sell properties or re-tenant properties at favorable terms, and increase our future interest expense.
Adverse U.S. and global market, economic and political conditions, including dislocations and volatility in the credit markets, elevated levels of inflation and interest rates, and general global economic uncertainty, could have a material adverse effect on our business, results of operations, and financial condition as a result of the following potential consequences, among others: • reduced values of our properties may limit our ability to dispose of assets at attractive prices, or at all, or to obtain debt financing secured by our properties and may reduce the availability of unsecured loans; and • our ability to obtain financing on terms and conditions that we find acceptable, or at all, may be limited, which could reduce our ability to pursue acquisition and redevelopment opportunities, refinance existing debt, reduce our returns from our acquisition and redevelopment activities, reduce our ability to sell properties or re-tenant properties at favorable terms, and increase our future interest expense.
CMS continues to explore restrictions on LTACH and IRF reimbursement focused on more restrictive facility and patient level criteria. The Reform Law enacted in 2010 represented a major shift in the U.S. healthcare industry by, among other things, allowing millions of formerly uninsured individuals to obtain health insurance coverage and by significantly expanding Medicaid.
CMS continues to explore restrictions on LTACH and IRF reimbursement focused on more targeted facility and patient level criteria. The Reform Law enacted in 2010 represented a major shift in the U.S. healthcare industry by, among other things, allowing millions of formerly uninsured individuals to obtain health insurance coverage and by significantly expanding Medicaid.
For 95 of these properties, the purchase option generally allows the lessee to purchase the real estate at the end of the lease term, assuming not currently in default, at a price equivalent to the greater of (i) fair market value or (ii) our original purchase price (increased, in some cases, by a certain annual rate of return from the lease commencement date).
For 85 of these properties, the purchase option generally allows the lessee to purchase the real estate at the end of the lease term, assuming not currently in default, at a price equivalent to the greater of (i) fair market value or (ii) our original purchase price (increased, in some cases, by a certain annual rate of return from the lease commencement date).
For nine of these properties, the purchase option generally allows the lessee to purchase the real estate at the end of the lease term, assuming not currently in default, at our purchase price (increased, in some cases, by a certain annual rate of return from lease commencement date). For the remaining eight properties, the purchase options approximate fair value.
For eight of these properties, the purchase option generally allows the lessee to purchase the real estate at the end of the lease term, assuming not currently in default, at our purchase price (increased, in some cases, by a certain annual rate of return from lease commencement date). For the remaining seven properties, the purchase options approximate fair value.
Given this increased focus and demand, public reporting regarding ESG practices is becoming more broadly expected. If our ESG practices and reporting regarding, among others, corporate governance, environmental compliance, human capital management, and workforce inclusion and diversity do not meet investor, employee, and other stakeholder expectations, our reputation may be negatively impacted.
Given this increased focus and demand, public reporting regarding corporate responsibility practices is becoming more broadly expected. If our practices and reporting regarding, among others, corporate governance, environmental compliance, human capital management, and workforce inclusion and diversity do not meet investor, employee, and other stakeholder expectations, our reputation may be negatively impacted.
These expenditures or renovations may have a material adverse effect on our business, results of operations, and financial condition. 34 State certificate of need laws may adversely affect our development of facilities and the operations of our tenants.
These expenditures or renovations may have a material adverse effect on our business, results of operations, and financial condition. 35 State certificate of need laws may adversely affect our development of facilities and the operations of our tenants.
We could also incur additional costs and devote additional resources to monitoring, reporting, and implementing various ESG practices. Our failure, or perceived failure, to meet the goals and objectives we set in our sustainability disclosure or the expectations of our various stakeholders, could negatively impact our reputation, tenant and employee retention, and access to capital.
We could also incur additional costs and devote additional resources to monitoring, reporting, and implementing various corporate responsibility practices. Our failure, or perceived failure, to meet the goals and objectives we set in our sustainability disclosure or the expectations of our various stakeholders, could negatively impact our reputation, tenant and employee retention, and access to capital.
We have acquired interests in 28 facilities, at least in part, by acquiring leasehold interests in the land on which the facility is located rather than an ownership interest in the land.
We have acquired interests in 21 facilities, at least in part, by acquiring leasehold interests in the land on which the facility is located rather than an ownership interest in the land.
Increased scrutiny and changing expectations from investors, employees, and other stakeholders regarding our ESG practices and reporting could cause us to incur additional costs, devote additional resources, and expose us to additional risks, which could adversely impact our reputation, tenant and employee acquisition and retention, and access to capital.
Increased scrutiny and changing expectations from investors, employees, and other stakeholders regarding our corporate responsibility practices and reporting could cause us to incur additional costs, devote additional resources, and expose us to additional risks, which could adversely impact our reputation, tenant and employee acquisition and retention, and access to capital.
RISKS RELATING TO THE HEALTHCARE INDUSTRY The continued pressure on healthcare reimbursement in the U.S. and other countries in which we do business, including shifts from fee-for-service reimbursement towards alternative payment models and other healthcare policy reforms, could adversely affect the profitability of our tenants and hinder their ability to make payments to us.
RISKS RELATING TO THE HEALTHCARE INDUSTRY The continued pressure on healthcare reimbursement in the U.S. and other countries in which we do business, including shifts from fee-for-service reimbursement towards alternative payment models, other healthcare policy reforms, and government cost cutting measures, could adversely affect the profitability of our tenants and hinder their ability to make payments to us.
Companies across all industries are facing increased scrutiny related to their ESG practices and reporting. Investors, employees, and other stakeholders have begun to focus on ESG practices and to place greater importance on the implications and social cost of their investments and business decisions.
Companies across all industries are facing increased scrutiny related to their corporate responsibility practices and reporting. Investors, employees, and other stakeholders have begun to focus on corporate responsibility practices and to place greater importance on the implications and social cost of their investments and business decisions.
In addition, investors, particularly institutional investors, use ESG practices and scores to benchmark companies against their peers and if a company is perceived as lagging, such investors may engage with a company to improve ESG disclosure or performance and may also make voting decisions on this basis.
In addition, 27 investors, particularly institutional investors, use corporate responsibility practices and scores to benchmark companies against their peers and if a company is perceived as lagging, such investors may engage with a company to improve disclosure or performance and may also make voting decisions on this basis.
We believe that we qualify as a REIT for U.S. federal income tax purposes as of December 31, 2023. In addition, we own a direct interest in two subsidiary REITs that have elected to be taxed as a REIT for U.S. federal income tax purposes commencing with the 2019 and 2022 tax years, respectively.
We believe that we qualify as a REIT for U.S. federal income tax purposes as of December 31, 2024. In addition, we own a direct interest in several subsidiary REITs that have elected to be taxed as a REIT for U.S. federal income tax purposes commencing with the 2019 and 2022 tax years, respectively.
Public health crises, pandemics and epidemics, such as those caused by new strains of viruses such as H5N1 (avian flu), severe acute respiratory syndrome (SARS) and, most recently, COVID-19, could adversely impact our and our tenants’ business by disrupting supply chains and transactional activities, creating labor shortages, and negatively impacting local, national, or global economies.
Public health crises, pandemics and epidemics, such as those caused by viruses such as H5N1 (avian flu), severe acute respiratory syndrome (SARS) and COVID-19, could adversely impact our and our tenants’ business by disrupting supply chains and transactional activities, creating labor shortages, and negatively impacting local, national, or global economies.
Failure to make required distributions as a REIT would subject us to tax. In order to qualify as a U.S. REIT, each year we must distribute to our stockholders at least 90% of our REIT taxable income, excluding net capital gains.
Failure to make required distributions as a REIT would increase our tax burden. In order to qualify as a U.S. REIT, each year we must distribute to our stockholders at least 90% of our REIT taxable income, excluding net capital gains.
As a result, interest rate fluctuations and capital market conditions can affect the market price of our common stock. In addition, rising interest rates would result in increased interest expense on our variable-rate debt, thereby adversely affecting cash flow and our ability to service our indebtedness and make distributions. Limited access to capital may restrict our growth.
As a result, interest rate fluctuations and capital market conditions can affect the market price of our common stock. In addition, rising interest rates would result in increased interest expense on our variable-rate debt, thereby adversely affecting cash flow and our ability to service our indebtedness and make distributions.
If a lease is assumed by a tenant in bankruptcy (like it was in the case of Pipeline Health System, LLC ("Pipeline") in 2022), we expect that all pre-bankruptcy balances due under the lease would be paid to us in full.
If a lease is assumed by a tenant in bankruptcy (as in the case of Pipeline Health System, LLC ("Pipeline") in 2022), we expect that all pre-bankruptcy balances due under the lease would be paid to us in full.
Any adverse result to our tenants (particularly Steward, Circle, Priory, Prospect, and Lifepoint Behavioral) in regulatory proceedings or financial or operational setbacks may have a material adverse effect on the relevant tenant’s operations and on its ability to make required lease and loan payments to us.
Any adverse result to our tenants (particularly Circle, Priory, HSA, Lifepoint Behavioral, and Swiss Medical) in regulatory proceedings or financial or operational setbacks may have a material adverse effect on the relevant tenant’s operations and on its ability to make required lease and loan payments to us.
We have less experience with healthcare facilities located outside the U.S. At December 31, 2023, we had approximately 39% of our total assets located in eight different countries outside the U.S. We have less experience investing in healthcare properties or other real estate-related assets located outside the U.S.
We have less experience with healthcare facilities located outside the U.S. At December 31, 2024, we had approximately 47.8% of our total assets located in eight different countries outside the U.S. We have less experience investing in healthcare properties or other real estate-related assets located outside the U.S.
The market price and trading volume of our common stock may be volatile and may decline regardless of our operating performance, and you may lose all or part of your investment. As can be seen in 2023 and 2022, the market price of our common stock may be highly volatile and subject to wide fluctuations.
The market price and trading volume of our common stock may be volatile and may decline regardless of our operating performance, and you may lose all or part of your investment. As observed in 2024 and 2023, the market price of our common stock may be highly volatile and subject to wide fluctuations.
In addition, if strong economic conditions or higher than normal inflation results in significant increases in CPI (like has been the case in 2023), but the escalations under our leases are capped, our growth and profitability may be limited.
In addition, if strong economic conditions or higher than normal inflation results in significant increases in CPI (as was the case in 2023), but the escalations under our leases are capped, our growth and profitability may be limited.
Defaults by our tenants under our leases may adversely affect our results of operations, financial condition, and our ability to service our debt and make distributions to our 24 stockholders. Defaults by our significant tenants under master leases (like Steward, Circle, Priory, Prospect, and Lifepoint Behavioral) would have an even more pronounced negative impact.
Defaults by our tenants under our leases may adversely affect our results of operations, financial condition, and our ability to service our debt and make distributions to our stockholders. Defaults by our significant tenants under master leases (like Circle, Priory, HSA, Lifepoint Behavioral, and Swiss Medical) would have an even more pronounced negative impact.
See the risk factor titled “Our revenues are dependent upon our relationships with and success of our tenants, particularly our largest tenants, like Steward, Circle, Priory, Prospect, and Lifepoint Behavioral” and Item 7 of this Annual Report on Form 10-K. The bankruptcy or insolvency of our tenants or investees could harm our operating results and financial condition.
See the risk factor titled “Our revenues are dependent upon our relationships with and success of our tenants, particularly our largest tenants, like Circle, Priory, HSA, Lifepoint Behavioral, and Swiss Medical” and Item 7 of this Annual Report on Form 10-K. The bankruptcy or insolvency of our tenants or investees could harm our operating results and financial condition.
For example, an increasing number of investment funds focus on positive ESG practices and sustainability scores when making an investment decision.
For example, an increasing number of investment funds focus on positive corporate responsibility practices and sustainability scores when making an investment decision.
We cannot predict when and to what extent these delays may occur, nor whether our business will be adversely impacted. The CMS regulatory restrictions on reimbursement for LTACHs and IRFs can lead to reduced reimbursement for our tenants that operate such facilities and departments.
We cannot predict when and to what extent these delays may occur, nor whether our business will be adversely impacted. The CMS regulatory restrictions on reimbursement for long-term acute care hospitals ("LTACHs") and inpatient rehabilitation hospitals ("IRFs") can lead to reduced reimbursement for our tenants that operate such facilities and departments.
We have investments in five unconsolidated real estate joint ventures with independent parties that total approximately $1.5 billion at December 31, 2023.
We have investments in five unconsolidated real estate joint ventures with independent parties that total approximately $1.2 billion at December 31, 2024.
