美國
證券交易委員會
華盛頓特區20549
表格
截至2024年6月30日季度結束
或
到 至
委員會文件編號
委員會文件編號
（根據其組織憲章規定的正式名稱）
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(依據所在地或其他管轄區) 的註冊地或組織地點) |
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(美國稅務局僱主 識別號碼) |
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(總部辦公地址) |
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(郵遞區號) |
登記人的電話號碼，包括區號：（
根據法案第12(b)條規定註冊的證券：
每種類別的名稱 |
交易標的（s） |
每個註冊交易所的名稱 |
請勾選以下選項以表示申報人（1）已提交證券交易法1934年第13條或15(d)條所要求提交的所有報告，且在過去12個月中（或申報人需要提交此類報告的較短期間）已提交；（2）已受到過去90天內此類提交要求的限制。
請勾選是否在過去12個月（或較短時期）內根據Regulation S-t第405條規定提交所有需要提交的互動數據文件。
請打勾表示，申請人是否為大快速歸檔者、快速歸檔者、非快速歸檔者、較小的報告公司或新興成長公司。請參閱《交易所法》第120億2條對“大快速歸檔者”、“快速歸檔者”、“較小的報告公司”和“新興成長公司”的定義。
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☒（僅限Medical Properties Trust, Inc.） |
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加速歸檔人 |
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☐ |
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☒（僅限MPt Operating Partnership, L.P.） |
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小型報告公司 |
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新興成長型企業 |
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如果一家新興成長公司，請打勾表示申請人已選擇不使用根據交易所法第13(a)條提供的任何新的或修訂的財務會計準則的擴展過渡期遵守。 ☐
請在核取方框內表明公司是否為空殼公司（根據交易所法規120億2號所定義）。 是 ☐ 否
截至2024年11月8日醫療物業信託公司截至當日擁有
解說說明
本報告結合了醫療物業信託公司和MPt Operating Partnership，L.P.到2024年9月30日結束的三個月和九個月的第10-Q表格的季度報告，醫療物業信託公司是一家馬里蘭州公司，MPt Operating Partnership，L.P.是一家特拉華州有限合夥公司，醫療物業信託公司通過其執行基本所有業務的MPt Operating Partnership，L.P.，除非另有說明或上下文另有要求，本報告中所有提到的“我們”，“我們”，“我們的”，“醫療物業”，“MPt”，或“公司”均指醫療物業信託公司及其合併子公司，包括MPt Operating Partnership，L.P. 除非另有說明或上下文另有要求，所有提到的“經營合夥”都指MPt Operating Partnership，L.P.及其合併子公司。
MEDICAL PROPERTIES TRUSt, INC.與MPt營運合夥企業，L.P。
及其附屬公司
第10-Q表格季報告
截至2024年9月30日的季度結束
目錄 內容
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頁面 |
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Medical Properties Trust, Inc.和MPt Operating Partnership, L.P.及其附屬公司 |
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2
第一部分 — 財務撥號信息
項目 1. 財務報表財務報表。
醫療屬性真St, INC.及其子公司
精簡合併資產負債表簡明合併資產負債表
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九月三十日, |
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12月31日, |
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（以千爲單位，除每股金額外） |
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（未經審計） |
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(附註2) |
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資產 |
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房地產業資產 |
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土地、建築、改良、無形租賃資產和其他 |
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$ |
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融資租賃投資 |
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持有待售房地產 |
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抵押貸款 |
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房地產資產的總投資 |
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累計折舊及攤銷費用 |
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房地產資產的淨投資 |
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現金及現金等價物 |
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利息和租金應收款 |
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平折租賃應收款 |
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未納入合併範圍的房地產合資企業投資 |
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未納入合併範圍的經營實體投資 |
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其他貸款 |
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其他 |
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總資產 |
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$ |
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$ |
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負債和股東權益 |
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負債 |
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淨債務 |
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$ |
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$ |
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應付賬款和應計費用 |
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遞延營業收入 |
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對租戶的債務和其他租賃責任 |
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總負債 |
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股權 |
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優先股，$0.0001 |
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普通股，每股面值爲 $0.0001； |
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額外實收資本 |
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赤字 |
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累計其他綜合收益 |
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Total Medical Properties Trust, Inc.股東權益 |
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非控股權益 |
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總股本 |
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總負債和股權 |
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$ |
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$ |
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請參閱附註事項的簡明合併財務報表。
3
醫療產業信託公司及其子公司
彙總的合併財務報表淨利潤報表
(未經審計)
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三個月期間 |
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九個月期間 |
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（以千爲單位，除每股金額外） |
2024 |
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2023 |
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2024 |
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2023 |
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營業收入 |
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出租費用計入賬單 |
$ |
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$ |
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$ |
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$ |
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直線租金 |
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融資租賃收入 |
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利息和其他收入 |
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總收入 |
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費用 |
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利息 |
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房地產折舊及攤銷 |
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房地產相關 |
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總務和行政 |
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總支出 |
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其他（費用）收入 |
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房地產業銷售利潤 (損失) |
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房地產和其他減值損失，淨額 |
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股權投資收益（損失） |
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債務再融資和未使用融資（成本）益處 |
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其他（包括證券的公允價值調整） |
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其他收支總額 |
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稅前（虧損）收益 |
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所得稅費用（收益） |
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淨（損失）收入 |
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歸屬於非控股股權的淨利潤 |
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淨利潤(損失)歸屬於普通股東 |
$ |
( |
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$ |
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$ |
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$ |
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每普通股收益 - 基本和稀釋 |
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淨利潤(損失)歸屬於普通股東 |
$ |
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$ |
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$ |
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基本加權平均股本 |
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攤薄加權平均股本 |
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每股普通股宣佈的分紅派息 |
$ |
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$ |
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$ |
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$ |
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參見簡明合併財務報表的附註。
4
醫療產業信託公司及其子公司
壓縮合並財務報表綜合損益表項目
(未經審計)
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三個月期間 |
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九個月期間 |
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（以千爲單位） |
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2024 |
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2023 |
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2024 |
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2023 |
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淨（損失）收入 |
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$ |
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$ |
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$ |
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其他綜合收益（損失）： |
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利率對沖的未實現損失，稅後淨額 |
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將來自AOCI的利率對沖收益重新分類爲 |
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— |
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外匯翻譯收益（損失） |
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將未實現的外匯轉換損失重新分類爲 |
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— |
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— |
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— |
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綜合(損失)收益合計 |
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歸屬於非控制權益的綜合收益 |
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歸屬於MPt普通股股東的全面（虧損）收入 |
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$ |
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$ |
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$ |
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$ |
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請參閱附註事項的簡明合併財務報表。
5
醫療產業信託公司及其子公司
簡明綜合報表 權益報表
(未經審計)
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優先的 |
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Common |
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（以千爲單位，除每股金額外） |
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股份 |
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面值 |
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股份 |
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面值 |
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其他 |
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留存收益 |
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累計 |
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非- |
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合計 |
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2023年12月31日的餘額 |
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— |
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$ |
— |
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$ |
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$ |
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$ |
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$ |
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淨（損失）收入 |
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利率對沖的未實現損失， |
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— |
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— |
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外幣匯兌損失 |
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— |
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— |
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— |
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— |
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( |
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— |
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股票分配和攤銷的 |
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— |
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— |
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— |
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— |
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— |
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股票分配 - 納稅滿足 |
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— |
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— |
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分配給非控股股權的股東 |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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分紅派息已宣佈調整 |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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2024年3月31日結存餘額 |
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— |
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$ |
— |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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淨（損失）收入 |
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— |
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( |
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— |
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利率對沖未實現損失， |
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— |
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— |
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— |
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— |
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( |
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— |
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利率對沖收益重新分類 |
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— |
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— |
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— |
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外幣匯兌損失 |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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股票解禁和攤銷 |
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— |
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— |
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— |
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|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股票解禁 - 納稅額滿足 |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
分配給非控股股權的股東 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
已宣佈的分紅派息（$ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
2024年6月30日餘額 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
淨（損失）收入 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
利率套期保值未實現損失， |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
利率套期保值收益重新分類 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
外幣兌換收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
股票解禁和攤銷 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股票解禁 - 納稅滿足 |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
分配給非控股股權的股東 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
已宣佈的分紅派息（$ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
2024年9月30日的餘額 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
6
醫療產業信託公司及其子公司
簡明合併股東權益表
(未經審計)
|
|
優先的 |
|
|
Common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
（以千爲單位，除每股金額外） |
|
股份 |
|
|
面值 |
|
|
股份 |
|
|
面值 |
|
|
其他 |
|
|
留存收益 |
|
|
累計 |
|
|
非- |
|
|
合計 |
|
|||||||||
2022年12月31日的餘額 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
淨利潤 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
利率對沖的未實現損失分紅派息， |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
外幣兌換收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
利率對沖再分類 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
股票分紅及分攤 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
股票歸還-滿足稅款 |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
分配給非控股股權的股東 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
已宣佈的分紅派息（$ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
2023年3月31日的餘額 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
淨虧損 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
利率對沖的未實現收益， |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
外幣兌換收益 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
外幣重分類 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
股票授予及攤銷 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股票授予-滿足稅收 |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
分配給非控股股權的股東 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
已宣佈的分紅派息（$ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
2023年6月30日的餘額 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||
淨利潤 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
利率對沖未實現損失， |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
外幣匯兌損失 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
股票分紅和攤銷 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
股票分紅 - 納稅滿足 |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
分配給非控股股權的股東 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
已宣佈的分紅派息（$ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