The nature and timing of any changes to each jurisdiction’s tax laws and the impact on our future tax exposure both in the U.S. and abroad cannot be predicted with any accuracy but could materially and adversely impact our results of operations and cash flows.
The nature and timing of any changes to each jurisdiction’s tax laws and the impact on our future tax exposure both in the U.S. and abroad cannot be predicted with any accuracy but could materially and adversely impact our results of operations and cash flows. 39 ITEM 1B. U nresolved Staff Comments None.
Another economic or financial crisis, significant concerns over energy costs and inflation, rising interest rates, geopolitical issues (including as a result of the armed conflict between Russia and Ukraine, and recent escalation in the conflict between the State of Israel and Hamas, and potentially other countries in the Middle East and North Africa), the availability and cost of credit, or a declining real estate market in the U.S. or abroad can contribute to increased volatility, diminished expectations for the economy and the markets, shortage of available healthcare workers and related increased labor costs, and high levels of unemployment by historical standards.
Economic or financial crises, significant concerns over energy costs and inflation, elevated interest rates, geopolitical issues (including as a result of the armed conflict between Russia and Ukraine, recent escalation in the conflict between the State of Israel and Hamas, and other potential conflicts amongst countries in the Middle East and North Africa), the availability and cost of credit, or a declining real estate market in the U.S. or abroad have in the past, and may in the future, contribute to increased volatility, diminished expectations for the economy and the markets, shortage of available healthcare workers and related increased labor costs, and high levels of unemployment by historical standards.
Failure to hedge effectively against interest rate changes may adversely affect our results of operations and our ability to make distributions to our stockholders. As of February 16, 2024, we had approximately $3.0 billion in variable interest rate debt along with €655 million and approximately $890 million in our joint venture arrangements with Primotop Holdings S.à.r.l. (“Primotop”) and MAM, respectively.
Failure to hedge effectively against interest rate changes may adversely affect our results of operations and our ability to make distributions to our stockholders. As of February 28, 2025, we had approximately $0.3 billion in variable interest rate debt along with €655 million in our joint venture arrangement with Primotop Holdings S.à.r.l. (“Primotop”).
As of February 16, 2024, we had approximately $10.1 billion of debt outstanding - see "Contractual Commitments" in Item 7 of this Annual Report on Form 10-K for a schedule of our debt coming due over the next five years.
As of February 28, 2025, we had approximately $9.0 billion of debt outstanding - see "Contractual Commitments" in Item 7 of this Annual Report on Form 10-K for a schedule of our debt coming due over the next five years.
Our business plan contemplates growth through acquisitions and development of facilities. As a REIT, we are required to make distributions, which (if paid in cash) reduce our ability to fund acquisitions and developments with retained earnings. Thus, access to 29 the capital markets, bank borrowings, and other financing vehicles are important to fund new opportunistic investments.
As a REIT, we are required to make distributions, which (if paid in cash) reduce our ability to fund acquisitions and developments with retained earnings. Thus, access to the capital markets, bank borrowings and other financing vehicles is important to fund new opportunistic investments.
From time-to-time, we or our tenants may be involved in litigation, regulatory proceedings and other governmental inquiries.
We are, and from time-to-time may be, involved in litigation, regulatory proceedings and other governmental inquiries.
It is possible that future economic, market, legal, tax, or other considerations may cause our Board to revoke the REIT election, which it may do without stockholder approval. 36 If we lose or revoke our REIT status (currently or with respect to any tax years for which the statute of limitations has not yet expired), we will face serious tax consequences that will substantially reduce the funds available for distribution because we would not be allowed a deduction for distributions to stockholders in computing our taxable income; therefore, we would be subject to U.S. federal income tax at regular corporate rates, and we might need to borrow money or sell assets in order to pay any such tax.
If we lose or revoke our REIT status (currently or with respect to any tax years for which the statute of limitations has not yet expired), we will face serious tax consequences that will substantially reduce the funds available for distribution because we would not be allowed a deduction for distributions to stockholders in computing our taxable income; therefore, we would be subject to U.S. federal income tax at regular corporate rates, and we might need to borrow money or sell assets in order to pay any such tax.
Our indebtedness could have significant effects on our business, including by: • requiring us to use a substantial portion (or all) of our cash flow from operations to service our indebtedness, which would reduce available cash flow to fund working capital, development projects, and other general corporate purposes, as well as distributions; • forcing us to dispose of one or more of our properties, possibly on disadvantageous terms, to make payments on our debt; • reducing our ability to extend existing bank debt or refinance debt on favorable terms; • increasing our vulnerability to general adverse economic and industry conditions; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • restricting us from making strategic acquisitions or exploiting other business opportunities; and • placing us at a competitive disadvantage compared to our competitors that have less debt. 27 Our future borrowings under our loan facilities may bear interest at variable rates in addition to the $1.8 billion in variable interest rate debt that we had outstanding as of February 16, 2024 (excluding the variable rate debt that we have fixed through interest rate swaps).
Our indebtedness could have significant effects on our business, including by: • requiring us to use a substantial portion (or all) of our cash flow from operations to service our indebtedness, which would reduce available cash flow to fund working capital, development projects, and other general corporate purposes, as well as cash distributions; • forcing us to dispose of one or more of our properties, possibly on disadvantageous terms, to make payments on our debt; • reducing our ability to extend existing bank debt or refinance debt on favorable terms; • increasing our vulnerability to general adverse economic and industry conditions; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; • restricting us from making strategic acquisitions or exploiting other business opportunities; and • placing us at a competitive disadvantage compared to our competitors that have less debt.
We have 112 leased properties that are subject to purchase options as of December 31, 2023.
We have 100 leased properties that are subject to purchase options as of December 31, 2024.
Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital. During 2023, our credit ratings were lowered by both S&P Global and Moody's Investors Service. As of February 16, 2024, S&P Global rates our unsecured notes at BB- while the credit rating on Medical Properties Trust is B+.
Downgrades in our credit ratings could have a material adverse effect on our cost and availability of capital. During 2024, our credit ratings were lowered by both S&P Global and Moody's Investors Service. As of February 28, 2025, S&P Global rates Medical Properties Trust and our unsecured notes at CCC+.
We have made investments in certain operators of our healthcare facilities and the cash flows (and related returns) from these investments are subject to more volatility than our properties with the traditional net leasing structure. At December 31, 2023, we have approximately $1.8 billion of investments in unconsolidated operating entities, including $0.4 billion of investments in Steward, our largest tenant.
We have made investments in certain operators of our healthcare facilities and the cash flows (and related returns) from these investments are subject to more volatility than our properties with the traditional net leasing structure. At December 31, 2024, we have approximately $0.4 billion of investments in unconsolidated operating entities, or 3% of our total assets.
As disclosed elsewhere in this Annual Report, Steward has been experiencing operational challenges, which could impact our ability to recover our investments, in part or at all, and therefore could have a material adverse impact on our financial condition, results of operations, stock price, and ability to make distributions to our stockholders.
As disclosed elsewhere in this Annual Report, operational challenges for certain operators have in the past, and may in the future, impact our ability to recover our investments, in part or at all, and therefore could have a material adverse impact on our financial condition, results of operations, stock price, and ability to make distributions to our stockholders.
Therefore, we will likely need to refinance at least a portion of that debt as it matures. There is a risk that we may not be able to refinance debt maturing in 2024 and future years or that the terms of any refinancing will not be as favorable as the terms of the then-existing debt.
There is a risk that we may not be able to refinance debt maturing in 2026 and future years or that the terms of any refinancing will not be as favorable as the terms of the then-existing debt.
Such operational challenges can result in our tenants and operators having to write-off uncollectible accounts receivable, incurring higher expenses, or even undergoing insolvency in certain cases. 23 For example, we recorded approximately $700 million of impairment charges related to Steward in the 2023 fourth quarter due to ongoing operational and liquidity challenges.
Such 23 operational challenges can result in our tenants and operators having to write-off uncollectible accounts receivable, incurring higher expenses, or even undergoing insolvency in certain cases. For example, we recorded approximately $1.6 billion of real estate and other impairment charges related to Steward in 2024 due to operational and liquidity challenges.
Any loss of revenues or additional capital expenditures occurring as a result could have a material adverse effect on our financial condition and results of operations and could hinder our ability to meet debt service obligations or make distributions to our stockholders.
Alternatively, we may be required to spend substantial amounts to adapt the facilities to other uses. Any loss of revenues or additional capital expenditures occurring as a result could have a material adverse effect on our financial condition and results of operations and could hinder our ability to meet debt service obligations or make distributions to our stockholders.
We are subject to risks inherent in concentrating investments in real estate. The risks resulting from a lack of diversification become even greater as a result of our business strategy to invest solely in healthcare facilities. A downturn in the real estate industry could materially adversely affect the value of our facilities.
We acquire, develop, and make investments in healthcare real estate. In addition, we selectively make investments in healthcare operators. We are subject to risks inherent in concentrating investments in real estate. The risks resulting from a lack of diversification become even greater as a result of our business strategy to invest solely in healthcare facilities.
Due to market or other conditions, we may not be able to obtain additional equity or debt capital or dispose of assets on favorable terms, if at all, at the time we need additional capital to acquire healthcare properties, which could have a material adverse effect on our results of operations and our ability to service our debt and make distributions to our stockholders.
Due to market or other conditions, we may not be able to obtain additional equity or debt capital or dispose of assets on favorable terms, or at all, at the time we need additional capital to acquire healthcare properties, which could have a material adverse effect on our results of operations and our ability to service our debt and make distributions to our stockholders. 30 RISKS RELATING TO REAL ESTATE INVESTMENTS Our investments are and are expected to continue to be concentrated in a single industry segment, making us more vulnerable economically than if our investments were more diversified.
From time-to-time, the lenders of our Credit Facility may adjust certain covenants to give us more flexibility to complete a transaction; however, such modified covenants are temporary, and we must be in a position to meet the lowered reset covenants in the future.
From time-to-time, the lenders of our Credit Facility may adjust certain covenants to give us more flexibility (as was done in April and August of 2024, and most recently in February 2025); however, such modified covenants could be temporary, and we must be in a position to meet the 28 lowered reset covenants in the future.
These and other charter and bylaw provisions may delay or prevent a change of control or other transaction in which holders of our common stock might receive a premium for their common stock over the then-current market price or which such holders otherwise might believe to be in their best interests.
These and other charter and bylaw provisions may delay or prevent a change of control or other transaction in which holders of our common stock might receive a premium for their common stock over the then-current market price or which such holders otherwise might believe to be in their best interests. 36 We rely on information technology in our operations, and any material failure, inadequacy, interruption, or security failure of our technology (or that of our third-party vendors) could harm our business.
Any bankruptcy filings by one of our tenants could bar us from collecting pre-bankruptcy debts from that tenant or their property, unless we receive an order permitting us to do so from the bankruptcy court.
Any bankruptcy filing by one of our tenants (such as Steward in 2024 and Prospect in 2025) could harm our operating results and financial condition. A bankruptcy filing could bar us from collecting pre-bankruptcy debts from that tenant or their property, unless we receive an order permitting us to do so from the bankruptcy court.
We are dependent upon the ability of our tenants to make rent and loan payments to us, and any failure to meet these obligations could have a material adverse effect on our financial condition and results of operations.
For more information, including reserves and impairment charges, see Note 3 to Item 8 of this Annual Report on Form 10-K. We are dependent upon the ability of our tenants to make rent and loan payments to us, and any failure to meet these obligations could have a material adverse effect on our financial condition and results of operations.
A downturn in the healthcare industry could negatively affect our tenants’ ability to make lease or loan payments to us as well as our return on our equity investments. Consequently, our ability to meet debt service obligations or make distributions to our stockholders is dependent on the real estate and healthcare industries.
A downturn in the real estate industry could materially adversely affect the value of our facilities. A downturn in the healthcare industry could negatively affect our tenants’ ability to make lease or loan payments to us as well as our return on our equity investments.
We compete for acquisition and development opportunities with, among others, private investors, including large private equity funds; healthcare providers, including physicians; other REITs; real estate developers; government-sponsored and/or not-for-profit agencies; financial institutions; and other lenders. Some of these competitors may have substantially greater financial resources than we have and may have better relationships with lenders and sellers.
Our business is highly competitive, and we may be unable to compete successfully. We compete for acquisition and development opportunities with, among others, private investors, including large private equity funds; healthcare providers, including physicians; other REITs; real estate developers; government-sponsored and/or not-for-profit agencies; financial institutions; and other lenders.
If we, or our tenants, terminate the leases for these facilities, or if these tenants lose their regulatory authority to operate these facilities, we may not be able to locate suitable replacement tenants to lease the facilities for their specialized uses. Alternatively, we may be required to spend substantial amounts to adapt the facilities to other uses.
Primarily all of the facilities in our current portfolio are net-leased healthcare facilities. If we, or our tenants, terminate the leases for these facilities, or if these tenants lose their regulatory authority to operate these facilities, we may not be able to locate suitable replacement tenants to lease the facilities for their specialized uses.
However, if a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages. Any secured claims we have against our tenants may only be paid to the extent of the value of the collateral, which may not cover any or all of our losses.
Any secured claims we have against our tenants may only be paid to the extent of the value of the collateral, which may not cover any or all of our losses.
In instances where we have an equity investment in our tenants’ operations, 32 in addition to the effect on these tenants’ ability to meet their financial obligations to us, our ownership and investment interests may also be negatively impacted.
In instances where we have an equity investment in our tenants’ operations, in addition to the effect on these tenants’ ability to meet their financial obligations to us, our ownership and investment interests may also be negatively impacted. 33 Additionally, government and commercial payors in the United States, and in other countries (like Colombia) in which we do business, have the ability to withhold or delay claims payments to our tenants.
Even if these governmental programs eventually increase reimbursement rates in line with CPI, there could be interim shortfalls for our tenants, which may adversely impact our ability to collect rent/interest on a timely basis. Our business is highly competitive, and we may be unable to compete successfully.
Conversely, higher than normal increases in CPI could negatively impact our tenants' profitability, particularly if reimbursement revenues from governmental programs, like Medicare, do not keep pace. Even if these governmental programs eventually increase reimbursement rates in line with CPI, there could be interim shortfalls for our tenants, which may adversely impact our ability to collect rent/interest on a timely basis.
For more information, including reserves and impairment charges, see Note 3 (Operational and Liquidity Challenges) to Item 8 of this Annual Report on Form 10-K.
For more information, including reserves and impairment charges, see Note 3 to Item 8 of this Annual Report on Form 10-K. Impairment charges also indicate a potential permanent adverse change in the fundamental operating characteristics of the impaired asset.
In addition, our Credit Facility and senior unsecured notes limit the amount of dividends we can pay. Finally, senior unsecured notes require us to maintain total unencumbered assets (as defined in the related indenture) of not less than 150% of our unsecured indebtedness.
Furthermore, 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, and the terms of our senior secured notes issued in February 2025 limit the amount of first lien debt that can be secured on the collateral of such notes.
Our corporate fund rating for Moody's was lowered to Ba2. Both agencies currently have a negative outlook on our ratings, and there can be no assurance that we will be able to maintain our current credit ratings.
However, S&P currently has a negative outlook on our ratings, and there can be no assurance that we will be able to maintain or improve our current credit ratings.
As of December 31, 2023, our largest tenants – Steward, Circle, Priory, Prospect, and Lifepoint Behavioral – represented 19.2%, 11.6%, 7.6%, 6.0%, and 4.4%, respectively, of our total assets.
As of December 31, 2024, our largest tenants – Circle, Priory, HSA, Lifepoint Behavioral, and Swiss Medical – represented 14.2%, 8.6%, 8.3%, 5.7%, and 5.1%, respectively, of our total assets.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeHowever, the Board, led by members of the Risk Committee, oversees the enterprise risk management process, specifically addressing material risks stemming from cybersecurity threats. 39 The Board receives regular updates from the Computer Security Incident Response Team (“CSIRT”) to provide insight into significant cybersecurity risks, potential impacts on business operations, and management's strategies for identifying, monitoring, and mitigating these risks.
Biggest changeThe Board receives regular updates from the Computer Security Incident Response Team (“CSIRT”) to provide insight into significant cybersecurity risks, potential impacts on business operations, and management's strategies for identifying, monitoring, and mitigating these risks.
The collaborative efforts of the Board and our skilled CSIRT team underscore our commitment to effectively addressing and mitigating cybersecurity risks within the organization. 40
The collaborative efforts of the Board and our skilled CSIRT team underscore our commitment to effectively addressing and mitigating cybersecurity risks within the organization. 41
Led by our Director of Information Technology and Security (“Director of IT”) with over 40 years of experience in Information Technology, our CSIRT, comprising cross-functional professionals, collaborates to execute our cybersecurity risk assessment and management processes by reviewing and assessing cybersecurity initiatives, including the incident response plan, cybersecurity compliance, training, and overall risk management efforts.
This includes sharing results from assessments or audits of relevant processes. 40 Led by our Director of Information Technology and Security (“Director of IT”) with years of experience in Information Technology, our CSIRT, comprising cross-functional professionals, collaborates to execute our cybersecurity risk assessment and management processes by reviewing and assessing cybersecurity initiatives, including the incident response plan, cybersecurity compliance, training, and overall risk management efforts.
Our management has primary responsibility for identifying, assessing, and managing our exposure to cybersecurity threats and incidents.
Our management has primary responsibility for identifying, assessing, and managing our exposure to cybersecurity threats and incidents. However, the Board, led by members of the Risk Committee, oversees the enterprise risk management process, specifically addressing material risks stemming from cybersecurity threats.
Removed
This includes sharing results from assessments or audits of relevant processes.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table shows lease and loan expirations, assuming that none of the tenants/borrowers exercise any of their renewal options (dollars in thousands): Total Lease and Loan Portfolio(1) Total Leases/ Loans(2) Annualized Base Rent/ Interest(3) % of Total Annualized Base Rent/ Interest Total Square Footage Total Licensed Beds 2024 — $ — — — — 2025 7 19,961 1.5 % 1,371,928 778 2026 4 2,274 0.2 % 332,221 238 2027 1 3,476 0.3 % 102,948 13 2028 8 19,968 1.5 % 2,281,409 548 2029 6 15,163 1.2 % 734,452 527 2030 11 6,454 0.5 % 220,258 59 2031 4 4,789 0.4 % 172,655 89 2032 41 68,677 5.3 % 1,291,879 804 2033 8 11,991 0.9 % 230,296 142 Thereafter 336 1,147,291 88.2 % 45,353,110 39,438 Total 426 $ 1,300,044 100.0 % 52,091,156 42,636 (1) Schedule includes leases and mortgage loans and related terms as of December 31, 2023.
Biggest changeThe following table shows lease and loan expirations, assuming that none of the tenants/borrowers exercise any of their renewal options (dollars in thousands): Total Lease and Loan Portfolio(1) Total Leases/ Loans(2) Annualized Base Rent/ Interest(3) % of Total Annualized Base Rent/ Interest Total Square Footage Total Licensed Beds 2025 3 $ 4,962 0.5 % 442,947 241 2026 2 1,152 0.1 % 23,782 24 2027 3 4,788 0.5 % 622,778 140 2028 8 20,880 2.0 % 2,281,409 548 2029 6 16,247 1.5 % 808,610 527 2030 9 6,205 0.6 % 205,795 59 2031 4 4,919 0.5 % 172,655 89 2032 22 57,079 5.3 % 1,067,663 754 2033 5 6,201 0.6 % 85,477 24 2034 15 108,437 10.2 % 2,526,898 2,186 Thereafter 296 837,301 78.2 % 34,581,624 33,240 Total 373 $ 1,068,171 100.0 % 42,819,638 37,832 (1) Schedule includes leases and mortgage loans and related terms as of December 31, 2024.
ITEM 2. P roperties At December 31, 2023, our portfolio (including properties in our five real estate joint ventures) consisted of 439 properties (including properties under construction or in the form of a first lien mortgage loan) operated by 54 different operators. Our vacant facilities represent less than 0.3% of total assets at December 31, 2023.
ITEM 2. P roperties At December 31, 2024, our portfolio (including properties in our five real estate joint ventures) consisted of 396 properties (including properties under construction or in the form of a first lien mortgage loan) operated by 53 different operators. Our vacant facilities represent less than 1% of total assets at December 31, 2024.
(2) Reflects all properties, including properties owned through our real estate joint ventures, except vacant properties and facilities that are under development. 42 (3) The December 2023 base rent and mortgage loan interest per the lease/loan agreements are annualized. This does not include tenant recoveries, additional rents, and other lease/loan-related adjustments to revenue (i.e., straight-line rents, deferred revenues, or reserves/write-offs).
(3) Represents base rent/interest income contractually owed per the lease/loan agreements on an annualized basis as of period end (including foreign currency exchange rates) but does not include tenant recoveries, additional rents and other lease-related adjustments to revenue (i.e., straight-line rents and deferred revenues), or any reserves or write-offs. 43
(F) For Germany, the U.S., Switzerland, Spain, and Italy, we own properties through five real estate joint venture arrangements.
(B) Includes one facility that was vacant at December 31, 2024. (C) Includes a development project still under construction and facilities that were vacant at December 31, 2024. 42 (D) Includes development projects still under construction at December 31, 2024. (E) For Germany, the U.S., Switzerland, Spain, and Italy, we own properties through five real estate joint venture arrangements.
Removed
Total Properties Total 2023 Revenues(A) Total Assets(B) (Dollars in thousands) United States: Alabama 2 $ 791 $ 6,684 Arizona 18 2,131 547,789 Arkansas 2 10,146 78,146 California 19 102,224 1,252,674 Colorado 14 18,544 159,292 Connecticut 3 28,508 354,141 Florida 9 35,688 1,348,210 Idaho 6 34,423 265,368 Indiana 5 6,930 63,116 Iowa 1 5,307 48,592 Kansas 9 20,712 204,972 (C) Kentucky 1 (5,093 ) 72,946 Louisiana 6 (33 ) 128,233 Massachusetts 10 (99,548 ) 732,550 (F) Michigan 2 2,178 20,493 Missouri 4 17,350 125,633 Montana 1 1,915 18,696 New Jersey 6 35,515 263,870 New Mexico 2 5,187 48,463 North Carolina 1 3,114 31,849 Ohio 9 20,411 349,141 Oklahoma 2 7,495 72,377 Oregon 1 12,381 86,634 Pennsylvania 9 44,418 470,562 South Carolina 8 15,714 136,264 Texas 51 30,326 1,891,482 (D) Utah 7 30,329 824,048 Virginia 2 2,863 19,418 Washington 2 4,187 37,536 Wisconsin 1 3,476 22,281 Wyoming 3 9,740 93,649 Other assets — — 1,397,170 Total United States 216 $ 407,329 $ 11,172,279 International: Australia — $ 29,707 $ — Colombia 4 17,913 178,309 Germany 85 37,955 734,630 (F) Italy 8 — 80,562 (F) Portugal 2 3,410 50,151 Spain 9 8,349 252,529 (E)(F) Switzerland 19 3,117 735,891 (F) United Kingdom 92 352,594 4,261,944 Finland 4 11,425 218,322 Other assets — — 620,227 Total International 223 $ 464,470 $ 7,132,565 Total 439 $ 871,799 $ 18,304,844 41 (A) Total 2023 revenues include approximately $459 million of reserves for billed rent, straight-line rent, and interest and other income, primarily related to Steward.
Added
Total Properties Total 2024 Revenues Total Assets(A) (Dollars in thousands) United States: Alabama 2 $ 793 $ 6,423 Arizona 10 39,146 379,801 Arkansas 1 10,671 67,536 California 17 92,200 935,470 Colorado 3 15,720 104,079 Connecticut 3 35 176,087 Florida 6 18,168 840,876 (B) Idaho 6 36,993 295,533 Indiana 4 7,122 60,374 Iowa 1 5,365 46,483 Kansas 9 15,048 208,913 (B) Kentucky 1 4,797 54,746 Louisiana 6 5,539 109,955 Massachusetts 2 877 226,331 Michigan 2 3,028 19,678 Missouri 4 22,095 121,529 Montana 1 1,964 18,904 New Jersey 2 29,187 146,080 New Mexico 2 5,240 49,488 North Carolina 1 3,145 30,938 Ohio 9 27,791 327,577 (B) Oklahoma 2 7,618 70,188 Oregon 1 12,516 83,586 Pennsylvania 9 31,973 298,684 South Carolina 6 16,995 127,594 Texas 48 91,782 1,394,296 (C) Utah 7 37,248 147,782 (E) Virginia 2 790 16,286 Washington 2 4,297 36,435 Wisconsin 1 3,594 21,554 Wyoming 3 9,936 91,401 Other assets — — 951,486 Total United States 173 $ 561,673 $ 7,466,093 International: Colombia 4 $ 5,177 $ 141,508 Germany 85 40,662 672,343 (E) Italy 8 — 77,592 (E) Portugal 2 3,571 45,647 Spain 9 11,534 247,996 (D)(E) Switzerland 19 1,015 719,632 (E) United Kingdom 92 359,991 3,985,672 Finland 4 11,924 199,721 Other assets — — 738,390 Total International 223 $ 433,874 $ 6,828,501 Total 396 $ 995,547 $ 14,294,594 (A) Represents total assets at December 31, 2024.