2023年9月30日財務狀況表 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
請參閱附註事項的簡明合併財務報表。
7
醫療地產信託有限公司和子公司
壓縮的合併現金流量表現金流量表
(未經審計)
|
|
九個月期間 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
（以千爲單位） |
|
|||||
經營活動 |
|
|
|
|
|
|
||
淨（損失）收入 |
|
$ |
( |
) |
|
$ |
|
|
調整爲將淨（虧損）收益調節爲經營活動提供的現金流量： |
|
|
|
|
|
|
||
折舊與攤銷 |
|
|
|
|
|
|
||
延期融資成本和貼現債務攤銷 |
|
|
|
|
|
|
||
按直線法計算的租金收入和其他 |
|
|
( |
) |
|
|
( |
) |
基於股票的薪酬 |
|
|
|
|
|
|
||
房地產出售盈利 |
|
|
( |
) |
|
|
( |
) |
房地產和其他減值損失，淨額 |
|
|
|
|
|
|
||
股權利益房地產減值 |
|
|
|
|
|
|
||
按直線法計算的租金和其他沖銷 |
|
|
|
|
|
|
||
債務再融資和未使用融資成本（利益） |
|
|
|
|
|
( |
) |
|
稅率變更和其他 |
|
|
|
|
|
( |
) |
|
非現金公允價值調整 |
|
|
|
|
|
( |
) |
|
從債務和股權證券收到的非現金收入 |
|
|
|
|
|
( |
) |
|
其他調整 |
|
|
|
|
|
|
||
變動內容: |
|
|
|
|
|
|
||
利息和租金應收款 |
|
|
|
|
|
( |
) |
|
其他 |
|
|
( |
) |
|
|
( |
) |
應付賬款和應計費用 |
|
|
( |
) |
|
|
( |
) |
遞延營收 |
|
|
( |
) |
|
|
|
|
營業活動產生的淨現金 |
|
|
|
|
|
|
||
投資活動 |
|
|
|
|
|
|
||
收購和其他相關投資 |
|
|
( |
) |
|
|
( |
) |
房地產銷售淨收益 |
|
|
|
|
|
|
||
銷售及應收貸款回收款項 |
|
|
|
|
|
|
||
投資應收款項 |
|
|
( |
) |
|
|
( |
) |
在建工程和其他資產 |
|
|
( |
) |
|
|
( |
) |
股權投資銷售和回報的收益 |
|
|
|
|
|
|
||
資本增值和其他投資淨額 |
|
|
( |
) |
|
|
( |
) |
投資活動提供的淨現金流量 |
|
|
|
|
|
|
||
籌資活動 |
|
|
|
|
|
|
||
來自有期限債務的收入 |
|
|
|
|
|
|
||
償還有期限的債務 |
|
|
( |
) |
|
|
( |
) |
循環信貸額度淨額 |
|
|
( |
) |
|
|
|
|
分紅派息 |
|
|
( |
) |
|
|
( |
) |
租金按金和對租戶的其他義務 |
|
|
( |
) |
|
|
|
|
股票解禁-滿足稅款代扣要求 |
|
|
( |
) |
|
|
( |
) |
其他融資活動，償付債務再融資和延期融資成本 |
|
|
( |
) |
|
|
|
|
籌集淨現金流量 |
|
|
( |
) |
|
|
( |
) |
現金及現金等價物的增加，期間受限制現金的增加 |
|
|
|
|
|
|
||
匯率變動的影響 |
|
|
|
|
|
|
||
期初現金、現金等價物和受限制的現金餘額 |
|
|
|
|
|
|
||
期末現金、現金等價物和受限制的現金餘額 |
|
$ |
|
|
$ |
|
||
支付利息 |
|
$ |
|
|
$ |
|
||
非現金投資活動表: |
|
|
|
|
|
|
||
收到用於特定義務、房地產和營業收入的債務和股權證券 |
|
$ |
|
|
$ |
|
||
滿足特定義務和應收款項，並出售房地產 |
|
|
|
|
|
|
||
非現金融資活動表: |
|
|
|
|
|
|
||
宣佈未支付的分紅 |
|
$ |
|
|
$ |
|
||
現金、現金等價物和受限現金包括以下內容： |
|
|
|
|
|
|
||
期初： |
|
|
|
|
|
|
||
現金及現金等價物 |
|
$ |
|
|
$ |
|
||
包括在受限制現金中 |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
期末： |
|
|
|
|
|
|
||
現金及現金等價物 |
|
$ |
|
|
$ |
|
||
包括在受限制現金中 |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
參見簡明合併財務報表的附註。
8
MPt運營合作伙伴P，L.P.及其子公司
精簡合併資產負債表簡明合併資產負債表
|
|
九月三十日, |
|
|
12月31日, |
|
||
（以千爲單位） |
|
(未經審計) |
|
|
(附註2) |
|
||
資產 |
|
|
|
|
|
|
||
房地產業資產 |
|
|
|
|
|
|
||
土地、建築、改良、無形租賃資產和其他 |
|
$ |
|
|
$ |
|
||
融資租賃投資 |
|
|
|
|
|
|
||
持有待售房地產 |
|
|
|
|
|
|
||
抵押貸款 |
|
|
|
|
|
|
||
房地產資產的總投資 |
|
|
|
|
|
|
||
累計折舊及攤銷費用 |
|
|
( |
) |
|
|
( |
) |
房地產資產的淨投資 |
|
|
|
|
|
|
||
現金及現金等價物 |
|
|
|
|
|
|
||
利息和租金應收款 |
|
|
|
|
|
|
||
平折租賃應收款 |
|
|
|
|
|
|
||
未納入合併範圍的房地產合資企業投資 |
|
|
|
|
|
|
||
未納入合併範圍的經營實體投資 |
|
|
|
|
|
|
||
其他貸款 |
|
|
|
|
|
|
||
其他 |
|
|
|
|
|
|
||
總資產 |
|
$ |
|
|
$ |
|
||
負債和資本 |
|
|
|
|
|
|
||
負債 |
|
|
|
|
|
|
||
淨債務 |
|
$ |
|
|
$ |
|
||
應付賬款和應計費用 |
|
|
|
|
|
|
||
遞延營收 |
|
|
|
|
|
|
||
對租戶的債務和其他租賃責任 |
|
|
|
|
|
|
||
應付醫療房地產信託公司 |
|
|
|
|
|
|
||
總負債 |
|
|
|
|
|
|
||
資本 |
|
|
|
|
|
|
||
普通合夥人 - 已發行和未流通 - |
|
|
|
|
|
|
||
Limited Partners — issued and outstanding — |
|
|
|
|
|
|
||
累計其他綜合收益 |
|
|
|
|
|
|
||
Total MPt Operating Partnership, L.P.資產 |
|
|
|
|
|
|
||
非控股權益 |
|
|
|
|
|
|
||
總資本 |
|
|
|
|
|
|
||
負債和資本合計 |
|
$ |
|
|
$ |
|
||
請參閱附註事項的簡明合併財務報表。
9
MPt操作合夥企業，有限合夥及其附屬公司
壓縮的合併現金流量表淨利潤報表
(未經審計)
|
|
三個月期間 |
|
|
九個月期間 |
|
||||||||||
（以千爲單位，除每單位金額外） |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
營業收入 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
出租費用計入賬單 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
直線租金 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
融資租賃收入 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
利息和其他收入 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
總收入 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
費用 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
利息 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
房地產折舊及攤銷 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
房地產相關 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
總務和行政 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
總支出 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
其他（費用）收入 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
房地產業銷售利潤 (損失) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
房地產和其他減值損失，淨額 |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
股權投資收益（損失） |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
債務再融資和未使用融資（成本）益處 |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
其他（包括證券的公允價值調整） |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
其他收支總額 |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
稅前（虧損）收益 |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
所得稅費用（收益） |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
淨（損失）收入 |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
歸屬於非控股股權的淨利潤 |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
淨利潤（虧損）歸屬於MPt經營合夥企業合夥人 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
基本和稀釋每單位盈利 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
淨利潤（虧損）歸屬於MPt經營合夥企業合夥人 |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
加權平均每單位股數（基本） |
|
|
|
|
|
|
|
|
|
|
|
|
||||
稀釋後加權平均單位數 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
每單位宣佈的分紅 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
See accompanying notes to condensed consolidated financial statements.
10
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive (Loss) Income
(Unaudited)
|
|
For the Three Months |
|
|
For the Nine Months |
|
||||||||||
(In thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Other comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized loss on interest rate hedges, net of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Reclassification of interest rate hedges gain from AOCI to |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Foreign currency translation gain (loss) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Reclassification of foreign currency translation loss from |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Total comprehensive (loss) income |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Comprehensive income attributable to non-controlling interests |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Comprehensive (loss) income attributable to MPT Operating |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
See accompanying notes to condensed consolidated financial statements.
11
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Capital
(Unaudited)
|
|
General |
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
||||||||||
|
|
Partner |
|
|
Limited Partners |
|
|
Other |
|
|
Non- |
|
|
|
|
|||||||||||||
(In thousands, except per unit amounts) |
|
Units |
|
|
Unit |
|
|
Units |
|
|
Unit |
|
|
Comprehensive |
|
|
Controlling |
|
|
Total |
|
|||||||
Balance at December 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Net (loss) income |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared adjustment |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Balance at March 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
Net (loss) income |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Reclassification of interest rate hedge gain to earnings, |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared ($ |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
Net (loss) income |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
Unrealized loss on interest rate hedges, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Reclassification of interest rate hedge gain to earnings, |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared ($ |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at September 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
12
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Capital
(Unaudited)
|
|
General |
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
||||||||||
|
|
Partner |
|
|
Limited Partners |
|
|
Other |
|
|
Non- |
|
|
|
|
|||||||||||||
(In thousands, except per unit amounts) |
|
Units |
|
|
Unit |
|
|
Units |
|
|
Unit |
|
|
Comprehensive |
|
|
Controlling |
|
|
Total |
|
|||||||
Balance at December 31, 2022 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
Net income |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Unrealized loss on interest rate hedges, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Reclassification of interest rate hedge gain to |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared ($ |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
Net loss |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Unrealized gain on interest rate hedges, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Foreign currency translation gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Reclassification of foreign currency translation loss to earnings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
||
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared ($ |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at June 30, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Net income |
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
||||
Unrealized loss on interest rate hedges, |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Foreign currency translation loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Unit vesting and amortization of unit-based |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||||
Unit vesting - satisfaction of tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distributions to non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions declared ($ |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at September 30, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
See accompanying notes to condensed consolidated financial statements.
13
MPT OPERATING PARTNERSHIP, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
For the Nine Months |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(In thousands) |
|
|||||
Operating activities |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization of deferred financing costs and debt discount |
|
|
|
|
|
|
||
Straight-line rent revenue and other |
|
|
( |
) |
|
|
( |
) |
Unit-based compensation |
|
|
|
|
|
|
||
Gain on sale of real estate |
|
|
( |
) |
|
|
( |
) |
Real estate and other impairment charges, net |
|
|
|
|
|
|
||
Equity interest real estate impairment |
|
|
|
|
|
|
||
Straight-line rent and other write-off |
|
|
|
|
|
|
||
Debt refinancing and unutilized financing costs (benefit) |
|
|
|
|
|
( |
) |
|
Tax rate changes and other |
|
|
|
|
|
( |
) |
|
Non-cash fair value adjustments |
|
|
|
|
|
( |
) |
|
Non-cash revenue from debt and equity securities received |
|
|
|
|
|
( |
) |
|
Other adjustments |
|
|
|
|
|
|
||
Changes in: |
|
|
|
|
|
|
||
Interest and rent receivables |
|
|
|
|
|
( |
) |
|
Other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable and accrued expenses |
|
|
( |
) |
|
|
( |
) |
Deferred revenue |
|
|
( |
) |
|
|
|
|
Net cash provided by operating activities |
|
|
|
|
|
|
||
Investing activities |
|
|
|
|
|
|
||
Acquisitions and other related investments |
|
|
( |
) |
|
|
( |
) |
Net proceeds from sale of real estate |
|
|
|
|
|
|
||
Proceeds received from sale and repayment of loans receivable |
|
|
|
|
|
|
||
Investment in loans receivable |
|
|
( |
) |
|
|
( |
) |
Construction in progress and other |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale and return of equity investments |
|
|
|
|
|
|
||
Capital additions and other investments, net |
|
|
( |
) |
|
|
( |
) |
Net cash provided by investing activities |
|
|
|
|
|
|
||
Financing activities |
|
|
|
|
|
|
||
Proceeds from term debt |
|
|
|
|
|
|
||
Payments of term debt |
|
|
( |
) |
|
|
( |
) |
Revolving credit facility, net |
|
|
( |
) |
|
|
|
|
Distributions paid |
|
|
( |
) |
|
|
( |
) |
Lease deposits and other obligations to tenants |
|
|
( |
) |
|
|
|
|
Unit vesting - satisfaction of tax withholdings |
|
|
( |
) |
|
|
( |
) |
Other financing activities, payment of debt refinancing, and deferred financing costs |
|
|
( |
) |
|
|
|
|
Net cash used for financing activities |
|
|
( |
) |
|
|
( |
) |
Increase in cash, cash equivalents, and restricted cash for period |
|
|
|
|
|
|
||
Effect of exchange rate changes |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash at beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash at end of period |
|
$ |
|
|
$ |
|
||
Interest paid |
|
$ |
|
|
$ |
|
||
Supplemental schedule of non-cash investing activities: |
|
|
|
|
|
|
||
Debt and equity securities received for certain obligations, real estate, and revenue |
|
$ |
|
|
$ |
|
||
Certain obligations and receivables satisfied and real estate sold |
|
|
|
|
|
|
||
Supplemental schedule of non-cash financing activities: |
|
|
|
|
|
|
||
Distributions declared, unpaid |
|
$ |
|
|
$ |
|
||
Cash, cash equivalents, and restricted cash are comprised of the following: |
|
|
|
|
|
|
||
Beginning of period: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash, included in |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
End of period: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash, included in |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
See accompanying notes to condensed consolidated financial statements.
14
MEDICAL PROPERTIES TRUST, INC. AND MPT OPERATING PARTNERSHIP, L.P.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Organization
Medical Properties Trust, Inc., a Maryland corporation, was formed on August 27, 2003, under the Maryland General Corporation Law for the purpose of engaging in the business of investing in, owning, and leasing healthcare real estate. Our operating partnership subsidiary, MPT Operating Partnership, L.P. (the “Operating Partnership”), through which we conduct substantially all of our operations, was formed in September 2003. At present, we own, directly and indirectly, all of the partnership interests in the Operating Partnership and have elected to report our required disclosures and that of the Operating Partnership on a combined basis, except where material differences exist.
We operate as a real estate investment trust (“REIT”). Accordingly, we are generally not subject to United States (“U.S.”) federal income tax on our REIT taxable income, provided that we continue to qualify as a REIT and our distributions to our stockholders equal or exceed such taxable income. Similarly, the majority of our real estate operations in the United Kingdom ("U.K.") operate as a REIT and generally are subject only to a withholding tax on earnings upon distribution out of the U.K. REIT. Certain non-real estate activities we undertake in the U.S. are conducted by entities which we elected to be treated as taxable REIT subsidiaries (“TRS”). Our TRS entities are subject to both U.S. federal and state income taxes. For our properties located outside the U.S. (excluding those assets that are in the U.K. REIT), we are subject to the local income taxes of the jurisdictions where our properties reside and/or legal entities are domiciled; however, we do not expect to incur additional taxes, of a significant nature, in the U.S. from foreign-based income as the majority of such income flows through our REIT.
Our primary business strategy is to acquire and develop healthcare facilities and lease the facilities to healthcare operating companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. The majority of our leased assets are owned
Our business model facilitates acquisitions and recapitalizations, and allows operators of healthcare facilities to unlock the value of their real estate to fund facility improvements, technology upgrades, and other investments in operations. At September 30, 2024, we have investments in
2. Summary of Significant Accounting Policies
Unaudited Interim Condensed Consolidated Financial Statements: The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information, including rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included. Operating results for the three and nine months ended September 30, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The condensed consolidated balance sheet at December 31, 2023 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements.
The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. We believe the estimates and assumptions underlying our condensed consolidated financial statements are reasonable and supportable based on the information available as of September 30, 2024, (particularly as it relates to our assessments of the recoverability of our real estate, the ability of our tenants/borrowers to make lease/loan payments in accordance with their respective
15
agreements, the fair value of our equity and loan investments, and the adequacy of our credit loss reserves on loans and financing receivables).