Removed
See Note 3 to Item 8 of this Annual Report on Form 10-K. (B) Represents total assets at December 31, 2023. (C) Includes one facility that was vacant at December 31, 2023. (D) Includes development projects still under construction and facilities that were vacant at December 31, 2023. (E) Includes development projects still under construction at December 31, 2023.
Added
The table below shows revenues earned from our joint venture arrangements: Total Properties Total 2024 Revenues (Dollars in thousands) Germany 71 $ 66,871 U.S. 5 11,355 Switzerland 19 52,544 Spain 2 7,127 Italy 8 6,006 Total 105 $ 143,903 (1) The table above does not include $38 million of revenue earned in 2024 from our Massachusetts-based partnership with Macquarie, which was terminated in the third quarter of 2024.
Removed
The table below shows revenues earned from our joint venture arrangements: Total Properties Total 2023 Revenues (Dollars in thousands) Germany 71 $ 64,578 U.S. 8 41,217 Switzerland 19 48,606 Spain 2 7,033 Italy 8 9,218 Total 108 $ 170,652 A breakout of our facilities at December 31, 2023 based on property type is as follows: Number of Properties Total Square Footage Total Licensed Beds(A) General acute care hospitals 192 35,112,270 20,758 Behavioral health facilities 70 3,272,782 4,479 IRFs 114 12,954,523 16,611 LTACHs 20 1,174,007 939 FSERs 43 407,936 — 439 52,921,518 42,787 (A) Excludes our facilities that are under development.
Added
A breakout of our facilities at December 31, 2024 based on property type is as follows: Number of Properties Total Square Footage Total Licensed Beds(A) General acute care hospitals 173 28,183,587 17,474 Behavioral health facilities 69 3,158,336 4,363 Post acute care facilities 133 14,096,656 17,246 FSERs 21 179,081 — 396 45,617,660 39,083 (A) Excludes our facilities that are under development.
Added
(2) Reflects all properties, including those that are part of real estate joint ventures, except vacant properties (less than 1% of total assets), facilities that are under development, and transitioning properties.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. Legal Proceedings In 2023, we became party to various lawsuits as further described in Note 8 to the consolidated financial statements in Item 8 to this Annual Report on Form 10-K.
Biggest changeITEM 3. Legal Proceedings We are party to various lawsuits as further described in Note 8 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
We have not recorded a liability related to these lawsuits because, at this time, we are unable to determine whether an unfavorable outcome is possible or to estimate reasonably possible losses. In addition to the foregoing, we are currently and have in the past been subject to various legal proceedings and regulatory actions in connection with our business.
We have not recorded a liability related to these lawsuits because, at this time, we are unable to determine whether an unfavorable outcome is possible or to estimate reasonably possible losses. In addition to the foregoing, we are currently and have in the past been subject to various other legal proceedings and regulatory actions in connection with our business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest change(c) Stock repurchases: 43 The table below summarizes repurchases of our common stock made during the quarter ended December 31, 2023: Period Total number of shares purchased(1) (in thousands) Average price per share Total number of shares purchased as part of publicly announced programs(2) (in thousands) Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) October 1-October 31, 2023 370 $ 5.38 — November 1-November 30, 2023 — — — December 1-December 31, 2023 — — — Total 370 $ 5.38 — $ — (1) The number of shares purchased consists of shares of common stock tendered by employees to satisfy the employees' tax withholding obligations arising as a result of vesting of restricted stock awards under the 2019 Equity Incentive Plan (the "Equity Incentive Plan"), which shares were purchased based on their fair market value on the vesting date.
Biggest change(c) Stock repurchases: The table below summarizes repurchases of our common stock made during the quarter ended December 31, 2024: Period Total number of shares purchased (1) (in thousands) Average price per share Total number of shares purchased as part of publicly announced programs (in thousands) Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) October 1-October 31, 2024 94 $ 5.89 — (1) The number of shares purchased consists of shares of common stock tendered by employees to satisfy the employees' tax withholding obligations arising as a result of vesting of restricted stock awards under the 2019 Equity Incentive Plan (the "Equity Incentive Plan"), which shares were purchased based on their fair market value on the vesting date. 44 The following graph provides a comparison of cumulative total stockholder returns for the period from December 31, 2019 through December 31, 2024, among us, the S&P 500 Index, MSCI U.S.
As of February 16, 2024, there were 46 holders of record of our common stock. This figure does not reflect the beneficial ownership of shares held in nominee name. (b) Not applicable.
As of February 28, 2025, there were 37 holders of record of our common stock. This figure does not reflect the beneficial ownership of shares held in nominee name. (b) Not applicable.
High Low Dividends Year Ended December 31, 2023 First Quarter $ 14.00 $ 7.10 $ 0.29 Second Quarter 9.41 7.20 0.29 Third Quarter 10.74 4.97 0.15 Fourth Quarter 5.77 4.04 0.15 Year Ended December 31, 2022 First Quarter $ 24.13 $ 19.51 $ 0.29 Second Quarter 21.55 14.10 0.29 Third Quarter 17.36 11.35 0.29 Fourth Quarter 13.33 9.90 0.29 On February 16, 2024, the closing price for our common stock, as reported on the New York Stock Exchange, was $3.56 per share.
High Low Dividends Year Ended December 31, 2024 First Quarter $ 5.16 $ 2.92 $ — Second Quarter 6.54 3.94 0.30 Third Quarter 6.55 3.92 0.08 Fourth Quarter 5.91 3.63 0.08 Year Ended December 31, 2023 First Quarter $ 14.00 $ 7.10 $ 0.29 Second Quarter 9.41 7.20 0.29 Third Quarter 10.74 4.97 0.15 Fourth Quarter 5.77 4.04 0.15 On February 28, 2025, the closing price for our common stock, as reported on the New York Stock Exchange, was $5.90 per share.
Real Estate Health Care Index 100.00 121.48 109.58 127.37 99.53 113.33 The graph and accompanying text shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended. ITEM 6.
Real Estate Health Care Index 100.00 90.20 104.84 81.93 93.29 120.49 The graph and accompanying text shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended.
The stock performance graph assumes an investment of $100 in us and the three indices, and the reinvestment of dividends. The historical information below is not indicative of future performance. Period Ending Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Medical Properties Trust, Inc. 100.00 138.53 151.07 172.61 88.02 43.81 S&P 500 Index 100.00 131.49 155.68 200.37 164.08 207.21 MSCI U.S.
REIT Index, and Dow Jones U.S. Real Estate Health Care Index. The stock performance graph assumes an investment of $100 in us and the three indices, and the reinvestment of dividends. The historical information below is not indicative of future performance.
Removed
(2) On October 9, 2022, the Board of the Company authorized a stock repurchase program (the "Stock Repurchase Program") for up to $500 million of common stock, par value $0.001 per share. No shares were repurchased under this plan during 2023.
Added
Period Ending Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Medical Properties Trust, Inc. 100.00 109.05 124.60 63.54 31.62 28.07 S&P 500 Index 100.00 118.40 152.39 124.79 157.59 197.02 MSCI U.S. REIT Index 100.00 92.43 132.23 99.82 113.54 123.47 Dow Jones U.S.
Removed
The repurchase authorization expired on October 10, 2023. 44 The following graph provides a comparison of cumulative total stockholder returns for the period from December 31, 2018 through December 31, 2023, among us, the S&P 500 Index, MSCI U.S. REIT Index, and Dow Jones U.S. Real Estate Health Care Index.
Removed
REIT Index 100.00 125.84 116.31 166.39 125.61 142.87 Dow Jones U.S.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThese decreases were partially offset by $15 million of incremental revenue on new investments, along with approximately $1 million of interest revenue on the CHF 60 million mortgage loan from Infracore (which was repaid in the second quarter of 2023), approximately $3 million of higher income from annual escalations due to increases in CPI, and $0.4 million of favorable foreign currency fluctuations. o Other income — down $7.0 million from the prior year due to less direct reimbursements from our tenants for ground leases, property taxes, and insurance.
Biggest changeThese decreases were partially offset by approximately $1 million from the increase in CPI above the lease contractual minimum escalations. • Interest and other income — down $20.5 million from the prior year due to the following: o Interest from loans — down $4.9 million, primarily due to an approximate $16.9 million decrease from loan payoffs in 2024 and 2023 (including $12.8 million from the sale of our interest in the Priory syndicated term loan in the first quarter of 2024) and approximately $10.5 million more interest revenue in 2023 compared to the same period of 2024 as a result of the Prospect Transaction as described in Note 3 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K. 58 These decreases are partially offset by approximately $16 million of net reserves recorded in 2023 related to interest receivables from Steward and our international joint venture (as the $81 million of write-offs in the 2023 fourth quarter exceeded the amount of revenue recorded in the year), approximately $4 million of interest income from the Prime mortgage loan we received as a result of the Prime disposal (as further described in Note 3 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K including the repayment on August 29, 2024), approximately $1 million of higher income from annual escalations due to increases in CPI, approximately $0.8 million from loans made to new operators of the former Steward facilities, and approximately $1 million of favorable foreign currency fluctuations. o Other income — down $15.6 million from the prior year as we had less direct reimbursements from our cash basis tenants (such as Steward) for ground leases, property taxes, and insurance.
In arriving at the DLOM, we considered many qualitative factors including the percent of control, the nature of the underlying investee’s business along with our rights as an investor pursuant to the operating agreement, the size of investment, expected holding period, number of shareholders, access to the capital marketplace, etc.
In arriving at the DLOM, we considered many qualitative factors, including the percent of control, the nature of the underlying investee’s business along with our rights as an investor pursuant to the operating agreement, the size of investment, expected holding period, number of shareholders, access to capital marketplace, etc.
While FFO and normalized FFO are relevant and widely used supplemental measures of operating and financial performance of REITs, they should not be viewed as a substitute measure of our operating performance since the measures do not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs (if any not paid by our tenants) to maintain the operating performance of our properties, which can be significant economic costs that could materially impact our results of operations.
While FFO and normalized FFO are relevant and widely used supplemental measures of operating and financial performance of REITs, they should not be viewed as a substitute measure of our operating performance since the measures do not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs (if any are not paid by our tenants) to maintain the operating performance of our properties, which can be significant economic costs that could materially impact our results of operations.
Liquidity and Capital Resources Our typical sources of cash include our monthly rent and interest receipts, distributions from our real estate joint ventures, borrowings under our revolving credit facility, public issuances of debt and equity securities, and proceeds from bank debt, asset dispositions (either one-off or group asset sales through joint venture transactions), and principal payments on loans.
Liquidity and Capital Resources Our typical sources of cash include our monthly rent and interest receipts, distributions from our real estate joint ventures, borrowings under our revolving credit facility, public and private issuances of debt, public issuances of our equity securities, and proceeds from bank debt, asset dispositions (either one-off or group asset sales through joint venture transactions), and principal payments on loans.
You should read the following selected financial data in conjunction with the consolidated financial statements and notes thereto of each of Medical Properties Trust, Inc. and MPT Operating Partnership, L.P. and their respective subsidiaries included in Item 8 to this Annual Report on Form 10-K.
You should read the following selected financial data in conjunction with the consolidated financial statements and notes thereto of each of Medical Properties Trust, Inc. and MPT Operating Partnership, L.P. and their respective subsidiaries included in Item 8 of this Annual Report on Form 10-K.
Our loans are recorded at fair value based on Level 2 or Level 3 inputs by discounting the estimated cash flows using the market rates which similar loans would be made to borrowers with similar credit ratings and the same remaining maturities.
Our loans are recorded at fair value based on Level 2 or Level 3 inputs by discounting the 52 estimated cash flows using the market rates which similar loans would be made to borrowers with similar credit ratings and the same remaining maturities.
At December 31, 2023 and 2022, we determined that we were not the primary beneficiary of any variable interest entity in which we hold a variable interest because we do not control the activities (such as the day-to-day operations) that most significantly impact the economic performance of these entities.
At December 31, 2024 and 2023, we determined that we were not the primary beneficiary of any variable interest entity in which we hold a variable interest because we do not control the activities (such as the day-to-day operations) that most significantly impact the economic performance of these entities.
The information set forth in this Item 7 is intended to provide readers with an understanding of our financial condition, changes in financial condition, and results of operations. This section generally discusses the results of our operations for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The information set forth in this Item 7 is intended to provide readers with an understanding of our financial condition, changes in financial condition, and results of operations. This section generally discusses the results of our operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Investments in Unconsolidated Entities: Investments in entities in which we have the ability to significantly influence (but not control) are accounted for by the equity method. This includes the five investments in unconsolidated real estate joint ventures at December 31, 2023.
Investments in Unconsolidated Entities: Investments in entities in which we have the ability to significantly influence (but not control) are accounted for by the equity method. This includes the five investments in unconsolidated real estate joint ventures at December 31, 2024.
Although it represents approximately 1.6% of our total assets at December 31, 2023, we consider our lending business an important element of our overall business strategy for two primary reasons: (1) it provides opportunities to make income-earning investments that could yield attractive risk-adjusted returns in an industry in which our management has expertise, and (2) by making debt capital available to certain qualified operators, we believe we create a competitive advantage for our company over other buyers of, and financing sources for, healthcare facilities.
Although it represents less than 1% of our total assets at December 31, 2024, we consider our lending business an important element of our overall business strategy for two primary reasons: (1) it provides opportunities to make income-earning investments that could yield attractive risk-adjusted returns in an industry in which our management has expertise, and (2) by making debt capital available to certain qualified operators, we believe we create a competitive advantage for our company over other buyers of, and financing sources for, healthcare facilities.
It is our policy to make sufficient cash distributions to stockholders in order for us to maintain our status as a REIT under the Code and to avoid corporate income and excise taxes on undistributed income, although there is no assurance as to further dividends because they depend on future earnings, capital requirements, and our financial condition.
It is our policy to make sufficient distributions to stockholders in order for us to maintain our status as a REIT under the Code and to efficiently manage corporate income and excise taxes on undistributed income, although there is no assurance as to further dividends because they depend on future earnings, capital requirements, and our financial condition.
In addition, our Credit Facility limits the amount of dividends we can pay — see Note 4 to our consolidated financial statements in Item 8 to this Annual Report on Form 10-K for further information.
In addition, our Credit Facility limits the amount of cash dividends we can make — see Note 4 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further information.
While our tenants are generally responsible for all operating costs at a facility, in the event we incur costs of repairs and maintenance, we expense those costs as incurred. We compute depreciation using the straight-line method over the weighted-average useful life of approximately 39.1 years for buildings and improvements.
While our tenants are generally responsible for all operating costs at a facility, in the event we incur costs of repairs and maintenance, we expense those costs as incurred. We compute depreciation using the straight-line method over the weighted-average useful life of approximately 38.6 years for buildings and improvements.
Debt Restrictions and REIT Requirements Our debt facilities impose certain restrictions on us, including, but not limited to, restrictions on our ability to: incur debt; 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.
Debt Amendments, Restrictions, and Covenant Compliance Our debt facilities impose certain restrictions on us, including, but not limited to, restrictions on our ability to: incur debt; 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.
We have applied these credit loss percentages to the book value of the related instruments to establish a credit loss reserve on our financing lease receivables and such credit loss reserve (including the underlying assumptions) is reviewed and adjusted quarterly.
We apply these credit loss percentages to the book value of the related instruments to establish a credit loss reserve on our financing lease receivables and such credit loss reserve (including the underlying assumptions) is reviewed and adjusted quarterly.
See below for highlights of our sources and uses of cash for the past two years: 2023 Cash Flow Activity We generated cash of approximately $506 million from operating activities during 2023, primarily consisting of rent and interest from mortgage and other loans and distributions from our real estate joint ventures.
See below for highlights of our sources and uses of cash for the past two years: 2024 Cash Flow Activity We generated cash of approximately $245 million from operating activities during 2024, primarily consisting of rent and interest from mortgage and other loans and distributions from our real estate joint ventures.
Investments in entities in which we do not control nor do we have the ability to significantly influence and for which there is no readily determinable fair value (such as our investment in Steward) are accounted for at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions involving the investee.
Investments in entities in which we do not control nor do we have the ability to significantly influence and for which there is no readily determinable fair value are accounted for at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions involving the investee.
Based upon our review of all positive and negative evidence, including our three-year cumulative 57 pre-tax book loss position in certain entities, we concluded that a valuation allowance of approximately $117 million should be reflected against certain of our international and domestic net deferred tax assets at December 31, 2023.
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 $419 million should be reflected against certain of our international and domestic net deferred tax assets at December 31, 2024.
At December 31, 2023, we have not assigned any value to customer relationship intangibles. We amortize the value of lease intangibles to expense over the term of the respective leases, which have a weighted-average useful life of 28.0 years at December 31, 2023.
At December 31, 2024, we have not assigned any value to customer relationship intangibles. We amortize the value of lease intangibles to expense over the term of the respective leases, which have a weighted-average useful life of 28.3 years at December 31, 2024.
We then determined a credit loss percentage per pool based on our history over a period of time that closely matches the remaining terms of the financial instruments being 49 analyzed and adjusted as needed for current trends or unusual circumstances.
We then determine a credit loss percentage per pool based on our history over a period of time that closely matches the remaining terms of the financial instruments being analyzed and adjust as needed for current trends or unusual circumstances.
In regard to other investing and financing activities in 2023, we did the following: a) sold all 11 Australian properties ("Australia Transaction") resulting in proceeds of A$1.2 billion and used such proceeds to pay down our Australian term loan by A$730 million, with the remaining proceeds used to pay down our revolving credit facility; b) sold three properties to Prime resulting in proceeds of $100 million; c) received approximately $500 million of loan principal proceeds, including approximately $200 million from the Lifepoint Transaction, $100 million from Steward after the completion of their sale of Utah properties to CHIC, CHF 60 million 52 from the payoff of a loan by Infracore, and approximately $100 million from the sale of our temporary interest in Steward's asset-backed credit facility to a third-party; d) funded approximately $290 million of new investments, including $125 million to Prospect as part of its recapitalization plan that was implemented on May 23, 2023; e) funded approximately $195 million to Steward, including our temporary participation in its syndicated four-year asset-backed credit facility and loans for general working capital purposes; f) paid off our £400 million 2.550% Senior Unsecured Notes due 2023 (of which we purchased approximately £50 million before the maturity date at a discount); and g) reduced our quarterly dividend per share from $0.29 to $0.15 in the 2023 third quarter, which would result in annual cash savings of approximately $330 million.
We used these operating cash flows (along with cash on-hand and borrowings on our revolving credit facility) to fund our dividends of $615 million. 54 In regard to other investing and financing activities in 2023, we did the following: a) sold all 11 Australian properties ("Australia Transaction") resulting in proceeds of A$1.2 billion and used such proceeds to pay down our Australian term loan by A$730 million, with the remaining proceeds used to pay down our revolving credit facility; b) sold three properties to Prime resulting in proceeds of $100 million; c) received approximately $500 million of loan principal proceeds, including approximately $200 million from the Lifepoint Transaction, $100 million from Steward after the completion of their sale of Utah properties to CHIC, CHF 60 million from the payoff of a loan by Infracore, and approximately $100 million from the sale of our interest in Steward's asset-backed credit facility to a third-party; d) funded approximately $290 million of new investments, including $125 million to Prospect as part of its recapitalization plan that was implemented on May 23, 2023; e) funded approximately $195 million to Steward, including our participation in its syndicated four-year asset-backed credit facility and loans for general working capital purposes; f) paid off our £400 million 2.550% Senior Unsecured Notes due 2023 (of which we purchased approximately £50 million before the maturity date at a discount); and g) reduced our quarterly dividend per share from $0.29 to $0.15 in the 2023 third quarter, which provided for annual cash savings of approximately $330 million based on shares outstanding at the time.
Of the property expenses in 2023 and 2022, approximately $29 million and $36 million, respectively, represents costs (primarily property insurance premiums) that were reimbursed by our tenants and included in the “Interest and other income” line on our consolidated statements of net income.
Of the property expenses in 2024 and 2023, approximately $14 million and $29 million, respectively, represents costs (primarily property taxes and insurance premiums) that were reimbursed by our tenants and included in the “Interest and other income” line on our consolidated statements of net income.
(3) Much of our contractual obligations to make operating lease payments are related to ground leases for which we are reimbursed by our tenants along with corporate office and equipment leases. (4) Includes approximately $61 million of future expenditures related to development projects and $176 million of future expenditures on committed capital improvement projects.
(4) Much of our contractual obligations to make operating lease payments are related to ground leases for which we are reimbursed by our tenants along with corporate office and equipment leases. (5) Includes approximately $40 million of future expenditures related to development projects and $76 million of future expenditures on committed capital improvement projects.
Our debt refinancing and unutilized financing net benefit for 2023 was a result of a $1.1 million benefit related to the purchase of £50 million of our 2.550% Senior Unsecured Notes due 2023 in 2023 at a discounted price, partially offset by $0.8 million of costs associated with the partial prepayment of our A$1.2 billion Australian term loan in the second quarter of 2023.
We had a debt refinancing and unutilized financing net benefit in 2023 of $0.3 million including a $1.1 million benefit related to the purchase of £50 million of our 2.550% Senior Unsecured Notes due 2023 at a discounted price, partially offset by $0.8 million of costs associated with the partial prepayment of our A$1.2 billion Australian term loan in the second quarter of 2023.
For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 1, 2023. 46 Selected Financial Data The following sets forth selected consolidated financial and operating data.
For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024. 46 Selected Financial Data The following sets forth selected consolidated financial and operating data.
If a lease is terminated early, the unamortized portion of the lease intangible is charged to expense, as was the case in 2023 with the Steward Utah Transaction as more fully described in Note 3 to Item 8 of this Annual Report on Form 10-K.
If a lease is terminated early, the unamortized portion of the lease intangible is charged to expense, as was the case in 2023 with the re-leasing of the Utah properties to CommonSpirit as more fully described in Note 3 to Item 8 of this Annual Report on Form 10-K.
At December 31, 2023, the amount of investments recorded using the fair value option were approximately $1.1 billion made up of loans and equity investments (see Note 10 to Item 8 of this Annual Report on Form 10-K for additional details).
At December 31, 2024, the amount of investments recorded using the fair value option were approximately $266 million made up of loans and equity investments (see Note 10 to Item 8 of this Annual Report on Form 10-K for additional details).
However, we will modify such projections as needed based on our review and analysis of historical results, meetings with key members of management, and our understanding of trends and developments within the healthcare industry. The DLOM on our investment in PHP Holdings was approximately 8% at December 31, 2023.
However, we may modify such projections as needed based on our review and analysis of historical results, meetings with key members of management, and our understanding of trends and developments within the healthcare industry. The DLOM on our investment in PHP Holdings was approximately 14.2% at December 31, 2024.
Normalized FFO, after adjusting for certain items (as more fully described in the section titled “Non-GAAP Financial Measures” in this Item 7 of this Annual Report on Form 10-K), was $951 million for 2023, or $1.59 per share, as compared to $1.1 billion, or $1.82 per diluted share, for 2022.
Normalized FFO, after adjusting for certain items (as more fully described in the section titled “Non-GAAP Financial Measures” in this Item 7 of this Annual Report on Form 10-K), was $483 million for 2024, or $0.80 per share, as compared to $951 million, or $1.59 per share, for 2023.
In regard to cost reduction, we implemented a REIT tax structure in the U.K. in the second quarter of 2023 that we expect will result in quarterly tax savings.
In regard to cost reduction, we implemented a REIT tax structure in the U.K. in the second quarter of 2023 that provides quarterly income tax savings.
As described previously, our monthly rent and interest receipts and distributions from our joint venture arrangements along with our current liquidity of approximately $0.5 billion at February 16, 2024, are typically enough to cover our short-term liquidity requirements.
As described previously, our monthly rent and interest receipts and distributions from our joint venture arrangements along with our current liquidity of approximately $1.4 billion at February 28, 2025, are typically enough to cover our short-term liquidity requirements.
This decrease is due to a $30 million reserve of billed and straight-line rent in 2023 on Steward leased properties that make up our Massachusetts-based partnership with MAM (see Note 3 to the consolidated financial statements in Item 8 to this Annual Report on Form 10-K for further details).
In 2023, we recorded a $30 million reserve of billed and straight-line rent on Steward leased properties that are included in our Massachusetts-based partnership with Macquarie (see Note 3 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for further details).
At December 31, 2023, our portfolio (including real estate assets in joint ventures) consisted of 439 properties, of which 434 properties are leased or loaned to 54 operators, including facilities under development or in the form of mortgage loans.