For information about significant accounting policies, and how actual results could differ from estimates, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes to these significant accounting policies.
Reclassifications
Certain amounts in the condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation.
Variable Interest Entities
At September 30, 2024, we had loans and/or equity investments in certain variable interest entities ("VIEs"), which may also be tenants of our facilities. We have determined that we were not the primary beneficiary of these VIEs.
VIE Type |
|
Carrying |
|
|
Asset Type |
|
Maximum Loss |
|
||
Loans, net and equity investments |
|
$ |
|
|
Investments in Unconsolidated |
|
$ |
|
||
Loans, net |
|
|
|
|
Mortgage and other loans |
|
|
|
||
For the VIE types above, we do not consolidate the VIEs because we do not have the ability to control the activities (such as the day-to-day healthcare operations of our borrowers or investees) that most significantly impact the VIE's economic performance. As of September 30, 2024, we were not required to provide financial support through a liquidity arrangement or otherwise to our unconsolidated VIEs, including circumstances in which they could be exposed to further losses (e.g. cash short falls).
Recent Accounting Developments
Segment Reporting
In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" ("ASU 2023-07") to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are finalizing our assessment of the impact of adopting this standard and expect to have additional disclosures in our Form 10-K for the year ended December 31, 2024.
Income Taxes
In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU 2023-09") which focuses on income tax disclosures regarding effective tax rates and cash income taxes paid. This standard requires public entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit disaggregated by domestic and foreign, and (3) provide additional information for certain reconciling items at or above a quantitative threshold of
16
Disaggregation of Income Statement Expenses
In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03") to improve the disclosures about a public company's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. ASU 2024-03 is effective for annual periods beginning after December 15, 2026. We are currently evaluating the potential impact of the adoption of this standard on our consolidated financial statements.
3. Real Estate and Other Activities
New Investments
We acquired or invested in the following net assets (in thousands):
|
|
For the Nine Months |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
|
|
|
|
|
||
Land and land improvements |
|
$ |
|
|
$ |
|
||
Buildings |
|
|
|
|
|
|
||
Intangible lease assets — subject to amortization (weighted-average useful |
|
|
|
|
|
|
||
Investments in unconsolidated real estate joint ventures |
|
|
|
|
|
|
||
Investments in unconsolidated operating entities |
|
|
|
|
|
|
||
Other loans |
|
|
|
|
|
|
||
Liabilities assumed |
|
|
( |
) |
|
|
— |
|
|
|
$ |
|
|
$ |
|
||
Loans repaid(1) |
|
|
|
|
|
( |
) |
|
Total net assets acquired |
|
$ |
|
|
$ |
|
||
2024 Activity
Utah Transaction
On April 12, 2024, we sold our interests in
The Utah lessee (an affiliate of CommonSpirit Health ("CommonSpirit")) may acquire the leased real estate at a price equal to the greater of fair market value and the approximate $
2023 Activity
Prospect Transaction
In August 2019, we invested in a portfolio of
17
between Prospect and certain third parties in early 2023 that would have recapitalized Prospect and provided for payment of unpaid rent and interest, we recorded an approximate $
However, Prospect continued to pursue a recapitalization plan, and, in late March 2023, Prospect received a binding commitment from several lenders to provide liquidity to pay down certain debt instruments. Along with these commitments from third-party lenders, we agreed to pursue certain transactions with Prospect as part of their recapitalization plan, including originating a $
On May 23, 2023, Prospect completed its recapitalization plan, which included receiving $
Lifepoint Transaction
On February 7, 2023, a subsidiary of Lifepoint Health, Inc. ("Lifepoint") acquired a majority interest in Springstone (now Lifepoint Behavioral Health, "Lifepoint Behavioral") (the "Lifepoint Transaction") based on an enterprise value of $
In the first quarter of 2024, we sold our minority equity investment in Lifepoint Behavioral for approximately $
Other Transactions
In the second quarter of 2023, we acquired
On April 14, 2023, we acquired
Development Activities
See table below for a status summary of our current development projects (in thousands):
Property |
|
Commitment |
|
|
Costs |
|
|
Estimated Rent |
||
IMED Hospitales ("IMED") (Spain) |
|
$ |
|
|
$ |
|
|
|||
IMED (Spain) |
|
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
|
|
||
We have
18
Separately, on the Norwood redevelopment, we recovered cash in November 2024 that was in excess of our recovery receivable (included in "Other assets" in the condensed consolidated balance sheets), resulting in a $
2024 Activity
During the first quarter of 2024, we completed construction and began recording rental income on a $
2023 Activity
During the first nine months of 2023, we completed construction and began recording rental income on one inpatient rehabilitation facility located in Lexington, South Carolina, which commenced rent on July 1, 2023, and another inpatient rehabilitation facility located in Stockton, California, which commenced rent on May 1, 2023. Both of these facilities are leased to Ernest Health, Inc. ("Ernest") pursuant to an existing long-term master lease.
Disposals
2024 Activity
During the first nine months of 2024, we had the following disposal activities:
19
Summary of Operations for Disposed (or to be Disposed) Assets in 2024
The following represents the operating results from the five properties sold as part of the Utah Transaction, the five Prime properties sold in April 2024, the eight properties sold to Dignity Health, the 11 properties sold to UCHealth, and the properties designated as held for sale at September 30, 2024 (in thousands):
|
|
For the Three Months |
For the Nine Months |
|
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Revenues(1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Real estate depreciation and amortization(2) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Property-related expenses |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Real estate impairment charges(3) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Other income (expense)(4) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
(Expense) income from real estate dispositions, net |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
||
2023 Activity
On March 30, 2023, we entered into a definitive agreement to sell our
On March 8, 2023, we received notice that Prime planned to exercise its right to repurchase from us the real estate associated with one master lease for approximately $
Leasing Operations (Lessor)
We acquire and develop healthcare facilities and lease the facilities to healthcare operating companies. The initial fixed lease terms of these infrastructure-type assets are typically at least
For all of our properties subject to lease, we are the legal owner of the property and the tenant's right to use and possess such property is guided by the terms of a lease. At September 30, 2024, we account for all of these leases as operating leases, except where GAAP requires alternative classification, including leases on
20
leases on
|
|
As of September 30, |
|
|
As of December 31, |
|
||
Minimum lease payments receivable |
|
$ |
|
|
$ |
|
||
Estimated unguaranteed residual values |
|
|
|
|
|
|
||
Less: Unearned income and allowance for credit loss |
|
|
( |
) |
|
|
( |
) |
Net investment in direct financing leases |
|
|
|
|
|
|
||
Other financing leases (net of allowance for credit loss) |
|
|
|
|
|
|
||
Total investment in financing leases |
|
$ |
|
|
$ |
|
||
Other Leasing Activities
At September 30, 2024, our vacant properties represent less than
Our tenants’ financial performance and resulting ability to satisfy their lease and loan obligations to us are material to our financial results and our ability to service our debt and make distributions to our stockholders. Our tenants operate in the healthcare industry, which is highly regulated, and changes in regulation (or delays in enacting regulation) may temporarily impact our tenants’ operations until they are able to make the appropriate adjustments to their business. In addition, our tenants may experience operational challenges from time-to-time as a result of many factors, including those external to them, such as cybersecurity attacks or public health crises (like the COVID-19 pandemic), economic issues resulting in high inflation and spikes in labor costs, extreme or severe weather and climate-related events, and adverse market and political conditions. We monitor our tenants' operating results and the potential impact from these challenges. We may elect to provide support to our tenants from time-to-time in the form of short-term rent deferrals to be paid back in full (like as described below under Pipeline Health System), or in the form of temporary loans (like as described previously in the Prospect Transaction). See below for an update on some of our tenants:
Steward Health Care System
As discussed in previous filings, Steward has experienced significant operational and liquidity challenges and filed for Chapter 11 bankruptcy on May 6, 2024 with the United States Bankruptcy Court for the Southern District of Texas. On September 11, 2024, the bankruptcy court entered an interim order approving a global settlement between Steward, its lenders, the unsecured creditors committee, and the Company. The interim order was made final by the bankruptcy court on September 18, 2024. The order provided for the following: a) termination of our master lease with Steward; b) the release of claims against
With this global settlement, our relationship with Steward effectively ends with no remaining Steward exposure on our condensed consolidated balance sheets at September 30, 2024, other than from the re-tenanting or selling of formerly leased Steward properties that are currently not under lease.
In regard to our real estate partnership with Macquarie Asset Management (“Macquarie”), the bankruptcy court approved the termination of the partnership’s master lease with Steward during the 2024 third quarter. In addition, we and Macquarie entered into an agreement with the mortgage lender of the partnership to transition the eight Massachusetts properties to them along with cash proceeds of approximately $
21
Impairment Charges
Due to the events discussed above, we recorded real estate and other impairment charges, net of approximately $
Description |
|
For the Three Months Ended September 30, 2024 |
|
|
For the Nine Months Ended September 30, 2024 |
|
||
Working capital and other loans |
|
$ |
|
|
$ |
|
||
Real estate, primarily Space Coast facilities |
|
|
|
|
|
|
||
Investment in Massachusetts partnership(1) |
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
||
Property taxes, insurance and other, net |
|
|
( |
) |
|
|
|
|
Total real estate and other impairment charges, net |
|
$ |
|
|
$ |
|
||
In addition with the lease termination discussed above, we accelerated the amortization on the related in-place lease intangibles resulting in $
Re-tenanting Activity
Subsequent to the release of claims on the
Other Activity
During 2024, we received and recorded rent and interest revenue from Steward of $
Subsequent to September 30, 2024, the sale of the Space Coast properties to Orlando Health was completed, and the Steward bankruptcy estate retained $
Prospect
We lease real estate assets to Prospect in California and Connecticut and have a mortgage loan secured by four properties in Pennsylvania. Our total real estate investment is approximately $
In regard to PHP Holdings, we account for our investment (both the equity investment and convertible loan) using the fair value option method. Prospect and its investment bankers continued to work through the sale process during and subsequent to the end of the period, resulting in a binding agreement with Astrana Health on November 8, 2024, as further described in Note 10 to the condensed consolidated financial statements. Based on our consideration of information in the purchase agreement, along with consultations with our third party appraisers, we recorded an additional approximate $
22
Pipeline Health System
On October 2, 2022, Pipeline Health System ("Pipeline") filed for reorganization relief under Chapter 11 protection of the United States Bankruptcy Code in the Southern District of Texas, while keeping its hospitals open to continue providing care to the communities served. On February 6, 2023, Pipeline emerged from bankruptcy. Per the bankruptcy settlement, Pipeline's lease of our California assets remained in place, and we were repaid on February 7, 2023, for all rent that was outstanding at December 31, 2022, along with what was due for the first quarter of 2023. As part of the settlement, we deferred approximately $
International Joint Venture
As discussed in our Annual Report on Form 10-K for the year ending December 31, 2023, we placed our loan to the international joint venture on the cash basis of accounting, as we determined that it was no longer probable that the borrower would pay its future interest in full. This loan, accounted for under the fair value option method, was collateralized by the equity of Steward held by an investor in both Steward and the international joint venture. Consistent with the discussion above on non-real estate investments in Steward, we recorded a $
CommonSpirit
On May 1, 2023, Catholic Health Initiatives Colorado ("CHIC"), a wholly owned subsidiary of CommonSpirit, acquired the Utah hospital operations of
Other Tenant Matters
In the 2023 third quarter, we moved to the cash basis of accounting for a tenant that comprised approximately
Investments in Unconsolidated Entities
Investments in Unconsolidated Real Estate Joint Ventures
Our primary business strategy is to acquire real estate and lease to providers of healthcare services. Typically, we directly own
23
unconsolidated real estate joint ventures are generally structured similarly and carry a similar risk profile to the rest of our real estate portfolio.
The following is a summary of our investments in unconsolidated real estate joint ventures by operator (amounts in thousands):
Operator |
|
Ownership Percentage |
As of September 30, |
|
|
As of December 31, |
|
||
Swiss Medical Network |
|
$ |
|
|
$ |
|
|||
MEDIAN |
|
|
|
|
|
|
|||
CommonSpirit (Utah partnership) |
|
|
|
|
|
|
|||
Policlinico di Monza |
|
|
|
|
|
|
|||
HM Hospitales |
|
|
|
|
|
|
|||
Steward (Macquarie partnership) |
|
|
|
|
|
|
|||
Total |
|
|
$ |
|
|
$ |
|
||
The decrease in our total investment in unconsolidated real estate joint ventures since December 31, 2023, is primarily due to the impairment recorded to our Massachusetts-based partnership with Macquarie in the second quarter of 2024 as more fully described above in this same Note 3. In the third quarter of 2024, we and the other equity owners funded capital contributions (our share being approximately $
As discussed previously, we hold a
Investments in Unconsolidated Operating Entities
Our investments in unconsolidated operating entities are noncontrolling investments that are typically made in conjunction with larger real estate transactions in which the operators are vetted as part of our overall underwriting process. In many cases, we would not be able to acquire the larger real estate portfolio without such investments in operators. These investments also offer the opportunity to enhance our overall return and provide for certain minority rights and protections.
The following is a summary of our investments in unconsolidated operating entities (amounts in thousands):
Operator |
|
As of September 30, |
|
|
As of December 31, |
|
||
PHP Holdings |
|
$ |
|
|
$ |
|
||
Swiss Medical Network |
|
|
|
|
|
|
||
Aevis Victoria SA ("Aevis") |
|
|
|
|
|
|
||
Priory |
|
|
|
|
|
|
||
Aspris Children's Services ("Aspris") |
|
|
|
|
|
|
||
Caremax |
|
|
|
|
|
|
||
Steward (loan investment) |
|
|
|
|
|
|
||
International joint venture |
|
|
|
|
|
|
||
Steward (equity investment) |
|
|
|
|
|
|
||
Lifepoint Behavioral |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
See "Leasing Operations (Lessor)" under this same Note 3 for details on the change in the first nine months of 2024 related to Steward.
For our investments marked to fair value (including our investments in PHP Holdings, Aevis, Caremax, and the international joint venture), we recorded approximately $
24
related to our international joint venture investments as described in Note 3 and included in the "Real estate and other impairment charges, net" line of the condensed consolidated statements of net income.
In the first quarter of 2024, we sold our interest in the Priory syndicated term loan for £
Other Investment Activities
In the third quarter of 2023, we invested approximately $
In the second quarter of 2023, we received repayment of the CHF
Credit Loss Reserves
We apply a forward-looking "expected loss" model to all of our financing receivables, including financing leases and loans, based on historical credit losses of similar instruments.
The following table summarizes the activity in our credit loss reserves (in thousands):
|
|
For the Three Months |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Balance at beginning of the period |
|
$ |
|
|
$ |
|
||
Provision for credit loss, net |
|
|
|
(1) |
|
|
||
Expected credit loss reserve written off or related to financial |
|
|
( |
) |
(3) |
|
( |
) |
Balance at end of the period |
|
$ |
|
|
$ |
|
||
|
|
For the Nine Months |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Balance at beginning of the year |
|
$ |
|
|
$ |
|
||
Provision for credit loss, net |
|
|
|
(1)(2) |
|
|
||
Expected credit loss reserve written off or related to financial |
|
|
( |
) |
(3) |
|
( |
) |
Balance at end of the period |
|
$ |
|
|
$ |
|
||
25
Concentrations of Credit Risk
We monitor concentration risk in several ways due to the nature of our real estate assets that are vital to the communities in which they are located and given our ability to replace inefficient operators of our facilities, if needed, with more effective operators.
Total Assets by Operator
|
|
As of September 30, 2024 |
|
|
As of December 31, 2023 |
|
||||||||||
Operators |
|
Total Assets (1) |
|
|
Percentage of |
|
|
Total Assets (1) |
|
|
Percentage of |
|
||||
Circle Health Ltd ("Circle") |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Priory |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Healthcare Systems of America |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Prospect |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Lifepoint Behavioral |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Steward |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other operators |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other assets |
|
|
|
(2) |
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Total Assets by U.S. State and Country (1)
|
|
As of September 30, 2024 |
|
|
As of December 31, 2023 |
|
||||||||||
U.S. States and Other Countries |
|
Total Assets |
|
|
Percentage of |
|
|
Total Assets |
|
|
Percentage of |
|
||||
Texas |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
California |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Florida |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Pennsylvania |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Arizona |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
All other states |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other domestic assets |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total U.S. |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
United Kingdom |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Switzerland |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Germany |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Spain |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
All other countries |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other international assets |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total international |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Grand total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
26
Total Assets by Facility Type (1)
|
|
As of September 30, 2024 |
|
|
As of December 31, 2023 |
|
||||||||||
Facility Types |
|
Total Assets |
|
|
Percentage of |
|
|
Total Assets |
|
|
Percentage of |
|
||||
General acute care hospitals |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
Behavioral health facilities |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Post acute care facilities |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Freestanding ER/urgent care facilities |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Other assets |
|
|
|
|
|
% |
|
|
|
|
|
% |
||||
Total |
|
$ |
|
|
|
% |
|
$ |
|
|
|
% |
||||
On an individual property basis, our largest investment in any single property was less than
From a revenue concentration perspective, Circle and Priory individually represented more than
27
4. Debt
The following is a summary of debt (dollar amounts in thousands):
|
|
As of September 30, |
|
|
As of December 31, |
|
||
Revolving credit facility(A) |
|
$ |
|
|
$ |
|
||
Term loan |
|
|
|
|
|
|
||
British pound sterling secured term loan due 2024(B) |
|
|
|
|
|
|
||
British pound sterling term loan due 2025(B) |
|
|
|
|
|
|
||
British pound sterling secured term loan due 2034(B) |
|
|
|
|
|
|
||
Australian term loan facility(B) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
$ |
|
|
$ |
|
||
Debt issue costs and discount, net |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
||
As of September 30, 2024, principal payments due on our debt (which exclude the effects of any discounts, premiums, or debt issue costs recorded) are as follows (amounts in thousands):
2024 |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
Credit Facilities
On April 12, 2024, we amended our unsecured credit facility (the "Credit Facility") and certain other agreements to (i) reduce revolving commitments from $
On August 6, 2024, we amended the Credit Facility and the British pound sterling term loan due 2025 to (i) further reduce revolving commitments in the Credit Facility from $
28
Australian Term Loan Facility
On May 18, 2023, we completed the first phase of the Australia Transaction in which we sold
British Pound Sterling Secured Term Loan due 2034
On May 24, 2024, we closed on a secured loan facility with a consortium of institutional investors that provides for a term loan in aggregate principal amount of approximately £
British Pound Sterling Term Loan due 2025
In addition to the £
Debt Refinancing and Unutilized Financing Costs
2024 Activity
In the first nine months of 2024, we incurred $
2023 Activity
As a result of the prepayment of a portion of the Australian term loan, we incurred approximately $
Covenants
Our debt facilities impose certain restrictions on us, including restrictions on our ability to: incur debts; create or incur liens; provide guarantees in respect of obligations of any other entity; make redemptions and repurchases of our capital stock; prepay, redeem, or repurchase debt; engage in mergers or consolidations; enter into affiliated transactions; dispose of real estate or other assets; and change our business. In addition, the credit agreement governing our Credit Facility limit the amount of dividends we can pay as a percentage of normalized adjusted funds from operations (“NAFFO”), as defined in the agreement, on a rolling four quarter basis to
In addition to these restrictions, the Credit Facility contains customary financial and operating covenants, including covenants relating to our total leverage ratio, fixed charge coverage ratio, secured leverage ratio (which was amended on April 12, 2024 to lower the maximum permitted ratio from
On August 6, 2024, we entered into an amendment to the Credit Facility and the British pound sterling term loan due 2025 (the “Amendments”) to increase the maximum total leverage ratio covenant from
29
payment of dividends in cash during the Modified Covenant Period to $
As of September 30, 2024, we are in compliance with all such financial and operating covenants. However, as of September 30, 2024, we would not have been in compliance with certain covenants without the Amendments discussed above. Our ability to maintain compliance with our debt covenants, including the reset leverage and interest coverage requirements, after the end of the Modified Covenant Period depends primarily on reducing debt through asset sales, retention of cash generated from our monthly rent and interest receipts, extending maturities of certain debt instruments, and other access to capital. We expect to continue to comply with these covenants, but if we are not in compliance, including following the expiration of the Modified Covenant Period, we would have to seek additional amendments to our covenants. However, no assurances can be made that such amendments will be approved by our lenders. If an event of default occurs and is continuing under the Credit Facility, the entire outstanding balance may become immediately due and payable which could have a material adverse impact to the Company.
5. Income Taxes
2024 Activity
In connection with closing the secured term loan facility in the U.K. on May 24, 2024, we realized a gain, for U.K. tax purposes, on the interest rate swap associated with the internal restructuring of the British pound sterling term loan due 2025. This gain resulted in a tax expense of approximately $
2023 Activity
During the 2023 second quarter, we elected to move a majority of our U.K. assets into a U.K. REIT regime with an effective date of July 1, 2023. With this election, we adjusted the deferred tax liabilities associated with these properties, resulting in a $
As a result of the Australia Transaction described in Note 3 to the condensed consolidated financial statements, we recorded a $
6. Stock Awards
During the second quarter of 2022, we amended the 2019 Equity Incentive Plan (the “Equity Incentive Plan”), which authorizes the issuance of common stock options, restricted stock, restricted stock units, deferred stock units, stock appreciation rights, performance units, and awards of interests in our Operating Partnership. Our Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors, and we have reserved
7. Fair Value of Financial Instruments
We have various assets and liabilities that are considered financial instruments. We estimate that the carrying value of cash and cash equivalents and accounts payable and accrued expenses approximate their fair values. We estimate the fair value of our interest and rent receivables using Level 2 inputs such as discounting the estimated future cash flows using the current rates at which similar receivables would be made to others with similar credit ratings and for the same remaining maturities. The fair value of our mortgage loans and other loans are estimated by using Level 2 inputs such as discounting the estimated future cash flows using the current rates which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. We determine the fair value of our senior unsecured notes using Level 2 inputs such as quotes from securities dealers and market makers. We estimate the fair value of our revolving credit facility and term loans using Level 2 inputs based on the present value of future payments, discounted at a rate which we consider appropriate for such debt.
Fair value estimates are made at a specific point in time, are subjective in nature, and involve uncertainties and matters of significant judgment. Settlement of such fair value amounts may not be a prudent management decision.
30
The following table summarizes fair value estimates for our financial instruments (in thousands):
|
|
As of September 30, 2024 |
|
|
As of December 31, 2023 |
|
||||||||||
Asset (Liability) |
|
Book |
|
|
Fair |
|
|
Book |
|
|
Fair |
|
||||
Interest and rent receivables |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Loans(1) |
|
|
|
(2) |
|
|
|
|
|
(2) |
|
|
||||
Debt, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Items Measured at Fair Value on a Recurring Basis
Our equity investment and related loan to the international joint venture, our loan investment in the real estate of
At September 30, 2024 and December 31, 2023, the amounts recorded under the fair value option method were as follows (in thousands):
|
|
As of September 30, 2024 |
|
|
As of December 31, 2023 |
|
|
|
||||||||||
Asset (Liability) |
|
Fair Value |
|
|
Original |
|
|
Fair Value |
|
|
Original |
|
|
Asset Type Classification |
||||
Mortgage loans |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Mortgage loans |
||||
Equity investment and other loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in unconsolidated operating entities/Other loans |
||||
Our loans to the international joint venture and its subsidiaries are recorded at fair value based on Level 2 and Level 3 inputs by discounting the estimated future contractual cash flows using a credit-adjusted rate of return, which is derived from market rates of return on similar loans with similar credit quality and remaining maturity. Our equity investment in Lifepoint Behavioral (which was sold in March 2024) was recorded at fair value as of December 31, 2023, based on Level 2 inputs by discounting the estimated cash flows expected to be realized as part of the Lifepoint Transaction described in Note 3 to the condensed consolidated financial statements. Our equity investment in the international joint venture and our investment in PHP Holdings are recorded at fair value based on Level 3 inputs, by using a market approach (for our equity investment in the international joint venture) and a discounted cash flow model and guideline public company model, a form of market approach, (for our investment in PHP Holdings), 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. We classify our valuations of these investments as Level 3, as we use certain unobservable inputs to the valuation methodology that are significant to the fair value measurement, and the valuations require management judgment due to the absence of quoted market prices. For the cash flow and market approach models used for our investment in PHP Holdings, our unobservable inputs include use of a discount rate (which is based on a weighted-average cost of capital), selected revenue and EBITDA multiples in reference to guideline public companies, 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. 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.
In the first nine months of 2024, we recorded a net unfavorable adjustment to the investments accounted for under the fair value option method of approximately $
The discount rate and DLOM on our investment in PHP Holdings was approximately
31
30, 2024 compared to 1.1x to 1.3x at December 31, 2023. The selected EBITDA multiples ranged from 5.5x to 6.5x at September 30, 2024, compared to 10x to 14x at December 31, 2023. The decrease in multiples used in the fair value analysis of our investment in PHP Holdings compared to December 31, 2023 aligned with the expected value from the Astrana Health deal more fully described in Note 10 to the condensed consolidated financial statements.
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. To illustrate the effect of movements in the DLOM, we performed a sensitivity analysis below by using full basis point variations (in thousands):
Basis Point Change in Marketability Discount |
|
Estimated |
|
|
+100 basis points |
|
$ |
( |
) |
- 100 basis points |
|
|
|
|
Items Measured at Fair Value on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, we have assets and liabilities that are measured, from time-to-time, at fair value on a nonrecurring basis, such as for impairment purposes of our real estate, financial instruments, and for certain equity investments without a readily determinable fair value.