At December 31, 2024, our portfolio (including real estate assets in joint ventures) consisted of 396 properties, of which 388 properties are leased or loaned to 53 operators, including facilities under development or in the form of mortgage loans.
To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute (in the form of cash or stock) at least 90% of our REIT taxable income, excluding net capital gains, to our stockholders.
To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute (in the form of cash or stock) at least 90% of our REIT taxable income, excluding net capital gains, to our stockholders. It is our current intention to comply with these requirements and maintain such status going forward.
Short-term Liquidity Requirements: Our short-term liquidity requirements typically consist of general and administrative expenses, dividends in order to comply with REIT requirements, interest payments on our debt, and planned funding commitments on development and capital improvement projects, for the next twelve months.
As of December 31, 2024, we are in compliance with all such financial and operating covenants, as amended. Short-term Liquidity Requirements: Our short-term liquidity requirements typically consist of general and administrative expenses, dividends in order to comply with REIT requirements, interest payments on our debt, and planned funding commitments on development and capital improvement projects for the next twelve months.
Other income for 2023 was $7.6 million, which included an approximate $45 million favorable non-cash fair value adjustment on our investment in PHP Holdings and a CHF 20 million unrealized gain on our equity investment in Swiss Medical Network, partially offset by unfavorable non-cash fair value adjustments on investments marked to fair value in 2023 and approximately $16 million of expenses associated with responding to certain defamatory statements published by certain parties, including those who are defendants to a lawsuit we filed on March 30, 2023.
For 2023, we had an approximate $45 million favorable non-cash fair value adjustment on our investment in PHP Holdings and a CHF 20 million (approximately $22 million) unrealized gain on our equity investment in Swiss Medical Network, partially offset by unfavorable non-cash fair value adjustments on other investments marked to fair value in 2023 and approximately $16 million of expenses associated with responding to certain defamatory statements previously mentioned.
For our equity investments in PHP Holdings and the international joint venture, fair value is determined based on Level 3 inputs, by using a discounted cash flow model, which requires significant estimates of our investee such as projected revenue and expenses and appropriate consideration of the underlying risk profile of the forecasted assumptions associated with the investee.
For our equity investment in the international joint venture and our investment in PHP Holdings at December 31, 2024, fair value is determined based on Level 3 inputs, by using a market approach (for our equity investment in the international joint venture) and a market approach based on the agreed upon price in the pending transaction (for our investment in PHP Holdings), 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 record above-market and below-market in-place lease values, if any, for the facilities we own which are based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease.
We also consider information obtained about each property as a result of our pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of the tangible and intangible assets acquired. 51 We record above-market and below-market in-place lease values, if any, for the facilities we own which are based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease.
Income tax expense includes U.S. federal and state income taxes on our TRS entities, as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S. The $130.7 million income tax benefit for 2023 was primarily based on the $161 million benefit received by entering the U.K.
Income Tax Income tax expense includes U.S. federal and state income taxes on our TRS entities, as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S.
The secured instruments include our investments in financing receivables as all are secured by the underlying real estate, among other collateral. Within the two primary pools, we further grouped our instruments into sub-pools based on several tenant/borrower characteristics, including years of experience in the healthcare industry and in a particular market or region and overall capitalization.
Within the two primary pools, we further group our instruments into sub-pools based on several tenant/borrower characteristics, including years of experience in the healthcare industry and in a particular market or region and overall capitalization.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Net loss for the year ended December 31, 2023, was $(556.5) million ($(0.93) per share) compared to net income of $902.6 million ($1.50 per diluted share) for the year ended December 31, 2022.
Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Net loss for the year ended December 31, 2024, was $(2.4) billion ($(4.02) per share) compared to net loss of $(556.5) million ($(0.93) per share) for the year ended December 31, 2023.
Interest expense for 2023 and 2022 totaled $411.2 million and $359.0 million, respectively.
Interest Expense Interest expense for 2024 and 2023 totaled $417.8 million and $411.2 million, respectively.
However, to address upcoming debt maturities (as outlined below in our commitment schedule), we may need to look to other sources, which may include one or a combination of the following: • reducing our dividend (or moving to a stock dividend), while still complying with REIT requirements; • strategic property sales or joint ventures including the expected $480 million proceeds of binding asset sales discussed previously under "Short-term Liquidity Requirements," and the binding commitment to sell three Connecticut facilities, subject to regulatory approval, that is expected to generate $355 million; • monetizing our investment in operators, including our investment in PHP Holdings; • entering into new secured loans on real estate; • extending the maturity of existing term loans; • identifying and implementing cost reduction opportunities; • entering into new bank term loans or issuing new USD, EUR, or GBP denominated debt securities; and • sale of equity securities.
However, to further improve cash flows and to fund future debt maturities, we may need to look to other sources, which may include one or a combination of the following: • further property sales or joint ventures; • monetizing our investments in operators, including our investment in PHP Holdings that is expected to close in the first half of 2025; • reducing our dividend (or moving to a stock dividend), while still complying with REIT requirements and credit facility covenants; • identifying and implementing cost reduction opportunities; • entering into new secured loans on real estate; • extending the maturity or refinancing our existing Credit Facility and other term loans; 56 • entering into new bank term loans or issuing new USD, EUR, or GBP denominated debt securities; and • sale of equity securities.
The provision is an amount which reduces the receivable to its estimated net realizable value based on a determination of the eventual amounts to be collected either from the debtor or from existing collateral, if any.
The provision is an amount which reduces the receivable to its estimated net realizable value based on a determination of the eventual amounts to be collected either from the debtor or from existing collateral, if any. 50 Losses on Financing Lease Receivables : We apply a forward-looking “expected credit loss” model to all of our financing receivables, including financing leases and loans.
Because our strategy to a large degree involves the origination and acquisition of long-term lease arrangements at market rates with independent parties, we do not expect the above-market or below-market in-place lease values to be significant for many of our transactions. 50 We measure the aggregate value of other lease intangible assets to be acquired based on the difference between (i) the property valued with new or in-place leases adjusted to market rental rates and (ii) the property valued as if vacant when acquired.
Because our strategy to a large degree involves the origination and acquisition of long-term lease arrangements at market rates with independent parties, we do not expect the above-market or below-market in-place lease values to be significant for many of our transactions.
Except for our joint ventures with Primotop and MAM (for which we handle the accounting of), we have elected to record our share of such investee’s earnings or losses on a lag basis (not to exceed three months).
Except for our joint venture with Primotop (for which we handle the accounting of), we have elected to record our share of such investee’s earnings or losses on a lag basis (not to exceed three months). The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the interest in the investee entity.
It is our current intention to comply with these requirements and maintain such status going forward. 59 The table below is a summary of our distributions declared (and paid in cash) during the three year period ended December 31, 2023: Declaration Date Record Date Date of Distribution Distribution per Share November 9, 2023 December 7, 2023 January 11, 2024 $ 0.15 August 21, 2023 September 14, 2023 October 12, 2023 $ 0.15 April 27, 2023 June 15, 2023 July 13, 2023 $ 0.29 February 16, 2023 March 16, 2023 April 13, 2023 $ 0.29 November 10, 2022 December 8, 2022 January 12, 2023 $ 0.29 August 18, 2022 September 15, 2022 October 13, 2022 $ 0.29 May 26, 2022 June 16, 2022 July 14, 2022 $ 0.29 February 17, 2022 March 17, 2022 April 14, 2022 $ 0.29 November 11, 2021 December 9, 2021 January 13, 2022 $ 0.28 August 19, 2021 September 16, 2021 October 14, 2021 $ 0.28 May 26, 2021 June 17, 2021 July 8, 2021 $ 0.28 February 18, 2021 March 18, 2021 April 8, 2021 $ 0.28 In the third quarter of 2023, we reduced our quarterly dividend from $0.29 to $0.15 per share of common stock, which would result in annual cash savings of approximately $330 million.
The table below is a summary of our distributions declared (and paid in cash) during the three year period ended December 31, 2024: Declaration Date Record Date Date of Distribution Distribution per Share November 21, 2024 December 12, 2024 January 9, 2025 $ 0.08 August 22, 2024 September 9, 2024 October 10, 2024 $ 0.08 May 30, 2024 June 10, 2024 July 9, 2024 $ 0.15 April 12, 2024 April 22, 2024 May 1, 2024 $ 0.15 November 9, 2023 December 7, 2023 January 11, 2024 $ 0.15 August 21, 2023 September 14, 2023 October 12, 2023 $ 0.15 April 27, 2023 June 15, 2023 July 13, 2023 $ 0.29 February 16, 2023 March 16, 2023 April 13, 2023 $ 0.29 November 10, 2022 December 8, 2022 January 12, 2023 $ 0.29 August 18, 2022 September 15, 2022 October 13, 2022 $ 0.29 May 26, 2022 June 16, 2022 July 14, 2022 $ 0.29 February 17, 2022 March 17, 2022 April 14, 2022 $ 0.29 On February 13, 2025, we announced that our Board of Directors declared a regular quarterly cash dividend of $0.08 per share of common stock to be paid on April 10, 2025, to shareholders of record on March 10, 2025.
FFO and normalized FFO should not be considered an alternative to net income (loss) (computed in accordance with GAAP) as indicators of our financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of our liquidity. 58 The following table presents a reconciliation of net (loss) income attributable to MPT common stockholders to FFO and Normalized FFO for the years ended December 31, 2023 and 2022 (in thousands except per share data): For the Years Ended December 31, 2023 2022 FFO Information Net (loss) income attributable to MPT common stockholders $ (556,476 ) $ 902,597 Participating securities’ share in earnings (1,644 ) (1,602 ) Net (loss) income, less participating securities’ share in earnings $ (558,120 ) $ 900,995 Depreciation and amortization 676,132 399,622 Loss (gain) on sale of real estate 1,815 (536,887 ) Real estate impairment charges 167,966 170,582 Funds from operations $ 287,793 $ 934,312 Write-off of billed and unbilled rent and other 649,911 35,370 Other impairment charges 208,941 97,793 Litigation and other 15,886 — Share-based compensation adjustments (9,691 ) 3,076 Non-cash fair value adjustments (34,157 ) (3,097 ) Tax rate changes and other (167,332 ) 10,697 Debt refinancing and unutilized financing (benefit) costs (285 ) 9,452 Normalized funds from operations $ 951,066 $ 1,087,603 Per diluted share data Net (loss) income, less participating securities’ share in earnings $ (0.93 ) $ 1.50 Depreciation and amortization 1.13 0.67 Loss (gain) on sale of real estate — (0.90 ) Real estate impairment charges 0.28 0.29 Funds from operations $ 0.48 $ 1.56 Write-off of billed and unbilled rent and other 1.09 0.06 Other impairment charges 0.35 0.16 Litigation and other 0.03 — Share-based compensation adjustments (0.02 ) 0.01 Non-cash fair value adjustments (0.06 ) (0.01 ) Tax rate changes and other (0.28 ) 0.02 Debt refinancing and unutilized financing (benefit) costs — 0.02 Normalized funds from operations $ 1.59 $ 1.82 Distribution Policy We have elected to be taxed as a REIT commencing with our taxable year that began on April 6, 2004 and ended on December 31, 2004.
The following table presents a reconciliation of net loss attributable to MPT common stockholders to FFO and Normalized FFO for the years ended December 31, 2024 and 2023 (in thousands except per share data): For the Years Ended December 31, 2024 2023 FFO Information Net loss attributable to MPT common stockholders $ (2,410,271 ) $ (556,476 ) Participating securities’ share in earnings (946 ) (1,644 ) Net loss, less participating securities’ share in earnings $ (2,411,217 ) $ (558,120 ) Depreciation and amortization 509,524 676,132 (Gain) loss on sale of real estate (478,693 ) 1,815 Real estate impairment charges 980,263 167,966 Funds from operations $ (1,400,123 ) $ 287,793 Write-off of billed and unbilled rent and other 2,514 649,911 Other impairment charges 1,255,929 208,941 Litigation and other 51,308 15,886 Share-based compensation adjustments — (9,691 ) Non-cash fair value adjustments 563,666 (34,157 ) Tax rate changes and other 5,119 (167,332 ) Debt refinancing and unutilized financing costs (benefit) 4,292 (285 ) Normalized funds from operations $ 482,705 $ 951,066 Per diluted share data Net loss, less participating securities’ share in earnings $ (4.02 ) $ (0.93 ) Depreciation and amortization 0.86 1.13 (Gain) loss on sale of real estate (0.80 ) — Real estate impairment charges 1.63 0.28 Funds from operations $ (2.33 ) $ 0.48 Write-off of billed and unbilled rent and other — 1.09 Other impairment charges 2.08 0.35 Litigation and other 0.09 0.03 Share-based compensation adjustments — (0.02 ) Non-cash fair value adjustments 0.94 (0.06 ) Tax rate changes and other 0.01 (0.28 ) Debt refinancing and unutilized financing costs (benefit) 0.01 — Normalized funds from operations $ 0.80 $ 1.59 61 Distribution Policy We have elected to be taxed as a REIT commencing with our taxable year that began on April 6, 2004 and ended on December 31, 2004.