Impairment and Fair Value Adjustments of Non-Real Estate Investments
Prior to the global settlement in September 2024 (as described in Note 3 to the condensed consolidated financial statements) in which our claims were released, our non-real estate investments in Steward and related affiliates included our
We updated our fair value analysis of Steward's business at June 30, 2024, using a similar approach as done in the 2024 first quarter resulting in no further impairments or fair value adjustments to non-real estate investments in the 2024 second quarter. In the third quarter of 2024, as a result of the Company’s global settlement with Steward (as discussed further in Note 3 to the condensed consolidated financial statements), the Company recorded impairment charges of approximately $
Impairment of Real Estate Investments
In the 2024 third quarter, we recognized a real estate impairment charge of approximately $
32
estate impairment charges, primarily involving the eight Massachusetts properties in the Macquarie partnership. In our assessment, we first made a comparison of the carrying value of our real estate to projected undiscounted cash flows. For those properties for which the carrying value was not deemed recoverable, we recorded an impairment charge to the extent our carrying value was greater than its estimated fair value. In estimating fair value for these properties, we, along with assistance from a third-party, independent valuation firm, used a combination of cost, market, and income approaches using Level 3 inputs. The cost approach used comparable sales to value the land and cost manuals to value the improvements. The value derived from the market approach was based on sale prices of similar properties. For the income approach, we divided the expected operating income (i.e. revenue less expenses, if any) from the property by a market capitalization rate (range from
8. Earnings Per Share/Unit
Medical Properties Trust, Inc.
Our earnings per share were calculated based on the following (in thousands):
|
|
For the Three Months |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
Non-controlling interests’ share in net income |
|
|
( |
) |
|
|
( |
) |
Participating securities’ share in earnings |
|
|
( |
) |
|
|
( |
) |
Net (loss) income, less participating securities’ share in earnings |
|
$ |
( |
) |
|
$ |
|
|
Denominator: |
|
|
|
|
|
|
||
Basic weighted-average common shares |
|
|
|
|
|
|
||
Dilutive potential common shares(1) |
|
|
|
|
|
|
||
Diluted weighted-average common shares |
|
|
|
|
|
|
||
|
|
For the Nine Months |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
Non-controlling interests’ share in net income |
|
|
( |
) |
|
|
( |
) |
Participating securities’ share in earnings |
|
|
( |
) |
|
|
( |
) |
Net (loss) income, less participating securities’ share in earnings |
|
$ |
( |
) |
|
$ |
|
|
Denominator: |
|
|
|
|
|
|
||
Basic weighted-average common shares |
|
|
|
|
|
|
||
Dilutive potential common shares(1) |
|
|
|
|
|
|
||
Diluted weighted-average common shares |
|
|
|
|
|
|
||
MPT Operating Partnership, L.P.
Our earnings per unit were calculated based on the following (in thousands):
|
|
For the Three Months |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
Non-controlling interests’ share in net income |
|
|
( |
) |
|
|
( |
) |
Participating securities’ share in earnings |
|
|
( |
) |
|
|
( |
) |
Net (loss) income, less participating securities’ share in earnings |
|
$ |
( |
) |
|
$ |
|
|
Denominator: |
|
|
|
|
|
|
||
Basic weighted-average units |
|
|
|
|
|
|
||
Dilutive potential units(1) |
|
|
|
|
|
|
||
Diluted weighted-average units |
|
|
|
|
|
|
||
33
|
|
For the Nine Months |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Numerator: |
|
|
|
|
|
|
||
Net (loss) income |
|
$ |
( |
) |
|
$ |
|
|
Non-controlling interests’ share in net income |
|
|
( |
) |
|
|
( |
) |
Participating securities’ share in earnings |
|
|
( |
) |
|
|
( |
) |
Net (loss) income, less participating securities’ share in earnings |
|
$ |
( |
) |
|
$ |
|
|
Denominator: |
|
|
|
|
|
|
||
Basic weighted-average units |
|
|
|
|
|
|
||
Dilutive potential units(1) |
|
|
|
|
|
|
||
Diluted weighted-average units |
|
|
|
|
|
|
||
9. Commitments and Contingencies
Commitments
On October 5, 2022, we entered into definitive agreements to sell
Contingencies
As part of the global settlement with Steward discussed in Note 3, upon completion of the transfers to the new operators and satisfaction of certain other conditions, in addition to approval by relevant state and local regulators, each of the Company and Steward have agreed, subject to specified exceptions, to the mutual release of claims against each other, including payment by Steward of any accrued or future rent under its master leases with the Company and accrued or future payments of principal and interest on outstanding loans from the Company. Steward’s asset backed lenders also forfeited their right to cause the Company to purchase up to $
We are party to various lawsuits as described below:
Securities and Derivative Litigation
On April 13, 2023, we and certain of our executives were named as defendants in a putative federal securities class action lawsuit alleging false and/or misleading statements and/or omissions resulted in artificially inflated prices for our common stock, filed by a purported stockholder in the United States District Court for the Northern District of Alabama (Case No. 2:23-cv-00486). The complaint seeks class certification on behalf of purchasers of our common stock between July 15, 2019 and February 22, 2023 and unspecified damages including interest and an award of reasonable costs and expenses. This class action complaint was amended on September 22, 2023 and alleges that we made material misstatements or omissions relating to the financial health of certain of our tenants. On September 26, 2024, the Court dismissed the amended complaint with prejudice. On October 24, 2024, the plaintiff moved to alter the Court’s judgment and for leave to further amend the complaint. On November 11, 2024, the Company filed an opposition to plaintiff's motion.
34
Members of our Board of Directors were also named as defendants in two related shareholder derivative lawsuits filed by purported stockholders in the United States District Court for the Northern District of Alabama on October 19, 2023 (Case No. 2:23- cv-01415) and December 7, 2023 (Case No. 2:23-cv-01667). The Company was named as a nominal defendant in both complaints. These shareholder derivative complaints both make allegations similar to those made in the Alabama securities lawsuit described above relating to purported material misstatements or omissions relating to the financial health of certain of our tenants. Members of our Board of Directors were also named as defendants in three related shareholder derivative lawsuits filed by purported stockholders in the United States District Court for the District of Maryland on February 16, 2024 (Case No. 1:24-cv-00471), June 28, 2024 (Case No. 1:24-cv-01899), and July 26, 2024 (Case No. 1 24-cv-02173). The Company was named as a nominal defendant. These shareholder derivative complaints make allegations similar to those made in the Alabama securities and derivative lawsuits described above relating to purported material misstatements or omissions relating to the financial health of certain of our tenants.
On September 29, 2023, we and certain of our executives were named as defendants in a putative federal securities class action lawsuit filed by a purported stockholder in the United States District Court for the Southern District of New York (Case No. 1:23-cv- 08597). The complaint seeks class certification on behalf of purchasers of our common stock between May 23, 2023 and August 17, 2023 and alleges false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect. This class action complaint was amended on October 30, 2024 and alleges that we made material misstatements or omissions in connection with certain transactions involving Prospect.
Members of our Board of Directors were also named as defendants in two related shareholder derivative lawsuits filed by purported stockholders in the United States District Court for the Southern District of New York on December 18, 2023 (Case No. 1:23-cv- 10934) and March 1, 2024 (Case No. 1:24-cv-01589). The Company was named as a nominal defendant in both complaints. These shareholder derivative complaints both make allegations similar to those made in the New York securities lawsuit described above relating to purported false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect. On February 21, 2024, members of our Board of Directors were named as defendants in a shareholder derivative lawsuit filed by a purported stockholder in the United States District Court for the District of Maryland (Case No. 1:24-cv-00527). The Company was named as a nominal defendant. This shareholder derivative complaint makes allegations similar to those made in the New York securities and derivative lawsuits described above relating to purported false and/or misleading statements and/or omissions in connection with certain transactions involving Prospect.
We believe these claims are without merit and intend to defend the cases vigorously. We have not recorded a liability related to the lawsuits above because, at this time, we are unable to determine whether an unfavorable outcome is probable or to estimate reasonably possible losses.
Defamation Litigation
On March 30, 2023, we commenced an action in the United States District Court for the Northern District of Alabama (Case No. 2:23-cv-00408), against short-seller Viceroy Research LLC (“Viceroy”) and its members. We are seeking injunctive relief and damages for defamation, civil conspiracy, tortious interference, private nuisance, and unjust enrichment based on defamatory statements expressed against us. On June 29, 2023, we won a preliminary ruling in this lawsuit after Viceroy's motion to dismiss the case was denied by a judge in the United States District Court for the Northern District of Alabama.
From time-to-time, we are a party to other legal proceedings, claims, or regulatory inquiries and investigations arising out of, or incidental to, our business. While we are unable to predict with certainty the outcome of any particular matter, in the opinion of management, after consultation with legal counsel, the ultimate liability, if any, with respect to those proceedings is not presently expected to materially affect our financial position, results of operations, or cash flows.
10. Subsequent Events
On October 18, 2024, we sold
On November 8, 2024, Astrana Health entered into a binding agreement to purchase the majority of PHP Holdings for approximately $
35
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the consolidated financial condition and consolidated results of operations are presented on a combined basis for Medical Properties Trust, Inc. and MPT Operating Partnership, L.P. as there are no material differences between these two entities. Such discussion and analysis should be read together with the condensed consolidated financial statements and notes thereto contained in this Form 10-Q and the consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2023.
Forward-Looking Statements.
This Quarterly Report on Form 10-Q contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements can generally be identified by the use of forward-looking words such as "may", "will", "would", "could", "expect", "intend", "plan", "estimate", "target", "anticipate", "believe", "objectives", "outlook", "guidance", or other similar words, and include statements regarding our strategies, objectives, asset sales and other liquidity transactions (including the use of proceeds thereof), expected returns on investments and financial performance, expected trends and performance across our various markets, and expected outcomes from Steward's restructuring process. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results or future performance, achievements or transactions or events to be materially different from those expressed or implied by such forward-looking statements, including, but not limited to, the risks described in our Annual Report on Form 10-K and as updated in our quarterly reports on Form 10-Q for future periods, and current reports on Form 8-K as we file them with the SEC under the Exchange Act. Such factors include, among others, the following:
36
Key Factors that May Affect Our Operations
Our revenue is derived from rents we earn pursuant to the lease agreements with our tenants, from interest income from loans to our tenants and other facility owners, and from profits or equity interests in certain of our tenants’ operations. Our tenants operate in the healthcare industry, generally providing medical, surgical, rehabilitative, and behavioral health care to patients. The capacity of our tenants to pay our rents and interest is dependent upon their ability to conduct their operations at profitable levels. We believe that the business environment of the industry segments in which our tenants operate is generally positive for efficient operators. However, our tenants’ operations are subject to economic, regulatory, market, and other conditions (such as the impact of the COVID-19 pandemic) that may affect their profitability, which could impact our results. Accordingly, we monitor certain key performance indicators that we believe provide us with early indications of conditions that could affect the level of risk in our portfolio.
Key factors that we may consider in underwriting prospective deals and in our ongoing monitoring of our tenants’ (and guarantors’) performance, as well as the condition of our properties, include, but are not limited to, the following:
37
Certain business factors, in addition to those described above that may directly affect our tenants and borrowers, will likely materially influence our future results of operations. These factors include:
CRITICAL ACCOUNTING POLICIES
Refer to our 2023 Annual Report on Form 10-K for a discussion of our critical accounting policies, which include investments in real estate, purchase price allocation, loans, credit losses, losses from rent and interest receivables, investments accounted for under the fair value option election, and our accounting policy on consolidation. During the nine months ended September 30, 2024, there were no material changes to these policies.
Overview
We are a self-advised REIT focused on investing in and owning net-leased healthcare facilities across the U.S. and selectively in foreign jurisdictions. Medical Properties Trust, Inc. was incorporated under Maryland law on August 27, 2003, and MPT Operating Partnership, L.P. was formed under Delaware law on September 10, 2003. We conduct substantially all of our business through MPT Operating Partnership, L.P. We acquire and develop healthcare facilities and lease the facilities to healthcare operating companies under long-term net leases, which require the tenant to bear most of the costs associated with the property. The majority of our leased assets are owned 100%; however, we do own some leased assets through joint ventures with other partners that share our view that healthcare facilities are part of the infrastructure of any community, which we refer to as investments in unconsolidated real estate joint ventures. We also make mortgage loans to healthcare operators collateralized by their real estate assets. In addition, we may make loans to certain of our operators through our TRS, the proceeds of which are typically used for working capital and other purposes. From time-to-time, we may make noncontrolling investments in our tenants, which we refer to as investments in unconsolidated operating entities. These investments are typically made in conjunction with larger real estate transactions with the tenant that give us a right to share in such tenant’s profits and losses, and provide for certain minority rights and protections. Our business model facilitates acquisitions and recapitalizations, and allows operators of healthcare facilities to serve their communities by unlocking the value of their real estate assets to fund facility improvements, technology upgrades, and other investments in operations.
38
At September 30, 2024, our portfolio consisted of 402 properties leased or loaned to 55 operators, of which four are under development. We manage our business as a single business segment.
At September 30, 2024, all of our investments are located in the U.S., Europe, and South America. Our total assets are made up of the following (dollars in thousands):
|
|
As of |
|
|
% of |
|
|
As of |
|
|
% of |
|
||||
Real estate assets - at cost |
|
$ |
13,222,167 |
|
|
|
86.7 |
% |
|
$ |
14,778,132 |
|
|
|
80.8 |
% |
Accumulated real estate depreciation and amortization |
|
|
(1,423,702 |
) |
|
|
(9.3 |
)% |
|
|
(1,407,971 |
) |
|
|
(7.7 |
)% |
Net investment in real estate assets |
|
|
11,798,465 |
|
|
|
77.4 |
% |
|
|
13,370,161 |
|
|
|
73.1 |
% |
Cash and cash equivalents |
|
|
275,616 |
|
|
|
1.8 |
% |
|
|
250,016 |
|
|
|
1.4 |
% |
Investments in unconsolidated real estate joint ventures |
|
|
1,242,772 |
|
|
|
8.2 |
% |
|
|
1,474,455 |
|
|
|
8.0 |
% |
Investments in unconsolidated operating entities |
|
|
508,227 |
|
|
|
3.3 |
% |
|
|
1,778,640 |
|
|
|
9.7 |
% |
Other |
|
|
1,411,076 |
|
|
|
9.3 |
% |
|
|
1,431,572 |
|
|
|
7.8 |
% |
Total assets |
|
$ |
15,236,156 |
|
|
|
100.0 |
% |
|
$ |
18,304,844 |
|
|
|
100.0 |
% |
Results of Operations
Three Months Ended September 30, 2024 Compared to September 30, 2023
Net loss for the three months ended September 30, 2024, was ($801.2) million, or ($1.34) per share compared to net income of $116.7 million, or $0.19 per diluted share, for the three months ended September 30, 2023. This decrease in net income is primarily driven by the approximate $608 million of impairment charges primarily related to the global settlement reached with Steward and its lenders as described in Note 3 to the condensed consolidated financial statements, the approximate $134 million unfavorable fair value adjustment to our investment in PHP Holdings, $137 million of accelerated amortization of in-place lease intangibles, and lower revenues from Steward and Prospect along with property sales, partially offset by approximately $90 million of gains as a result of the Dignity Health and UCHealth sales, both discussed further in Note 3 to the condensed consolidated financial statements. Normalized funds from operations (“FFO”), after adjusting for certain items (as more fully described in the section titled “Reconciliation of Non-GAAP Financial Measures” in Item 2 of this Quarterly Report on Form 10-Q), was $93.9 million for the 2024 third quarter, or $0.16 per diluted share, as compared to $225.5 million, or $0.38 per diluted share, for the 2023 third quarter. This 58% decrease in Normalized FFO is primarily due to lower revenues from Steward moving to the cash basis of accounting on December 31, 2023, and lower revenues as a result of various disposals in 2023 and 2024.
Revenues
A comparison of revenues for the three months ended September 30, 2024 and 2023 is as follows (dollar amounts in thousands):
|
|
2024 |
|
|
% of |
|
|
2023 |
|
|
% of |
|
|
Year over |
|
|||||
Rent billed |
|
$ |
169,721 |
|
|
|
75.2 |
% |
|
$ |
229,306 |
|
|
|
74.8 |
% |
|
|
(26.0 |
)% |
Straight-line rent |
|
|
36,602 |
|
|
|
16.2 |
% |
|
|
21,511 |
|
|
|
7.0 |
% |
|
|
70.2 |
% |
Income from financing leases |
|
|
9,798 |
|
|
|
4.3 |
% |
|
|
26,066 |
|
|
|
8.5 |
% |
|
|
(62.4 |
)% |
Interest and other income |
|
|
9,706 |
|
|
|
4.3 |
% |
|
|
29,693 |
|
|
|
9.7 |
% |
|
|
(67.3 |
)% |
Total revenues |
|
$ |
225,827 |
|
|
|
100.0 |
% |
|
$ |
306,576 |
|
|
|
100.0 |
% |
|
|
(26.3 |
)% |
Our total revenues for the 2024 third quarter are down $80.7 million, or 26%, over the same period in the prior year. This decrease is made up of the following:
39
The decreases in operating lease revenue discussed above were partially offset by approximately $50 million more straight-line rent write-offs in the 2023 third quarter compared to the same period of 2024; approximately $2 million from incremental revenue from acquisitions in 2023, capital additions, and the commencement of rent on two development properties in 2024; $2.4 million of favorable foreign currency fluctuations; and approximately $6 million from increases in CPI above the contractual minimum escalations in our leases.
Interest Expense
Interest expense for the quarters ended September 30, 2024 and 2023 totaled $106.2 million and $106.7 million, respectively. This decrease is primarily related to debt principal repayments including paying off the Australian term loan facility in the second quarter of 2024 (A$470 million), the 2.550% Senior Unsecured Notes in December 2023, and the British pound sterling secured term loan due 2024 in the 2024 second quarter and paying down a portion of our revolver and British pound sterling term loan due 2025 in 2024. The decrease was offset by additional interest from our British pound sterling secured term loan due 2034 that closed in May 2024 and higher overall interest rates. Overall, our weighted-average interest rate was 4.3% for the quarter ended September 30, 2024, compared to 4.0% for the same period in 2023, as our specific rates have increased due to a credit rating adjustment in March 2023 and our Credit Facility amendment on August 6, 2024.
Real Estate Depreciation and Amortization
Real estate depreciation and amortization during the third quarter of 2024 increased to $204.9 million from $77.8 million in 2023 due to approximately $137 million of additional amortization expense recorded in the 2024 third quarter to fully amortize the intangibles associated with two terminated master leases, including the Steward master lease that was terminated effective September 11, 2024 as part of the global settlement discussed in Note 3 to the condensed consolidated financial statements.
Property-related
Property-related expenses totaled $5.0 million and $6.5 million for the quarters ended September 30, 2024 and 2023, respectively. Of the property expenses in the third quarter of 2024 and 2023, approximately $2.6 million and $3.3 million, respectively, represents costs that were reimbursed by our tenants and included in the “Interest and other income” line on our condensed consolidated statements of net income.
General and Administrative
General and administrative expenses decreased to $36.6 million for the 2024 third quarter, compared to $38.1 million for the 2023 third quarter. For the 2024 period, general and administrative expenses included $14.4 million of stock compensation expenses, of which $7 million related to certain 2024 stock grants with cash-settled features that are marked to fair value quarterly.
Gain on Sale of Real Estate
During the three months ended September 30, 2024, the gain on sale of real estate of $91.8 million primarily relates to the sale of eight Dignity Health facilities and 11 UCHealth facilities as more fully described in Note 3 to the condensed consolidated financial statements.
40
Real Estate and Other Impairment Charges, Net
In the 2024 third quarter, we recognized $607.9 million of real estate and other impairment charges. Of these charges, approximately $425 million consisted of the impairment of working capital loans and other secured loans advanced to Steward, and $180 million was related to real estate, including the Space Coast facilities and certain excess properties previously leased to Steward (as more fully described in Note 3 to the condensed consolidated financial statements).
Earnings (Loss) from Equity Interests
Earnings from equity interests was $21.6 million for the quarter ended September 30, 2024 compared to the $11.3 million of earnings for the same period in 2023. This increase is primarily from our share of income in the Utah partnership that was formed in the 2024 second quarter, which included a $13.5 million positive fair value adjustment primarily related to the underlying real estate, (as further described in Note 3 to the condensed consolidated financial statements), partially offset by not recording any income in the third quarter of 2024 related to our Massachusetts-based partnership with Macquarie.
Debt Refinancing and Unutilized Financing (Costs) Benefit
Debt refinancing and unutilized financing costs were $0.7 million for the third quarter of 2024. 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. We recognized a benefit for the same period of 2023, as a result of the purchase of £40 million of our 2.550% Senior Unsecured Notes due 2023 at a discounted price.
Other (Including Fair Value Adjustments on Securities)
Other expense for the third quarter of 2024 was $169.8 million, compared to income of $41.1 million in the prior year. For the third quarter of 2024, we recognized unfavorable non-cash fair value adjustments to our investment in PHP Holdings and Aevis of approximately $140 million. The 2024 third quarter also included approximately $29 million of legal and other professional expenses associated with the Steward bankruptcy, responding to certain defamatory statements published by certain parties, including those who are defendants to a lawsuit we filed on March 30, 2023, among other things. For the third quarter of 2023, we recognized an approximate $30 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 $2.8 million of expenses associated with responding to defamatory statements previously mentioned.
With certain investments accounted for at fair value, such as our investment in PHP Holdings, we may have positive or negative fair value adjustments from quarter-to-quarter.
Income Tax Expense
Income tax expense includes U.S. federal and state income taxes on our TRS entities, as well as non-U.S. income based or withholding taxes on certain investments located in jurisdictions outside the U.S. The $9.0 million income tax expense for the three months ended September 30, 2024 is primarily based on the income generated by our investments in the U.K. and Germany and slightly less than the $10.1 million income tax expense in the third quarter of 2023.
We utilize the asset and liability method of accounting for income taxes. Deferred tax assets are recorded to the extent we believe these assets will more likely than not be realized. In making such determination, all available positive and negative evidence is considered, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. Based upon our review of all positive and negative evidence, including our three-year cumulative pre-tax book loss position in certain entities, we concluded that a valuation allowance of approximately $386 million should be reflected against certain of our international and domestic net deferred tax assets at September 30, 2024. In the future, if we determine that it is more likely than not that we will realize our net deferred tax assets, we will reverse the applicable portion of the valuation allowance, recognize an income tax benefit in the period in which such determination is made, and potentially incur higher income tax expense in future periods as income is earned.
41
Nine Months Ended September 30, 2024 Compared to September 30, 2023
Net loss for the nine months ended September 30, 2024, was ($2.0) billion, or ($3.33) per share compared to net income of $107.5 million, or $0.18 per diluted share, for the nine months ended September 30, 2023. This decrease in net income is primarily driven by the approximate $1.8 billion of impairment charges and negative fair value adjustments related to Steward and the international joint venture as further described in Note 3 to the condensed consolidated financial statements. In addition, we had an approximate $498 million unfavorable fair value adjustment to our investment in PHP Holdings in the first nine months of 2024 along with lower revenues from Steward and property sales. These decreases were partially offset by approximately $475 million of gains on real estate sales in the first nine months of 2024. Normalized funds from operations (“FFO”), after adjusting for certain items (as more fully described in the section titled “Reconciliation of Non-GAAP Financial Measures” in Item 2 of this Quarterly Report on Form 10-Q), was $375.0 million for the first nine months of 2024, or $0.62 per diluted share, as compared to $733.0 million, or $1.22 per diluted share, for the same period of 2023. This 49% decrease in Normalized FFO is primarily due to lower revenues from Steward moving to the cash basis of accounting on December 31, 2023, and as a result of various disposals in 2023 and 2024.
Revenues
A comparison of revenues for the nine months ended September 30, 2024 and 2023 is as follows (dollar amounts in thousands):
|
|
2024 |
|
|
% of |
|
|
2023 |
|
|
% of |
|
|
Year over |
|
|||||
Rent billed |
|
$ |
552,784 |
|
|
|
72.4 |
% |
|
$ |
724,954 |
|
|
|
72.9 |
% |
|
|
(23.7 |
)% |
Straight-line rent |
|
|
119,719 |
|
|
|
15.7 |
% |
|
|
38,875 |
|
|
|
3.9 |
% |
|
|
208.0 |
% |
Income from financing leases |
|
|
53,832 |
|
|
|
7.0 |
% |
|
|
107,729 |
|
|
|
10.8 |
% |
|
|
(50.0 |
)% |
Interest and other income |
|
|
37,368 |
|
|
|
4.9 |
% |
|
|
122,624 |
|
|
|
12.4 |
% |
|
|
(69.5 |
)% |
Total revenues |
|
$ |
763,703 |
|
|
|
100.0 |
% |
|
$ |
994,182 |
|
|
|
100.0 |
% |
|
|
(23.2 |
)% |
Our total revenues for the first nine months of 2024 are down $230.5 million, or 23%, over the same period in the prior year. This decrease is made up of the following:
Operating lease revenues in the first nine months of 2024 further declined by approximately $107 million due to disposals and other leasing transactions in 2023 and 2024 (including approximately $60 million from the Utah Transaction described in Note 3 to the condensed consolidated financial statements). These decreases are partially offset by approximately $145 million more straight-line rent write-offs in the first nine months of 2023 compared to the same period of 2024 (related to the Steward and CommonSpirit transaction in 2023 described in Note 3 to the condensed consolidated financial statements); approximately $11 million in incremental revenue from acquisitions in 2023, capital additions, and the commencement of rent on two development properties in 2024; approximately $7 million of favorable foreign currency fluctuations; and approximately $16 million from increases in CPI above the contractual minimum escalations in our leases.