REIT regime effective July 1, 2023 and a $5.0 million tax benefit recognized in the first quarter of 2023 related to the sale of our Australia facilities.
In comparison, we had a $130.7 million income tax benefit in 2023 that was primarily based on the $161 million benefit received by entering the U.K. REIT regime effective July 1, 2023 and a $5.0 million tax benefit recognized in the first quarter of 2023 related to the sale of our Australia facilities.
Described below are the non-GAAP financial measures used by management to evaluate our operating performance and that we consider most useful to investors, together with reconciliations of these measures to the most directly comparable GAAP measures.
Described below are the non-GAAP financial measures used by management to supplement our evaluation of operating performance and that we consider useful to investors, together with reconciliations of these measures to the most directly comparable GAAP measures. 60 Funds From Operations and Normalized Funds From Operations Investors and analysts following the real estate industry utilize funds from operations, or FFO, as a supplemental performance measure.
In addition, application of these critical accounting policies involves the exercise of judgment on the use of assumptions as to future uncertainties (such as uncertainties caused by the COVID-19 pandemic) and, as a result, actual results could materially differ from these estimates.
In addition, application of these critical accounting policies involves the exercise of judgment on the use of assumptions as to future uncertainties and, as a result, actual results could materially differ from these estimates. See Note 2 to Item 8 of this Annual Report on Form 10-K for more information regarding our accounting policies and recent accounting developments.
Due to previous charges taken earlier in the year (as described below), we did not have any significant gain/loss on property sales in 2023.
We did not have any significant gain/loss on property sales in 2023.
In addition, we reduced our dividend from $0.29 per share per quarter to $0.15 starting with our dividend declared in the 2023 third quarter, which equates to annual cash savings of approximately $330 million.
In addition, we reduced our dividend from $0.15 per share to $0.08 per share for the last two quarters of the year, which resulted in cash savings of approximately $40 million per quarter.
For the Years Ended December 31, 2023 2022 (In thousands except per share data) OPERATING DATA Total revenues $ 871,799 $ 1,542,851 Expenses: Interest 411,171 359,036 Real estate depreciation and amortization 603,360 332,977 Property-related 41,567 45,697 General and administrative 145,588 160,494 Total expenses 1,201,686 898,204 Other (expense) income: (Loss) gain on sale of real estate (1,815 ) 536,755 Real estate and other impairment charges, net (376,907 ) (268,375 ) Earnings from equity interests 13,967 40,800 Debt refinancing and unutilized financing benefit (costs) 285 (9,452 ) Other (including fair value adjustments on securities) 7,586 15,344 Income tax benefit (expense) 130,679 (55,900 ) Net (loss) income (556,092 ) 903,819 Net income attributable to non-controlling interests (384 ) (1,222 ) Net (loss) income attributable to MPT common stockholders $ (556,476 ) $ 902,597 Net (loss) income attributable to MPT common stockholders per diluted share $ (0.93 ) $ 1.50 Weighted-average shares outstanding — diluted 598,518 598,837 OTHER DATA Dividends declared per common share $ 0.88 $ 1.16 FFO(1) $ 287,793 $ 934,312 Normalized FFO(1) $ 951,066 $ 1,087,603 Normalized FFO per share(1) $ 1.59 $ 1.82 Cash paid for acquisitions and other related investments $ 212,287 $ 1,332,962 December 31, 2023 2022 (In thousands) BALANCE SHEET DATA Real estate assets — at cost $ 14,778,132 $ 15,917,839 Real estate accumulated depreciation/amortization (1,407,971 ) (1,193,312 ) Cash and cash equivalents 250,016 235,668 Investments in unconsolidated real estate joint ventures 1,474,455 1,497,903 Investments in unconsolidated operating entities 1,778,640 1,444,872 Other loans 292,615 227,839 Other 1,138,957 1,527,191 Total assets $ 18,304,844 $ 19,658,000 Debt, net $ 10,064,236 $ 10,268,412 Other liabilities 606,743 795,181 Total Medical Properties Trust, Inc. stockholders’ equity 7,631,600 8,592,838 Non-controlling interests 2,265 1,569 Total equity 7,633,865 8,594,407 Total liabilities and equity $ 18,304,844 $ 19,658,000 (1) See section titled “Non-GAAP Financial Measures” for an explanation of why these non-GAAP financial measures are useful along with a reconciliation to our GAAP earnings. 47 2023 Highlights In 2023, economic uncertainty, high interest rates, and inflationary pressures affected our business (and that of some of our tenants) and caused us to look at several initiatives to improve cash flows, reduce costs, and secure the value of our non-performing assets.
For the Years Ended December 31, 2024 2023 (In thousands except per share data) OPERATING DATA Total revenues $ 995,547 $ 871,799 Expenses: Interest 417,824 411,171 Real estate depreciation and amortization 447,657 603,360 Property-related 27,255 41,567 General and administrative 133,789 145,588 Total expenses 1,026,525 1,201,686 Other (expense) income: Gain (loss) on sale of real estate 478,693 (1,815 ) Real estate and other impairment charges, net (1,825,402 ) (376,907 ) (Loss) earnings from equity interests (366,642 ) 13,967 Debt refinancing and unutilized financing (costs) benefit (4,292 ) 285 Other (including fair value adjustments on securities) (615,565 ) 7,586 Income tax (expense) benefit (44,101 ) 130,679 Net loss (2,408,287 ) (556,092 ) Net income attributable to non-controlling interests (1,984 ) (384 ) Net loss attributable to MPT common stockholders $ (2,410,271 ) $ (556,476 ) Net loss attributable to MPT common stockholders per diluted share $ (4.02 ) $ (0.93 ) Weighted-average shares outstanding — basic and diluted 600,248 598,518 OTHER DATA Dividends declared per common share $ 0.46 $ 0.88 FFO(1) $ (1,400,123 ) $ 287,793 Normalized FFO(1) $ 482,705 $ 951,066 Normalized FFO per share(1) $ 0.80 $ 1.59 Cash paid for acquisitions and other related investments $ 105,618 $ 212,287 December 31, 2024 2023 (In thousands) BALANCE SHEET DATA Real estate assets — at cost $ 12,471,543 $ 14,778,132 Real estate accumulated depreciation/amortization (1,422,948 ) (1,407,971 ) Cash and cash equivalents 332,335 250,016 Investments in unconsolidated real estate joint ventures 1,156,397 1,474,455 Investments in unconsolidated operating entities 439,578 1,778,640 Other loans 109,175 292,615 Other 1,208,514 1,138,957 Total assets $ 14,294,594 $ 18,304,844 Debt, net $ 8,848,112 $ 10,064,236 Other liabilities 612,699 606,743 Total Medical Properties Trust, Inc. stockholders’ equity 4,832,729 7,631,600 Non-controlling interests 1,054 2,265 Total equity 4,833,783 7,633,865 Total liabilities and equity $ 14,294,594 $ 18,304,844 47 (1) See section titled “Non-GAAP Financial Measures” for an explanation of why these non-GAAP financial measures are useful along with a reconciliation to our GAAP earnings. 2024 Highlights In 2024, our focus was on improving our liquidity position, managing our near-term debt maturities, and securing as much value as possible while exiting our relationship with Steward.
The initial carrying value of investments in unconsolidated entities is based on the amount paid to purchase the interest in the investee entity. Subsequently, our investments are increased/decreased by our share in the investees’ earnings/losses and decreased by cash distributions from our investees.
Subsequently, our investments are increased/decreased by our share in the investees’ earnings/losses and decreased by cash distributions from our investees.
("Prime") for approximately $100 million; • CHIC acquired the Utah hospital operations of five general acute care facilities previously operated by Steward, and we received $100 million from Steward as a result of this transaction (see Note 3 to Item 8 of this Annual Report on Form 10-K for further details); • Received CHF 60 million from the payoff of a loan by Infracore SA ("Infracore"); • Paid off our £400 million 2.550% Senior Unsecured Notes due 2023 (of which £50 million was purchased before the maturity date at a discounted price); • Acquired three inpatient rehabilitation facilities for a total of €70 million that are leased to MEDIAN and five behavioral health hospitals for £44 million that are leased to Priory; • Completed two developments for approximately $70 million that are leased to Ernest Health, Inc.
In addition, we reduced our dividend from $0.29 per share per quarter to $0.15 starting with our dividend declared in the 2023 third quarter, which equates to annual cash savings of approximately $330 million. 49 A summary of additional 2023 activity is as follows: • Recorded approximately $700 million in various charges related to our investments in Steward and moved to the cash basis of accounting at December 31, 2023; • Agreed to a restructuring of our investments in Prospect, that included a new investment in PHP Holdings (see Note 3 to Item 8 of this Annual Report on Form 10-K for more information on this transaction); • Reserved approximately $95 million of billed rent/interest receivables and straight-line rent receivables associated with two other domestic tenants and a loan to our international joint venture and began applying cash basis accounting on these investments; • Received approximately $205 million from Lifepoint to pay off our initial acquisition loan, plus accrued interest, as part of their acquisition of a majority ownership interest in Springstone (now Lifepoint Behavioral); • Sold three facilities to Prime for approximately $100 million; • Catholic Health Initiatives Colorado ("CHIC") acquired the Utah hospital operations of five general acute care facilities previously operated by Steward, and we received $100 million from Steward as a result of this transaction (see Note 3 to Item 8 of this Annual Report on Form 10-K for further details); • Received CHF 60 million from the payoff of a loan by Infracore; • Paid off our £400 million 2.550% Senior Unsecured Notes due 2023 (of which £50 million was purchased before the maturity date at a discounted price); • Acquired three inpatient rehabilitation facilities for a total of €70 million that are leased to MEDIAN and five behavioral health hospitals for £44 million that are leased to Priory; • Completed two developments for approximately $70 million that are leased to Ernest Health, Inc.
For any variable rate debt, we have assumed that the interest rate in effect at February 16, 2024 remains in effect through maturity. (2) As of February 16, 2024, we have a $1.8 billion revolving credit facility. This table assumes the balance outstanding under the revolver (which was $1.6 billion as of February 16, 2024) remains in effect through maturity.
For any variable rate debt, we have assumed that the interest rate in effect at February 28, 2025 remains in effect through maturity. (2) No debt principal maturities until October 15, 2026 for €500 million. (3) As of February 28, 2025, we have a $1.28 billion revolving credit facility.
See Note 2 to Item 8 of this Annual Report on Form 10-K for more information regarding our accounting policies and recent accounting developments.
See Note 4 to Item 8 of this Annual Report on Form 10-K for further details.
For the cash flow models, our unobservable inputs include use of a discount rate (which is based on a weighted-average cost of capital) and an 51 adjustment for a marketability discount (“DLOM”). In regard to the underlying projections used in the discounted cash flow model, such projections are provided by the investees.
For the market approach used for our investment in PHP Holdings, our unobservable inputs include purchase price adjustments related to expected balance sheet measures at the time of the transaction close, and an adjustment for a marketability discount (“DLOM”). In regard to the underlying projections used in the discounted cash flow model, such projections are provided by the investees.
We believe these initiatives, along with liquidity of approximately $0.5 billion (including cash on-hand and availability under our revolving credit facility) at February 16, 2024 and routine cash receipts of rent and interest, can fund our short-term liquidity requirements.
In addition, we have liquidity of $1.4 billion (including cash on hand and availability under our $1.28 billion revolving credit facility) at February 28, 2025. We believe this liquidity along with the expected cash receipts of rent and interest pursuant to our contractual agreements with our tenants/borrowers is sufficient to fund our short-term liquidity requirements.
REIT regime (as more fully described in Note 5 to the consolidated financial statements in Item 8 to this Annual Report on Form 10-K).
REIT regime (as more fully described in Note 5 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K), with no similar benefit in 2024. These changes were partially offset by approximately $479 million of gains on real estate sales in 2024 along with lower real estate depreciation due to these sales.
This facility also 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 facility, the entire outstanding balance may become immediately due and payable.