42
Interest Expense
Interest expense for the nine months ended September 30, 2024 and 2023 totaled $316.4 million and $308.8 million, respectively. This increase is primarily related to an increase in borrowings on our revolving credit facility on average during the comparable periods that carried higher interest rates (as variable rate debt) compared to the lower fixed interest rates of debt that was repaid in 2023, including the A$730 million Australian term loan facility paid off in the 2023 second quarter and the 2.550% Senior Unsecured Notes paid off in December 2023. We closed on a new British pound sterling secured term loan in May 2024 that also partially contributed to higher interest expense period over period. Overall, our weighted-average interest rate was 4.3% for the nine months ended September 30, 2024, compared to 3.9% for the same period in 2023, as our specific rates have increased due to a credit rating adjustment in March 2023 and our Credit Facility amendment on August 6, 2024.
Real Estate Depreciation and Amortization
Real estate depreciation and amortization during the first nine months of 2024 decreased to $382.7 million from $526.1 million in 2023 due to accelerating the amortization of lease intangibles as part of the sale of hospital operations by Steward and re-leasing of five Steward Utah facilities to CommonSpirit in May 2023 (approximately $286 million) and the sale of various properties in 2024 and 2023. This decrease is partially offset by approximately $170 million of additional amortization expense recorded in 2024 primarily to fully amortize the intangibles associated with two master leases, including the Steward master lease that was terminated effective September 11, 2024.
Property-related
Property-related expenses totaled $17.5 million and $38.3 million for the nine months ended September 30, 2024 and 2023, respectively. Of the property expenses in the first nine months of 2024 and 2023, approximately $9.8 million and $28.6 million, respectively, represents costs that were reimbursed by our tenants and included in the “Interest and other income” line on our condensed consolidated statements of net income.
General and Administrative
General and administrative expenses decreased to $105.3 million for the first nine months of 2024, compared to $115.4 million for the same period of 2023. For the 2024 period, general and administrative expenses included $30.6 million of stock compensation expense, of which $9 million related to certain 2024 stock grants with cash-settled features that are marked to fair value quarterly.
Gain on Sale of Real Estate
During the nine months ended September 30, 2024, the gain on sale of real estate of $475.2 million primarily related to the disposal of five Prime facilities, 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 condensed consolidated financial statements.
Real Estate and Other Impairment Charges, Net
In the first nine months of 2024, we recognized $1.4 billion of real estate and other impairment charges and fair value adjustments, primarily associated with our investments in Steward and the international joint venture as further described in Note 3 to the condensed consolidated financial statements. In the first nine months of 2023, we recorded a $93.3 million net impairment charge, of which $82 million related to the Australia Transaction and $11 million was a non-cash impairment charge on the three Prime properties as more fully described in Note 3 to the condensed consolidated financial statements.
Earnings (Loss) from Equity Interests
Loss from equity interests was ($369.6) million for the nine months ended September 30, 2024, compared to $34.8 million of earnings for the same period in 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 condensed
43
consolidated financial statements. This was partially offset by our share of income on our new Utah partnership as a result of the Utah Transaction in the second quarter of 2024.
Debt Refinancing and Unutilized Financing (Costs) Benefit
Debt refinancing and unutilized financing costs were $3.7 million for the first nine months of 2024. 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 condensed consolidated financial statements. Our debt refinancing and unutilized financing net benefit for the first nine months of 2023 was a result of a $0.9 million benefit related to the purchase of £40 million of our 2.550% Senior Unsecured Notes due 2023 in the third quarter of 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.
Other (Including Fair Value Adjustments on Securities)
Other expense for the first nine months of 2024 was $566.8 million, compared to $25.4 million of income in the prior year. For 2024, we recognized an approximate $498 million unfavorable fair value adjustment to our investment in PHP Holdings. In addition, we incurred a $7.8 million economic loss from the sale of our interest in the Priory syndicated term loan and approximately $46.5 million of legal and other professional expenses associated with the Steward bankruptcy, responding to certain defamatory statements published by certain parties, including those who are defendants to a lawsuit we filed on March 30, 2023, among other things. For 2023, we had an approximate $30 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 $13 million of expenses associated with responding to defamatory statements previously mentioned.
Income Tax Expense
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 $34.5 million income tax expense for the nine months ended September 30, 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. In comparison, we had a $134.7 million income tax benefit in the first nine months of 2023, which included a $158 million benefit by entering the U.K. REIT regime and a $5.0 million tax benefit recognized in the first quarter of 2023 related to the expected sale of our Australia facilities.
We utilize the asset and liability method of accounting for income taxes. Deferred tax assets are recorded to the extent we believe these assets will more likely than not be realized. In making such determination, all available positive and negative evidence is considered, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. Based upon our review of all positive and negative evidence, including our three-year cumulative pre-tax book loss position in certain entities, we concluded that a valuation allowance of approximately $386 million should be reflected against certain of our international and domestic net deferred tax assets at September 30, 2024. In the future, if we determine that it is more likely than not that we will realize our net deferred tax assets, we will reverse the applicable portion of the valuation allowance, recognize an income tax benefit in the period in which such determination is made, and potentially incur higher income tax expense in future periods as income is earned.
Reconciliation of Non-GAAP Financial Measures
Investors and analysts following the real estate industry utilize funds from operations, or FFO, as a supplemental performance measure. FFO, reflecting the assumption that real estate asset values rise or fall with market conditions, principally adjusts for the effects of GAAP depreciation and amortization of real estate assets, which assumes that the value of real estate diminishes predictably over time. We compute FFO in accordance with the definition provided by the National Association of Real Estate Investment Trusts, or Nareit, which represents net income (loss) (computed in accordance with GAAP), excluding gains (losses) on sales of real estate and impairment charges on real estate assets, plus real estate depreciation and amortization, including amortization related to in-place lease intangibles, and after adjustments for unconsolidated partnerships and joint ventures.
In addition to presenting FFO in accordance with the Nareit definition, we disclose normalized FFO, which adjusts FFO for items that relate to unanticipated or non-core events or activities or accounting changes that, if not noted, would make comparison to prior period results and market expectations less meaningful to investors and analysts.
44
We believe that the use of FFO, combined with the required GAAP presentations, improves the understanding of our operating results among investors and the use of normalized FFO makes comparisons of our operating results with prior periods and other companies more meaningful. 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. 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.
The following table presents a reconciliation of net (loss) income attributable to MPT common stockholders to FFO and Normalized FFO for the three and nine months ended September 30, 2024 and 2023 (in thousands except per share data):
|
|
For the Three Months Ended |
|
|
For the Nine Months Ended |
|
||||||||||
|
|
September 30, 2024 |
|
|
September 30, 2023 |
|
|
September 30, 2024 |
|
|
September 30, 2023 |
|
||||
FFO information: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income attributable to MPT common stockholders |
|
$ |
(801,163 |
) |
|
$ |
116,710 |
|
|
$ |
(1,997,423 |
) |
|
$ |
107,467 |
|
Participating securities’ share in earnings |
|
|
(153 |
) |
|
|
(311 |
) |
|
|
(807 |
) |
|
|
(1,295 |
) |
Net (loss) income, less participating securities’ share in |
|
$ |
(801,316 |
) |
|
$ |
116,399 |
|
|
$ |
(1,998,230 |
) |
|
$ |
106,172 |
|
Depreciation and amortization |
|
|
218,646 |
|
|
|
96,280 |
|
|
|
430,128 |
|
|
|
580,484 |
|
(Gain) loss on sale of real estate |
|
|
(91,795 |
) |
|
|
20 |
|
|
|
(475,196 |
) |
|
|
(209 |
) |
Real estate impairment charges |
|
|
179,952 |
|
|
|
3,750 |
|
|
|
679,276 |
|
|
|
55,854 |
|
Funds from operations |
|
$ |
(494,513 |
) |
|
$ |
216,449 |
|
|
$ |
(1,364,022 |
) |
|
$ |
742,301 |
|
Write-off of billed and unbilled rent and other |
|
|
(159 |
) |
|
|
52,742 |
|
|
|
2,846 |
|
|
|
150,576 |
|
Other impairment charges, net |
|
|
427,970 |
|
|
|
— |
|
|
|
1,169,943 |
|
|
|
37,434 |
|
Litigation and other |
|
|
28,899 |
|
|
|
2,759 |
|
|
|
46,507 |
|
|
|
12,987 |
|
Share-based compensation adjustments |
|
|
— |
|
|
|
1,243 |
|
|
|
— |
|
|
|
(3,120 |
) |
Non-cash fair value adjustments |
|
|
130,949 |
|
|
|
(46,815 |
) |
|
|
511,472 |
|
|
|
(42,562 |
) |
Tax rate changes and other |
|
|
8 |
|
|
|
— |
|
|
|
4,596 |
|
|
|
(164,535 |
) |
Debt refinancing and unutilized financing costs (benefit) |
|
|
713 |
|
|
|
(862 |
) |
|
|
3,677 |
|
|
|
(46 |
) |
Normalized funds from operations |
|
$ |
93,867 |
|
|
$ |
225,516 |
|
|
$ |
375,019 |
|
|
$ |
733,035 |
|
Per diluted share data: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net (loss) income, less participating securities’ share in |
|
$ |
(1.34 |
) |
|
$ |
0.19 |
|
|
$ |
(3.33 |
) |
|
$ |
0.18 |
|
Depreciation and amortization |
|
|
0.37 |
|
|
|
0.16 |
|
|
|
0.72 |
|
|
|
0.97 |
|
(Gain) loss on sale of real estate |
|
|
(0.15 |
) |
|
|
— |
|
|
|
(0.79 |
) |
|
|
— |
|
Real estate impairment charges |
|
|
0.30 |
|
|
|
0.01 |
|
|
|
1.13 |
|
|
|
0.09 |
|
Funds from operations |
|
$ |
(0.82 |
) |
|
$ |
0.36 |
|
|
$ |
(2.27 |
) |
|
$ |
1.24 |
|
Write-off of billed and unbilled rent and other |
|
|
— |
|
|
|
0.09 |
|
|
|
— |
|
|
|
0.25 |
|
Other impairment charges, net |
|
|
0.71 |
|
|
|
— |
|
|
|
1.94 |
|
|
|
0.06 |
|
Litigation and other |
|
|
0.05 |
|
|
|
0.01 |
|
|
|
0.08 |
|
|
|
0.02 |
|
Share-based compensation adjustments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
Non-cash fair value adjustments |
|
|
0.22 |
|
|
|
(0.08 |
) |
|
|
0.85 |
|
|
|
(0.07 |
) |
Tax rate changes and other |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
(0.27 |
) |
Debt refinancing and unutilized financing costs (benefit) |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
Normalized funds from operations |
|
$ |
0.16 |
|
|
$ |
0.38 |
|
|
$ |
0.62 |
|
|
$ |
1.22 |
|
LIQUIDITY AND CAPITAL RESOURCES
2024 Cash Flow Activity
During the first nine months of 2024, we generated approximately $169 million of cash flows from operating activities, primarily consisting of rent and interest from mortgage and other loans. In addition to operating cash flows, we received approximately $1.8 billion during the first nine months of 2024 from the Utah Transaction and the sale of 25 properties (as further discussed in Note 3 to the condensed consolidated financial statements), along with approximately $130 million from the sale of our interest in the syndicated Priory term loan and remaining minority interest in Lifepoint Behavioral. In May 2024, we closed on a new secured term loan, generating proceeds of approximately $800 million. We used our operating cash flows, asset sale proceeds, and
45
term loan proceeds to fund our dividends of $273 million, pay down over $1 billion of our revolving credit facility and British pound sterling term loan due 2025, and to pay off our British pound sterling secured term loan due 2024.
See below for further details of these transactions along with additional liquidity activity in the first nine months of 2024:
Subsequent to September 30, 2024, we recovered cash related to our Norwood property that exceeded our recovery receivables (as discussed in Note 3 to the condensed consolidated financial statements) and sold three facilities for approximately $45 million. In addition, we funded a quarterly cash dividend of $48 million on October 10, 2024, which was declared by our Board of Directors on August 22, 2024. Finally, on November 8, 2024, Astrana Health entered into a binding agreement to purchase the majority of PHP Holdings for approximately $745 million and the assumption of certain liabilities. After satisfaction of certain obligations, we expect to receive approximately $200 million in total proceeds. We expect to receive the majority of these proceeds in the first half of 2025, while a $50 million payment is expected by 2027.