In addition to these restrictions, the Credit Facility contains customary financial and operating covenants, along with customary events of default, including among others, nonpayment of principal or interest, material inaccuracy of representations, and failure to comply with our covenants.
In 2023, we did record approximately $69 million of income from financing leases with the receipt of additional investment in PHP Holdings, in lieu of cash, as part of the Prospect Transaction as described in Note 3 to the consolidated financial statements in Item 8 to this Annual Report on Form 10-K.
See Note 3 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K for more details regarding the activity above. • Income from financing leases — down $63.5 million primarily due to receiving cash of approximately $25 million for rent revenue from Prospect (cash basis tenant) in 2024, whereas we recorded $82 million of rent for this tenant in 2023.
In addition, we began recording rent on our Prospect leases on a cash only basis as of December 31, 2022. Critical Accounting Estimates In order to prepare financial statements in conformity with generally accepted accounting principles (“GAAP”) in the U.S., we must make estimates about certain types of transactions and account balances.
(“Ernest”); and • Selected as one of Modern Healthcare's Best Places to Work in healthcare in 2023, for the third consecutive year. Critical Accounting Estimates In order to prepare financial statements in conformity with GAAP in the U.S., we must make estimates about certain types of transactions and account balances.
In addition, income from financing leases declined due to approximately $17.0 million of lower revenues from the disposal of Prime financing leases in 2023 and 2022.
In addition, financing lease income was lower by $7.5 million from the disposal of three Prime financing leases in the third quarter of 2023.
Our weighted-average interest rate was 3.9% for 2023 compared to 3.3% in 2022. 56 Real estate depreciation and amortization during 2023 increased to $603.4 million from $333.0 million in 2022.
Overall, our weighted-average interest rate was 4.3% for 2024, compared to 3.9% for 2023.
Losses on Financing Lease Receivables : We apply a forward-looking “expected credit loss” model to all of our financing receivables, including financing leases and loans. To do this, we have grouped our financial instruments into two primary pools of similar credit risk: secured and unsecured.
To do this, we group our financial instruments into two primary pools of similar credit risk: secured and unsecured. The secured instruments include our investments in financing receivables as all are secured by the underlying real estate, among other collateral.
In 2022, debt refinancing and unutilized financing costs were $9.5 million, as a result of the termination of our $1 billion interim credit facility in March 2022 and the amendment of our Credit Facility (see Note 4 to the consolidated financial statements in Item 8 to this Annual Report on Form 10-K for further details).
These costs were incurred as a result of the reduction in revolving commitments under our Credit Facility and partial paydown of our British pound sterling term loan due 2025, both of which are described in more detail in Note 4 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
This 13% decrease in Normalized FFO is primarily due to lower revenue from various disposals in 2022 and 2023, including the Macquarie Transaction, the Australia Transaction, and Prime disposals, along with lower revenues from Prospect from moving to the cash basis of accounting on December 31, 2022 and higher interest expense. 55 A comparison of revenues for the years ended December 31, 2023 and 2022 is as follows (dollar amounts in thousands): 2023 2022 Change Rent billed $ 803,375 92.2 % $ 968,874 62.8 % $ (165,499 ) Straight-line rent (127,894 ) (14.7 )% 204,159 13.2 % (332,053 ) Income from financing leases 127,141 14.6 % 203,580 13.2 % (76,439 ) Interest and other income 69,177 7.9 % 166,238 10.8 % (97,061 ) Total revenues $ 871,799 100.0 % $ 1,542,851 100.0 % $ (671,052 ) Our total revenues for 2023 declined by $671.1 million or 43% over the prior year.
A comparison of revenues for the years ended December 31, 2024 and 2023 is as follows (dollar amounts in thousands): 2024 2023 Change Rent billed $ 719,749 72.3 % $ 803,375 92.2 % $ (83,626 ) Straight-line rent 163,414 16.4 % (127,894 ) (14.7 )% 291,308 Income from financing leases 63,651 6.4 % 127,141 14.6 % (63,490 ) Interest and other income 48,733 4.9 % 69,177 7.9 % (20,444 ) Total revenues $ 995,547 100.0 % $ 871,799 100.0 % $ 123,748 Our total revenues for 2024 increased by $123.7 million or 14% over the prior year.
In the future, as part of our liquidity improvement strategy, we may consider moving to a stock dividend, while still complying with REIT requirements.
Although we have only made cash distributions historically, we may consider making stock dividends in the future for liquidity purposes, while still complying with REIT requirements.
These decreases are partially offset by approximately $40 million in incremental revenue from acquisitions, capital additions, and the commencement of rent on a development property in the first quarter of 2022 and two properties in 2023.
Compared to 2023, we realized $14 million of incremental operating lease revenue from acquisitions in 2023 and the completion of capital addition and development projects, including the commencement of rent on two development properties in 2024.
See Note 3 to the consolidated financial statements in Item 8 to this Annual Report on Form 10-K for further details of the 2023 and 2022 charges. In 2022, we did recognize an impairment recovery of approximately $15 million related to our Watsonville facility. Earnings from equity interests was $14 million for 2023, down from $40.8 million in 2022.
In 2023, we recorded $376.9 million of impairment charges, of which $271 million related to our Steward properties, $86 million related to the Australia Transaction, and $11 million was a non-cash impairment charge on the three Prime properties sold. 59 (Loss) Earnings from Equity Interests Loss from equity interests was ($366.6) million for 2024, compared to $14 million of earnings for 2023, primarily due to the $410 million charge in the second quarter of 2024 associated with the real estate impairment in our Massachusetts-based partnership with Macquarie as further described in Note 3 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
Of this increase, $286 million relates to accelerating the amortization of lease intangibles as part of the Steward Utah Transaction as described in Note 3 to the consolidated financial statements in Item 8 to this Annual Report on Form 10-K. Property-related expenses for 2023 decreased to $41.6 million, compared to $45.7 million in 2022.
Gain on Sale of Real Estate During 2024, the gain on sale of real estate of $478.7 million primarily related to the disposal of five Prime facilities, the sale of a 75% interest in five Utah facilities as part of the Utah Transaction, and the sale of eight Dignity Health facilities and 11 UCHealth facilities as more fully described in Note 3 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
This change is made up of the following: • Operating lease revenue (includes rent billed and straight-line rent) — down $497.6 million over the prior year, primarily due to approximately $483 million of more rent reserves in 2023 compared to 2022 (including $378 million in the fourth quarter of 2023 related to Steward billed and straight-line rent and $95 million as a result of the write-off of straight-line rent associated with the Steward Utah Transaction in the second quarter of 2023).
This change is made up of the following: • Operating lease revenue (includes rent billed and straight-line rent) — up $207.7 million from the prior year.
See Note 8 to the consolidated financial statements in Item 8 to this Annual Report on Form 10-K for further details on the lawsuit. Other income for 2022 was $15.3 million which included a favorable non-cash fair value adjustment of $18.0 million on our investment in Aevis Victoria SA ("Aevis") and other investments marked to fair value during 2022.
Real Estate and Other Impairment Charges, Net In 2024, we recognized $1.8 billion of real estate and other impairment charges and negative fair value adjustments, primarily associated with our investments in Steward, Prospect, and the international joint venture (including approximately $18 million related to our investment in three hospitals in Colombia) as further described in Note 3 to the consolidated financial statements in Item 8 of this Annual Report on Form 10-K.
In comparison, we incurred a $55.9 million income tax expense for 2022, primarily based on the income generated by our investments in the U.K., Colombia, and Australia along with an additional $5 million U.S. tax expense related to our Watsonville loan recovery in 2022.
The $44.1 million income tax expense for 2024 is primarily based on the income generated by our investments in the U.K. and Germany, and included $5 million of additional tax expense in the second quarter of 2024 as a result of the gain on the interest rate swap associated with the internal restructuring of the British pound sterling term loan due 2025.
Removed
Due to operational and liquidity challenges (as discussed previously above in "Significant Tenants" and in Note 3 to Item 8 of this Annual Report on Form 10-K), we recorded an approximate $700 million charge related to our investments in Steward and moved to the cash basis of accounting at December 31, 2023.
Added
In regard to improving liquidity, we set a target to generate $2 billion of liquidity in 2024, which we surpassed by approximately $800 million through a combination of real estate asset sales (discussed below) that resulted in approximately $500 million of gains on sale and closing on a new secured loan facility with a 10-year term for approximately £631 million (approximately $800 million).
Removed
To help secure the value of our $1.7 billion investment in Prospect, we agreed to a restructuring, that included a new $700 million investment in PHP Holdings at December 31, 2023 (see Note 3 to Item 8 of this Annual Report on Form 10-K for more information on this transaction).
Added
With these liquidity proceeds in 2024 and those from our private offering of notes (discussed below) shortly after year-end, along with our ability to extend our revolving credit facility for an additional year (subject to certain conditions), we have successfully cleared all debt maturities through June 30, 2027, other than one issue of unsecured notes of €500 million due in October 2026.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+2 added−1 removed10 unchanged
Biggest changeBased solely on our 2023 operating results, a 10% change to the following exchange rates would have impacted our net income, FFO, and Normalized FFO by the amounts below (in thousands): Net Income Impact(1) FFO Impact(1) NFFO Impact British pound (£) $ 11,331 $ 20,762 $ 20,734 Euro (€) 1,670 6,177 6,180 Swiss franc (CHF) 3,350 5,741 3,667 Colombian peso (COP) 1,466 1,537 1,537 (1) Excludes the approximate $161 million one-time tax benefit in 2023 as a result of entering the U.K.
Biggest changeBased solely on our 2024 operating results, a 10% change to the following exchange rates would have impacted our net income, FFO, and Normalized FFO by the amounts below (in thousands): Net Income Impact FFO Impact NFFO Impact British pound (£) $ 9,093 $ 18,948 $ 19,675 Euro (€) 1,293 5,927 5,785 Swiss franc (CHF) 220 2,396 3,252 Colombian peso (COP) 1,849 174 263 63
In addition, they do not include measures we may take to minimize our exposure such as entering into future interest rate swaps to hedge against interest rate increases on our variable rate debt. Interest Rate Sensitivity For fixed rate debt, interest rate changes affect the fair market value but do not impact net income to common stockholders or cash flows.
In addition, they do not include measures we may take to minimize our exposure such as entering into future interest rate swaps to hedge against interest rate increases on our variable rate debt. 62 Interest Rate Sensitivity For fixed rate debt, interest rate changes affect the fair market value but do not impact net income to common stockholders or cash flows.
If market rates of interest on our variable rate debt decrease by 10%, the decrease in interest expense on our variable rate debt would increase future earnings and cash flows by $11.3 million per year.
If market rates of interest on our variable rate debt decrease by 10%, the decrease in interest expense on our variable rate debt would increase future earnings and cash flows by $3.7 million per year.
This assumes that the average amount outstanding under our variable rate debt for a year is $1.7 billion, the balance of such variable rate debt at December 31, 2023.
This assumes that the average amount outstanding under our variable rate debt for a year is $0.6 billion, the balance of such variable rate debt at December 31, 2024.
Changes in the fair value of our fixed rate debt will not have any impact on us unless we decided to repurchase the debt in the open market. 60 If market rates of interest on our variable rate debt increase by 10%, the increase in annual interest expense on our variable rate debt would decrease future earnings and cash flows by $11.3 million per year.
If market rates of interest on our variable rate debt increase by 10%, the increase in annual interest expense on our variable rate debt would decrease future earnings and cash flows by $3.7 million per year.
At December 31, 2023, our outstanding debt totaled $10.1 billion, which consisted of fixed-rate debt of approximately $8.4 billion (after considering interest rate swaps in-place) and variable rate debt of $1.7 billion. If market interest rates increase by 10%, the fair value of our debt at December 31, 2023 would decrease by approximately $219.9 million.
At December 31, 2024, our outstanding debt totaled $8.9 billion, which consisted of fixed-rate debt of approximately $8.3 billion (after considering interest rate swaps in-place) and variable rate debt of $0.6 billion.
Removed
REIT regime on July 1, 2023 (as discussed in further detail in Note 5 to our consolidated financial statements in Item 8 to this Annual Report on Form 10-K). 61
Added
If market interest rates increase by 10%, the fair value of our debt at December 31, 2024 (excluding the three senior unsecured notes paid off in 2025 with the new senior secured notes offering as discussed in Item 7 of this Annual Report on Form 10-K) would decrease by approximately $200.8 million.
Added
Changes in the fair value of our fixed rate debt will not have any impact on us unless we decided to repurchase the debt in the open market.

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