Debt Amendments and Covenant Compliance
On April 12, 2024, we amended the Credit Facility and certain other agreements to (i) reduce revolving commitments from $1.8 billion to $1.4 billion, (ii) apply certain proceeds from the Utah Transaction and other asset sales and debt transactions to repay the Australian term loan facility and certain other outstanding obligations, including revolving loans under the Credit Facility to the extent necessary to reduce the outstanding borrowings to no more than the amended $1.4 billion commitment, (iii) lower the maximum permitted secured leverage ratio from 40% to 25%, and (iv) waive the 10% cap on unencumbered asset value attributable to tenants subject to a bankruptcy event for purposes of determining compliance with the unsecured leverage ratio for the trailing four fiscal quarter period ended June 30, 2024, and for purposes of determining pro forma compliance with the unsecured leverage ratio for certain asset sale and debt transactions.
On August 6, 2024, we entered into an amendment to the Credit Facility and the British pound sterling term loan due 2025 (the “Amendments”) to (i) further reduce our maximum borrowing in the Credit Facility from $1.4 billion to $1.28 billion, (ii) increase borrowing spreads to 300 basis points during the Modified Covenant Period (defined below) and then to 225 basis points after the Modified Covenant Period, and (iii) require that proceeds of certain future asset sales and debt transactions (during the Modified Covenant Period) be applied to repay certain outstanding obligations, including our revolving loans (by 15% of such proceeds but for which the revolving loans can be reborrowed) and our British pound sterling term loan due 2025 (by 50% of such proceeds).
The Amendments also amended certain covenants including increasing the maximum total leverage ratio covenant from 60% to 65% and the maximum unsecured leverage ratio covenant from 65% to 70% and decreasing the minimum unsecured interest coverage
46
ratio from 1.75:1.00 to 1.45:1.00. The Amendments were effective as of June 30, 2024 and will continue in effect through and including September 30, 2025, unless earlier terminated by us (the “Modified Covenant Period”) at which point the credit agreement provides that covenants will automatically reset to their prior levels. In addition, the Amendments permanently reduced the minimum consolidated adjusted net worth covenant from approximately $6.7 billion to $5 billion, in each case plus the sum of certain equity proceeds. The Amendments also limit the payment of dividends in cash during the Modified Covenant Period to $0.08 per share in any fiscal quarter, but the Amendments do not provide any additional restrictions on the payment of dividends outside of the Modified Covenant Period.
As of September 30, 2024, we are in compliance with all such financial and operating covenants. However, as of September 30, 2024, we would not have been in compliance with certain covenants without the Amendments discussed above. Our ability to maintain compliance with our debt covenants, including the reset leverage and interest coverage requirements after the end of the Modified Covenant Period, depends primarily on reducing debt through asset sales, retention of cash generated from our monthly rent and interest receipts, extending maturities of certain debt instruments, and other access to capital. We expect to continue to comply with these covenants, but if we are not in compliance, including following the expiration of the Modified Covenant Period, we would have to seek additional amendments to our covenants. However, no assurances can be made that such amendments will be approved by our lenders. If an event of default occurs and is continuing under the Credit Facility, the entire outstanding balance may become immediately due and payable which could have a material adverse impact to the Company.
2023 Cash Flow Activity
During the first nine months of 2023, we generated approximately $370.4 million of cash flows from operating activities, primarily consisting of rent and interest from mortgage and other loans. We used these operating cash flows (along with cash on-hand and borrowings on our revolving credit facility) to fund our dividends of $524.2 million.
In regard to other investing and financing activities in the first nine months of 2023, we did the following:
See Note 3 to the condensed consolidated financial statements for further details on the transactions above.
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. Our monthly rent and interest receipts and distributions from our joint venture arrangements are typically enough to cover our short-term liquidity requirements.
However, with higher interest rates, loss of revenue from asset sales, ramping up of cash rents from new operators of 17 properties formerly leased to Steward, not as predictable revenue from Prospect, and $1.2 billion of debt coming due within the next twelve months, we have looked to other initiatives to improve cash flows including:
47
We believe these initiatives, along with liquidity of approximately $1.2 billion (including cash on-hand, availability under our $1.28 billion revolving credit facility, and recovery proceeds received on our Norwood property as discussed in Note 3 to the condensed consolidated financial statements) at November 8, 2024, and routine cash receipts of rent and interest can fund our short-term liquidity requirements.
In addition to the cash flow improvement initiatives discussed above, we could see further cash flow upside from the transition of our remaining vacant facilities to new healthcare operators (whether it be from a sale of our real estate or in the form of rent paid by the new lessee).
Long-term Liquidity Requirements:
Our long-term liquidity requirements generally consist of the same requirements described above under “Short-term Liquidity Requirements” along with the acquisition of real estate and the funding of debt maturities coming due after the next twelve months. At this time, we do not expect any material acquisitions of real estate in the foreseeable future.
As described previously, our monthly rent and interest receipts and distributions from our joint venture arrangements along with our current liquidity of approximately $1.2 billion at November 8, 2024, are typically enough to cover our short-term liquidity requirements. However, to address upcoming debt maturities (as outlined below), we may need to look to other sources, which may include one or a combination of the following:
However, there is no assurance that conditions will be favorable for such possible transactions or that our plans will be successful. As a result of our Quarterly Report on Form 10-Q for the period ended March 31, 2024, not being filed timely, we are currently ineligible to file a new shelf registration statement on Form S-3 or access our existing registration statement on Form S-3 for sales of securities, including under our ATM program, until June 1, 2025, which may impair our ability to raise capital in the public markets. While we are able to use other registration avenues for public offerings, such avenues are less expeditious and efficient than a shelf registration statement on Form S-3. See "Risk Factors" in our Quarterly Report on Form 10-Q for the period ended March 31, 2024.
Principal payments due on our debt (which exclude the effects of any discounts, premiums, or debt issue costs recorded) as of November 8, 2024 are as follows (in thousands):
2024 |
|
$ |
— |
|
2025 |
|
|
1,172,905 |
|
2026 |
|
|
2,054,706 |
|
2027 |
|
|
1,600,000 |
|
2028 |
|
|
775,260 |
|
Thereafter |
|
|
3,468,040 |
|
Total |
|
$ |
9,070,911 |
|
48
Contractual Commitments
We presented our contractual commitments in our 2023 Annual Report on Form 10-K and provided updates in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2024 and June 30, 2024. Except for the changes noted below, there have been no significant changes through November 8, 2024.
The following table updates our contractual commitments schedule as of November 8, 2024 (in thousands):
Contractual Commitments |
|
2024(1) |
|
|
2025 |
|
|
2026 |
|
|
2027 |
|
|
2028 |
|
|
Thereafter |
|
|
Total |
|
|||||||
British pound sterling term loan |
|
$ |
1,912 |
|
|
$ |
637,974 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
639,886 |
|
Revolving credit facility |
|
|
4,062 |
|
|
|
26,894 |
|
|
|
385,085 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
416,041 |
|
Term loan |
|
|
2,611 |
|
|
|
15,403 |
|
|
|
14,266 |
|
|
|
207,074 |
|
|
|
— |
|
|
|
— |
|
|
|
239,354 |
|
Distribution Policy
The table below is a summary of our distributions declared during the two year period ended September 30, 2024:
Declaration Date |
|
Record Date |
|
Date of Distribution |
|
Distribution |
|
|
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 |
|
It is our policy to make sufficient distributions to stockholders in order for us to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended, and to efficiently manage corporate income and excise taxes on undistributed income. However, our Credit Facility limits the amount of dividends we can make- see Note 4 to the condensed consolidated financial statements for further information.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices, and other market changes that affect market sensitive instruments. We seek to mitigate the effects of fluctuations in interest rates by matching the terms of new investments with new long-term fixed rate borrowings to the extent possible. We may or may not elect to use financial derivative instruments to hedge interest rate or foreign currency exposure. For interest rate hedging, these decisions are principally based on our policy to match investments with comparable borrowings, but are also based on the general trend in interest rates at the applicable dates and our perception of the future volatility of interest rates. For foreign currency hedging, these decisions are principally based on how our investments are financed, the long-term nature of our investments, the need to repatriate earnings back to the U.S., and the general trend in foreign currency exchange rates.
In addition, the value of our facilities will be subject to fluctuations based on changes in local and regional economic conditions and changes in the ability of our tenants to generate profits.
Our primary exposure to market risks relates to fluctuations in interest rates and foreign currency. The following analyses present the sensitivity of the market value, earnings, and cash flows of our significant financial instruments to hypothetical changes in interest rates and exchange rates as if these changes had occurred. The hypothetical changes chosen for these analyses reflect our view of changes that are reasonably possible over a one-year period. These forward looking disclosures are selective in nature and only address the potential impact from these hypothetical changes. They do not include other potential effects which could impact our business as a result of changes in market conditions. 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. Conversely, for floating rate debt, interest rate changes generally do not affect the fair market value but do impact net
49
income to common stockholders and cash flows, assuming other factors are held constant. At September 30, 2024, our outstanding debt totaled $9.3 billion, which consisted of fixed-rate debt of approximately $8.7 billion (after considering interest rate swaps in-place) and variable rate debt of $0.6 billion. If market interest rates increase by 10% on our fixed rate debt, the fair value of our debt at September 30, 2024 would decrease by approximately $212.0 million. 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.
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 $4.2 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 $4.2 million per year. 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 September 30, 2024.
Foreign Currency Sensitivity
With our investments in the U.K., Germany, Spain, Italy, Portugal, Switzerland, Finland, and Colombia, we are subject to fluctuations in the British pound, euro, Swiss franc, and Colombian peso to U.S. dollar currency exchange rates. Although we generally deem investments in these countries to be of a long-term nature, are typically able to match any non-U.S. dollar borrowings with investments in such currencies, and historically have not needed to repatriate a material amount of earnings back to the U.S., increases or decreases in the value of the respective non-U.S. dollar currencies to U.S. dollar exchange rates may impact our financial condition and/or our results of operations. Based solely on our 2024 operating results to-date and on an annualized basis, 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 (£) |
|
$ |
10,591 |
|
|
$ |
20,476 |
|
|
$ |
21,411 |
|
Euro (€) |
|
|
1,317 |
|
|
|
5,981 |
|
|
|
6,230 |
|
Swiss franc (CHF) |
|
|
1,247 |
|
|
|
1,263 |
|
|
|
2,956 |
|
Colombian peso (COP) |
|
|
187 |
|
|
|
264 |
|
|
|
2,018 |
|
Item 4. Controls and Procedures.
Medical Properties Trust, Inc. and MPT Operating Partnership, L.P.
We have adopted and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by Rule 13a-15(b), under the Securities Exchange Act of 1934, as amended, we have carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the quarter covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in providing reasonable assurance that information required to be disclosed by us in the reports that we file under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.
There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
We are party to various lawsuits as further described in Note 9 “Commitments and Contingencies” to the condensed consolidated financial statements. We have not recorded a liability related to any particular lawsuit because, at this time, we are unable to determine whether an unfavorable outcome is probable 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 believe that the resolution of any current pending legal or regulatory matters will not have a material adverse effect on our business, financial condition, results of operations, or cash flows. Nonetheless, we cannot predict the outcome of these proceedings, as legal and regulatory matters are subject to inherent uncertainties, and there exists the possibility that the ultimate resolution of such matters could have a material adverse effect on our financial condition, cash flows, results of operations, and the trading price of our common stock.
Item 1A. Risk Factors.
Other than the risk factors disclosed on pages 41 and 42 in our Quarterly Report on Form 10-Q for the period ended March 31, 2024, there have been no material changes to the Risk Factors as presented in our Annual Report on Form 10-K for the year ended December 31, 2023.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The table below summarizes repurchases of our common stock made during the quarter ended September 30, 2024:
Period |
|
Total number of |
|
|
Average price |
|
|
Total number of shares |
|
|
Approximate dollar |
|
||||
July 1-July 31, 2024 |
|
|
94 |
|
|
$ |
4.46 |
|
|
|
— |
|
|
$ |
— |
|
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
During the three months ended September 30, 2024, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities and Exchange Act)
51
Item 6. Exhibits
Exhibit Number |
|
Description |
|
|
|
10.1* |
|
|
|
|
|
31.1* |
|
|
|
|
|
31.2* |
|
|
|
|
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31.3* |
|
|
|
|
|
31.4* |
|
|
|
|
|
32.1** |
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|
|
|
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32.2** |
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|
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|
|
Exhibit 101.INS* |
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
Exhibit 101.SCH* |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
|
|
|
Exhibit 104* |
|
Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) |
* Filed herewith.
** Furnished herewith.
52
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.
MEDICAL PROPERTIES TRUST, INC. |
||
|
|
|
By: |
|
/s/ J. Kevin Hanna |
|
|
J. Kevin Hanna |
|
|
Senior Vice President, Controller, Assistant Treasurer, and Chief Accounting Officer (Principal Accounting Officer) |
MPT OPERATING PARTNERSHIP, L.P. |
||
|
|
|
By: |
|
/s/ J. Kevin Hanna |
|
|
J. Kevin Hanna |
|
|
Senior Vice President, Controller, Assistant Treasurer, and Chief Accounting Officer of the sole member of the general partner of MPT Operating Partnership, L.P. (Principal Accounting Officer) |
Date: November 12, 2024
53